Liked the idea, it seems easy to replicate and implement, mobility is key for what you want to achieve and this seems to be a creative response to the problem in place. I also liked the fact that you are running a pilot project to show for impact.
If you are indeed unable to raise capital, are there other ways to finance this project? Could you charge a small fee from current members of the network? Can you change the model to accomodate for regular fertilizer or seed companies to invest? This could be great marketing for them as well.
As the project develops, I would challenge you into considering what else can be done with this network of growers. Can you offer them training in processing their crops? Could they train other people? Can they donate to more backpacks?
Would an alliance with a major grains trader help you? (for example, Bunge, Cargill, ConAgra,..)
Hi.... how funny you have my puppy's name. Now I promise to be serious. first, I love the questions.. thank you for the challenge.
We have 2 models for making money. We make money selling the inputs but we also want to finance ourselves so we can go out and identify and work with established co-ops. And it's not that we "can't" raise capital. I just want to use responsible capital. Charging a small fee won't accomplish much. Our system in comparison to most rural growing models is actually expensive. But don't forget there are large, commercially managed farms who work with out-grower schemes who love our project because we can double their production models. But once again, we must ensure these farmers are financed and have a market for the increased production. Not all commercial farmers are willing to fund their out-growers.
And I don't want regular fertilizer companies to invest. I will not violate the ethical commitment we have made to provide inputs that we think farmers in Africa should really be using. As far as seed companies, I am unwilling to sign exclusivity with anyone because of the massive seed shortages here in East Africa. I also want to be able to support plantings of indigenous food crops which have great returns and much lower input costs.
We have four layers of training including one to support semi commercial out-grower schemes to process their crops but until they are fully mechanized (even with really cool SME options), it just isn't cost effective. And honestly, a lot of these farmers don't want to deal with processing. We from the West need to learn to talk to these people instead of assuming that what we think they should want do to, they want to do!
I wouldn't mind talking to major grain traders but with the big boys you have to be able to meet quality and quantity of production and we don't have a model capable of supporting that kind of quantity yet. Unlikely they wouldn't fund us as a CSR project. And as a commercial investment, not sure they would consider something so high risk when they typically purchase from the wholesale markets.
Can you please tell us more about how your project seeks to have an impact on public policy? Also, can you tell us more about your economic value chain and how your work proves it?
1. Public policy is still a touchy one especially here in Africa. But there is already a huge shift in policy discussions towards how to work with small landholders and provide them the technology and finance they need to enhance rural value chains. I look forward to see how these discussions will impact the use of DAP/CAN fertilizers rather than newer models which weight 1/10 and cost 1/7 without damaging local ecology.
What is exciting is that AGRA will now be supporting African governments to shape home-grown agricultural policies that provide comprehensive support to smallholder farmers. It has a limited focus on 5 countries and will really support more research but that is what firms like mine need to help secure funding because we currently fund every aspect. So by default we hope to be a role model for how commercial solutions can lead by example on what practical policies & programs should be implemented instead of making ineffective funding recommendations.
2. We have done some independent financial modeling to prove our value chain using local wholesale market prices combined with expected production rates to prove economic viability and impact. This will be backed up when we plant our pilot this December, harvest & sell the crops. The biggest issue for me is not that the crops have value and will impact the lives of farmers. But we have also learned there are crops we will not advocate for planting such as cassava which will only have a 2% financial return but other crops like indigenous varieties of cow peas and kale have more than 150% financial ROI. Obviously our program is too expensive for most farmers individually so we still have to help them secure financing, just another baby step.
The real issue is that we need to ensure these farmers have markets for what they grow or we are simply going to mirror the Jeffrey Sachs model, which floods local markets and decimates rural value chains.
Commentaires
Liked the idea, it seems easy to replicate and implement, mobility is key for what you want to achieve and this seems to be a creative response to the problem in place. I also liked the fact that you are running a pilot project to show for impact.
If you are indeed unable to raise capital, are there other ways to finance this project? Could you charge a small fee from current members of the network? Can you change the model to accomodate for regular fertilizer or seed companies to invest? This could be great marketing for them as well.
As the project develops, I would challenge you into considering what else can be done with this network of growers. Can you offer them training in processing their crops? Could they train other people? Can they donate to more backpacks?
Would an alliance with a major grains trader help you? (for example, Bunge, Cargill, ConAgra,..)
Congrats on the idea!
Moises:
Hi.... how funny you have my puppy's name. Now I promise to be serious. first, I love the questions.. thank you for the challenge.
We have 2 models for making money. We make money selling the inputs but we also want to finance ourselves so we can go out and identify and work with established co-ops. And it's not that we "can't" raise capital. I just want to use responsible capital. Charging a small fee won't accomplish much. Our system in comparison to most rural growing models is actually expensive. But don't forget there are large, commercially managed farms who work with out-grower schemes who love our project because we can double their production models. But once again, we must ensure these farmers are financed and have a market for the increased production. Not all commercial farmers are willing to fund their out-growers.
And I don't want regular fertilizer companies to invest. I will not violate the ethical commitment we have made to provide inputs that we think farmers in Africa should really be using. As far as seed companies, I am unwilling to sign exclusivity with anyone because of the massive seed shortages here in East Africa. I also want to be able to support plantings of indigenous food crops which have great returns and much lower input costs.
We have four layers of training including one to support semi commercial out-grower schemes to process their crops but until they are fully mechanized (even with really cool SME options), it just isn't cost effective. And honestly, a lot of these farmers don't want to deal with processing. We from the West need to learn to talk to these people instead of assuming that what we think they should want do to, they want to do!
I wouldn't mind talking to major grain traders but with the big boys you have to be able to meet quality and quantity of production and we don't have a model capable of supporting that kind of quantity yet. Unlikely they wouldn't fund us as a CSR project. And as a commercial investment, not sure they would consider something so high risk when they typically purchase from the wholesale markets.
Hello,
Can you please tell us more about how your project seeks to have an impact on public policy? Also, can you tell us more about your economic value chain and how your work proves it?
Thank you and I look forward to your response.
Dana Frasz
Ashoka's Changemakers
Dana.. hi...
I will take each of your questions separately:
1. Public policy is still a touchy one especially here in Africa. But there is already a huge shift in policy discussions towards how to work with small landholders and provide them the technology and finance they need to enhance rural value chains. I look forward to see how these discussions will impact the use of DAP/CAN fertilizers rather than newer models which weight 1/10 and cost 1/7 without damaging local ecology.
What is exciting is that AGRA will now be supporting African governments to shape home-grown agricultural policies that provide comprehensive support to smallholder farmers. It has a limited focus on 5 countries and will really support more research but that is what firms like mine need to help secure funding because we currently fund every aspect. So by default we hope to be a role model for how commercial solutions can lead by example on what practical policies & programs should be implemented instead of making ineffective funding recommendations.
2. We have done some independent financial modeling to prove our value chain using local wholesale market prices combined with expected production rates to prove economic viability and impact. This will be backed up when we plant our pilot this December, harvest & sell the crops. The biggest issue for me is not that the crops have value and will impact the lives of farmers. But we have also learned there are crops we will not advocate for planting such as cassava which will only have a 2% financial return but other crops like indigenous varieties of cow peas and kale have more than 150% financial ROI. Obviously our program is too expensive for most farmers individually so we still have to help them secure financing, just another baby step.
The real issue is that we need to ensure these farmers have markets for what they grow or we are simply going to mirror the Jeffrey Sachs model, which floods local markets and decimates rural value chains.
Hope I was able to answer your questions.
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