Capacities and costs required
In deciding if providing RAS to farmer clients is a worthwhile investment, agribusinesses must make critical decisions on the type and extent of the services they will provide, the human resources and equipment needed, and whether it is more cost-effective to build capacity in-house or to outsource the services. While designing and implementing these services using in-house resources may make long-term strategic sense, it can be very expensive and time-consuming. Alternatively, there may be existing firms on the market with the capacity to provide better services at lower cost. In either case, significant internal management and oversight will be required.
Critical skills and expertise that agribusinesses need to develop when providing RAS are:
- training provision in agronomy, business management, and financial literacy
- community mobilisation.
Some critical cost drivers for implementing RAS include:
- land availability for demonstration plots
- facilities for training
- agricultural inputs/equipment
- development of training materials
- monitoring, learning, and adjusting services in response to what has been learned.
Strengths and weaknesses
Private sector companies must analyse the following strengths and weaknesses to determine whether they should provide RAS to farmers.
- Potential to develop relationships with and loyalty of farmer clients, resulting in increased and more reliable future sales of products and services.
- Marketing and distribution capacity, providing opportunities to enter new markets more efficiently and with a greater chance of success in establishing a brand.
- Many technical RAS subjects may be already developed and understood in-house, making it relatively easy to roll them out to external clients.
- Upfront and ongoing costs of RAS can be high, and the company may not realise a return on its investment in sufficient time to justify the expense.
- There may be a perception that RAS is purely for product promotion, particularly for agricultural inputs, to drive sales revenue.
- Additional investment in human resource development may be needed to implement and manage RAS activities effectively.
- Small-scale businesses may not see benefits from providing costly RAS.