appendices

Appendix 4. Project summary
Testing market segmentation of seed
for agricultural development in Africa
Justification
Growth and development in Africa depend acutely on our ability to promote rapid productivity increases in the
region’s agriculture. These productivity gains depend primarily on the ability of small-scale, resource-poor farmers
to purchase modern inputs such as improved seed and fertilizer.
Often, it is the high cost of improved seed marketed by private companies that challenges small farmers.
However, without a viable and competitive private seed industry, small farmers are unlikely to gain access to
improved seed.
The challenge for Africa is to develop mechanisms that encourages farmer adoption of new technologies and
supports the growth of private investment in seed markets. A combination of development- and market-oriented
interventions can potentially achieve this, provided it simultaneously addresses the interests of small farmers and
seed companies.
Objective
The objective of this project is to explore viable market-based mechanisms that would increase small farmers’
access to improved seed and growth of a competitive seed industry.
To do so, the project will develop and test a market segmentation strategy for the Kenyan maize seed market that
simultaneously lowers the cost of improved seed for low-income farmers and encourages growth of a competitive
seed industry.
Figure 1. Maize agroecological zones and the poor.
Principle
The key principle here is to maximize the benefits for low-income farmers of using improved seed while
minimizing the costs of distributing improved seed to them, and minimizing the distortions to the competitive
market for improved seed.
Options
The challenge identified here can be approached in several ways, for example, by exploring alternative
distribution mechanisms such as:
• Direct distribution: Selected farm households in the project area are provided with a set quantity of seed (5-15
kg) at some discounted price. The project distributes the seed directly.
• Tiered pricing: All farm households in the project area could be allowed to purchase a set quantity of seed (5-
15 kg) at some discounted price. Private seed stockists sell the seed directly.
• Voucher distribution: Selected farm households in the project area are issued vouchers that provide them with
the right to purchase a set quantity of seed (5-15 kg) at some discounted price. Private seed stockists would
sell seed directly.
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