Production vs Ownership

Production vs ownership

One of the biggest misconceptions about farming is that farming can only be done by farmers who own land. There are plenty of ways to get into farming. You can enter into rental agreements with people who have idle land or you can get involved in crowdfarming ventures.

When you start to separate the farming aspect (an economic activity) from the rightful ownership aspect you may be able to see that the land question poses more questions than issues.

Prodcution vs Ownweship

  

Production can be defined as the action of making or manufacturing from components or raw materials. Ownership can be defined as the act, state, or right of possessing something.

A lesson can be learned from what happened in Zimbabwe. The fast track land reform program was an important step in addressing colonial injustices. I am not here to argue about whether it was wrong or right, nor am I here to talk about  the methods used to take back the land. I’m here to talk about production.

Overnight many people suddenly found themselves with land. They became the owners. But they were not able to produce. It was not because they lacked the skills or the passion. They lacked a key raw material. Money.  This created a scenario where there was ownership, but no economic activity, production. The banks would not lend money to these farmers because they did not have title to the land. (All land became state land after the land reform program. Farmers were issued with 99 year leases). The international community punished Zimbabwe for violating property rights and closed off lines of credit. So banks could not borrow money from outside to then lend to farmers.

This was a disaster for an agro based economy. But again I am not here to talk about those effects. I am hear to talk about what could have been done differently and how South Africans can avoid this trap.

Smallholder farmers are the real heros

Smallholder farmers produce 70% of the food consumed in Africa, yet they are deemed not to be credit worthy. This statistic makes sense when you think about it. Commercial farmers produce commercial crops like flowers for export, maize for stockfeed or grapes for wine making. Smallholder farmers produce food for consumption. Just look at any informal vegetable market around the country.

We need to change the narrative that states that commercial farmers are the ones who feed the nation. The real heros are smallholder farmers. They are the people who are feeding the nation but are ignored by traditional financial instituions because 1 guy farming on 10ha of land doing maize is not as sexy as one guy doing a 1000ha maize. But there are are there are a 1000 guys doing 10ha for every one guy doing 1000ha.

We need to start looking at smallholder farmers as a collective unit and not individuals scattered everywhere. Only then does a picture of their power start to emerge.

In order to harness their power, we have to provide them with the raw material that every farmer needs. Money! The best way to start recaliming the land in South Africa is to start by funding smallholder farmers. We need to take control of production by taking control of how smallholder farmers are financed. If this is done now, when the land issue is addressed in South Africa there will be no need to worry about banks controling production.

Reclaim the land

The best way to support smallholder farmers is by getting involved in the agricultural value chain. Farming is hard work. It takes dedication, passion and determination. Not everyone wants to be a farmers or is cut out to be a farmer. In Zimbabwe a lot of people got land only to realise that its not for them. Yet they love the idea of growing crops and raising animals.

2 ways to get involved are by providing smallholder farmers with access to finance and better access to markets. By providing finance for farmers prodcution can be controlled. If we want to reclaim the land then we need to take control of production. Banks control production yet they do not own the land, so why cant we the people do the same? Land ownership is not the issue.

So how can we finance farmers? Crowdfarming has made it possible to take control of production. You can become a part of the agricultural value chain from the comfort of your own office or home and earn great returns while you are doing it. In South Africa you have YouFarm, Agricool and Livestock Wealth. Fedgroup has also gotten in of the crowdfarming bandwagon.

What do these companies have in common? They are using the power of 4IR to get farmers funded and allowing people who do not have access to land an opportunity to earn money and become a part of the agricultural value chain.

Stokvels

Stokvels currently have close to R49 billion sitting in bank accounts earning little to no interest. The only winners here are the banks who then take that money and lend it commercial farmers and other businesses, ignoring smallholder farmers.

Imagine if 10% of that money was channeled towards supporting smallholder farmers. Not only would the stokvel members get great returns, but the downstream effects would be amazing. You create employment and prosperity in rural communities.

Supporting smallholder farmers is an opportunity to take control of production. Once you take control of production, the land ownership issue becomes irrelevant and can be left to the politicians deal with. While they argue we can can take ownership of a large part of the economy.

Conclusion

To reclaim the land we need to look beyond the politics and noise. We need to see who the real heros are, the smallholder farmers, and we need to get behind them.

That farmer that produces chickens to sell to her neighbours is helping feed the nation. That farmer with a small plot producing maize contributes to feeding the nation. When you take all of the smallholder farmer and combine them into on group you suddenly have a large army of producers that can not be ignored.

