Developing appropriate business model for maize shelling technologies in small holder farmers in North West Ethiopian Districts

Abstract

The aim of this paper is to identify and select an appropriate business model for the utilization of maize shelling technologies in small-scale farming practices. Though a very old practice, agriculture is still the central activity of the entire globe due the reason that it directly or indirectly affects the livelihood of the inhabitants. West Gojjam zone of the Amhara National Regional State (ANRS) in Ethiopia is among the known maize producing zones in Country for both consumption and as a cash crop. But, the problem is the high wastage of production due to post-harvest losses (PHL) due to mechanical shelling practices. Aiming to solve this PHL of maize production, at the shelling stage, assessments and discussion with the maize growing farmers and experts concerned were conducted. This paper tries to present an appropriate business model for enabling local small holder farmers get access to different maize shelling technologies. The research follows a survey-type design which provides both a quantitative and a qualitative description of operational and business variables, attitudes, or opinions of a population in the target area, and overall insight of the technology market. The current data shows that rental maize shelling service is feasible for the fragmented maize production of the West Gojjam zone, in the Amhara National Regional State of Ethiopia. Hence, a generic conceptual model has been developed based on the feedbacks of local smallholder farmers, agricultural agents, service providers and suppliers. This model shows how to select and make available appropriate maize shelling technologies that will fit the actual demand at household level. It also shows a rent-to-own approach of maize shelling service that will help the unemployed youth in the localities.

Keywords:

• business model
• small holder farmers
• maize shelling
• appropriate technology

1. Introduction

Global experience shows that about 90% of the poor people live in rural area and their lives, i.e. daily consumption, income and employment, depend on agriculture (Ahmed, 2015). In Ethiopia too, agriculture covers nearly 72.7% of the citizens’ employment (Kedir, 2018), 42% of the country’s GDP and 90% of the total export (Bati et al., 2017) since agriculture is the major income sector for majority of Ethiopians. According to Jongebreur (2000), food security and sustainable resource management are key issues for agricultural production. Increase in agricultural productivity is the key source of achievement of poverty reduction by transforming farm income and the food security that ultimately improves the rural household welfare (Iddrisu et al., 2017) that leads to the necessity of well-structured strategic management of agribusiness (Chen et al., 2016).

Nowadays, the importance of small and medium-sized farms and its associated job creation gets a research focus. Swedish researchers have shown that the decrease in number of small and medium-sized farms and the inability to get sufficient workers that can be employed in such agricultural setups are severe challenges (Cederholm Björklund, 2018). This is an alarm for the government of Ethiopia to give focus to small farm holders so that they can play their part in the development of the country.

In Ethiopia, several cereals are produced among which maize accounts the largest share of production volume and it is a predominant source of food (Ahmed, 2015). It is a crop with the highest average yield per hectare which can grow in a wide range of environmental conditions (Dugassa et al., 2017). In 2012, it was reported that the farming land covered by maize in Ethiopia was 21.4% out of the total cereal coverage and the production of maize was 32.3% of the total cereal production in the same year (Ahmed, 2015). Recent reports also indicate that maize, that covers 30% of the total cereal production, is the main and important production of Ethiopian smallholder farmers (WB-AGP, 2018). Ethiopia is one of the largest maize producers in Africa and is ranked second after South Africa (Mekureyaw, 2016). Maize ranks the second after teff in area coverage but first in total production volume (Dugassa et al., 2017). According to a report of International Food Policy Research Institute ((Benson et al., 2014)), Ethiopia has invested in cereal, teff, wheat and maize production and has shown an increase in production between 12% and 14%.

Maize yield per hectare in Ethiopia is low due to several factors when compared to the global yield. The most determinant factors identified for the low yield are (Dugassa et al., 2017):

• Frequent occurrence of draught,

• Declining of soil fertility,

• Poor agronomic practice,

• Limited use of input,

• Insufficient technology generation,

• Poor seed quality,

• Disease, insect and weeds.

2. Maize shelling activity

Maize shelling is the harvesting practice of the maize grains by detaching them from their cobs. Observations conducted by the experts of Conservation Agriculture (CA) in Amhara region (West Gojjam Administrative Zone) showed that the agricultural conservation practices increased the gross return on investment, though variable costs are increased when it is compared to conventional plots. There are several critical stages in maize production (harvesting) where measures can be applied that help to reduce the losses possibly occur in every stage of the maize harvesting activities. These activities include harvesting, drying, shelling, transporting, sorting and milling.

