While the Dominican Republic has a flourishing tourism sector and lush forests, Haiti has suffered large-scale deforestation and had its coffee and sugar resources exploited for many years by foreign powers. Despite growing demand for Aflatoxin-free and cost-competitive peanut production, the Haitian peanut sector currently suffers from low productivity, declining farmer revenues and poor management. Without access to large, stable buyers with adequate cash flow; quality testing; and medium-term storage facilities; Haitian farmers typically commercialize their harvest over a several-month period via regional or provincial markets. This puts excessive strain on their time, energy and money, all the while increasing the risk of Aflatoxin contamination and other quality management concerns from poor storage conditions. These factors threaten to force the introduction of imports, crippling a viable revenue stream for Haitians.

The Innovation

We saw a unique opportunity to transform the ailing peanut sector and help Haitians meet the demand domestically.

First, we facilitated a $1.25M investment in Acceso Peanut Enterprise Corporation (APEC), a peanut supply chain enterprise, to provide capacity building and inputs for Haitian peanut farmers that will significantly improve yield and quality. APEC will also purchase peanuts from smallholder farmers at favorable, fixed prices, then it will sort, test and re-sell them directly to buyers and the general market.

APEC’s depots will be staffed and supervised by Haitians and optimized to serve approximately 200 to 400 farmers within a five-kilometer radius. The depots will manage all disbursements of credit, seed and other supplies to farmers throughout the growing cycle as well as purchase farmer stock immediately following harvest at market-competitive prices.

 

The Impact

APEC’s supply chain business model will train and source from 5,000 farmers over the next five years and 13,000 farmers over the next ten years.

With better knowledge, targeted inputs, services and available credit, program farmers can double – potentially triple – their current yields with minimal cost increases. These yield increases, paired with reductions in production costs, will result in 300% income increases. Yields for other crops also stand to improve due to better rotation, allowing farmers to diversify their sources of revenue.

The Clinton Giustra Enterprise Partnership’s strategy is to create businesses that will naturally scale without long-term dependence on donor funds. In the current financial model without donor funds to amplify impact, APEC is expected to break even in 2016 with revenues of $5 million and an EBITDA of 2.4%. By 2023, revenue will grow to $21 million with an EBITDA of 6.5%. Profits will be reinvested into the enterprise. In addition to operating as a viable, self-sustaining business, APEC strives to help create a competitive and profitable peanut value-chain in Haiti. Beyond the health benefits of increasing the supply of Aflatoxin-free peanuts to Haitian population, APEC activities specifically target farmer income and job creation in complementary sectors and enterprises.