If you would like to become a part of the agricultural value chain visit our website http://www.youfarm.africa and register as a crop investor. Follow is on Twitter and like our Facebook page for up to date information on the latest projects. If you have any questions about how you can invest or how you can become an agent and support farmers in your community feel free to email us info@youfarm.africa or WhatsApp +27730270637

Ncumisa Mkabile: The Spinach Queen

Ncumisa Mkabile, Spinach queen

“Anything is possible, if you put your mind to it.”

The 27 year old Agripreneur, Ncumisa Mkabile is living proof of how hard work and passion can lead to your success. The Cape Town based crop and poultry farmer is using spinach to not only feed the nation, but create employment while at it. Mkabile uses the power of social media to market her business and it is definitely working as she continues to gain traction which is opening new doors and giving her the platform to grow and make a change.

Ncumisa’s talents and interests do not end with green fingers, the Cofimvaba born champion is also a travel and tourism graduate who tapped into farming when COVID-19 lockdown regulations were passed.

Before then, she was selling takeaways. Mkabile didn’t let the CoronaVirus pandemic stop her from dreaming and creating wealth for her and her community, she later tapped into Poultry farming as she identified the demand.

“When I saw that the demand was high for chicken, I decided to farm chicken and supply to people who would like to start their own businesses, while still doing my deliveries,” she says.

This was still not enough for the passionate Khayelitsha-based agripreneur. Ncumisa decided to start farming crops on a nearby land. After planning to grow Green peppers on the land, she decided to use the winter season to her advantage. “I saw that spinach is easy to maintain and can survive any weather conditions. That is where my journey started!” said the enthusiastic Mkabile.

Spinach produce

When Ncumisa started the business, she didn’t know anything about farming and had to learn everything from the internet as it wasn’t something she had studied for. She planted her first seedling in May and on 18 July she proudly posted on Facebook about the progress.

“I planted, I prayed, and now it’s time to harvest.” – Ncumisa Mkabile, Facebook

Land access still remains a challenge for most South Africans. Mkabile’s farming lands in inbetween Khayelitsha shacks where poverty is prevalent, she says that she’s currently using leased land which doesn’t allow her to expand. One of the major challenges she is currently facing is the lack of irrigation system as she’s still using watering cans. She believes owning a bigger space will allow her to overcome the challenges.

Ncumisa is the exact reason that YouFarm exists. We don’t believe that an enterprising young farmer like Ncumisa should struggle to get finance so that she pursues her dreams of farming. We also value the power of communities coming together. 

While she enjoys empowering her community, her ambitions do not end there as she wants to become a commercial farmer. “I do not want to limit myself. I want to be able to produce high-quality fresh fruit and veggies to supply all over South Africa…” she says. The local Spar took note of Ncumisa’s business and she’s currently supplying her produce to them.

For Ncumisa, family and community is everything. The YouFarm Crowd Farming Platform uses the power of communities to raise finance for farmers and we are proud to be helping Ncumisa raise the money she needs to purchase irrigation equipment and shade netting so that she can expand operations.

To find out more about how you can help Ncumisa and become a part of her journey by investing in her project, visit www.youfarm.africa and open your YouFarm account today.

Eggciting times at YouFarm South Africa!

Growth

It’s been a very busy couple of weeks at YouFarm. We’ve had a number of exciting developments as we start to spread our wings. We have a couple of new agents who we are now working with and we are one step closer to achieving our vision of changing the way agricultural finance is done in Africa.

Recap

Last week I spoke about our pivot to a more sustainable model that allows us to scale and identify more farmers across the country that need funding. This model has us working with agents in South Africa and 3 other countries namely Uganda, Zambia and Zimbabwe.

YouFarm Agents identify farmers that require funding. The agents perform due diligence on the farmer and ensure that the farmers have the capacity to produce the crops that they are seeking funding for. For example if a farmer says that they have 1 hectare of irrigation, our agents will go and inspect the farm to see if the irrigation equipment works. The agents also assist the farmers with budgeting for their projects. This helps the farmer to focus on the project and ensures that projects are not over inflated.

The agents help the farmers manage the projects from planting all they way to harvest. Not only do the agents assist farmers with project management, they also provide expert agronomy advice and extension services so that the farmers can reduce waste and maximize yields.

tapiwa logo

One such agent is Prestige Agri Solutions. Prestige Agri Solutions has been providing expert advice to farmers in the Gauteng region for several years now and is managed by a highly motivated team of agronomists. Their sole purpose is to help farmers achieve their goals.

Some of the services Prestige Agri Solutions provide include:

  • Farm mapping
  • Soil and water analyses plus test result recommendations
  • Crop management
  • Irrigation management and scheduling
  • Fertilizer recommendations
  • Pest and disease management
  • Crop budgets
  • Agronomic reports and recommendations

Prestige Agri Solutions managed to identify a farmer who requires funding.

