In this guest blog post, Courtney Paisley, Director of Young Professionals for Agricultural Development (YPARD) shares the stories of success from young Kenyan agriculture enthusiasts who have taken part in a pilot mentoring program.
Switch your eyes and ears off, for a moment, to the on-going discourse about agriculture as an “ageing sector” that doesn’t attract the youth anymore. Instead, step into YPARD: a vibrant international network of young professionals for agricultural development, which counts thousands of members all around the world,
We are living in an era in which rapid urbanization has led to a decline in rural populations, and for the first time ever the majority of the world’s population lives in a city. The UN World Health Organization predicts that “by 2030, 6 out of every 10 people will live in a city, and by 2050, this proportion will increase to 7 out of 10 people”. This means that more young people than ever before are moving to cities and towns to find work, leaving few behind to work in rural areas. Continue reading →
In this guest post, Ivan Mbowa, co-founder of Umati Capital discusses the financing challenges agribusiness SMEs are experiencing in Kenya, and how his team has arrived at a solution.
With commercial lending to agriculture representing just one per cent of all lending in Africa, many agribusiness SMEs (small-and-medium sized enterprises) have limited options for financing or even worse, are excluded from financing entirely. One main obstacle, for example, is the onerous requirement for collateral. In Kenya, the time and cost of registering a building as loan collateral in Nairobi for an amount of KES 10 million would take a minimum of 2 months with fees around 6 per cent of the amount.
Compared to other players across the agricultural value chain, smallholder farmers face an even higher obstacle. Even though financial institutions have attempted to provide financial services, farmers’ financing needs are not well understood. This leads to poorly defined financial products based largely on the same restrictions as those put on SMEs. Given that smallholder farmers usually live in difficult-to-reach areas and lack “viable” collateral, they unfortunately must deal with informal lenders at exorbitant rates that inhibit their growth.
Umati Capital strives to revolutionize access to finance for the underbanked and unbanked in Africa through the consistent and innovative use of technology. Our motto, “Access to capital should be guided by transparent access to information”, drives our team to increase financial inclusion for the Kenyan SMEs and agribusinesses in the broad agricultural sector who need more than USD $3.6 billion in financing to grow their businesses.
With our financing, Umati Capital offers simple and transparent pricing without the hefty collateral requirements. With our technology solution, Umati Capital offers a customized web platform and mobile application to collect data, conduct data analytics, and make payments easily to suppliers in remote areas.
Although Umati Capital is relatively new to the market, we have learned that there are several things that financial institutions need to understand to access underserved communities.
First, Umati Capital recognized the need to develop strong and deep relationships with our clients. Although this need is typical of any organization targeting businesses, relationships in markets like Kenya are critical to understanding how to continuously evaluate and meet our client’s needs as well as collaborate to identify issues and define solutions. For example, one of our clients is a food processor who collects agricultural produce including raw milk and fruits from agricultural suppliers consisting mainly of farmer cooperatives and smallholder farmers. The client was facing a challenge: they were not receiving enough produce from the suppliers.
Umati Capital then visited the client’s premises and the collection centers in remote areas to better understand their operations. Upon further inspection, Umati Capital learned that producers were side-selling: selling their produce to informal buyers (brokers) that offer cash immediately but at a much reduced price to address their immediate needs such as paying for school fees. For example, brokers offered a “cash now” price at times less than half of the price offered by a formal buyer. Therefore, the supplier or farmer receives a lower price and consequently a lower income. These same brokers turn around and sell the same produce to the same buyers at a higher price thereby decreasing the buyer’s margins.
With this deep understanding of our client’s challenge, Umati Capital provided our Supply Chain Financing product enabled by our technology solution so that the client could pay their suppliers on time. With money upfront, suppliers received up to twice as much income comparatively while the buyers gained more satisfied and loyal suppliers.
Second, we realized the need to develop and consistently deliver a minimum viable product (MVP). Initially, we were presented with various, seemingly lucrative opportunities from partners and even our clients. However, these opportunities would divert our team beyond our core strengths. For example, our clients in the agricultural sector have various business needs that translate to different financing products from asset financing to working capital financing. At first, we explored various financing products to meet the many business needs of our clients. However, designing a workable, scalable model for each financing product became unwieldy.
With that, we decided to create a niche for ourselves: addressing the working capital financing challenge for our clients. Although we could not meet all the financing needs, we decided to excel in one area and completely satisfy our clients. By focusing on a MVP, we learned the power of saying no and the power of committing to a product that provided clear benefits for our clients.
This World Water Week, young Kenyan Environmental Scientist Hudson Shiraku tells Farming First how farmers in Kenya are overcoming water scarcity in a variety of ways. This article is part of our ongoing partnership with Young Professionals for Agricultural Development (YPARD)
My hometown Kakamega, is endowed with predictable rains and ever-flowing rivers supplying water all year round. Many people have therefore taken this availability of water for granted and are shocked when they hear of other people suffering for lack of it in other places. One such place is Machakos in Eastern Kenya.
Machakos is one of the areas susceptible to frequent and prolonged droughts. Lack of irrigation facilities, inadequate policies and abject poverty have all subjected residents of some areas in the region to a complete dependency on food assistance. This problem has been further exacerbated by climate variability and climate change, causing more or less precipitation in different regions and more extreme weather events. Cognizant of this challenge, the Biovision Farmer Communication Programme (FCP) has been training farmers on sustainable and effective use of water resources to make farming possible in the face of water scarcity. It promotes different technologies to make this happen. Through the field-based workers, FCP conducts farmer training and demonstrations on how to use certain technologies such as;
Mulching: Mulching uses plant remains such as leaves or grass to cover the soil between rows of cultivated crops. Mulching compliments irrigation by reducing the impact of water on the soil – reducing soil erosion and allowing longer retention of moisture. Mulch improves the condition of the soil since this mulch slowly decomposes, becoming part of the soil organic matter. Mrs. Mutisya, one of the farmers practicing mulching, says that since she started mulching, she now uses a mere quarter of the water she previously used on her kale plantation.
Drip irrigation: Another technology being promoted in the region is a watering system that delivers a slow moving supply of water at a gradual rate directly to the soil at the base of crops (drip irrigation). Also referred to as micro-irrigation or trickle irrigation, it consists of a network of pipes, tubing valves, and emitters. Bottles are also filled with water, a small hole pierced at the top and then inverted and buried at the base of a plant to allow water to seep to its roots gradually. This is an economical use of water, as there is reduced evaporation and deep drainage compared to other types of irrigation such as flood or overhead sprinklers, since water can be more precisely applied to the plant roots. Farmers have also reduced disease prevalence due to this technology.
Drip irrigation technology
Water harvesting: Besides teaching our farmers how to sustainably use their water, we also train them on water harvesting technologies, to avoid water flowing to waste when it rains. We teach farmers the importance of capturing water runoff from the road for agricultural use. Fixing gutters on iron roofs is also important for water harvesting. The benefit of water harvesting is not only to secure and increase crop production in these regions, but also to stop soil erosion and recharge aquifers tapped for irrigation. It also improves soil fertility due to deposition of humus, silt, manure and other organic matter together with harvested water.
Agroforestry: Trees also play a vital role in agriculture. Practicing agroforestry using drought resistant trees species has helped to create more diverse, productive, profitable, healthy, and sustainable land-use systems. Besides providing shade to the crops, these trees are important sources of fruits, nuts and edible oils which counter global warming and the risk of hunger in the region. Trees in agroforestry practices catch, store and release water. Trees break the force of falling rain – preventing soil erosion and allowing percolation into the ground where it is stored as groundwater.
A multi story garden
Multi-storey gardens: One of our farmers discovered that it is easier to water and maintain plants in a sack. She fills a sack with soil and then uses it as her land. It is easier to water it and accommodates more crops. This technology not only saves on water but also on other resources like fertilizer.
This and other technologies that we promote have since spread to other farmers through our farmer to farmer sharing systems. Farming has been made possible in the wake of water scarcity, and many people are adopting agriculture in the rural areas of Machakos. Thanks to these water saving technologies, farmers have increased crop production and a steady supply of agricultural products all year round. This has in turn cushioned them against the pangs of hunger.
Thanks to a steady supply of water, they have also been able to produce in surplus for the market earning some income. Generally, enabling people to farm has improved the food security situation in the region as there are more farmers than before. Trees have been incorporated in the crop production lots changing the entire picture of a dry area with scorching sun to a better environment.
There are more areas affected by water scarcity and struggling with agriculture. There is need to spread the benefits by these water saving technologies to them. We need to learn from these FCP experiences and replicate them in such areas. Having a database of all these technologies in ready to access and understand formats would help in sharing their benefits.
In this guest post, young soil scientist Steve Kibet tells Farming First how he has managed to mobilise young people to take action against soil degradation in Kenya. This blog is part of our ongoing partnership with Young Professionals for Agricultural Development (YPARD).
My grandmother would sit us by the fireside after a long day of looking after her livestock. She would tell us how she used to plant crops; there was no use of organic fertilizer, just removing vegetation cover by slashing and planting the crops using hoes. There was little disturbance to the soil structure. The cover material would protect the soil from water erosion, which is the main type of erosion in the area.. This resulted in a maize plant producing 2-3 maize cops. Her granary was full all year round and the cost of production was very low. Continue reading →
In this guest post, Nat Robinson, Chief Executive Officer of Juhudi Kilimo highlights three innovative Kenyan start-ups, from solar pumps to credit companies that are helping to change the lives of rural farmers for the better.
Joseph Omwega is a 41 year-old farmer living in the Southern Nianza region of Kenya, Kisii. He belongs to the large community of smallholder farmers in the country estimated at 7.5 million individuals. Like him, the average smallholder farmer in Kenya owns 1-5 acres of land, produces for subsistence or sales in informal markets to earn USD 2-4 per day.
Despite his limited means, Joseph was determined to develop his plantation and searched tirelessly for a lender who would not ask for a land title deed or vehicle logbook as security for a loan. In 2014, he met us, at Juhudi Kilimo. A for-profit social enterprise serving rural smallholder farmers and small-to-medium agribusinesses throughout Kenya, we provide financing to help them acquire wealth-generating assets, such as high-yield dairy cows, poultry, irrigation equipment and farm machinery. Continue reading →
An acre is about the size of a football pitch. That might seem like a lot, but if your livelihood depends on it, it is rather small. In a good year, (that is with good seed, fertilizer and rain) a farmer can yield about 3 tons of maize on one acre. You might wonder why the 500 million or so smallholder farmers worldwide, who by definition farm on less than five acres (two hectares), farm at all. But my recent trip to Bungoma, Kenya, proved that there are ways these small farmers can be supported to build more robust livelihoods. The Montpellier Panel, Growth with Resilience report, for example, makes the case that people can be resilient with support for women and youth, diversified incomes and better nutrition.
FOCUS ON RURAL WOMEN AND YOUTH
We talked to Fumona, a single mother and grandmother. Over 30 percent of rural households in Kenya are headed by women, and focusing support on rural women proves to have a positive impact on health, nutrition and education levels for the rest of the family, thus contributing to more resilient communities. Funoma has been receiving credit, inputs, training and insurance from NGO One Acre Fund. https://www.youtube.com/watch?v=9byUyq5g9nU Fumona planted more than just maize this year as an outbreak of Maize Lethal Necrosis Disease (MLND) could have destroyed her entire crop. Instead, with advice from One Acre Fund she divided her acre between finger millet, maize, beans and groundnuts. She ended up with an astounding seven bags of finger millet (about 70 kg) from planting just a quarter-acre, or in other words, more than enough to feed her family and leftovers to sell.
Farmers situated near Kisumu in a small village called Siaya such as Timothy Okoth, his wife Jennifer and their 5 children, weren’t as lucky. With just a few goats and a couple of chickens milling about the village, it was clear that these farmers have very little to fall back on if the rains are too short or their crops are damaged by pest or disease. Last year they faced severe drought and only produced 6 bags of maize that simply was not enough for the 7 of them. Diversity is key to resilience as an entire livelihood can be wiped out if you are reliant solely on one crop. When and where these options don’t exist, safety nets can catch your fall and help you to bounce back more quickly. Even though drought ravaged Timothy and Jennifer’s crops, they were relieved to be One Acre Fund members. In addition to their package of seeds and fertilizer, they also bought an insurance policy. The insurance pay-out turned out to be a very smart investment indeed; enabling them to stay on their feet in hopes of better rains to come.
SCALE UP NUTRITION
40 percent of children under five in sub-Saharan Africa are stunted. Adequate nutrition not only prevents irreversible damage to physical and mental abilities, but helps children become more resilient in the face of disease. To that end, the farmers we visited in Siaya are learning how to build a nursery for sukumu seedlings, a nutrient-rich kale variety. The sukumu will not only help to provide essential vitamins and minerals, but also a potential source of income. They hope that One Acre Fund will also help them access seeds for onions and tomatoes to eventually sell in their local markets. So can you survive on one acre or less? It’s not easy, but it is doable, especially when there is good weather. And when there’s not, one hopes that more farmers will have the access to and choose to participate in programmes like One Acre Fund. Resilience for farmers on an acre or less might still require cattle and kale, but making a wise investment never hurts either.
This blog article is part of an ongoing series on resilience being published ahead of an upcoming IFPRI conference to be held in Addis Ababa, Ethiopia in May 2014. Building resilience means helping people, communities, countries, and global institutions prevent, anticipate, prepare for, cope with, and recover from shocks, not only helping them to “bounce back” but also to become better off. This conference aims to help set priorities for building resilience, to evaluate emerging threats to resilience, and to draw lessons from humanitarian and development responses to previous shocks.