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Timely completion of field preparation and grain harvesting is a major challenge for rice farmers across sub-Saharan Africa. A new business model led by young people is providing mechanised services to farmers for activities such as soil preparation and harvesting, helping them to intensify production and improve their income as a result.
Launched by the Syngenta Foundation for Sustainable Agriculture and partners in 2015, the Center for Agricultural Mechanized Services (CEMA) model currently operates in Senegal and Mali. A CEMA is a centralised platform generally established within a farmer organisation, which delivers a package of agricultural services to smallholder farmers – mainly its members – including mechanisation, storage infrastructure and access to advice, training and monitoring through digital applications.
The concept is designed to be profitable for the young agripreneurs who manage the platform, and detailed pricing models are drawn up together with the farmers’ organisations. The prices charged to the farmers are around 27,500 XOF/hectare (ha) (€42/ha) for soil preparation, 180,000 XOF/ha (€275/ha) for harvesting (actual costs are paid in kind – 18% of the harvest), and 2,000 XOF/bag (€3/bag) for storing the paddy. With a capacity to cover between 300 and 500 ha per season, a CEMA can typically achieve a return on investment after two to three years.
The CEMA itself is an independent company, which provides professional mechanisation services to members of the farmers’ organisation to which it is linked, and if there is sufficient capacity, to farmers outside. Since each CEMA is run by farmers for farmers, they best serve the needs of local producers.
Financing investments through guarantee funds
Buying appropriate machinery can require significant capital investment, which often exceeds the financial capacity of farmers’ organisations. So for this model to work, a key component is the establishment of a guarantee fund with a local agricultural bank, to finance equipment and infrastructure. Given the important role played by banks, these are directly involved in the selection process of the various farmers’ organisations wanting to establish a CEMA.
A strong business model with a secured market is equally important. The upside of working with farmers’ organisations is the fact that they already have a guaranteed market, through their members. This is a key feature, since banks need the confidence that farmers will be willing to pay for the services on offer.
In each case, the partnership between the Syngenta Foundation and the national agricultural bank helps to provide a guarantee fund to secure against risks. In addition, SFSA provides the CEMA with technical support through training and coaching.
The success of the two pilot models in Mali and Senegal has already helped to increased banks’ confidence in lending to several other farmers’ organisations wanting to set up a CEMA. To date, both the original farmers’ organisations involved in the CEMA pilots have been able to meet their annual repayments on loans incurred for purchasing machinery and equipment.
A Senegal example
In Senegal, the Syngenta Foundation has partnered with national bank the Caisse Nationale de Crédit Agricole du Sénégal (CNCAS). The loan for the machinery and equipment is taken out by the farmers’ organisation, while the CEMA operates and manages the equipment, according to clearly defined rules.
To ensure that the different providers are paid promptly for their products and services, a secured system has been put in place. At the beginning of each season, the farmers’ organisation members inform the bank of their requirements for products and services, such as seeds, fertiliser, irrigation and mechanisation. Once bank approval has been given, the members receive Purchase Order Forms (POF), which are then passed on to the different product and service suppliers. Each time a service or product has been delivered, the farmer gives the POF to the service provider – for example the CEMA.
By speeding up harvesting and field preparation using machinery, rice growers have found that they can add an extra growing season. One Senegalese rice farmer who has managed to do double rice-cropping since he became a CEMA client in 2015 is Alioune Diop, from Pont-Gendarme north of Saint-Louis. As a direct result of the scheme, Diop says that in return for the fee he pays, he has seen major benefits in terms of rice quality and yield, as well as his own knowledge.
This article was created through a CTA-led process to document and share actionable knowledge on 'what works' for ACP agriculture. It capitalises on the insights, lessons and experiences of practitioners to inform and guide the implementation of agriculture for development projects.