The Opportunity

Moatlhodi is a 40-year-old poultry farmer from Hammanskraal in Gauteng who specializes in egg production. He is the only egg producer in his area and he sells close to 30 crates of eggs a day. In order to keep up with the demand Moatlhodi requires R519,155.00 in order to purchase 1,600 point-of-lay hens. These hens will produce enough eggs to service his community for 1 year.

mothla

This presents an eggciting (I couldn’t resist) opportunity for anyone who wants to support a smallholder farmer in South Africa. By partnering up with Moatlhodi you will achieve the following:

  • Support a smallholder farmer
  • Earn some money while becoming a part of the agricultural value chain
  • Help create downstream employment. (Think of the bakers he sells eggs to!)

Moatlhodi requires R519,155.00 so that he can purchase 1,600 point of lay hens plus feed and medicines for the birds to produce eggs for 1 year. The birds will produce an estimated 421,120 eggs making a projected gross income of R694,924.48. This gives us a project profit of R175,768.26.

The investors will get to share 30% of the profit from the sale of the eggs, which works out to a return of 10.2%, meaning that for every R100.00 you put into this project you can expect to earn R10.20. Not bad considering that the interest rates are sitting at 7.25%. Best of all your returns are paid back monthly for this project.

  • If you invest R1,000.00 you can earn up to R102.00 after 12 months. The repayments will be R91.83 per month for 12 months.
  • If you invest R5,000.00 you can earn up to R510 after 12 months. The repayments will be R459.16 per month for 12 months.
  • If you invest R20,000.00 you can earn up to R2,040.00 after 12 months. The repayments will be R1,836.66 per month for 12 months.

YouFarm South Africa is very excited to be supporting Moatlhodi and we are confident that Prestige Agri Solutions will manage the project so that we can produce great returns for both Moatlhodi and potential investors.

If you would like to invest in the project visit www.youfarm.africa (link) and enter the reference code hampol12m. For more details, please download the project prospectus from here. If you would like to know more about how you can become a YouFarm Agent, email info@youfarm.africa or WhatsApp +27730270637.

 

If you would like more information on Prestige Agri Solutions please email tapiwa.nyatsambo@agrsolutions.co.za

 

We have a lot of exciting projects coming soon. Follow is on Twitter. Like us and follow us on Facebook or visit our website http://www.youfarm.africa. If you have any questions about how you can invest or how you can become an agent and support farmers in your community feel free to email us info@youfarm.africa or WhatsApp +27730270637

Learning from our mistakes!

Changes

It’s been a while since I last blogged about the work we are doing so I thought I would share our progress with you. Our mission at YouFarm has always been to change the way agricultural finance is done in Africa. It has not been an easy journey. We are 3 years into becoming an overnight success and along this journey we have made many mistakes but we made sure that we learned from them.

The Move

A lot has happened since I last posted. We decided to move from Zimbabwe to South Africa after getting accepted into the Startupbootcamp Afritech Accelerator program. It was an amazing experience and it helped us scale into a new country.
SBC_AfriTech_color_500

When we started we were naive and optimistic. We thought that we knew it all and that we had created a great business model that we thought would uplift Zimbabwean farmers and survive the fluid Zimbabwean economy. Validation came in the form of support from early crop investors, the agricultural community and a global impact investor who offered us USD200,000 for a 20% stake in the company. Things were looking good!

We turned down the investment offer because the investor wanted to give us the money in Zimbabwe’s local currency, as they had funds in the country from their other projects that they could not get out of the country. At that time, the black market exchange rate had started running. At one point I remember when the rate increased by 100% in the space of a week. Had we accepted the deal a week earlier, the money would have lost half its value. I knew nothing about buying forex on the black market and I did not want to take the risk of keeping that sort of cash in person.

Sometimes I wish I had taken that offer. Not only would we have had a great global partner to work with but I would have had money to keep my team going, as I had been paying them from my own pocket. While they shared my vision, their bills and other financial obligations did not and ultimately they moved on.

Learning from mistakes

We ran 5 pilot projects in Zimbabwe, 2 were very successful with the mushroom project seeing investors getting great returns. 3 did not work out because of the challenges of running a business in Zimbabwe.

mistakes

There was one common denominator in the 3 failed pilots. US! We were trying to do everything from providing the finance, to managing the farmers, to providing extension services. We ended up over stretching ourselves as opposed to focusing on one thing and doing it well. Imagine doing all these things in Zimbabwe where you also have to factor in exchange rates, hyperinflation and time spent looking for fuel. It’s a recipe for disaster. Add to that, we were a startup so there was no support from banks or angel investors.

