La Mission de la Maison.ETH est très liée à l’entrepreneuriat, puisqu’il s’agit rien moins que d’embarquer par l’inspiration les citoyens et les organisations dont ils font partie sur des projets pilotes de restauration multi-organisations, rentables pour passer à l’échelle, en refondant au passage l’Économie (pour qu’elle devienne conjointement celle de la Terre et des Hommes, d’où le sigle ETH ;).
Le premier consortium-projet de la Maison.ETH, “transformer les déserts en forêts nourricières” agrège ainsi une ONG comme Sadhana Forest (que vous avez pu découvrir et soutenir la semaine dernière) mais aussi des startups comme FarmCrew, qui aide des paysans d’Afrique sans terre à sortir de la pauvreté en leur garantissant un salaire de subsistance par la culture de terres dont la récolte est partagée avec les investisseurs du projet. Petite fierté pour la MaisonETH, puisque la startup est issue du MBA Innovation Management de l’Ecole des Ponts Business School que Dojo, opérateur de la Maison.ETH, accompagne.
Découvrez ici FarmCrew à travers l’interview (en anglais) d’un de ses fondateurs, Oladotun Olatunji.
Ola, please, pitch us FarmCrew in a few lines
Over 50 million smallholder farmers (SHFs) in Africa are trapped in vicious poverty which is perpetuated by lack of access to quality farm inputs, low farm yields, inefficient manual labor, disjointed supply chain from farm to market and opaque market pricing by middlemen. Additionally, a season of bad weather can spell disaster for their livelihoods, both financially and in terms of food security. Farmers livelihood, which is critically tied to impaired cash-flow, is unavoidably subjected to perpetual hardship often leading to suicides.
Farmers usually turn to middlemen and microfinance banks for finance but the terms are often predatory. A solution would be to provide farmers with a tech-driven agriculture value-chain platform that connects them directly to high quality inputs, interest-free social investment, advisory services and post-harvest market to enhance farm yield, limit food waste and boost farmers income. This is exactly what we have done at Farmcrew.
At FarmCrew, we provide all the inputs and resources needed on the farm. We give farmers hourly income per work done to cover their costs of living. We run a shared-farm-ownership business model. Farmers are enrolled as salaried workers and offered a 20% part farm ownership. FarmCrew matches investors to the farms so that all services are provided at zero upfront cost to the farmers. After harvest and sales, net profits will be shared fairly with all stakeholders. Aside from hourly income per work done, Farmers still earn (20%) of net income.
Tell us about the genesis of the project
The core team members have been college friends from Nigeria for over 10 years. We grew up with a common passion to help solve extreme poverty. This passion had propelled us to secure an international education and gain exposure to new strategies of solving our common local and national problems. FarmCrew is a product of the collective efforts of the team members in our various institutions (MSc @ MIT and MBA @ ENPC ParisTech) with the support of Dojo (the French pioneer of co-woking and Startup Science) to devise ways of empowering smallholder farmers to overcome poverty and hunger.
In our previous jobs, we have worked with farmers in various capacities during the implementation of different humanitarian cash transfer programs and mobile payment projects in rural communities. During our interactions with farmers, we saw the difficulties they experience, and we are motivated to help solve the farmers problems with innovative business models and technology platform. We went to different rural communities to connect with farmers and collectively find a solution to their common problems. Our engagement with farmers gave birth to Farmcrew.
How does FarmCrew connect landless farmers with investors who are often risk-averse?
At FarmCrew, we provide all the inputs and resources needed on the farm. From inputs (seeds, fertilizers, land) to services (irrigation, mechanization, advisory) and finance (investment and farmers salary), FarmCrew does the heavy lifting on resource provision while Farmers focus only on planting and harvesting. We provide farm advisory on sustainable farming practices and work with partners on access to markets for better price-transparency. We also engaged insurance providers to insure the expected crop yields. Warehouse providers have been integrated to better time crop storage and sales with favorable prices and prevent waste. We run a shared-farm-ownership business model. Farmers are enrolled as salaried workers and offered a 20% part ownership. FarmCrew matches investors to the farms so that all services are provided at zero upfront cost to the farmers.
In the local community where we operate from, we have supported over 100 farmers and have created 100 additional jobs in the local communities. We have now completed 4 seasons of maize farming with 100ha planted. The progress of Farmcrew is translating to improved livelihoods for smallholder farmers, the creation of jobs in rural communities, an improved quality of live and food security. With the full development of our platform, it will become easier for smallholder farmers to access low cost financing at scale.
We know that in the face of reality, a startup often has to « pivot ». Can you tell us about the business model adaptations that you had to make in contact with realities on the ground?
We have stuck to our mission of ending poverty among smallholder farms but our business model has evolved over time as we adapted to market realities. Initially, our shared-farm ownership was geared towards the farmer owning 50% of the farm and the land as well as coordinating farm activities. However, this approach created several bottlenecks. The farms are dispersed and it was difficult for the farm manager to travel across different farms regularly. The farmers are still adapting to this new model of farming and coordinating all the service providers supporting each farmer was a bit challenging. The cost of supporting each farm with mechanization was also too high to manage because the service providers were charging per farm serviced. We also realised that the lands had varying qualities and fertilizer requirements and most of the farms were not self-owned by the farmers.
In response to these challenges, we decided to alter our model slightly from being farmer-led to business-led. We decided to take leadership in the ownership and running of the farms and land. The farmers were then engaged as salaried-workers and get paid weekly per work done to boost motivation and commitment. They still get a good percentage of farm ownership but they are relieved of several farm responsibilities so they can focus on planting and harvesting. The result was outstanding. We increased productivity through clustered mechanization and precision-fertilization. We reduced cost per ha by 20% and increased output per ha. Most importantly, the farmers were more motivated due to regular income.
Going forward, we plan to digitize this system of value-added partners to automate the processes and enable all stakeholders in the value chain to operate together efficiently. Our plan is that services will become available on-demand. By integrating all the stakeholders, FarmCrew is creating the first Agriculture Investment-as-a-service platform dedicated to smallholder farmers in sub-Saharan Africa. Based on this, we will then further the technology development to aggregate a database of financial, agribusiness and demographic information on smallholder farmers in Nigeria. Using this data, we plan to generate bankable scoring system for smallholder farmers, unique to each individual and farmers cooperative, which will provide a first-of-its-kind means for SHFs to access low-cost financing from third party institutions.
Why do you often say that these landless peasants are not the problem but the solution?
We support unserved smallholder farmers with farm size of <2ha. They constitute about 80% of farmers and produce over 70% of food consumed in local markets. Through the farmers’ cooperatives, we create the maximum impact in their local communities and boost rural economies. This is why we believe that they have the key to save Africa from hunger and poverty. Small farmers sustain the main economic activities in rural communities.
We therefore support them by enabling access to machined-based harvesting on-demand, high quality seeds, on-site technical assistance to maximize yield, and post-harvest market access at zero upfront cost to the farmers. Our insurance partners provide area yield insurance to protect the crops. We work with smallholder farmer cooperatives for scalability, dilution of risk and efficient cost to farmer ratio.
Si vous connaissez des ONG, des startups ou d’autres organisations inspirantes pour contribuer à transformer les déserts en forêts nourricières, donnez-nous leurs noms, pour accroitre au sein du consortium.ETH la diversité des formes d’action 🙂