Commercialization prospects of low cost drip irrigation systems in Central America Print E-mail

A Research Project to Define a Maketing Plan for the Introduction of Low Cost Drip Irrigation Systems for Small Farmers in Nicaragua

by Nadja Kraenzlin

Abstract

This summary presents the results of her research project in Nicaragua. Over a period of two months, I interviewed 32 people from different parts of the supply and value chain. The project aims at defining a marketing plan for the introduction of low cost drip irrigation systems for small farmers in Nicaragua and its neighbouring countries.

The definition of a marketing plan for the introduction of low cost drip irrigation systems in Central America poses several challenges. The report focuses on three main challenging factors: supply chain, financial aid and promotion. In order to show how these challenges can be turned into opportunities, I would like to summarize some of the most interesting facts drawn from interviews with farmers, retailers and representatives of financial institutions. Due to these peoples’ immediate contact with daily problems and expectations, the following summary contains important information about how to deal with the three challenging factors.

1. Farmers: Farmers are very satisfied with the system and do not encounter any problems using it. Regarding promotion, they find it very important that farmers can have a look at the irrigation system. Therefore, demos need to be installed. In their spare time, the farmers like to stay with their family and friends, to do sports and go to church. These locations seem to be good places to do product marketing.

2. Retailers: Other retailers’ drip irrigation systems are more expensive than the IDE system. The cheapest one costs at least 900 dollars. It is important to keep in mind that up to now, it has not been customary to sell irrigation systems to small farmers. If retailers sell those systems to small farmers, they do so with the help of financial institutions. All of the retailers have the same promotion strategy: They work together with cooperatives and NGOs, as it is too expensive and very difficult for them to reach small farmers through their own promotion. However, retailers are very interested in the IDE system and some of them would like to sell the system in their shops, too.

3. Financial Institutions: Banks have been changing their strategy for some time so that small farmers are now part of their target group. Five institutions are interested in working together with IDE to help farmers to get credit. In order to get credit, farmers need to prove that they are the owners of their land, that they have some experience as a farmer and a moral solvency. Usually, farmers pay the credit back as soon as they have got money, for example after the harvest.

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