In a hyper inflationary environment, decisions cannot be made slowly. In the case of our first livestock project, it took a committee 3 weeks to agree on a start date for the project. They had signed all the contracts but there were disagreements. While we waited for them to resolve their issues the price of inputs tripled.

The last project failed because input suppliers started charging in United States dollars and fuel became almost impossible to get resulting in post harvest losses. 6 months of hard work went down the drain after we could not get produce to market.

Global COVID-19 Pandemic and it’s effects

We have learnt a great deal from these mistakes and we hope never to repeat them again. After going through the Startupbootcamp Accelerator program we were ready to launch our first pilot program in South Africa. The farmers were lined up and everything was ready to go. Then disaster struck. COVID-19!

A week before our pilot was supposed to launch, South Africa implemented a lockdown in effort to curb the spread of the Coronavirus. We told ourselves that this was a temporary setback and that things would be back to normal after 2-3 weeks. How wrong we were! We didn’t have a plan for a global pandemic. As the local and global numbers of people who were infected started going up, reality started to set in. We realised that things had changed forever!

We were faced with a massive problem. How were we going to inspect farms, manage farmers and provide extension services if we couldn’t travel and get to them? If we didn’t find a solution to this then our business was dead! 

Pivot

The solution to our problem came from looking at our past mistakes and learning from them. You are only as strong as your weakest link. Our weakest link had been the ability to manage multiple farmers and provide extension services to all farmers while operating on a shoestring budget. We realised that instead of trying to do everything, we needed to focus on providing a platform that allows people to invest in crops and livestock and share the profits with the farmers when the produce goes to market and leave the management of farmers to the experts.

pivot

This is how the YouFarm Franchisee model was born. Franchisees are independent operators and entrepreneurs who live in farming communities. Their job is to identify farmers who need funding and manage those farmers from planting all the way to harvest. This has profoundly changed the way we now operate. We can now scale faster and reach more farmers.

Meet Lerato and Mpundu

Lerato is a 23 year old entrepreneur from Taung in Northwest Province in South Africa. She was raised by her grandfather who is a farmer. Seeing him struggle to get finance is what made her decide to become a YouFarm Franchisee in Taung. She has partnered with an experienced Agronomist and they are now working with several farmers in Taung who produce lucerne grass. These farmers are in need of funding and Lerato is determined to make sure that they get it by getting them onto the YouFarm Crowd Farming Platform. YouFarm managed to partner with a franchisees in South Africa!

Lerato
Lerato Seimelo

In Zambia, we recently launched our first Southern African project for broiler chickens. We are proud and excited. The project is managed by Mpundu our franchisee in Zambia. Mpundu is supporting a farmer who has a contract to produce 12,000 chickens per month and requires finance in order to fulfill this contract. This project has an ROI of 5.69% after 6 weeks. Not too bad if you ask me. For more details on how to invest in this project download the prospectus here.

We are currently on boarding franchisees in Namibia and Uganda so you can expect exciting projects from those countries soon.

We have a lot of exciting projects coming soon. Follow us on Twitter . Like us and follow us on Facebook or visit our website www.youfarm.africa. If you have any questions about how you can invest or how you can become a franchisee and support farmers in your community feel free to email us info@youfarm.africa

YouFarm responds to COVID-19

Just over 3 weeks ago South Africa went into lockdown in order to slow down the spread of COVID-19. This lockdown was further extended until the end of April. Many industries have been affected, and many people are going lose their livelihoods as a result. Agriculture has not been spared from this disaster.

When agriculture sneezes (excuse the metaphor), many industries catch a cold! For example fertiliser and input manufacturers, input suppliers, people in food processing and packaging, people in FMCG all the way down to tourism. The bottom line is that people need to eat.

In order for people to eat and for the downstream industries to survive we need to support our farmers. Farmers are at the frontline of production. Farmers will face several challenges some of which include access to finance, access to markets and loss of labour.

What is the problem?

In order to help farmers YouFarm South Africa has stepped up to the challenge. Traditional financial institutions are not addressing the funding needs of farmers and finding safe , insured and profitable alternative investment options has always been a challenge for everyday individuals. YouFarm provides a solution to these 2 problems through the YouFarm Crowd Farming Platform.

The Solution!

YouFarm provides farmers with access to collateral free finance by getting people to invest in crops and livestock and share the profits with the farmers when the produce goes to market. From as little as R200 you can partner a farmer and become a part of the agricultural value chain. The best part is that you get your returns as soon as the produce goes to market. Some products can take 5 weeks to get to market and some can take up to 6 months, so it really depends on you!

