By far most people living on rural land in Kenya and Tanzania are dependent for food and income on what their small tract of land can produce. Farmers cultivate small amounts of maize or vegetables which is for the most part meant for their own consumption. Any surplus is sold in order to generate some income. When there is a disappointing harvest, the problems can be traumatic for the whole family.
At the end of every season farmers take seeds from old plants to use for the next season’s crop. This method is of course free, but it does mean the quality and yield of the harvest keeps being poor. The work is done manually and there is very little knowledge on their plot of land, the influence of climate and modern agricultural practice. The next problem is encountered when the farmer wants to sell his harvest. For smallholder farmers it is almost impossible to access a professional market. In most cases they sell their crop at local, weekly open air markets. The farmers receive low prices, also because of the low quality of their produce. This results in (too) little gain for all the farmer’s hard work to be able to take care of their families.
ICS is owner of three social businesses that supports farmers to improve their crops and income: Agrics, Alizetics and Geodatics. Read all about our three businesses here below.
Agrics offers smallholder farmers the opportunity to buy certified seeds and fertilizer by paying in installments. In addition to these core products Agrics also offers chickens, solar lamps, storage facilities and tractor rental. Farmers are given around six months to pay for these costs. Since the farmers form a collective, any payment problems that may arise can be taken up within the group.
Farmers who have ordered agricultural products from Agrics are also offered training programs to further improve their profits from the land in the future. Farmers learn when and how it is best to sow and harvest and they learn how best to use the Agrics products they’ve ordered.
In the video below we show you how Agrics works:
In 2012, Agrics started with a mere 1,000 smallholder clients in Western Kenya and has since grown to almost 32,000 halfway 2016, with a total turnover of USD 1.3 million in Western Kenya and Northern Tanzania. Recently, Agrics has attracted financing from impact investors like Achmea Foundation, Rabobank Foundation, Common Fund for Commodities (CFC) and Africa Enterprise Challenge Fund (AECF) to accommodate further growth towards 108,000 farmers in 2018, with a turnover of USD 7.9 million and EBIT of USD 1.0 million. Agrics plans to expand into Uganda in 2016/2017.
Our social enterprise Alizetics buys sunflower oilseeds from smallholder farmers in Tanzania and sells the seeds in bulk to oil processing companies in the Tanzanian domestic market. Alizetics is the first oilseed trading company in Tanzania that focuses on smallholders and provides services for this group, including training, market price information, and logistics.
Most Tanzanians cook their food in palm oil which is imported from Asia. Cooking foods in sunflower oil is healthier, more environmentally friendly and it can be cultivated locally. Furthermore, this crop offers extra potential now that cotton, a crop that was popular up until recently, is no longer yielding much profit. Sunflower seeds can well fill the gap, also because it requires little work.
In its first year of operation, 2014, Alizetics traded 400,000 kg of sunflower oilseed with a revenue of USD 185,000 and an 18% gross margin. In 2015, Alizetics was able to increase its trading volume and revenue to 700,000 kg and USD 300,000 respectively, as well as improve its gross margin to 32%. Through 2018, Alizetics will scale-up towards a trading volume of 5 million kg and net profits of USD 150,000, serving 16,000 smallholders.
Geodatics is our social business start-up that integrates geodata, including satellite data, and farmer profiles into tailor made and individual advice for smallholder farmers. Geodatics aims to provide smallholders with science based and geo-referenced advisory services for agronomic, market related as well as farm management subjects.
Geodatics advisory services provide an important added value to smallholders to further increase their yield and income. It will provide information and advice on e.g. the amount, type and composition of fertilizer to be applied, timing of seeding, fertilizer application and harvesting, livestock, household waste and crop residue management, actual market information like prices and buyers and weather developments. Receiving tailored information means that farmers no longer work with inexact, general information but with farm specific advice that may differ significantly from the generic advice from existing information sources.
Geodatics is an initiative of ICS and Agrics Ltd together with the Agricultural University of Wageningen and the commercial partners Biomass Research (Netherlands) and Manobi (Senegal). Geodatics received USD 1.6 million funding from the Netherlands Space Office in order to start service delivery by the end of 2015.
For extensive information on Geodatics, visit the website: www.geodatics.net
or download the Geodatics flyer.
Last weekend Koen Hefin Stanton, the new managing director of Alizetics, left for Tanzania to establish there for good. Alizetics Ltd, trade business in sunflower seeds, is one of the social businesses of ICS. Before he left ICS asked him a few questions. >>