Commercial Drivers of Inclusive Business
The commercial drivers for this business originate from the increase in value added to a small-holder farmer’s income. Soil testing enables the farmer to determine nutrient content, composition and other characteristics, including contaminants, making it possible to measure fertility and indicate deficiencies that need to be remedied. Farmers can then add the right inputs resulting in higher yields and quality of their produce. According to the Soil Resource Development Institute (SRDI), accurate soil testing increases productivity by 20-30%, reduces the cost of fertilizers by 25-30%, and enables soils to remain fertile for longer. Farmers purchasing soil tests from micro-entrepreneurs stand to increase their income, creating increased demand for low-cost soil-tests, this demand is met by the micro-entrepreneur who in turn sustains the core business activity of ERAS.
ERAS Main commercial opportunities
The main commercial opportunity is the potential to establish soil testing businesses in the low margin, high volume market for low-cost soil testing. Commercial soil testers are yet to reach the approximately 6.5 million small-holder farmers in Bangladesh, and with the development of low-cost reagents by ERAS, these potential customers are now within reach of the market. The new reagents and testing methods will be marketed under the brand: ‘Phosholer Pran’ (Heart of Crops), a term which will be understood widely in the country.
There are a number of development impacts expected through the successful implementation of this ERAS project. These include:
• The development of sustainable supply chains for the provision of low-cost soil testing facilities to small-holder farmers;
• Increased awareness of farmers about the need and benefits of using soil testing;
• Reduced fertilizer use by 20-30% per farmer for each growing season (with corresponding reduction in the emission of green house gases (GHG);
• Higher quality and yield of farmers’ produce;
• Increased income of farmers by 20-30% though higher yields, quality of produce and reduction in fertilizer use; and,
Increased income of farmer groups or small entrepreneur generated through the provision of sustainable soil testing services.
Ambition in 2014:
It is envisaged that with the right support it is possible to be ambitious with this project. In the medium to long term will be possible to substantially increase the number of micro-laboratories operating at the local level; to establish fully functioning supply chains (with intermediary soil collectors) in two geographic areas of Bangladesh (North and South); to cover operational costs through revenue generation. In summary the medium to long term ambitions are:
• Establish and support the implementation of 10 new laboratories at the village level in 2014
• Develop private sector supply chains (between ERAS and the micro-entrepreneur and between the micro-entrepreneur and the farmer);
• Support the testing of around 30,000 individual soil tests at the village level in 2014; and,
• Establish a robust business plan and meet the majority of operational costs.