Posts Tagged ‘agriculture’

Is Uganda’s rural, informal economy helping people climb over the poverty line?

uganda poverty worldbank opendataI stumbled across this dataset on the World Bank’s open data website yesterday, and couldn’t resist making a table to convey the message. Uganda’s poverty headcount halved in the decade between 2002 and 2012. Their statistics are rated well enough that this doesn’t seem to be too far off the mark. In the three years since, one can imagine it has only dropped a wee bit further. For context, the poverty headcount in the United States is officially 14.5% – not too far away from 19.5%.

datasetThis intrigued me enough to go through the data for the greater East African region. The first table is sorted in order of GNI per capita, with Kenya leading the pack, while the second table is sorted by the least proportion of the population below the poverty line.

Here are some visual outcomes of my playing around.

regional analysis efl wbregional indicators efl wbThough Kenya is the “richest” country, its poverty headcount is more than double Uganda’s. What’s interesting is that Uganda’s per capita GNI (Income) is around half of Kenya’s. Uganda is heavily dependent on agriculture, and not as urbanized. In fact, the urban poverty headcount is a wee bit higher than the rural.

Given that rural economies, especially in East Africa, are technically part of the “informal economy”, I wonder if looking closer into that might offer some insights on how a “Low Income” country can slash its poverty level so dramatically? It might help explain why the per capita GNI is so much lower (Kenya is far more industrialized) yet far less people are living hand to mouth.

An Introduction to Human Centered Design for Policy Makers in International Development

A design challenge for agric service innovation in rural Africa

Find a way to embed principles of sustainable good agriculture for the smallscale farmer in a socio-economically beneficial way.

drawing credit: herman weeda

drawing credit: herman weeda

How would we do this?

Where do we begin?

The answers to these questions and more will be forthcoming on this blog. I reach out and encourage you all to consider submitting your thoughts and opinions between 1000 to 1500 words in length. We will combine the thoughts of many voices together in this blog stream so you really should consider subscribing to the RSS feed.

The Role of Livestock Data in Rural Africa: The Tanzanian Case Study

Kilala livestock market, Eastern Kenya (photo: niti bhan)

Kilala livestock market, Eastern Kenya (photo: niti bhan)

The World Bank finally notices the humble goat, four of which will buy you a new Nokia featurephone in Malawi. Funded by Bill and Melinda, this report takes a closer look at the domesticated animal as a financial instrument and investment vehicle. Here’s a snippet with some points I’ve made bold:

Some of the most revealing findings of the Livestock and Livelihoods in Rural Tanzania study, which is a based on the most recent national survey, are about the contribution of the livestock sector to the economic growth of the country, productivity of the sector itself and gender differences in terms of livestock ownership and access to input and markets.

From an economic standpoint, the data collected indicates that smallholder farmers dominate the Tanzanian agricultural sector and are involved in some form of subsistence agriculture. Furthermore, most rural households report some income generated from livestock activities, earning up to an average of 22% of total household income.  Poor households tend to own smaller livestock, specifically chickens and goats, while wealthier ones tend to own larger animals, especially cattle.

Inputs such as animal fodder and hired labor tend to be scarce among smallholder farmers in Tanzania, while livestock diseases are widespread. Both of these factors hamper productivity of the sector and thus represent a missed opportunity. Data reveals that less than one-third of all family-owned livestock is vaccinated and approximately 60% of all the animals suffer from some type of preventable disease. On the positive side, 25% of the households that own livestock use organic fertilizer for crop production, a practice that if taken to scale can potentially increase overall agricultural production.
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The Tanzania study confirms that investing in smallholder farmers who own livestock in rural Africa is a catalyst for economic growth.

Food security: time to think of the small scale farmers

This article was written by David Indeje (@DavidBurudi) and was first put on the internet on West FM. It has been republished here with his kind permission.

Daily chores, rural Kenya 7 February 2012

Kenya 7 February 2012 photo credit: Niti Bhan

Agriculture is the essence of life, but it seems leaders are not getting the idea as farmers continue to experience the effects of climate change and in their own innovative ways, are rapidly adapting. A walk in various farms of Western Kenya farmers, many reiterate that, they have witnessed unpredictable weather conditions with long spells of drought and irregular rains that have had a negative effect on their lives.

