Feed the Future Mozambique Agricultural Innovations Activity (FTF Inova) Input Market Strategy Summary

Low purchasing power and limited market access hinder the adoption of improved inputs, such as certified seed and fertilizer. Input companies must deliver better value for money by establishing clear customer service channels and building strong relationships with SHFs based on trust and brand affiliation. Less than 10% of SHFs use improved inputs, with only 10% of total seed used in Mozambique being certified and 4% of SHFs using fertilizer. Average yields of cereals and pulses cultivated by SHFs are below 1,000kg/ha, compared to 2,000kg/ha in neighboring countries with similar climatic and socio-economic conditions. The supply of inputs in Mozambique has historically been dominated by the government and non-governmental organizations, but since 2013, input companies have begun to sell directly to SHFs and build their markets. Small to medium-sized input companies are now competing and innovating to reach SHFs, and the number of input plants in the country has increased. Firms are expanding distribution networks, and suppliers such as TECAP are expanding to new market segments. However, this development is taking place haphazardly, relying on contracts from large commercial farmers and donor financing, and is not well-focused on serving the SHF market segment. FTF Inova has identified three leverage points to address the targeted constraints and entry points. First, FTF Inova will work with input suppliers to develop inclusive business models that strengthen cooperation and trust with SHFs. This will include the establishment of customer relationship management systems and feedback mechanisms that provide information on the quality of inputs and marketing strategies focused on SHFs. Second, FTF Inova will support input companies in organizing marketing and promotional activities through agro-dealers directly linked to SHFs. Finally, FTF Inova will help buyers and suppliers to strategically work together to provide market signals that encourage SHFs to adopt improved inputs and expand their market footprints in a more strategic fashion. The initiative aims to address the low adoption of improved inputs among SHFs in Mozambique. By developing inclusive business models, organizing marketing activities, and promoting strategic coordination between buyers and suppliers, FTF Inova seeks to improve the use of improved inputs and increase yields among SHFs. This will ultimately contribute to improved food security and economic development in Mozambique.