Photo: One Acre Fund
Business Solutions for Smallholder Farmers in Africa
At last year’s G8 summit President Obama highlighted the need to invest in African agriculture, announcing a new initiative aimed at driving sustainable agricultural productivity. Smallholder farmers in sub-Saharan Africa are the key to that initiative’s success. There are around 33 million smallholder farmers in the region, representing 80% of all farms and producing up to 90% of all agricultural output on the continent.
In anticipation of this year’s G8 meeting in the UK, we’d like to call attention to several NGOs that have adopted a business approach to successfully reach smallholder farmers and increase their productivity.
Farm Africa, for instance, has developed a private-sector model to help livestock farmers in Kenya, where experienced stockists are lacking and counterfeit products are prevalent. Their model helps farmers access good vaccines and other products, as well as trusted veterinary advice.
The company Farm Africa started is entitled Sidai, meaning ‘good’ in the Maasai language. Sidai is a network of franchised Livestock Care Centres owned and run by qualified veterinarians, livestock technicians and other livestock professionals. Each franchise provides farmers with high quality inputs and enables farmers to access advice to ensure their livestock, and income, can remain healthy. Thirty-two franchises already exist, reaching 60,000 households and aiming to reach those in more remote or generally poorer areas.
Similarly, One Acre Fund has also adopted a private sector-style model to help farmers increase their yields of staple food crops. Operating in Kenya, Rwanda and Burundi, One Acre Fund serves 130,000 smallholder farmers. It purchases seed and fertiliser at wholesale prices and then distributes those inputs within two-kilometres of where their farmer clients live. One Acre Fund then provides up-front credit for the inputs so that farmers can repay the loans (in cash) once their harvests have been collected, and also offers farmers advice and training through a network of full-time local field staff.
Betty Sangura, a smallholder farmer in western Kenya and client of One Acre Fund, has seen significant improvements to her life. Without One Acre Fund, Betty stated that her life "could be very, very poor because I wouldn't have food in my home." Betty can now afford to feed her family of seven as well as sending everyone to school.
Lastly, SNV has been working with agro-dealers in Zimbabwe via their Rural Agro-dealers Restocking Programme (RARP) to insure the financial risks of linking agro-dealers to wholesalers to receive agricultural inputs. This, in turn, helps these inputs to reach smallholders in remote regions where wholesalers were less likely to sell their products themselves. An estimated 113,800 farmers have accessed inputs in this way and have also been trained in business management.
One such fertiliser supplier involved in the programme, Nico Orgo Fertilisers Inc, praised SNV's RARP scheme: "We have learned a great lot in the past one year, working with agro-dealers has been a wonderful experience. They have enabled us to increase our market penetration by almost 60% since we started working with them. Our aim is to have an agro-dealer in every ward."
Farm Africa, One Acre Fund, and SNV are all profiled in two new reports from Agriculture for Impact that offer a series of concrete recommendations and examples of how more inclusive and connected markets can benefit smallholder farmers in Africa.
The first report, Leaping and Learning: Linking Smallholders to Markets – a report commissioned by Agriculture for Impact and produced by the Overseas Development Institute – provides directions for policymakers, donors, investors and development practitioners on the most efficient ways they can support smallholders in Africa.
The second report, 8 Views for the G8: Business Solutions for African Smallholder Farm..., compiles the collective experiences of eight leading agricultural development organisations on how they are implementing these recommendations on the ground, and what the future priorities for action should be.
These reports highlight the key challenges that must be overcome for smallholders to reach their potential, including:
A Variety of Solutions Needed
Though organisations like Farm Africa, One Acre Fund and SNV show that it’s possible to overcome the challenges above, it is important to take note of a few caveats when designing market-based interventions for smallholders. The Leaping and Learning report highlights three such considerations:
Collaboration and Innovation is Key
Collaboration across sectors will be necessary to overcome the major barriers to helping smallholder farmers achieve their potential. To create an enabling investment climate, we need:
All these sectors need to collaborate to ensure that markets work more effectively for everyone – including the most vulnerable smallholder farmers.