This blog is part of a series called #SeedingOpportunity that explores the challenges and opportunities related to smallholder farming around the world.
When most people hear the word agriculture, they think of farming or of how their food is produced. But for hundreds of millions of smallholder farmers around the world, agriculture is so much more; it’s the chance to escape extreme poverty and hunger - an opportunity for a better life.
Today, 70 percent of the world’s poor live in rural areas and most of them depend on agriculture for their livelihoods. Many of them are subsistence farmers, often growing just enough food to feed their families, with little excess harvest to sell for income. They face many barriers: they don’t have enough money to buy quality seeds and fertilizers; they use outdated farming techniques; and they live in remote areas where the infrastructure often doesn’t exist to link to them to markets where they can consistently get a fair price for their crops. To make things more difficult, climate change leads to erratic rainfall and temperature patterns that make farming more challenging by the day.
In Africa, this low level of productivity not only affects smallholder farmers and their families, but also the continent’s entire economy and its food security. That’s because much of Africa relies on these smallholder farmers for the vast majority of its domestic agricultural production, and when production does not match demand, the continent is left dependent on foreign food imports that cost about $50 billion a year. Unless more is done to boost Africa’s domestic agricultural productivity, its reliance on expensive food imports will increase as its population grows.
Empowering Smallholder Farmers
The good news is, the African continent is rich in resources, including uncultivated land and fertile soil. The challenge, which is becoming increasingly complicated in light of climate change, is how best to take advantage of potentially productive farmland that is being underutilized.
More and more, governments are finding high-impact solutions in projects that encourage and support greater inclusion of smallholder farmers in large-scale domestic agricultural production. In fact, at the annual World Economic Forum's Grow Africa conference last month, one of the primary areas of focus was how to increase private sector investments in agricultural value chains and businesses that would help produce opportunities for smallholder farmers to move beyond subsistence-level farming. The conference was held in Rwanda, where the government has made a priority of streamlining processes to encourage investments and business development that help smallholder farmers.
A smallholder farmer in Malawi hand-harvests soya bean
At the Clinton Development Initiative (CDI), we work with the governments of Rwanda, Tanzania, and Malawi to generate greater economic empowerment for hundreds of thousands of smallholder farmers. And from what I’ve seen firsthand, I know that smallholder farmers in Africa are capable of feeding the continent and the world when they are equipped and supported with the right information and resources.
Our work focuses on filling gaps and seizing opportunities at various points along the entire agricultural supply chain, all in direct partnership with smallholder farmers.
In Malawi, where our work first began, smallholder farmers have seen, on average, a 150 percent increase in their yields and income. The extraordinary results we’ve achieved in Malawi led to our program expansions in Tanzania and Rwanda.
Anchor Farm Business Model
To support this direct, large-scale partnership with smallholder farmers, CDI has developed an innovative market-based solution called the Anchor Farm Business Model. Our model is rooted in the belief that farming – both small-scale and commercial – can be a viable business opportunity that fuels growth, and that we can put systems in place to help subsistence farmers move out of poverty and improve their access to markets.
Our Anchor Farm Business Model pairs commercial farms and agribusinesses with smallholder agricultural extension programs to strengthen opportunities and fill gaps in the local agricultural value chain. Specifically, we connect farmers with inputs such as seeds and fertilizer; markets for their goods; access to warehousing and processing that is essential to their work; and training and financial services that can increase their yields and livelihoods.
Agricultural machinery, like the combine harvester shown above, is used on CDI’s commercial farms to improve efficiency and reduce the physical burden of large-scale farming
From an operating standpoint, the structure of our Anchor Farm Business Model has two main strategic benefits: it provides us with a steady source of funding for CDI’s core social impact work with farmers, and it enables us to have a long-term impact by creating self-sufficient and sustainable businesses that can eventually be transferred to local ownership. Specifically, the funding from these for-profit agribusinesses supports CDI’s social impact work, which includes the training of smallholder farmers, the ability to connect them to financial literacy training and services, and the opportunity to provide these farmers with access to better seeds, fertilizers, and inputs.
The Promise of the Future
The Anchor Farm Business Model and all of CDI’s work with farmers are accessible, readily replicable, and economically and operationally sustainable. More importantly, the difference both make in a farmer’s life is truly transformative. When our farmers can increase their incomes by even $200 a year, it opens up opportunities and gives them new freedom to make choices for themselves as agricultural business men and women.
A participant in CDI’s smallholder farmer outreach program stands with her daughter
Many farmers use their increased earnings to invest in educational opportunities for their children and for home improvements. Farmers also invest in additional business opportunities like raising livestock or leasing more land – diversifying their crop production and generating other sources of income. We can measure the income increases our smallholder farmers receive, and the impact of this greater spending power is multiplied across local communities, but the true impact of our work on the quality of life for families is immeasurable.
If we can continue to make farming a viable business option for smallholder farmers in Africa, this continent so full of promise will be able to compete in the global economy and help feed the world.