Low agricultural productivity in sub-Saharan Africa cannot be explained by farmer behaviour alone, as major supply-side failures in input markets mean improved seeds and fertilisers often fail to reach farmers at the right time, price, or scale. Understanding the risks, incentives, and constraints faced by agro-dealers is essential if technological advances are to translate into sustained productivity gains.
Editor's note: This episode of VoxDevTalks is available on Spotify and Apple Podcasts.
In this episode of VoxDevTalks, Hope Michelson discusses a critical but often overlooked piece of the agricultural productivity puzzle in sub-Saharan Africa: agricultural input markets. While decades of research and policy have focused on farmers’ behaviour and demand-side constraints, Michelson and her co-authors argue that the supply side – the markets and firms that provide seeds, fertilisers and pesticides – deserves far more attention.
The episode centres on a new review article, which synthesises existing research and highlights major gaps in knowledge. The conversation challenges the assumption that improved agricultural technologies will naturally reach farmers once demand is stimulated, and instead shows how weaknesses in supply chains, logistics, finance, and trust can severely limit adoption and impact.
“Better seeds and fertilisers and pesticides exist, and this adoption challenge has been a persistent question in development economics and in policy”.
Yet these technologies often fail to appear “at the right time, the right price”.
Moving beyond the demand-side ‘streetlight effect’
A central theme of the discussion is what Michelson and her co-authors describe as a “streetlight effect” in development research. Much of what we know about low adoption of agricultural inputs comes from household surveys, which naturally emphasise farmer behaviour, preferences and constraints.
“Explanations for low agricultural productivity tend to be… biased towards what’s easiest to observe and measure, and that is to the neglect of other potentially important explanations and mechanisms”.
Because researchers are so well equipped to analyse household-level data, they may unintentionally overlook upstream constraints in markets and supply chains. This focus can lead to an over-attribution of low adoption to farmers’ choices, while underestimating whether inputs are actually available, affordable and responsive to demand.
The review argues that this bias is increasingly problematic as agricultural markets in sub-Saharan Africa have liberalised and become more complex. Supply chains now involve private firms, regional distributors and local retailers, yet these actors remain “relatively invisible” in much of the empirical literature.
When supply chains fail: Lessons from Rwanda and Kenya
Michelson illustrates the importance of supply-side constraints with concrete examples from recent research. One comes from a randomised controlled trial in Rwanda’s coffee sector, where training programmes successfully increased demand for fertiliser among treated farmers. However, this demand shock exposed weaknesses in the local input market.
“The agro-input market failed to respond to the increased demand, and that created stock-outs and limited availability”.
As a result, even farmers who had previously been using fertiliser could no longer access it. This created “negative spillovers on untreated farmers”, not because of behavioural responses, but because the supply system could not scale up quickly enough.
A second example comes from Michelson’s own work with the International Maize and Wheat Improvement Center (CIMMYT) in Kenya. Farmers were given the opportunity to trial new hybrid maize seeds that more than doubled yields. Despite strong demand and visible benefits, local agro-dealers failed to stock the new varieties in subsequent seasons.
“The farmers told us that the yield effects were great, but they couldn’t get the seed in the agri dealer”.
Instead, many farmers resorted to saving and replanting hybrid seed, leading to disappointing yields and frustration. The episode highlights how even well-designed interventions can have muted long-term effects if supply-side responses are weak.
Understanding agro-dealers as last-mile intermediaries
A key contribution of the episode is its detailed discussion of agro-dealers, described as “the last mile intermediaries in ag input supply chains”. These firms translate global and regional supplies of inputs into products that farmers can actually access locally, while navigating regulation, logistics, finance, and information provision.
Agro-dealers operate in highly heterogeneous environments. Some are small, seasonal shops with limited inventories; others are sophisticated businesses sourcing directly from ports and managing complex logistics. Many provide informal credit and act as de facto extension agents in areas where public services are weak.
Michelson stresses that this is “not just retailing inputs”. Agro-dealers manage substantial risks, including uncertain demand, limited insurance, and tight credit constraints. Timing is particularly critical: once rains arrive, “everybody needs their seed right away”, and missing that narrow window can mean losing an entire season’s sales.
Seasonality, risk, and the challenge of stocking innovation
The episode explores how seasonality and risk affect suppliers as much as farmers. Demand for inputs is highly concentrated in short periods, making inventory decisions risky. Overstocking can leave dealers with unsellable products, while understocking means lost sales and dissatisfied customers.
Michelson also highlights covariate risk: when an entire region experiences drought or crop failure, agro-dealers face a collective drop in demand the following season. These shocks can drive high entry and exit rates among firms and discourage experimentation with new products.
This has important implications for technological change.
“Why stock a new seed when everybody comes into your shop asking for something that’s 15 years old?”
The episode suggests that policies and research focusing exclusively on farmer demand may miss the fact that agro-dealers face weak incentives to take risks on innovative inputs.
Trust, data gaps, and why input markets matter for the future
Trust and reputation emerge as another major challenge. Many agricultural inputs are experience or credence goods, meaning quality is difficult to verify, especially in the presence of weather variability. Farmers often suspect fertiliser or seed quality, while agro-dealers themselves may distrust their suppliers.
“We’ve done more than 1,000 samples of urea tested in labs now and haven’t found a single issue”.
These perceptions add costs to supply chains and complicate efforts to build stable, reputable markets.
“The stakes for getting markets right are enormously high. When it comes to input markets, we have blinders on”.
The episode concludes by stressing the urgent need for better data on sellers and supply chains. Creating sampling frames, surveying firms and linking seller data to farmer outcomes are all challenging but essential steps. New opportunities may come from private-sector transaction data and novel partnerships.
Recent research documents declining agricultural yields in sub-Saharan Africa, even as population growth accelerates.
Understanding and fixing input markets is critical not only for productivity, but for poverty reduction, food security and long-term development.
Reference
Dillon, A, T J Lybbert, H Michelson, and J Rudder (2025), “Agricultural input markets in sub-Saharan Africa: Theory and evidence from the (underappreciated) supply side,” Annual Review of Resource Economics, 17: 423–443.