The problem There is an urgent need to increase farm productivity and increase production of agricultural produce in sub-Saharan Africa. Productivity and incomes of smallholder and SME farmers remain very low. Food imports are growing rapidly as domestic supply falls short of demand from an increasing and increasingly urban population. Improved farm practices are urgently needed to reverse the current degradation of the environment.
The failure so far Despite vast amounts of money spent over decades, progress has been very disappointing. Governments and donors have used subsidies, grants and technical support to generate short-term income gains - but this has been at the expense of diverting funding from investment to generate sustainable income and environmental gains. Consequently, there has been little improvement in productivity, food imports continue to grow and the environment continues to deteriorate. For more on the problem and the causes of failure see our lessons learned.
EfD’s approach EfD seeks to identify and support only those organisations with business models that have potential to achieve sustainable improvements in productivity and incomes of smallholder and SME farmers and in the environment. Despite evaluating a large number of opportunities over a number of years, in practice it has proven difficult so far to identify many businesses that can achieve these objectives.
AgDevCo deploys patient capital and provides extensive in-house technical support to support socially, environmentally and financially sustainable SME agribusinesses. It seeks as part of its investments to incorporate linkages with smallholder farmers to provide them with access to inputs and markets and to generate sustainable improvements in their livelihoods. Although EfD does not provide direct financial support to AgDevCo, it continues to collaborate in various ways: by publicising AgDevCo investments that demonstrate best practice achieving sustainable outcomes; and by seeking out opportunities for EfD to provide support where funding by AgDevCo is not appropriate.
EfD has provided financial and non-financial support to two other ventures – Apollo Agriculture and TIST.
Apollo provides credit and inputs to smallholder farmers in Kenya using an approach which reduces costs and makes providing access to many more farmers less costly and therefore more sustainable and scalable than conventional approaches. EfD provided early stage support to explore the effectiveness of satellite derived data analysis for predicting the recoverability of loans from smallholder farmers.
TIST is an innovative small farmer-led tree growing programme in Africa and India which simultaneously generates three important benefits:
- Substantial financial and non-financial benefits for the smallholder farmers themselves; and
- Substantial improvements in the non-carbon environment e.g. less deforestation, more species diversity; and
- A major contribution to mitigating climate change by sustainably increasing tree cover, thereby absorbing millions of tonnes of carbon from the atmosphere.
The TIST approach is truly unique in several ways: (i) farmers themselves are responsible for governance, operations and much of the promotion of the programme – strong values and self-reliance is at its core; (ii) the TIST approach demonstrably is able to scale at low cost (currently over 90,000 farmers); and (iii) it has perfected a means of measuring and validating “AAA-quality” carbon credits and selling them to generate revenue sufficient to cover current and expansion costs.