So how does the profit share work? Say for example a farmer needs R1000 to grow tomatoes and the tomatoes fetch R2000 at the market the first R1000 goes towards paying back what the partners put in and the remaining R1000 is the profit. The farmers take 40% of the profit, the partners take 40% and YouFarm takes the remaining 20%. So if you partnered with the farmer and put in the full R1000 you would walk away with your initial R1000 plus R400 after the time it takes for tomatoes to get to market. If you put in R200 you would walk away with your R200 plus profit of R80. It’s a very simple yet powerful concept! Shared economies!

The Opportunity!

At YouFarm we realised that there are farmers all over South Africa who will need support post COVID-19. So in response we are looking for passionate people who want to change the way agricultural finance is done in South Africa. We are looking for people who want to earn money and become a part of the agricultural value chain by becoming YouFarm franchisees!!

So whats does a YouFarm franchisee do? YouFarm franchisees are responsible for finding farmers in their communities, and working with them to make sure that they get funded and that their produce gets to market! YouFarm South Africa assists franchisees by providing them with training and linking their farmers to our global network of people who are looking to partner up with farmers by becoming micro impact investors.

The franchisees get to share the profits with the partners and the farmers. YouFarm South Africa takes care of everything else so that the YouFarm franchisees can focus on getting farmers funded and producing quality produce. Together we can ensure that our farmers get the support that they need.

If you would like to register as a YouFarm Franchisee or farmer visit www.youfarm.africa or email info@youfarm.africa. Follow us on Facebook http://www.facebook.com/youfarmsa #InvestingInAgriculture

 

 

The importance of good farm record keeping

Keeping records is the backbone of managing one’s agribusiness. Efficient management of a farming operation requires that records be maintained to enable the farmer to make informed decisions affecting their profits.

records
Types of Records

There are 2 main types of records that a farmer must keep. These are financial and production records. Financial records concern the financial dealings of the farm. These records show farm income and expenditures. These are a record of produce sales, operating expenses, equipment purchases, depreciation records, inventories and accounts payable or receivable. All these fall into the financial records category.

Production records include things such as crop yields, plant populations, quantities of inputs used and loss through death. Production records can also capture aspects such as how many animals you have, their health history, what you are feeding them and how often. Keeping and analysing accurate production records are essential aspects of farm management.

Both production and financial records are critical to the efficient management of a farm business. When such information is accurately maintained and categorized, it can be used to make useful decisions

Reasons for Keeping Farm Records

There are various reasons why a farmer should keep farm records. The reasons may be summarized as follows:

  1. Farm records are used to evaluate the performance of any farm or farm enterprise within a given period of time. Farm records will enable the farmer to know what each enterprise contributes to the overall progress of the farm.
  2. Records are an aid to managerial control. With the help of records, a farmer can keep a close check on whether work on his/her farm is going according to his/her plans. For instance, checks can be made on whether too much animal feed or too much seed is being used or whether crop and livestock yields are falling. It is important to detect where farm activities are going wrong quickly so that they can be put right before losses occur.
  3. Farm records provide figures for farm planning and budgeting. A farmer making plans to modify any farming activities needs to know what yields can be expected from crops and livestock and what costs and receipts are likely to be received.
  4. Farm records tell a farmer how much is being earned.
  5. Farm records tell a farmer where they are gaining progressively or loosing.
  6. Farm records enable the farmer to obtain loans from banks and other financial institutions. Banks normally give loans if a farmer can produce adequate physical records with the corresponding accounting records as well as the overall farm plan. This is necessary and beneficial to both the bank and the farmer for the good use of the loan which must be repaid with interest.
    It is the lack of accurate records in small scale farm production that makes it difficult for banks to extend credit facilities to small-scale farmers.

Analysing the records

Many farmers cannot list the inputs and associated costs that they have used in production. The inability to recall or record what went where or how much was spent on production operations is the first sign of trouble. Simple record keeping provides the solution to most of the problems farmers face during production.

Decision making can be enhanced by examining both production and financial records and their impact on profitability. The income and expense records can quickly show how a farm business stands on a cash basis, in a week, month or during any period desired. Good records can lead to better decisions.

At YouFarm we promote precision agriculture in order to reduce waste and increase yields. This is why we take record keeping seriously. Through our partnership with Harare Technical Academy we provide farm management courses that farmers must take so that they can understand their business better. Our goal is to create smarter farms and smarter farmers.

Next week we will talk about the importance of forging partnerships in agriculture.

Follow us on Facebook http://www.facebook.com/youfarmzw or on twitter @YouFarmZim. To register as a farmer or investor log onto the website http://www.youfarm.co.zw and fill out the registration forms.

