Adopting A Scalable Operating Model Tailored to African Smallholders

Posted on May 31, 2013


Originally published in Ag4Impact’s 8 Views for the G8 report, and co-authored with Andrew Youn, executive director of One Acre Fund:

Sub-Saharan Africa is one of the world’s six major crop regions, and it is the only one that has the potential for significant yield improvements. Farmers in sub-Saharan Africa use 15 times less fertilizer than every other region of the world (FAO) and plant less than 20% of arable land with improved seed varieties (Brookings, 2011).

Within Africa, the majority of farmers are smallholders with less than five hectares of land. They present a tremendous opportunity for increased food production. But for any productivity gains to be sustainable, they must be driven by the private sector.

One Acre Fund is an agriculture organization that has developed a private-sector-style operating model enabling African smallholder farmers to double their income per planted acre. We currently serve over 130,000 farmers in Kenya, Rwanda, and Burundi. Our operating model is simple:

Distribution of seed and fertilizer, purchasing in bulk from private-sector actors and distributing within two kilometers of where our clients live.

Financing, providing up-front credit for seed and fertilizer so that farmers can repay in cash over the course of the agriculture season, with final repayment a few weeks after harvest.

Training, via a network of over 1,000 full- time field staff who train farmers on best agriculture practices in the fields where they live and work. The trainings are interactive and easy to adopt.

Market facilitation, offering extensive training on post-harvest handling and storage, so that farmers can store their surplus and sell when market prices are highest.

One Acre Fund primarily distributes seed and fertilizer, but we also aim to innovate and develop new products and services to deliver to our customers. In 2010, we started pairing weather- indexed crop insurance with all our loans in Kenya. In 2011, we started distributing solar lights on credit. Both products have now expanded to our Rwanda operation.

When smallholder farmers have access to technologies that are tailored to their needs, within walking distance of their homes, they can double their productivity per acre.

“One Acre Fund makes a tremendous impact on the value for improved seed technologies by disseminating good agricultural practices among Kenya’s smallholder farmers.” Saleem Esmail, head of Western Seed

page6image16368

PROFILE | BETTY SANGURA, SMALLHOLDER MAIZE FARMER IN WESTERN KENYA

Betty Sangura sits in the modest living room of her home in Mukwa, western Kenya, propping her infant son Isaac on her lap. Isaac is only seven months old, but he looks as if he’s approaching 18 months. Every part of his body that is visible is chubby.

“If I were not a One Acre Fund farmer, my life could be very, very poor because I wouldn’t have food
in my home,” she says. “Before One Acre Fund, I could not purchase food or fertilizer.” During that time, Betty would plant two acres of land and only produce five bags (1/3 ton) of maize. That was not enough to feed her family, so they would experience a “hunger season” for several months of the year.

In 2008, Betty joined One Acre Fund as a farmer group leader and enrolled half an acre of land. She harvested eight bags of maize, and since that year, she has steadily increased the amount of land she plants with One Acre Fund. Her harvests have increased accordingly, and she has not had a single hunger season.

Now, Betty can afford to buy beans, chapatti (Indian flatbread), tea, and sweet potatoes for her family
of seven, as well as to pay school fees for all her children. Betty holds up Isaac, as if to illustrate that his plumpness is proof of her family’s life improvement.

page6image31624

CURRENT CHALLENGES IN LINKING SMALLHOLDER FARMERS TO VALUE CHAINS

One Acre Fund designed its operating model to address the biggest obstacle that smallholder farmers face: access. Farmers need access to high- quality seed and fertilizer at a place close to their farms; seed and fertilizer companies struggle to distribute their inputs to extremely rural farmers in a cost-effective way. Though fertilizer was invented a century ago, and is responsible for nearly half of global yield gains, it is still virtually unknown to African smallholder farmers.

A secondary obstacle that the private sector faces is right-sizing. Tools and technologies to increase agriculture productivity already exist. But many of them are not designed for a smallholder farmer. For instance, farmers need access to credit to purchase the technologies that will make their land more productive. Yet most commercial banks do not offer loans that are tailored to agricultural seasons. Farmers need storage materials that are practical and low-cost; large warehouses are expensive to reach and not practical for storing small surpluses.

“Capacity building along value chains will continue to be a challenge and assistance from our private sector partners such as One Acre Fund is welcome. We are beginning to see an increase in agricultural credit and small scale farmers are taking advantage of increased access to certified seed and fertilizers to enhance food security.” Dr. Wilson Songa, agriculture secretary, Ministry of Agriculture in Kenya

IN THE POST-2015 AGENDA, G8 LEADERS SHOULD:

• Prioritize smallholder-farmer-led agricultural development as a viable means of helping feed the world.

• Fund agriculture organizations that have a revenue model, as these are focused on developing products and services that their clients—smallholder farmers—want. Farmers are the best people to evaluate what they need to increase their land’s productivity. Organizations with a revenue model are also more likely to be sustainable.

• Create a fund that invests in the most innovative methods of distributing improved seed and fertilizer to smallholder farmers. Improved seed and fertilizer are necessary to jump- start yields increases in Africa. We must invest in innovative ways to distribute these basic technologies to farmers.

Advertisements
Posted in: One Acre Fund