Rural advisory services (RAS) provide farmers with training and information on agronomic and business best practices to help them maximise yields and profits. Such services can and should be offered by numerous stakeholders, including government, cooperatives, nongovernmental organisations (NGOs), and agribusinesses. In developing countries, traditional extension services offered through government agencies are often poorly funded and administered, leaving poor farmers to rely on other forms of technical advice, or none at all. The purpose of this note is to highlight the emergence of private sectordelivered RAS that aim to address the gaps in traditional government extension. Private sector RAS can serve a company’s business goals while also providing farmers with the essential agronomic and business knowledge needed to be more productive and earn higher incomes. It is in the private sector’s interest to engage with and improve their clients’ farming practices in order to achieve increased company revenues and profits. This enables them to ensure commercial viability, resulting in long-term mutual benefits for farmers, employees, and shareholders.
Philosophy and principles
Private sector agribusinesses such as input companies, service providers, and offtakers exist to create value by offering products and services demanded by the agricultural community. One critical way for these companies to capitalise on business opportunities and increase revenues is to build the capacity and skills of their clients. Farmers who grow and expand their on-farm operations will not only be more valuable clients, but also will help raise awareness among late adopters in their communities. Lagging farmers who see their neighbours improving their livelihoods will take notice and, in some cases, change their practices to mimic this witnessed success.
In this note we highlight examples of agribusinesses that have decided to offer and embed agricultural services as a complement to their core business products and services. Private sector agribusinesses are seeing the value in expanding their RAS to poor farmers. Such approaches include organising and financially supporting demonstration plots, farmer field schools, education on good agricultural practices (GAP), and business and financial literacy training; providing links with markets and financial institutions; and showcasing model farms. Some agribusinesses have experimented with IT or mobile phone-based technologies to share and transfer technical information.
Agribusinesses that realise the value of RAS, and want to offer such services to their clients, must decide how to monetise them or otherwise recover the added costs. Some larger multinational companies cover these costs through corporate social responsibility or foundation contributions. Companies may also charge fees directly to clients by embedding these costs in product/service fees, or charging them through other cost centres such as marketing and promotion budgets.