Types of Agricultural Financing in Zimbabwe

There is a US$223 million agricultural funding shortfall in Zimbabwe affecting thousands of farmers. This week I want to briefly look at the different types of agricultural finance in Zimbabwe and how they compare to the YouFarm Crowd Farming Platform

There are thousands of financially disenfranchised farmers in Zimbabwe. The table below shows the results from a study by Mapfidza et al (2010) showing the percentage of farmers who were interested in seeking funding if it was available

Farm Type Interested in seeking finance if available (%) Not interested due to fear of defaulting (%)
A1  (small holder) 45% 35%
A2 (small scale) 65% 25%
A2 (medium scale) 80%

Bank Finance

For most A2 farmers, bank finance is essential but has been largely unavailable due to many factors. The most important factor is the fact that the farmers do not have collateral and that the 99 year leases are not yet bankable because they are State property hence, can not be sold or sub-let. It is therefore, not clear how the land could be foreclosed to recover unpaid loans. This has made it impossible for banks to lend farmers money for farming activities. Even if government makes the leases bankable, it is still a political hot potato as no bank will want to be seen to be foreclosing and taking land from beneficiaries of the land reform program.

Resultanly, farmers have had to put up other assets in order to get loans. Once the bank provides the loan, it is up to the farmer to use the money for farming operations. The bank does not care if the farmer succeeds or not as long as they get their money back. I came across an interesting statistic, 90-95% of farming loans are repaid by farmers if they are given by the bank directly. Less than 50% of loans that are associated with government programs are paid back. It makes sense. Take a loan and just survive long enough for government to write it off at the next election.

At YouFarm we do not ask the farmer for collateral because we work with the farmer by providing them with technology like drone and satellite data plus expert agronomists so that they can reduce wastage and increase yields by practicing precision farming. We are interested in seeing the farmer succeed because we have to protect the investors money. We also share the profits so we monitor everything from the moment we reach the funding goal for the crop, till the crops get to market.

bank-finance.jpeg

Contract Farming

Contract farming has become very popular in Zimbabwe. Tobacco contract farming was vital to the growth of tobacco production in Zimbabwe post land reform. In fact this year, has seen record sales in large part due to contract farming that has provided both large scale and small scale farmers with the means to become tobacco farmers.

There are other crops that are covered by contract farming. These include cotton and sugar cane. One of the biggest complaints by farmers is the lopsided nature of the contracts they end up getting into. In some cases the farmers are paid as little as 8% of the profits. Most farmers sign because they are desperate, other out of ignorance. The other issue is that some of the companies that provide the contracts are run by unscrupulous individuals who fleece farmers by way of giving crops lower grades or in some cases not paying farmers after they have produced. In other cases they over charge farmers for the inputs. One example was given by one of my listeners who called into the agribusiness radio segment that I used to present on Capitalk FM saying that he was doing tobacco contract farming and the company he was contract farming for, was charging him more than double the market price for fertilizer, but he had no choice.

At YouFarm we believe that the farmer is the most important member of the team. That is why the farmer retains the lions share of the profits. We also do not over charge for inputs. In fact we have partnered up with a few companies so that we can get discounts on inputs. Our farmers can also get discounts for inputs beyond YouFarm funded projects. We involve the investor and farmer in all aspects including input purchase so that there is transparency.

Command Agriculture

Command agriculture was a political masterstroke that was accompanied by good rains. It captured the imagination of Zimbabwean farmers. Free inputs and free tillage. All you needed was land. Zimbabweans like free things and better yet free money. It was so successful that command has become a buzzword and now there is talk of command fisheries, command dairy, command beef and command horticulture.

Theoretically command maize should work if managed properly and if farmers receive inputs early. There is no point in providing compound D fertilizer 2 weeks after the farmer has planted. Like YouFarm command agriculture does not ask farmers for collateral. They do provide farmers with agritex officers to monitor the crop production and to insure that the inputs are used correctly and there is no crop insurance. In exchange, depending on the area, government wants 5 tonnes per hectare in return. The rest belongs to the farmer. 2 seasons ago a young farmer did 21 tonnes per hectare. If i recall correctly he planted 120 hectares for command. 120x16x$360=$691,200 not bad considering that the inputs were free. You can see why its popular.

There has been talk about command horticulture for export purposes but that’s a pipe dream. First of all getting the farms Global Gap certification would be too expensive. Secondly finding farms that are not under dispute would prove to be difficult. Lastly we no longer have direct flights to the markets like Amsterdam. It is not impossible but it would take a lot of work to train the farmer in order to get them to produce and meet the standards required for export.

YouFarm ensures that all crops are insured against force majeur and political risk. We are able to provide financing for a variety of crops as long as they have a market. We are not limited to maize or tobacco. While command may provide you with an over worked agritex officer who has to monitor all the farms in a district, YouFarm provides you with a dedicated expert agronomist who’s sole mandate is the success of your crop.