“By May, our maize crops would have tussled after we had top dressed but we are still planting or weeding for the first time. The planting season is over and we are not sure if we will have the yield we anticipate,” the farmers lament.

Christiana Figueres, Consultative Group on International Agricultural Research (CGIAR) Fund Council Chair and Vice President of Sustainable Development at the World Bank Inger Andersen, during the COP 16 meet in Caucun, Mexico, noted that agriculture is an area that needs to be moved into the negotiations.

“The story about agriculture is one that is on everybody’s mind,” she said; “agriculture needs to be positive for people, positive for productivity and positive for climate.”

Improving agricultural productivity is the key for reducing poverty in the country. A global consensus has emerged that agriculture must move up on the global development agenda, and that investment in agriculture, especially smallholder agriculture, must be increased if the twin goals of poverty reduction and food security are to be achieved.

In fact, if Kenya is to achieve the first Millennium Development Goal to eradicate extreme poverty and hunger, the agriculture sector needs to grow much faster and maintain annual growth rate of 6.2 percent. This requires that we work on every single aspect of the agriculture production chain from regenerating depleted soil, using better seeds and more suitable fertilizers, whether organic or industrial, to drastically improving the quality of so-called extension services that support agriculture. It implies working on marketing and storage issues, road infrastructure and financial services.

Only by tackling all those aspects at once, involving both the public and private sectors, will we manage to improve agriculture productivity in a sustainable way.

One consequence of this neglect is the appalling state of rural infrastructure in Kenya. This leaves rural areas, which have the potential to feed the more than 40 million hungry people, cut off and isolated. Kenya has only exploited a fraction of its irrigation potential, and the density of rural roads today is a fraction of what Asia had in the 1950s. As a result, farmers rely almost exclusively on rain-fed farming and face exceptionally high transport and marketing costs that makes a shift to more efficient farming unprofitable.

Kofi Annan, Chairperson of the Board of the Alliance for a Green Revolution in Africa (AGRA), has acknowledged this isolation:

“The average African small holding farmer swims alone. She has no insurance against erratic weather patterns, gets no subsidies, and has no access to credit. I say ‘she’ because the majority of small-scale farmers in Africa are women.”

Access to farm inputs is critical in increasing farm productivity.

Current use of agricultural inputs and financial services is low amongst smallholder farmers in Kenya. Small-scale farmers in rural areas of Kenya have not been able to access financial services for acquiring farm inputs among other needs to improve farm productivity. This is partly due to low density of financial institutions in rural areas; inappropriate financial products; high cost and high risks of lending. Smallholder farmers adjust by resorting to informal credit, reduction of farm inputs, sub-optimal production techniques, and borrowing from family and friends.

This limits the investment in farm equipment and capital as well as other agricultural assets and inputs. As a result, there is need for practical assistance and capacity building to be provided by the private sector. Secondly, financing rainwater harvesting projects through micro-credit organizations that appear to be a sustainable delivery vehicle to enabling communities address the challenges of access to water and sanitation. In addition, small-scale farmers concentrate on low risk, low return activities because they cannot access start-up capital and cannot transfer system risks.

Kenya, April 2013 Photo Credit: Niti Bhan

Kenya, April 2013

As a result, there is low agricultural productivity among smallholder farmers. Low productivity attributed to inadequate use of production enhancing technologies and inputs such as fertilizers has led to food insecurity amongst the smallholder households and worsen unemployment and poverty. Credit is an important input into the production system and it contributes to increased food productivity. Access to credit increases the farmer’s working capital enabling the farmers to buy productivity enhancing inputs such as good quality seeds, fertilizers and chemicals. The challenge for agricultural financial institutions is to develop low cost ways of reaching farmers, especially smallholders.

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Kenya, April 2013 Photo Credit: Niti Bhan

There is need for farmer’s education to sensitize them on existing and new technologies they can use to improve production. This is especially among the rural farmers. Eventually, this would help in strengthening and establishing producers and traders unions: providing farmers with professional advice, current market information and input results in an organized way; controlling market price and products; providing farmers with loans at lower interest rate; and improving transportation, storage and processing standards.

