Agriculture contributes 20% to Bangladesh’s GDP but employs 45% of the workforce. Approximately 80% of the working population involved in agriculture are employed in MSMEs (Medium, Small and Micro Enterprises). However, the overall MSME support ecosystem is underdeveloped with a handful of services and misaligned incentives. As a result of this immature system, Ag-MSMEs receive little market-relevant business development support, practical opportunities to accelerate growth, and opportunities to link with growth-orientated funding opportunities. MSMEs are often unaware of the latest Ag-techs, have minimal understanding of forward market dynamics and operate via extractive business strategies.
88% of the farm households (as micro enterprises) are marginal, farming between 0.05 to 2.49 acres, and has very limited access to technology. And while farmers are developing their “How to Produce” skills, “How to Sell” skill remains a challenge. Additionally, problems like absence of storage infrastructure, multiple value chain actors between original product producers and end-consumers, absence of quality inputs and funding doesn’t make things any easier.
As an opportunity from here, Syngenta Foundation has developed Farmers’ hub model which is an agro-input and output marketplace. Here farmers gets equipped with high yield agro-input (like seedlings), mechanization support and equipment rental, relevant market information as well as can sell their outputs to local traders and institutional buyers – few Farmers’ Hubs also have forward linkage to exporters to global giant like Kellogg.
Farmers’ Hubs are established to serve 500-1000 farmers each and link them to 10-20 buyers, including medium to large traders, agro-processing and export companies. Although a social enterprise, the hubs are also independent business entities, run by a manager on a franchise basis and charging famers fees for services provided. SFB identifies a local entrepreneur who provides the physical infrastructure. SFB provides the bulk of the capital and the local entrepreneur provides the rest.
Below is the Farmers’ Hub Operating Model: