Agricultural Market Development
At The World Food Bank, we are focused on ending hunger and extreme poverty in developing nations. According to the World Bank, 78% of poor people live in rural communities and participate directly in agriculture. It’s also important to note that the history of every first-world nation shows that their economic transformation was lead by agriculture. Therefore to truly transform the face of poverty and hunger in developing nations, it has to involve agricultural market improvements.
We work on sustainable solutions by making systematic changes to agricultural markets and systems in developing nations. We partner with governments, smallholder farmers, processors and every part of the value chain to fill gaps, improve efficiencies, and stabilize markets.
Although the ecosystems are complex, we have found that transformational change in smallholder farmers lives can be made by focusing on four key enablers: 1) Improved Markets, 2) Education on Good Agricultural Practices, 3) Access to High Quality Inputs, and 4) Access to Affordable Financing.
Perhaps the biggest challenge for agriculture in developing nations is market volatility. When of the farmers in a community harvest the same crop(s) at the same time, it causes a significant temporary increase in supply. Demand at this time is low because all of their neighbors also harvested so have ample food for their families. Frequently, school fees are due during harvest, when farmers earn money. This leads to farmers rushing to market to make the quick cash, despite low prices. As a result, it is not uncommon for smallholder farmers to sell below cost.
Mid-season, there is an increased demand for food as farmers run out of their own supply. This leads to increased prices, which is problematic for food processing facilities. It is common for these businesses to go idle three or more months per year because food prices are too high for them to afford.
We work to stabilize markets by establishing a profitable price floor that we offer farmers who produce crops that meet our quality requirements, and establishing a profitable price ceiling for food processing businesses that enables them to operate all year long.
Education on Good Agricultural Practices
Smallholder farmers are extremely risk adverse due to their lack of resiliency. As a result, they avoid experimentation with new inputs or techniques that could improve their harvest, and simply utilize traditional methods that served their ancestors. As a result, the quantity and quality of food harvested is significantly lower than would be possible with good agricultural practices. With healthier soils, hybrid seeds, crop rotation, and improved post-harvest techniques, the quantity and quality of the food they grow significantly improves.
We utilize a multi-pronged approach to solve this problem, including: 1) direct hands-on farmer training in their communities, 2) continuing education for agronomists and government extension workers, and 3) entertaining broadcast TV and radio educational programs that demonstrate the improved inputs and techniques and the impact they make.
Access to High Quality Inputs
In rural communities, access to high quality inputs is difficult. Most farmers save some seed from a prior season to plant in the next season. When compared to hybrid seeds, the yields possible from generational seeds are significantly lower.
Other inputs to control weeds, pests and fungus can be toxic and damage the soils or contaminate the harvest. When possible, organic products that are safe and enhance the soil and ecosystem are preferred.
We partner with high quality input providers to ensure that farmers in the communities where we operate have access to their inputs.
Access to Affordable Finance
The rural poor live in a constant state of no savings. Every shilling of income goes directly toward survival. Banks rarely want to lend to smallholder farmers due to the high risk of default. As a result, at the beginning of each season, farmers rarely have the capital required to buy the high quality inputs that could significantly improve their yields.
By educating farmers on good agricultural practices, making high inputs available, and guaranteeing a market for them, we significantly de-risk the farmers, and enable financial institutions to provide loans. We partner with microfinance institutions to make sure that affordable financial services are available where we operate.
Agriculture Ecosystem Complexity
Government Buy-In and Participation:
Advisory Board, Coordinating Agencies, Policy Making, Financial Commitment.
Identify and leverage synergies with facilities, agencies, systems and resources.
Analysis, Development, Implementation, and Evaluation.
Assess training needs, identify methods of instruction, develop training materials, measure the effectiveness of instructional methods.
Direct implementation, coordinated metrics and shared missions.
Facilitate Implementation and Integration.
Payment systems, analysis tools, planting, harvesting, irrigation, monitoring and management.
Build free market solutions to promote job and income growth.
Empower growth and success in local markets, seek partnerships, and provide mentoring.
Integrated Funding Model:
Coordinated commitments of Governments with Development Banks and Institutions.
Support direct and indirect financing of key sectors.
Monitoring, Traceability, Accountability, Quality Assurance and Coordination.
Monitor the effectiveness and efficiency of systems that address risk, deliver outputs, integrate technology and measure metrics.
Support health nutrient soil.
Enhance productivity with corrective measures..
Improve the timely removal of weeds.
Decrease the loss between production and harvest.
Expand the manufacturing of quality food products.
Extend access to agriculture coverage.
Provide dependable hybrids for higher yields.
Address the unpredictable rainfall.
Minimize the pesticide risks in agriculture operations.
Boost the efficiencies and reliability.
Maintain standards and increase marketable surplus.
Support farmers’ financial resiliency.
Model Farm Hub & Spoke Model
In some areas we operate commercially operated model farms. These provide an opportunity for a Hub & Spoke model, where we train farmers on the utilization of the best inputs, technology, and post-harvest processes available in their area. These farmers then take this learning from our Hub farm to their communities (the “Spokes”) and train others. In areas where high quality inputs are not available, the Hub can serve as a distribution center for those inputs. These Hub farms also serve as innovation labs where we can prove out new crops, inputs, and techniques before passing them along to farmers.
Hub & Spoke Model
Provide Impact Investment Opportunities in systematic value-chain-based models transforming small-scale agriculture to scalable enterprises, creating benefits for farmers, investors, and global food systems.
Demonstrated scalability in an environment where farmers have little access to information, training and minimal purchasing power. WFB PPP platform integrates all sectors from farmers to NGO’s to Governments to Private Sector companies.
REPLICABLE ACROSS AFRICA
Model has demonstrated relevance and applicability to countries across Africa, as WFB creates model farms that will be replicated to serve smallholder farmers that could eventually produce -80% of Africa’s food supply just from our East African countries. The ability to scale into Western and Southern Regions as those countries adopt the model.
WFB Hub & Spoke Model Farm
Currently, WFB operates a 300-acre model processing farm in Mbarara, Uganda. Some highlights from our farm site include:
- Demonstration of a collaborative model, working with Makerere University to provide and utilize new seed sources and organic fertilizers;
- Farm distributes seed to outgrowers and government;
- Forecast 50% higher yields at Mbarara due to our quality assurance and testing;
- Guarantee off-take and market linkage using long-term technology;
- Address inefficiencies through the value chain, including soil, seed, fertilizer, irrigation, herbicide, pesticide, harvest, transport, processing, storage, insurance and financing.