This document discusses marketing strategies for smallholder farmers to sell Aflasafe Maize. It identifies key markets like the poultry industry, food processors, and export aggregators. The poultry industry is a major driver of domestic maize production in Nigeria and aflatoxin negatively impacts poultry health and production. Field trials showed Aflasafe maize feed led to higher profits compared to toxic maize feed. Innovation platforms were used to connect farmers to buyers. Economic analysis found prices that would allow farmers to profit from Aflasafe use. Actions to create demand include demonstration, training, incentives, and linking farmers to markets. A pilot program in Babban Gona helped farmers collectively market Afl
Marketing and sales of Aflasafe maize by smallholder farmers
1. www.iita.orgA member of CGIAR consortium
Marketing of Aflasafe Maize by
Smallholder Farmers
Debo Akande,IITA
And the Aflasafe Team
2. www.iita.orgA member of CGIAR consortium
What is marketing
The management process through which goods and
services move from concept to the customer. It includes
the coordination of four elements called the 4 P’s of
marketing:
(1) identification, selection and development of a product,
(2) determination of its price,
(3) selection of a distribution channel to reach the
customer’s place, and
(4) development and implementation of a promotional strategy
3. www.iita.orgA member of CGIAR consortium
Process in marketing
Market Analysis: - the size of the market for the product,
barriers to entry for farming group, and requirements for
supplying product to market (i.e. quality of product,
labelling, packaging, etc.)
Product : How much is going to be produced? What
standard of quality? Consumer knowledge, Value addition
Operations: the production of the crop, the processing
facility (including labour requirements), storage and
transport. What are the risks, plans to mitigate the risk.
4. www.iita.orgA member of CGIAR consortium
Process in marketing cntd
Organisation management and ownership: Who will
manage the organization? What will the structure
look like? How can members hold managers/leaders
accountable?
Funds: What will they be used for? Where will they
come from? How will they be repaid?
Financial plan: What are the net income projections ?
How does this projection change when certain prices
change? What is the break-even point for farmers
producing the crop?
5. www.iita.orgA member of CGIAR consortium
Market strategy
Which way to go?
•Aggregation?
•Direct Sales? Open market
•Contract Farming ? what would a contract conceivably
look like - quantity, quality, duration?
•Agro Processing? Cooperation among smallholder
farmers to turn primary agricultural products into other
commodities for market .
6. www.iita.orgA member of CGIAR consortium
Markets for Aflasafe
DOREO PARTNERS
Poultry industry
Export-oriented aggregators
Food processors
Large commercial farmers
Smallholder farmers
Market based
• Poultry feed
• Premium food
market
AgResults (Incentive-
cum-market based)
marketdemandfor
Aflasafe • 60% maize consumed by farmers
• 40% sold in the market
7. Maize & Poultry Growth
• Nigerian maize production
has grown from 4 million
metric tons in 2000 to a 7.3
million metric tons in 2010
• Nigerian poultry production
has grown from 113 Million
birds in 2000 to 192 million
birds in 2010
• Each sector has grown on
average 5% per year.
• Poultry feed is
approximately 60% maize.
• Annual demand for maize:
1 million tons
Nigerian Govt Bans
Poultry Imports
Index of growth in production for maize and poultry
relative to Nigeria’s production in 1961* Measure:
Relative growth in production
Poultry Industry… Key Driver of Domestic Maize Production
8. Aflatoxin and Broilers
AF-free
diet
500 ppb AF diet
Aflatoxin impacts
• Significant increased mortality
• Reduced immunity
• Reduced vaccine efficiency
• Dramatic reduction in live weight / Feed
efficiency
• Drop in egg production rate
Aflatoxin levels in feeds in Nigeria
Aflatoxin level (ppb) Samples (%)
<20 (safe) 38
>20 to 100 (up to 5x) 14
>100 to 500 (up to 25x) 41
>500 to 1,000 (up to 100x) 7
Poultry industry’s current
cost (per ton feed*) for
toxin binders:
Tier 1: $3
Tier 2: $6
Tier 3: $13
* 600 kg maize per ton feed
9. Poultry Feeding Study
$3,200 net
profit from
10,000 birds
in 8 weeks
www.iita.orgMycored Europe, 28 May, 2013DOREO PARTNERSA member of CGIAR consortium
Aflasafe maize feed
Toxic maize feed
10. Innovation Platform
• Platform meeting with
leadership and members of
Poultry Association of
Nigeria, feed manufacturers,
maize aggregators, aflasafe
farmers, vet professionals
and regulators
• Results of poultry feeding
study presented
• Poultry farmers to buy all
aflasafe maize at a premium
www.iita.orgA member of CGIAR consortium
11. www.iita.orgA member of CGIAR consortium
Key Economic Drivers
• Ex-factory price: $12.2
including 28% EBITDA
• Farm Gate price: $15.6
• Maize yield required
for farmers to recover
aflasafe cost + 33%
profit: 3.5 t/ha
• Yield enhancement to
go hand in with
aflasafe use
DOREO PARTNERS
12. Actions to Create Demand
• Develop manufacturing capacity
• Create awareness about aflatoxin
• Engage stakeholders frequently
• Demonstrate efficacy of Aflasafe
• Train farmers in aflatoxin management
• Enable aflatoxin testing of products
• Incentivize use of Aflasafe by the poor
• Link Aflasafe users to food and feed market
• Being piloted by Doreo Partners
www.iita.orgDOREO PARTNERSA member of CGIAR consortium
13. Babban Gona Pilot
www.iita.orgDOREO PARTNERSA member of CGIAR consortium
• Farmers’ cooperative with professional management
• Credit, inputs and technical services
• Yield enhancing practices
• Aflasafe use
• Aflatoxin testing – 100% met standard
• Incentive for meeting aflatoxin standard
• Warehousing
• Output marketing – linking to market
• Return profit after sale ($140/ha)
• Farmers keep part of the harvest for family use