This post was written by Claire Kelly, Whole Planet Foundation’s Regional Program Manager for Africa and the Middle East.
So you’re participating in our Courage of One Challenge with The Hunger Games: Mockingjay – Part I and you want to learn more about Sub-Saharan Africa?
Topic: Oxymoron of the hungry farmer
According to the Food and Agriculture Organization of the UN, “Overall, the highest incidence of workers living with their families below the poverty line is associated with employment in agriculture” (2). And according to the UN Food and Agriculture Organization, one quarter of the world’s hungry people live in Sub-Saharan Africa (4).
When smallholder farmers are unable to produce enough food to feed their family throughout the year, it leads to the “wanjala” or hunger season phenomenon with Roger Thurow details in his book The Last Hunger Season. The United Nations has declared 2014 to be the International Year of Family Farming so it is fitting to examine this topic in more detail.
Problem: Sub-Saharan African farmers have difficulty producing enough food
The oxymoron of the hungry farmer is a multi-faceted problem. A Michigan State University study entitled “Principal Challenges Confronting Smallholder Agriculture in Sub-Saharan Africa” explores many challenges facing smallholder farmers in Sub-Saharan Africa, I’ve summarized some key findings below but the article gives much more detail.
- Large increase in population compared to marginal increase in arable land.
- Stagnant Food Crop Productivity caused by low input use such as fertilizer and irrigation.
- Most rural households purchase more maize than they produce
- Changing urban consumption patterns not met by Smallholder farmers: “Of the $3.7 billion of cereals imported annually by African countries, only 5% of it is produced by African farmers…This highlights the importance of developing more effective systems for linking smallholder farmers to urban demand centers” (3).
Solution: One Acre Fund’s integrated farm package
One Acre Fund offers clients a four part system to double their crop yield in one season.
- Farm Inputs on credit: Seed and fertilizer are provided on credit to make them affordable
- Delivery: Farm inputs are delivered in timely fashion within walking distance of the remote areas where smallholder farmers live
- Training: Field Officers train farmers on how to best use resources to maximize productivity
- Harvest Sales: Help farmers store harvest in such a way that it does not fall victim to pests or rotting, and then linking farmers with local traders offering best prices for surpluses.
At the end of 2013, One Acre Fund (OAF) had served 130,400 farm families, cultivating 87,337 acres and increasing annual farm family income by an average of $139/year. In the last few years, OAF has offered other products such as solar lamps, water purifiers and tree seeds which also increase farmer income over time by spending less on kerosene, batteries, charging, health expenses etc. (1)
Other partners of WPF have also developed their own agriculture loan products. For example – the Premiere Agence Microfinance (PAMF), a network of microfinance institutions operated by Aga Khan works in collaboration with the Aga Khan Development Network and Aga Khan Foundation to integrate agriculture trainings into their microfinance activities. Loan terms are also conducive to the farmer cash flows.
WPF also partners with BRAC in Sierra Leone, Uganda and Tanzania. The organization is involved with several initiatives including livestock, grace periods and selling inputs through micro-franchises. WPF’s partner in Ghana – Grameen Ghana has focused on food security education and tried various agriculture productions loans such as grain banking and shea production. MicroLoan Foundation (MLF) our Malawi partner also recently piloted a new agriculture product where they provided inputs to farmers.
Tie Back to Whole Planet Foundation Strategy: Agriculture in Whole Planet Foundation Portfolio & Support for One Acre Fund across East Africa
Usually Whole Planet Foundation funds a partner’s basic, entry level, collateral-free loan product. In many cases, the clients of our partners actually use these loans for agriculture even if no specific agriculture product exists. For example, Whole Planet Foundation partners such as CAURIE in Senegal, OCSSCO in Ethiopia and PAMF in Cote d’Ivoire allow clients to repay the principal of their loan at the end of the term. While clients at these institutions are not exclusively farmers, many are involved in agriculture as these terms better match the cash flow of their enterprise – farming.
OAF is the only partner of Whole Planet Foundation to exclusively offer agriculture related loan product. However, as these loans are collateral-free, group based loans of small size, OAF’s methodology is aligned with Whole Planet Foundation’s mission. The OAF/WPF partnership began with an agreement with OAF Rwanda in October 2010 with grant funding of $500K to add 20,000 clients over 3 years. In September 2011, WPF made an agreement with OAF Kenya with grant funding of $500K to add 14,500 clients over 3 years. Later that year, WPF was able to fund OAF Burundi operations in their first year post-pilot with $303k to add 10,000 new farmers over three years. Currently, second generation projects are underway in both Rwanda and Burundi for an additional $725,970 funding /13,000 clients and $719,146 funding/ 14,500 clients, respectively. The newest addition to the WPF portfolio is the OAF Tanzania program which will add 2,229 clients with $300K.
Each OAF country program is different in terms of growing seasons, crops, cultural context and relations with respective governments. This causes items such as average loan sizes and policies to differ across country programs and WPF has tried to understand each country context closely through annual site visits and close communication. WPF funds for loan capital have particular value to support OAF expansion in new countries.
When possible, WPF has worked to connect partners with each other and external organizations in the agriculture sector in order to encourage best practices and products for clients.