An estimated one billion people living on less than US$1.25 per day live in rural areas where agriculture is their main source of livelihood. Smallholder farmers also manage more than 80 per cent of the world’s estimated 500 million small farms and provide more than 80 per cent of the food consumed in a large part of the developing world, contributing significantly to poverty reduction and food security (International Fund for Agricultural Development).
However, farmers face multiple challenges that limit their ability to improve their productivity and the quality of their products, making it difficult to bring their families out of poverty. Some of these challenges include lack of working capital for inputs or investing in equipment, debt traps, and the inability to sell their products in formal markets.
Multinational and local companies and retailers are generally unwilling to extend their procurement systems and supply chains to deal directly with numerous smallholder farmers due to the associated risks and operational complexity, unreliability, and inconsistent, substandard produce.
In the meantime, rapidly increasing global demand for food is leading to increased levels of food insecurity and high levels of inflation.
Our farmer services and aggregation businesses bridge the gap between farmers and local and multinational companies. We accomplish this by understanding the product demand and specifications required of companies and securing buying commitments from them.
Based on these commitments, we identify the supplier farmers, provide training and inputs, and work directly with the farmers to improve their quality and yield, through the local business we build. The business provides financing, quality control, aggregation, and logistics solutions including the development of collection hubs and centralized, dry and cold storage warehouses, as well as delivery of products to the buyers. Through this integration, our businesses provide scalable, reliable supply chains for high value buyers.
By working directly with farmers to improve the quality and yield of their produce over time, we develop loyal, mutually beneficial, and long-term relationships with them.
Our businesses allow us to increase farmer income by paying them higher, fairer prices for their products, reduce poverty at the farm level, and deliver commercial returns to high value buyers such as retail stores, supermarket chains, and international food and beverage companies. And as a market driven, for-profit businesses, these become sustainable solutions to alleviate poverty.
We provide the opportunity for companies, supermarkets, restaurants, and other buyers to reliably source quality produce from local smallholder farmers through our farmer services and aggregation businesses.
Promoting sustainable supply chains provides a framework through which social investors can play a critical role in poverty alleviation and create greater impact. We offer an investment opportunity in our businesses on a case by case basis for social investors and philanthropists. Additionally, donors can provide grants for farmer training or for use as towards business case development. Social investors play a catalytic role in helping us build and scale our businesses and impact more communities across the developing world.