The establishment of supportive policies such us offering of subsidies or free medical schemes to highly productive units per given farming year; or scholarship packages for children and adults of the unit according to the minimum production percentage given for eligibility for the same (this is meant to curb problems of rural children finances of education as well as reduction of poverty).

More food must be produced to contain the impact of soaring prices on poor consumers, and simultaneously boost productivity and expand production to create more income and employment opportunities for the rural poor. Smallholder farmers must have proper access to land and water resources and essential inputs such as seeds and fertilizers.

To ensure that small farmers and rural households benefit from higher food prices, a policy environment that relaxes the constraints facing the private sector, farmers and traders, must be created. That would mean reversing the decline in the level of public resources spent on agriculture and rural development and investing more in agriculture.

Exploratory User Research in the Rural Economy

When I first began developing the attributes by which to select representative user profiles for the original fieldwork to begin understanding the “prepaid economy”, that is, household financial management in rural India, The Philippines and Malawi, it was based on people’s ability to plan and budget.

Sustainable Value Chain 8

One can plan best when one is certain of the amount of money incoming and its date of arrival, thus one is best able to manage household expenses on a regular salary on a periodic calender based schedule.  If we cluster rural residents by their ability to accurately estimate the amount of money against its arrival, then the salaried employee is at one of the continuum of certainty. He or she knows exactly how much they will receive and on which date. The other end, however, is the most uncertain, such as the case of the daily wages labourer who may or may not be called for work on a particular day or week.

The farmer, if experienced, tends to fall in between these two points, as they are usually able to look at their crops and estimate approximately the yield and readiness of the harvest. This simple framework of time and money allowed for a reasonably representative sample of any particular region where geography is responsible for the climate and the seasons. The uncertainties faced by local farmers were broadly the same.

Now, we hope to take a closer look at this segmentation model to better refine our understanding of rural economies. At which point did a farm transition from mere subsistence towards aspirations? How? What distinguished a member of the global emerging middle class (GEMs) from one who was barely able to hold house and hearth together? Which other actors were critical to the rural economy, delineated in this case as the last mile of the agricultural value chain, and who were the supporting cast ? All farmers in a region are not alike – how would we begin to cluster sub-segments and which additional attributes would help us?

As a starting point, here are some of the key insights that have already been consistently identified:

  1. The greater the span of control the end user had over their time and money in a payment plan – the amount, whether it was in cash or kind; and its timing i.e. the frequency, periodicity and duration, the greater the likelihood of its success.
  2. Seasonality was a fact of life and cash flows over the course of the natural year reflected this aspect. High seasons and low; wet seasons and dry – the rural economy was closely tied to the land, the ebb and flows of income affecting everyone in the farming community, from shopkeepers to truck drivers.
  3. Liquidity does not reflect wealth, nor cash expenditures a signal of purchasing power.
  4. Affordability is less a matter of absolute price and more dependent on the flexibility of the payment pattern.
  5. In the majority of the developing world, the rural economy is flexible, informal, local, social and interdependent. Trusted social networks were the basis of looking upon the community as insurance in bad times and resilience in the face of uncertainty and adversity a recurring characteristic.

Will “Grown in Africa” become tomorrow’s equivalent of “Made in China” ?

PhotoCredit: Niti Bhan Kenya 2012

Even as experts and specialists split hairs in their current debate over Africa’s rise, one has begun to see some weak signals of  the economic potential of private agribusinesses on the continent’s economy. Granted that the emphasis on agriculture itself by a variety of organizations is not insignificant, particularly in the context of the continent’s food security. However, what we’re sensing now is the entrepreneurial opportunity being embraced by youth and yuppies – non traditional segments – who bring more education, training and exposure to a wide variety of value additions.

Miss Gratitude Ntonda Mandiangu of the DRC is but one example.  A young professionally trained food technician in her twenties, she saw wealth in the wasted fruit from neighbourhood orchards, unable to reach any markets in time due to lack of infrastructure and transport.

