Iringa, Tanzania – In center of this East African nation, two organizations are working with poor farmers to prove that business, rather than traditional aid, is the key to making sustainable gains out of poverty.
The idea is a popular one in the development community, and seemingly obvious, but moving from concept to reality has it challenges.
The government of Tanzania and foreign donors are intensely focused on improving food security. Two foreign firms, Cheetah Development and the One Acre Fund, are promoting market-based solutions to farmers that they contend are more productive and sustainable than charity or hand-outs.
It is worth noting, perhaps, that both are non-profit organizations that depend upon charity and donations in the West to catalyze their for-profit business solutions in Africa. But more important is that One Acre Fund is monitoring and evaluating its projects; Cheetah simply assumes if people buy-in to its small for-profit venture here, that’s proof enough of its impact.
The two organizations are neighbors in Iringa, a small agricultural community in a very dry part of the country. The rains have not yet arrived and red dust coats the withered maize stalks.
Though located literally next door to each other, Cheetah and One Acre Fund take significantly different approaches to the needs of Tanzanian farmers. Cheetah takes a page from the business handbook, having launched a for-profit subsidiary that tracks sales of products – like its newly launched solar food drying system – to determine what is or is not working. One Acre Fund (OAF) offers loans, does farmer training and evaluates progress each step of the way.
The number of people reached by the two may reflect their respective tactics. Reservoir, a business under Cheetah that sells solar drying racks to farmers, has reached only 55 farmers so far this year. OAF worked with 1,150 farmers in the 2012 growing season, its first in Tanzania, and will enroll more than 3,000 for the upcoming planting season.
A For Profit Solution?
It is estimated that farmers in the Iringa area lose 40% of their tomato crops. The number raises when post-growth losses are added. Poor storage, not enough people to work the fields and a lack of places to sell the tomatoes destroy crops and reduce the potential incomes for farmers.
To combat the problem of waste and markets, Cheetah development’s founder, Raymond Menard, decided to develop a solar-based food dryer. The farmers could dry crops quickly for sale and easy home storage. He tinkered a bit with a few innovations and created the product now sold by Reservoir.
A second half to the work is linking the farmers to buyers. Connections exist in Zanzibar and Kenya. The establishment of another business under Cheetah called Sun Born. The hope is that it will guarantee the farmers that it will buy the dried food.
The few that are using the device are drying tomatoes, onions and eggplant.
“One woman is drying fish,” said program manager Tara Menon. “We did not even think about that as an option.”
While the program intends for the dryers to be shared by only a few people, one exception exists. Costanzia shares one of the solar dryers with 25 women and one man. All provided a contribution before making the purchase.
It takes a day and a half for drying to complete, said Costanzia. The group meets together each month to determine a schedule for sharing the dryer. It only works in the sun, so cloudy days mean that the schedule is pushed back.
The group is based on an existing savings and credit group. The money that bought the dryer came from the group savings. Costanzia hopes that they will buy another dryer next year. For the most part she keeps the tomatoes she dries for her own family.
“The taste is very good,” she said.
A Business Minded Nonprofit
One Acre Fund (OAF) has more experience behind its model. Seven years of growth from Western Kenya to Rwanda and Brundi gave way to the opening of an office in Tanzania last year. The model is essentially the same in each country. Farmers form groups that are trained together on improved farming techniques. They learn to spread out where seeds are planted, when is the right time to plant, storage and fertilizer use.
A small two-sided scoop tells the farmer how much of each fertilizer is used below and above the seed. Each farmer buys the full package from OAF for the season at a cost of roughly $133 per acre. It includes a flat fee amounting to roughly 13.5% to account for operating costs. Other offerings include death insurance, crop insurance and funeral insurance. All are optional and can help account for unexpected events in the farmer’s lives.
A part of the total fee is due before the planting season. Farmers must meet determined thresholds to get the package. Those who fall short are given the option below or fully refunded their money if they cannot raise enough for one half acre.
Maize is the main growing crop for the farmers living in the village of Mlanda. Located a short distance outside of Iringa, the red clay landscape creeps upward with each of the homes built from the same dirt. Alfred Mufanga is a group leader for OAF in the village. He participated last year and said his crops grew from 8 bags of maize in 2011 to 12 bags in 2012.
He is relatively well off for the village with three wives and twenty-one children. A car sat inside the compound of homes while children moved about during a visit by a OAF field worker. He is optimistic about the next planting season, but says that it all depends on the rain.
“I can’t know the ways of God,” he says.
Alfred already farmed using fertilizer, but he was doing it wrong. The OAF staff attribute the increase in maize yield to participating in the program. They say they have the evidence to back it up.
To Monitor, or Not to Monitor?
Some monitoring is in place for Reservoir. Its grants with the likes of the United States Agency for International Development requires for it to report on its work. That information is what they used for their evaluations, said Menon.
Random checks are carried out two weeks after a rack is sold. Reservoir staff members will make an unannounced visit to see if the racks are being properly used and stored. The materials are basic enough that a local repairman can fix them, but they are not sturdy enough to stand up to the wind, rain and dust.
“We’re not a traditional NGO,” added Pearl Foods, another Cheetah business, manager. “We don’t have a department devoted to monitoring and evaluation. In fact we want to stay away from that because it is resource intensive.”
The income made from buying back the dried goods for the farmers provides the direct feedback and information on the farmers. They are betting that if the product works the farmers will do better which will lead them to tell neighbors and family members about the dryer and drive further purchases.
A young program and a small group of beneficiaries means that the impacts are still relatively low. The hope is that the dryer will have paid for itself by the end of the drying season and its users will even see a small profit.
OAF, by contrast, includes monitoring and evaluation in all aspects of its work.
“M&E is a really important part of our work,” said Emma Impink, manager of monitoring and evaluation/innovation for OAF.
Change is a part of the design of OAF. Surveys are conducted to look at every aspect of the program. Random samples are taken of OAF and non-OAF farmer plots to compare whether or not there is a marked improvement. It informed OAF to start selling sunflower seeds as an additional option for the region.
The OAF farmers did well last harvest season, but they could have done better. Testing by the OAF staff determined that seeds should be placed 30 cm apart, not the 25 cm that was recommended last year. The difference of only 5 cm is big. The maize grows bigger and taller with just a little more space.
Rain fall is not what it used to be, say the farmers. Five years ago, they could count on the rain, explained OAF member Johanes Ndamba. He is planting one acre out three with OAF’s package of seed and fertilizer. They were taught about other growing options years ago, but he and other members do not want to grow anything but maize.
Climate change may be making an impact on the farmers around Iringa. Rains that traditionally start around now may not arrive on time. As things change, the farmers will have to make changes to the way they work. Reservoir is betting that solar drying is a part of the solution. One Acre Fund sees improved farming techniques as the ticket.
Both are betting that business-oriented solutions are the answer. With or without the evidence to prove it.
Tom Murphy reported this story in Tanzania as a fellow with the International Reporting Project (IRP).