Sociedade de Beneficiamento de Sementes (SBS) is a seed processing company set up in the Zambezia region of Mozambique with the aim of producing low cost, high quality seeds for the local market. With higher quality seed inputs, farmers will be able to increase their yield and quality of grain. The company was set up as a joint venture between Cooperativa dos Produtores da Alta Zambézia (COPAZA), a local farmer cooperative, and a local investor. The business model is that COPAZA members produce seed, the seed is then sorted, cleaned and packaged by SBS, and then COPAZA members act as sales representatives for SBS, selling seeds to their network of smallholder farmers.
One member, Mr. Joia Muchenguete stands apart. TechnoServe has worked with Mr. Muchenguete for the last 7 seasons. When he started, he had only 5 hectares of land. Over the years, through technical assistance and support in purchasing machines such as tractors, plows and seeders, he now has 55 hectares of his own farmland plus he also rents 20 hectares of land from others to cultivate. He grows a diversity of crops, including soy, corn, pigeon pea and onions. Additionally, he has dedicated 5.4 hectares of his land this season to growing high quality soy seed.
Last year, Mr. Muchenguete was one of the top seed sellers of COPAZA. He sold 10,000kg to 65 clients. These clients were all farmers he knows from the surrounding area. Given his confidence in his clients, he sold the seed on credit. They took one bag of 50kg of seed and at the end of the season, they pay him with 2 bags of 50kg of grain. This allows farmers without available cash to access high quality seeds and provides Mr. Muchenguete with the grain he needs to for his trading business. This year, he will receive 20,000kg of grain in payment.
Part of the reason he is so successful is that he pairs the seed sales with additional services. Mr. Muchenguete previously purchased a tractor, harrow, plow, seeder and trailer to allow to transport the equipment. In addition to selling seed, he rents out his machines to the farmers. Last year, 30 of the farmers rented his machines, resulting in 59 hectares of land under improved practices. The seed sales and machine rentals provide valuable revenue streams, but also ensure high quality grain production for the small farmers, providing them with additional revenue. It is a win-win scenario.
Mr. Muchenguete sees demand for both seed and services increasing. His neighbors have been increasing their land areas, some of them reaching areas as large as 15 hectares each. While he plans to continue working with the same 65 farmers next year, he estimates that demand for seed will be between 15,000-20,000 due to their growth in area. He also recognizes that demand for mechanized services will increase and plans to start providing services earlier in the year to help meet this demand.
Through his increasing agricultural revenues, last year Mr. Muchenguete was able to buy a car and construct a grain warehouse. After this season, he plane to buy a small mill, further diversifying his business.