3. Current maize shelling practices in the region

In Mecha Woreda of Amhara region West Gojam zone, motorized shelling tools that can shell 4000–5000 kg per hectare and manual shelling equipment that can shell 24 kilograms per hour have been employed to solve the post-harvest problems (AgroBig, 2016). The need of shelling tools increases during peak harvesting and shelling season as shortage of labor occurs at these times (Bati et al., 2017). AgroBig, in its report about its “Program for Agribusiness Induced Growth in Amhara Region”, has also reported that the practices to promote post-harvest technologies have failed because of the business model and service management problems (AgroBig, 2016).

Currently, the most critical problem in maize production is the shelling operation (Hadera, 2016) and it needs a solution so as to secure an improvement in maize production. Limited practices to use imported and adopted shelling equipment are observed as a result of low buying capacity and wrong attitude of the local farmers. Hence most of the time the shelling is done manually which results in much loss and damage of the maize grain (AgroBig, 2016).

One of the problems with maize farmers in West Gojam is their practice of storing the unshelled maize cobs and shell their stored wealth in several times at the time of need (Boxal, 1998) as can be seen in Figure 1.

Figure 1. Hand-Held cylindrical maize sheller (left) and farmers on practice (right; Yayu et al., 2016).

Some of the traditional and adopted shelling practices in the Amhara region West Gojam zone are tabulated below.

The major research questions in this particular practice include what are the appropriate maize shelling technologies in the market, how can the accessibility of maize shelling technologies be enhanced, what kind of alternative business models can be used to increase the accessibility of maize shellers for local farmers and how can we apply an appropriate business model for sustainable intensification programs in selected districts? Therefore, the main objective of this research is to develop an appropriate business model for maize shelling in small holder farmers in selected districts of North West Ethiopian.

4. Methodology

4.1. Study area

The purpose of this research is identification and selection of appropriate business model for maize shelling technologies in three selected Woredas of North West districts of Ethiopia (Figure 2). It follows a survey-type research design which provides a quantitative and qualitative description of operational and business variables, attitudes or opinions of a population in the target area, and overall insight of the technology market. While most of the data was obtained from direct observation of the available technologies, secondary data was also collected from different sources including Woreda agricultural offices, trade and industry offices, farmer associations, published and unpublished literature.

Figure 2. Study Area (Ethiopia, Amhara Region, West Gojjam Zone).

In addition, a participatory evaluation was conducted in North Western Ethiopia of Amhara region in Bure Woreda, Alefa Kebele, where most of the farmers grow maize as a major crop. To conduct this experiment with farmers’ participation, one Farmers Research Group (FRG) was organized in collaboration with village level development agents (Solomon and Degu, 2019). Gender, accessibility for demonstration session in the farm and willingness to use the maize sheller were considered as selection criteria from FRG members. From a total of 30 farmers on which the experiment was conducted, ten farmer households were selected, among which four of them were female-headed.

4.2. Approaches

In this research both quantitative and qualitative approaches are used. Due to the varying nature and characteristics of the population, this survey takes samples from population to be studied (questioned or observed) to determine key performance characteristics of available technologies for maize shelling. As we are not interested to generate data in quantitative form which can be subjected to rigorous quantitative analysis, we use much focus for a qualitative approach that involves observation of technologies while being operated, asking the views of end users, operators and owners and use subjective assessment of attitudes and opinions to construct an artificial environment within which relevant information and data can be obtained. This permits observation of the dynamic behavior of the system under study. Given the availability of different operational conditions, varying operating parameters and uncontrolled business models in the area, a research in such a situation is highly a function of researcher’s insights and impressions. As a result, the techniques of focus group interviews, projective techniques and depth interviews are used. The study carried out through collecting and analysis of the necessary secondary data related to the existing maize shelling practices, followed by preliminary discussion with stakeholders to guide the observation of technologies while they are at operation.

This research focus on end user and expert ratings during the field observation and data collection as the different factors cannot be evaluated based on technical experiments. Available alternative business models were evaluated with carefully selected expert opinions. The resulting business model which reflects the current situation helps as the basis for further analysis of possible business cases, scenarios, and alternative innovations, which may enable successful projects to be implemented, instead of ending on a shelf after the pilot stage.

5. Results and discussion

5.1. Impact of traditional shelling practices

Most of the farmers do shell the harvested maize cobs using their hands. Some of the traditional and aadopted shelling practices in the region are compiled in Table 1. This practice results in the health problems of the farmers especially hand injuries (Yayu et al., 2016). The striking/beating of the maize cobs also affects the quality of the maize production for the practice breaks grains or creates cracks on the grains so as it can easily be affected by insects (FAO, 2017; Yayu et al., 2016). Losses, whether they are quantity or quality loss, occur at all levels of post-harvest activities (harvesting, drying, shelling, transporting, storing, packaging and marketing) of maize production (FAO, 2017). According to a research held in UK concerning migrant entrepreneurship, roughly one third of the agricultural products produced for human consumption are wasted every year (Quan et al., 2019) and one should be aware of the problem.