The YouFarm Crowd Farming Platform provides a superior, alternative and disruptive form of collateral free funding for farmers.

Follow us on Facebook http://www.facebook.com/youfarmzw or on twitter @YouFarmZim. To register as a farmer or investor log onto the website http://www.youfarm.co.zw and fill out the registration forms.

Agriculture is everything

A brief history of agriculture….

Last week I spoke about the importance of due dilligence before investing your hard earned money in anything. For those of you who were paying attention, you will also remember that I had said that this week I would be talking about the different types of finance available to farmers in Zimbabwe. I’m going to postpone that topic till next week because I need to talk about why agriculture is EVERYTHING! I’ve been reading an amazing book by Jared Diamond called, ‘Guns, Germs and Steel’. I would recommend it to anyone who has an interest in agriculture.

Agriculture arose independently in different parts of the globe. Some of the centres of origin of food production include:

  1. The Fertile Crescent;
  2. China;
  3. Eastern United States;
  4. Mesoamerica (this is an important historical region and cultural area in the Americas, extending from central Mexico through Belize, Guatemala, El Salvador, Honduras, Nicaragua, and northern Costa Rica, It is one of six areas in the world where ancient civilization arose independently);
  5. Ethiopia; and
  6. West Africa.

There are 11 areas where agriculture is said to have developed independently.

EgyptianFarming2.jpg

The Fertile Crescent (also known as the “cradle of civilization”) is a crescent-shaped region where agriculture and early human civilizations like the Sumer and Ancient Egypt flourished. Technological advances in the region include the development of writing, glass, the wheel, agriculture, and the use of irrigation. Agriculture is said to have originated here as early as 9000 BC. From these areas agriculture spread around the globe.

Civilization

In all the areas that agriculture developed so did civilization. Tribes were able to grow into villages, villages grew into towns and so on. There was no longer a need for early humans to move around hunting and gathering food. It also saw the rise of political systems and Chiefs who would oversee the distribution of the food.

Because people did not have to worry about food they were able to invent writing so that they could record their harvest. Humans had the time to pursue things like poetry, art and science. These societies were also able to develop their armies. This is all because farmers produced the food so that others could focus on different activities and not worry about survival.

Domestication brought along disease. Many of the diseases we are immune to today actually came from animals which were domesticated for farming. Why is this important you ask? These civilizations that developed agriculture were able to colonise the rest of the the world by military force and in some cases by (inadvertently) exposing the populations they were trying to control to new diseases. For example the Aztecs were exposed to smallpox by Spanish colonialists. The origin of smallpox as a natural disease is lost in prehistory. It is believed to have appeared around 10,000 bc, at the time of the first agricultural settlements in northeastern Africa. AGRICULTURE IS EVERYTHING!

The Future

By 2030 the worlds population will be over 8 billion and agriculture in Africa will be a US$1 trillion industry. It is no mistake that other nations are investing heavily in this sector and buying up valuable land. Neither is it a mistake that Africa’s richest man is investing heavily into agribusinesses across the continent.

At YouFarm we recognise the importance of agriculture and how it contributes to human civilization and development. This is why we advocate for creating smarter farms and smarter farmers. We believe that by getting people to invest in agriculture they can have a say in how their food is grown and contribute to society while making money. Next week we will go back and talk about the different types of funding options that are available to farmers.

Follow us on Facebook http://www.facebook.com/youfarmzw or on twitter @YouFarmZim. To register as a farmer or investor log onto the website http://www.youfarm.co.zw and fill out the registration forms.

The importance of due diligence

Last week we spoke about how YouFarm is throwing out the rule book in order to provide finance for financially disenfranchised farmers who are failing to access funding from traditional financial institutions. This week I want to focus on the importance of due diligence.

Due diligence is an investigation of a business or person prior to signing a contract.

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YouFarm performs due diligence by vetting farmers and farms in order to protect the investors hard earned money. Our vetting process involves physical farm visits, equipment and infrastructure inspections. We also look at what sort of experience the farmer has. The less experience a farmer has the more we work with the farmer. Security at the farm is also critical. How safe is the produce from wild animals and humans. At YouFarm we promote best practice farming and as such we stand against the use of child labour in agriculture. We ensure our farmers do not use children to produce drops. Lastly we determine if the farmer has permission to use the land.

Partnership

The YouFarm Crowd Farming Platform is a relationship between the investor, the farmer and YouFarm. This is why we do not charge any fees for farmers or investors to register.  Anyone who requires farmers to pay fees for farm inspections is not a genuine partner. We also encourage investors to do due diligence on us before they invest their money. The Cattle Ownership Society is a good example of what happens if you dont do proper due diligence. Many people were swindled by this “fly by night” company.

