(Click to enlarge)

For decades, small farmers in Latin America have faced a grim outlook: low productivity and inefficiency. That was the background for the decision of Amanco, a subsidiary of the conglomerate GrupoNueva, to develop a hybrid value chain model for serving low-income markets. As part of that plan, the company shifted from selling water conveyance supplies to offering integrated irrigation solutions, priced per hectare of land.

The solutions included services to increase farm productivity and to maximize water efficiency. The company partnered with unconventional civil society organizations—closer to low-income clients—and with others providing microcredit and access to alternative channels for commercialization. Better irrigation methods raised productivity for Amanco customers up to 22%, cut labour costs 33% and brought significant water efficiencies.

Amanco developed partnerships with:

• Ashoka, who were able to promote small companies as viable and legitimate.

• RASA, an NGO, who acted as a distributor and promoter for the company. Also providing technical assistance, financing and commercialisation channels. RASA also had an advantage of community ‘closeness’, knowledge and familiarity with the region, and trust among its network of contacts.

• Walmart, who was able to promote Amanco’s products with the aim to increase the farmers profit margins.