Table 1. Shelling Practices in Amhara Region of Ethiopia(Self compiled)

S/N	Shelling equipment	Imported/Adopted	Reference
1	Hand shelling	traditional	(FAO, 2018)
	Detaching grains using thumbs Rubbing two maize ears each other Rubbing the maize ears against rough surface like stone		(FAO, 2017; Yayu et al., 2016)
2	Striking/beating with stick
3	Animal shelling
4	Hand-held single-ear maize sheller	Adopted	(Gebrekidan et al., 2007)
5	Hand held maize sheller	Adopted	(Yayu et al., 2016)

There are triple-effects observed in the traditional shelling practices as can be expressed using the Figure 3 and the corresponding description in Table 2.

Figure 3. Triple-effect of traditional maize shelling.

Table 2. Description of the tradition shelling effects

Effect category	Effect on	Common practice	Description
Loss	Maize volume	Hand shelling Cob rubbing Striking (stick beating) Animal trampling	Due to the un efficient shelling practice, loss of maize occurs
Quality	Maize content		Damage of the maize happens (broken and cracked which exposes to pests)
Health	Farmer		Hand damage Back bone pain Eye problem

According to a recent experimental study (Solomon and Degu, 2019) in the area, the common method of maize shelling is rubbing cob on rough stone and beating cobs with sticks. The majority of shelling activity was done by women and children. This method of maize shelling is tedious, time-consuming and less productive. Moreover, the experimental results indicate that higher grain damages, on average 7.1% for grain moisture content of 12.5%, was observed. Farmers prefer to use the method of beating cobs with sticks when more than 1,500 kg of maize will be shelled. According to the response of the farmers, it requires 4 to 5 man-days to shell 1,600 to 2,000 kg of maize with average composition of 1–2 adult men, 1–2 adult women and 2 children.

5.2. Mechanization practices

Bunch (2000) addressed in his research that the practice of mechanization in several countries has by-passed the small-holder farmers with land property of up to 5 hectares for the reason that the technologies need to be inexpensive for them. Moreover, he recommends the intensification of the fragmented small plots of the resource-poor farmers. The case is similar with study area of the current research (Bunch, 2000) that there are several influencing factors of agro-mechanization.

There are three important scientific elements that must be distinguished for agricultural mechanization through agricultural engineering discipline. These are (Jongebreur, 2000):

• Knowledge generation

• Technology development

• Innovation

After identifying the factors that influence the mechanization of agriculture in the selected Woredas, questionnaires were distributed to the farmers to assess and compare how much the factors affect their mechanization practice. The result of the preliminary survey which was conducted prior to this study to identify the potential factors of low mechanization practice in the maize production value chain identified the following factors:

Factor 1: Discouraging government policy

Factor 2: Lack of Infrastructure

Factor 3: Inefficient organization and communication culture

Factor 4: Lack of appropriate financial policy for agro- Technologies

Factor 5: Lack of technically skilled manpower

Factor 6: Wrong attitude for local technology

Factor 7: Effect of foreign technology products

Factor 8: Lack of long term plan and commitment

Factor 9: Lack of bench marking practice

Based on the collected data, a Pareto analysis was used to identify the few vital causes from the trivial many listed above. The resulting Pareto chart (Figure 4) shows that the four major factors affecting the use of mechanization tools in the region are poor infrastructure like road, electricity, low exposure of farmers to modern agricultural mechanization tools and equipment expressed as lack of benchmarking, discouraging government policy on mechanization as a result of human intensive agricultural policy of the country and lack of technically skilled manpower to provide operational and maintenance service to the local farmers.

Figure 4. Pareto-Chart of the factors affecting the mechanization Practice.

According to a sensitivity analysis (Wudu, 2019), the probability of adoption of motorized maize sheller declines by 35.18 percent for those farmers who are not attend demonstration/field day regarding the machine.

It is believed that the exposure of farmers to different technologies in their localities or elsewhere has a positive impact on their technology adoption. In a sample survey of motorized maize sheller field demonstration, it has been found that 76.92% of the participants were technology adopters and 39.34 % of them were non-adopter farmers from the sample Woreda. Moreover, a Chi-square test run between the two groups showed that the mean difference was found to be significant at 1% significant level (Wudu, 2019).

