Criteria for optimal selection of PPPs, fertilizers, and seeds. How to buy the best at the lowest price?

Getting ready for the sowing campaign is a significant stage of crop production. After all, a good harvest requires high-quality seeds, fertilizers, and effective PPPs. Usually, farmers stock up on these resources in advance and enter the sowing season 70-80% ready. However, the war changed these traditions.

The high cost of the means of production and the shortage of loan financing forced farmers to look for ways to optimize their business. Some try to cut costs by replacing own-brand products with ‘generic’ ones. Others experiment with fertilizer rates and plant protection systems. In any case, such savings only ‘play into the hands’ of fraudsters who sell a scarce commodity at an attractive price. Not to fall into the ‘quality-and-cheap’ trap, you need to understand:

• Where is the best place to buy fertilizers and seeds?
• What criteria should you apply when choosing the right product?
• What new financing models, promotions, and attractive offers are currently available in the market?

Market participants: who is who

Optimizing crop production involves selecting the best seeds, fertilizers, and PPPs, but the high cost of these resources and a lack of financing has led farmers to look for ways to cut costs. 

However, this may lead to fraudsters selling subpar products at lower prices. To avoid this, it is important to know where to buy high-quality products, how to select the right criteria, and what financing models and offers are available. In the Ukrainian market, there are various players, including domestic and foreign producers, distributors, and farmers. 

A survey conducted by the APK-Inform information agency found that while more than half among 120 of agricultural enterprises order from distributors, difficulties with communication, logistics, and payment methods prevent direct purchasing from producers. At the same time, the respondents emphasize that they would love to buy seeds directly from the producer, but difficulties with communication, logistics, and payment methods hinder such cooperation.

Bear in mind that…

When choosing seeds, fertilizers, and PPPs, farmers are guided by the following criteria:

• Price
• Brand
• Seed grade or list of ingredients (active substances)
• Vendor’s reputation 
• Availability of flexible payment methods
• Cost of logistics
• Success rate guarantees 
• Contract transparency 

At that, the following ratio is considered optimal:

commodity cost = relevant result.

When choosing seeds, fertilizers, and PPPs, farmers consider several criteria, including price, brand, seed grade or list of ingredients, vendor’s reputation, availability of flexible payment methods, cost of logistics, success rate guarantees, and contract transparency. An optimal ratio for commodity cost to relevant result is recommended. To ensure efficacy in real-life conditions, producers and vendors often hold Field Days and crop demonstrations for farmers planning to purchase seeds or PPPs.

Large agricultural enterprises with spare funds in their turnover can afford to buy in bulk directly from producers and often receive favorable terms of cooperation, discounts, and promotions. 

However, smallholders who need more resources and the ability to work now with producers must spend time searching for optimal delivery and payment options. Financial instruments like deferred payment, loans, and barter are crucial for aiding small and medium-sized agricultural enterprises, particularly in the current economic climate affected by the ongoing war. This is supported by the diagram below.

Survive and make a profit: agro sphere in new realities

The ongoing war in Ukraine has significantly impacted the state and balance of forces in the market of agricultural resources. As a result, domestic farmers are facing a range of new challenges. The Seed Association of Ukraine has reported that farmers experienced a shortage of critical resources in anticipation of the 2022 sowing season. Nitrogen fertilizers were lacking on 1.2 million hectares, complex fertilizers on 897 thousand hectares, PPPs on 1.1 million hectares, and seeds on 802 thousand hectares.

According to the summary report drawn up by the analysts of the Latifundist Media agro media holding, in 2022, farmers were provided with the basic means of production as follows:

• Factors that complicate the situation in the market of agricultural resources
• Difficulties with the delivery and customs clearance of seeds, fertilizers, and PPPs purchased abroad.
• Growing prices.
• Major vendors of nitrogen and potash fertilizers produced in Belarus and Russia left the domestic market.
• Suspension of production by domestic suppliers of fertilizers and PPPs located in occupied and de-occupied territories.
• Increase in cost and complexity of logistics.
• Non-transparent pricing by domestic vendors.
• Farmers lack financing and working capital.
• Stockout of seeds, fertilizers, and PPPs in warehouses of agricultural enterprises.
• Fraudsters offer substandard and counterfeit products.

«In Ukraine, the reserves of fertilizers are actually exhausted. And those imported from abroad are bought straight off, as soon as delivered. That is why the farmer loses three times: he waits a long time, buys expensively, and gets insufficient quantities. Because the 2023 sowing campaign is likely to be carried out in the situation of higher risks and skyrocketing prices, it will be difficult for agricultural producers to cope without state support…», — Ivan Chaykivskyi, secretary to the VRU Committee on Agrarian and Land Policy.

So, nowadays, Ukrainian farmers have to work with limited and expensive resources. It means that only the fastest — those who will be the first to find out about an advantageous offer made and purchase the high-quality means of production at an affordable price — will win the battle for business profitability.

Buy fertilizers and seeds at the best price

Therefore, we suggest using the Spilca trading platform, which will be helpful to farmers in today’s demanding conditions. In the app, you can find reliable partnerships: suppliers of resources, services and financing, and sell manufactured products.

In addition, this online platform informs customers about promotions, discounts, attractive financial solutions, credit and grant programs, etc. Thus, users can quickly discover the most exciting offers and buy the necessary products at the best price.