“Passion fruit juice here, mango juice there, the ginger and orange juices at the back. And here the honey and mead used as sweeteners,” says Gratitude. The sound of clinking glass bottles fills the 25sqm workshop where the young Congolese woman turns surplus fruit into delicious drinks. “We had to find a way to add value to this readily available raw material,”

And she isn’t the only one – there are the “rice brothers” in Mali and a Nigerian aspiring to emulate the success of the Amul farmer’s cooperative, now one of India’s most valuable brands. These are only a handful of known examples, where there must be many many more. The big difference here is the startup opportunity by private entrepreneurs building brands is as much of an upwardly mobile movement as large scale agribusinesses or horticultural plantations geared for lucrative export markets.

PhotoCredit: Niti Bhan Kenya 2012

Private equity has picked up the scent and begun entering this space. Here’s a snippet from the news:

At the end of last year private equity firm Silk Invest noted that the food industry is the most obvious way to tap into increasing spending power in Africa. The firm manages the Silk African Food Fund, which is a private equity fund that invests in processed food, beverages and quick-service restaurant companies on the continent.The fund has so far invested in a confectionery company in Egypt, a quick service restaurant brand in Nigeria, and a biscuit manufacturer in Ethiopia.

Last week The Abraaj Group, a private equity firm with operations across the world, announced that it will acquire a 100% stake in Fan Milk International, one of West Africa’s largest dairy companies. Established in Ghana more than 50 years ago, Fan Milk is today one of West Africa’s top producers and distributors of frozen dairy products and juices.

In addition to Ghana, the company also operates subsidiaries in Nigeria, Ivory Coast, Burkina Faso, Togo and Benin. It is estimated that Fan Milk currently sells more than 1.8 million products on a daily basis throughout West Africa.

Towards the end of 2012, South African consumer goods giant Tiger Brands bought a majority stake in Dangote Flour Mills (DFM), one of Nigeria’s largest flour and pasta producers.

With all the natural resources required for agriculture and other farm related produce, there’s as much of a chance that “Grown in Africa” just might become the “Made in China” by the end of this decade.

Reframing Public Private Partnerships (PPPs) as a human centered design challenge

The tangible manifestation of the concept of turning government’s calls to action for public private partnerships in development was crafted by Jeroen Meijer of JAM Visualdenken and expertise on sustainable agricultural value chains provided by Bart Doorneweert of LEI, Wageningen.

The design challenges, as we called them, reframed the problem statement in the form a visualization of the particular commodity, the particularities of its geography, the intent of the intervention, the point of view to be taken by the multi stakeholder teams and the good agricultural practices to be sustainably transferred to enable adoption even after donor funding was ended.

Here is the sample:

Interim project report: User centered Agricultural value chain development

My colleague and project leader for the current work in The Netherlands,  Bart Doorneweert has just published an excellent analysis of our workshop on user centered design for a multi stakeholder group invited by the Ministries of Economic Affairs and Foreign Affairs.

Here’s a snippet:

Insights on the multi-stakeholder working process
When the break-out groups re-convened after their design exercises, we asked each group to present their ideas, and discuss their assumptions and constraints with the audience. Across all presentations we discovered an interesting pattern. Participants found themselves to be confronted with an inability to associate with the user, deeming that area of the value chain apprehensive for conjecture about farmers’ needs, and too far removed in terms of values. In our attempt to lower the barriers to applying the user-centered approach through a free-form exercise, we apparently raised an inherently imbedded barrier to consider the user. Rather, participants insisted to direct their problem-solving attention to a more abstract, distant level of thinking (the value chain), or a particular part of the value chain that is more closely associated with Western values (working from the perspective of Nespresso, rather than the coffee farmer).  

This inability to associate with the users had impactful implications for ways in which the groups constructed design solutions. The approaches used were vertical in nature, thinking only within the bounds of what would directly associate with production of a particular agricultural commodity. In their thinking on solutions, people diverted to general principles (tea production provides for income, and thus makes the farmers happy), and then divided the relevant principles into disciplinary segments (like finance, training, agronomy, trade, etc).

The System Monster, by Jeroen Meijer, Jam visualdenken