A separate survey on the specific factors as to why small holder farmers are not using motorized maize sheller indicate that the majority of local farmers do not have access for the technology (Figure 5). While the demand is high to get maize shelling services once the awareness has been created in the locals, their problem is the lack of sufficient service providers in their proximity. While the harvest size for maize of individual small farm holders has been an important factor for shelling service providers to consider the feasibility of the shelling service using motorized maize sheller, still there is an ample potential to use from the business feasibility side.

Figure 5. Reasons for not using motorized maize sheller (Wudu, 2019).

5.3. Model development

Developing a clear and effective business model for the access and supply of appropriate scale mechanization technologies is an essential component of sustainable intensification. A well-known Zimbabwean company for mechanization of smallholder farming practices in African, Farm Mechanization and Conservation Agriculture for Sustainable Intensification (FACASI) developed a business model for maize sheller supply to help smallholder farmers and was successful (FACASI, 2016). The scheme of the model is: FACASI supplies the sheller, a service provider also provides a generator to power the sheller to the smallholder farmers. The maize sheller program works on a revolving fund approach and second the service provider pays the cost of the sheller (FACASI, 2016).

This shows that it is possible to develop a specific model that can be applicable to a specific agricultural ecology zone to help the farmers to sustain their agricultural productivity. Based on this fact and the available high demand of the technology, it has been tried to formulate a conceptual business model that will serve as a means to encourage both the service provider and user.

The development of this model basically considers the possible vital role players of the maize production sector identified in West Gojjam as indicated in Table 3.

Table 3. The role players in the maize production value chain

S/N	Player	Possible members	Role
1	Farmers	Maize producers	End users of sheller
2	Facilitators	GOs, NGOs, Unions	Integrate the player
3	Suppliers	Manufacturers, Retailors	Supply sheller and spare, promotion, training
4	Financial Supporters	Unions, NGOs, Banks, Saving and Credit Organizations	Loan service, donation
5	Service Providers	Individual, Union, that provide sheller Rental Service	Provide sheller to the surrounding community

5.3.1 Technology selection

The core parameters used to select an appropriate maize sheller for the maize varieties in the research area (LIMU and BH661) are its capacity, efficiency, percentage of breakage and unshelled grain, fuel consumption and ease of transportation. Motorized maize sheller with a capacity ranging from 1000 to 4000 kg/h and up to 98% efficient are available in the Ethiopian market. Locally manufactured maize sheller have a breakage rate of up to 5 % or even less. Their fuel consumption is estimated to be between 2.5 to 3.5 L/h and movable using animal drawing power depending on their design. Therefore, the selection of a particular maize sheller will highly depend on the size of harvest, the number of small holder farmers with the potential to use the technology and the level of precision targeted in terms of post-harvest loss. The post-harvest loss reduction is reflected on the rate of breakage and the existence of unshelled grain on the cob.

At the heart of the selection of such a technology, deployment to the farmers and the support of the end user of that specific technology is (are) the facilitator(s). Facilitators can first gather information from the smallholder farmers concerning their sheller demand, their technology preference, and their buying capacity to use it for supplier selection. Therefore, to know well about the farmers’ demand of the sheller (the nature of the maize cob of their specific farm) and to select the technology the role of these facilitators is vital. The facilitator(s) may be government officials and experts, cooperative or other unions which work for the benefit of the community and their members or may be NGOs. Secondly, they may also recommend the different choices of the sheller technology from different suppliers. According to the nature of harvested maize, farmers who settle in different agricultural zones may need different types of technology. Based on the nature of the maize cob and the quality and reliability of the sheller supplier, the facilitator(s) can consult and help the farmers to put their decisions to select the technology and buy. The end users of the sheller technology usually do not have enough buying capacity to buy and own the technology.

5.3.2 Generating alternative business models

To facilitate the maize shelling activity for smallholder farmers, three alternative business models were considered. These are (1) the sole ownership model where a house hold farmer can own a maize sheller like other tools and equipment, (2) the rent—to- own model where a single farmer owns a maize sheller by initially renting it from an equipment leasing company and (3) the pure service rental model where a service provider owns the maize shellers and provides shelling service for small holder farmers by renting the maize shellers on the bases of service rendered.

The first two models were found impractical for the current economic level of the local farmers where their harvest size is not sufficient to own and operate maize shellers privately. Even to own it in farmer groups, the geographical proximity of neighborhood farmers is highly scattered and management of such a technology is found to be difficult as per the opinion poll found from farmers. As a result the pure rental to service model is considered best situated to be chosen for the study situation due to the fact that it also facilitates job opportunities for the unemployed youth. Moreover, owning such mechanical equipment for local farmers seem to be unreasonable form technical point of view.