Before you invest in a crowd farming project in Zimbabwe, it is crucial that you ask yourself the following questions as there are too many snake oil salesmen in the country, who are looking to fleece farmers and investors.

  1. Is the company registered in Zimbabwe as per the Companies Act? If so what is the company registration number?
  2. If the company claims to be registered in another country, a quick google of the address and company details will yield results. Google maps will even show you what the premises looks like. If the company claims it is based in the United Kingdom for example you can use https.//beta.companieshouse.gov.uk to see if the company is registered and if they are up to date with tax returns etc.
  3. If the company is requesting that farmers or investors pay registration fees, alarm bells should immediately start ringing.
  4. Crop insurance is important. If a company claims they have insured the crops you need to demand that you see the insurance certificate.
  5. Does the company have contact telephone numbers or are they only keen to talk via email?
  6. Lastly perform background checks on the Directors. A simple search on google or LinkedIn can yield amazing results. If the company only has one director, take your money and run in the opposite direction.

Any genuine company should be able to provide all this information upon request. At YouFarm we take our partnerships seriously and we are open to scrutiny from anyone. We involve the investor in the project from start to finish.

 Media Coverage

YouFarm has been receiving a lot of positive media coverage because of the innovative way we create financial and technological inclusion. It also helps that we have been rated one of the best tech startups in Zimbabwe. YouFarm began operations in 2017 and is the first crowd farming platform in Zimbabwe. One company has been using press releases banking on the fact that Zimbabwean journalists do not do due diligence to claim that they are the first in Zimbabwe. Imitation is the sincerest form of flattery and while we welcome competition because it keeps us on our toes and brings out the best in us for our customers benefit, we urge investors and farmers alike to be weary and to perform their due diligence.

Next week we will look at the different forms of finance that are available to farmers in Zimbabwe. Follow us on Facebook http://www.facebook.com/youfarmzw or on twitter @YouFarmZim. To register as a farmer or investor log onto the website http://www.youfarm.co.zw and fill out the registration forms.

Throwing out the rule book!

3rd, not bad hey!

In my last post I spoke about the use of technology in agriculture and how YouFarm intends to provide access to technology for Zimbabwean farmers. This week we want to briefly look at how YouFarm is throwing the rule book out the window. But first a bit of housekeeping. Last week was a busy week for the YouFarm team as we went up against Zimbabwe’s top tech startups. A total of 50 teams from across Zimbabwe applied and only 10 made it to the Seedstars Harare final. We went up against some tough competition and seasoned operators. We came in third and will be representing Zimbabwe in Abidjan Ivory Coast later this year! Not bad as it was our first time entering a pitch competition. It also means we are onto something.

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Shortfalls

There is a 40% agricultural funding shortfall in Zimbabwe which mainly affects rural farmers. There are also thousands of financially disenfranchised farmers in Zimbabwe. In short traditional lenders are not catering to the needs of farmers in Zimbabwe. There is an agricultural funding requirement of approximately $549 million. There is a $223 million funding shortfall! Some of the reasons behind loan rejections include:

  • lack of collateral
  • poor past performance
  • lack of farmer experience.

At YouFarm we recognise the needs of farmers. Some of the requirements for farmers to get loans are ridiculous. Its almost as if theres a hidden hand that does not want farmers in Zimbabwe to succeed.reasons for loan rejections At YouFarm we are throwing all these preconditions out of the window. By thinking outside the box we have created a way to fund farmers without excluding them due to social or economic conditions. There are too many hectares of productive farm land lying fallow in Zimbabwe because the system refuses to recognize the needs of farmers.

Thinking outside the box

The YouFarm Crowd Farming Platform provides collateral free finance for farmers by getting people to invest in crops and livestock and share the profits with the farmer when the produce goes to market. In order to ensure that the farmer succeeds we pair them with experienced agronomists. This removes the need for the farmer to be experienced as we work closely with the farmers in order and educate them so that they become better farmers who reduce waste and increase yields.

We believe that all Zimbabweans should be beneficiaries of the land. By getting people to become cellphone farmers we are giving regular Zimbabweans a chance to  earn money form the land. In the next few months, Zimbabweans will be able to earn real foreign currency when YouFarm opens up investment into export crops. Imagine that, getting a piece of that horticultural export action by simply investing using your mobile phone or laptop!

Next week we will talk about profit sharing and how simple it is for you to become a farmer that does not own any land.

Follow us on Facebook http://www.facebook.com/youfarmzw or on twitter @YouFarmZim. To register as a farmer or investor log onto the website http://www.youfarm.co.zw and fill out the registration forms.