SNV and its partners in Zimbabwe have developed an innovative pilot project to enable smallholder farmer access agro-inputs. Agro-input suppliers will receive insurance to mitigate risks faced when doing business with rural retailers.

The programme, funded through FAO with SNV as the implementing organisation, will purchase insurance for agro-input suppliers to offset risks inherent in their business relationship with rural retailers. This will enable retailers to restock with agricultural inputs in time for the growing season. The capacity of Zimbabwean rural retailers to stock inputs has been seriously eroded by years of run-away hyperinflation and economic meltdown. The situation has been further worsened by the inability of agro-input suppliers to offer short-term credit facilities to the rural retailers. Against this background, an insurance to cover risks associated with non-sale of stock (recall insurance), theft or destruction by fire of consignment stock and non-payment of money to the agro-input supplier was necessary to win the confidence of participating suppliers. Fixed retail prices have been agreed between the supplier and retailers, which are publicly displayed in the shop in order to counter usury practices. Retailers will also receive business skills training. According one supplier: “This gives farmers the opportunity to purchase agro inputs locally at a much lower cost. Last year farmers had no inputs available what-so-ever resulting in massive crop failure”

SNV and its partners have already selected an insurance company called TriStar Insurance along with the three agro-input suppliers namely Red Star, Green House and Produtrade, to participate in the project. Over forty rural retailers have been selected and are now selling fertilisers, chemicals, and maize seed to rural smallholder farmers.

The ultimate objective of the project is to show evidence of the opportunities presented by the liberalised economy for humanitarian interventions. Humanitarian players in agriculture might find the findings of this project useful to revise their assistance strategies, and gradually move away from free agro input distribution programmes towards more market-oriented and sustainable ways of assistance to restore agricultural productivity.