5.3.3 Rental service model

In developing countries, where the farmers are unable to pay for the services, they are satisfied with the agro-inputs offered to them in credits (Iddrisu et al., 2017). The same author showed the scenario of payment in-kind from their maize harvest in northern Ghana and their model works on credit basis (Iddrisu et al., 2017).

The pure rental service model is developed based on the feedbacks of local smallholder farmers, agricultural agents, service providers and suppliers. In this model (Figure 6) the role of individual players has been explicitly indicated. The model is developed with the intention that private technology (sheller) owners will rent their sheller for local farmers or provide their shelling service by moving their sheller from one house hold to the other or a household farmer can take the sheller to his/her maize field depending on a set of shelling price arrangements per unit size of shelled maize grain.

Figure 6. Maize sheller pure rental service model.

Researchers show that agribusiness today, especially in the case of smallholder farmers, is unable to achieve its potential due to several factors that contribute to the poor-state of the farmers. The factors stated are poor market accessibility, weak infrastructure, limited ability to influence government policy and inadequate credit services (Sekyi et al., 2016)

For a sustainable access of the technology however, an integrated effort of all stakeholders including facilitators, financial institutions, machine suppliers, service providers (private businesses), after sale servicers and farmer clusters is essential. Figure 6 shows the conceptual model of a pure rental maize shelling service along with the interaction of different actors. From the economic point of view, application of such interactive and integrated business models will benefit farmers by enhancing their productivity and higher yield of production as a result of reduction of PHL. Besides, such affordable and easy to adapt business models have high potential for job creation and technology transfer by unemployed youth. Here the role of the government should not be underestimated as part of the facilitating agent in the process.

5.3.4 Model description

5.3.4.1 Facilitators

The role of the facilitator is to integrate the different actors in the use of maize shelling technology for better product quality and farmer productivities. It facilitates the selection of appropriate technologies for the shelling service providers, the facilitation of financial sources and creation of awareness in farmers. The facilitators can be also used as means of communication bridges between supplier, after sale service provider, farmer and shelling service provider.

5.3.4.2 Suppliers

Suppliers are public or private companies that supply the technology to the rental service providers. They may help the technology owners by providing after sale training on the management and operation of the technologies. Design and manufacture or import appropriate maize shellers based on the specific characteristics of maize cob and grain variety. Provision of spare parts, maintenance and training locals for after sale maintenance service are also other areas of collaboration between the machine owner and the supplier. This will in turn help the employability and job creation capacity of the local farmer community.

5.3.4.3 Financial sources

Financial support is another issue the farmers are facing. Local financial institutions need to arrange a special mechanism to help such a business model. The usual loan provision strategy of the commercial bank of Ethiopia, which is based on collateral and other loan securing mean, will not help either the farmers or the service providers. Youth revolving fund has to be administered with clear financial procedures to encourage the rental service providers and increase the access of such technologies for the local farmers.

5.3.4.4 Rental service providers

These may be youth unions or group of unemployed individuals or farmer associations engaged in business. The shelling service providers who are at the core of these business models are required to be supported by the different stakeholders in the value chain. Particularly, financial institutions need to build trust on the local unemployed youth to facilitate a startup business in the technology service sector. These private businesses will not be limited to maize shelling services but can also be engaged in the other agricultural activities by deploying the appropriate agricultural mechanization machines, tools and equipment. This multi-machinery rental system will help them make their business operational during seasonal agricultural activities as they can shift from one kind of agricultural activity to the other in different seasons of the year.

5.3.4.5 Maize sheller end users

These are the small holder farmers who grow and harvest maize and use the sheller rental service. Building their attitude towards using appropriate a technology in their farming practice is very essential. Moreover, the concept of cluster farming as one component of conservation agriculture and unit cost reduction of shelling has to be promoted. This will help farmers to use technologies with the minimum possible cost and reduce their time of transportation and labor.

6. Conclusion

The conceptual business model is a generic model that can be scaled up to other technologies depending their nature and level of demand. The current data shows that rental maize shelling service is feasible for the fragmented maize production of the West Gojjam zone, in the Amhara National Regional State of Ethiopia. To provide the access of a maize Shelling technology for farmer, maize shelling rental service offering private business can be established. However, such startups need the continual support of stakeholders concerned. As intended the business model shows this integration of different players to upgrade the maize production and quality of the farmers in the study area.

Acknowledgements

This research is conducted by the Appropriate Scale Mechanization Consortium under Sustainable Intensification Innovation Lab of USAID in collaboration with Kansas State University and Bahir Dar Institute of Technology.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The author received no direct funding for this research.