Risk mitigation: Insights into Zimbabwean agriculture

Last week I spoke about participatory agriculture and how the time has come for people to have a say in how their food is grown. I also spoke about becoming a part of the agricultural value chain as investing in agriculture is the smart thing to do. One only has to look at a few key statistics to know that it is a profitable choice in the short, medium and long term. Did you know that:

  • Since 2009, investors in the USA, Europe, Middle East and Asia have been buying and leasing millions of hectares of African land for agricultural purposes.
  • Foreign Direct Investment in African agribusiness was $10 billion in 2010 and is projected to reach $45 billion by 2020? Agriculture is taking a huge leap in Africa and investors want a piece of the action too.
  • Africa’s agribusiness industry will be worth $1 trillion by 2030! That’s huge! If this projection by the United Nations comes true, agribusiness will become the ‘new oil’ in Africa!
  • The YouFarm Crowd Farming Platform allows you to become a part of this “gold rush” by creating the next generation of tech savvy, cellphone farmers who do not require land to be a part of the agricultural value chain.

We are our own worst enemies!

Humans have a tendency of letting themselves down. I would say that its a Zimbabwean thing, but I think all humans look for the path of least resistance. Zimbabwean farmers have a nasty reputation for side marketing. For those who do not know whats side marketing is, its when a farmer decides to sell their produce outside the contractual agreement, after being supplied with inputs to grow the crop. Zimbabwean farmers have also been known to sell inputs and there is a tendency to not use agricultural loans for their intended purposes.

Side marketing breaches any contract that a farmer may have with a company or individual that may have supplied inputs. I believe it is theft and as such the farmers should go to jail. Same goes for sale of inputs. Not only does the sale and misuse of inputs deprive the supplier of their return on investment, it results in reduced yields and profits. I can tell wild stories about the abuse of Command Agriculture inputs but thats not why I’m here. Another thing that Zimbabweans do very well is misuse business loans. An agricultural loan is a business loan. There is a tendency to want to pay bills, school fees and buy cars instead of using the money for what it was intended for.

Having said that, there is an interesting statistic that I came across while I was researching this phenomenon of side marketing and how to combat it. Commercial banks have a 95% loan recovery rate when it comes to agricultural loans that they issue themselves and a 50% loan recovery rate when Government is attached to the loan. This tells me that there is a perception that Government loans do not have to be paid back. Lets face it, you only have to survive for 5 years at the most before government forgives debts as an election promise. This tells me that given the right conditions farmers are willing to do the right thing.

YouFarm employs a range of strategies in order to prevent side marketing. These include working closely with the farmer and educating the farmers about the importance of cash flows and budgeting. To us, the farmer is an important member of our family and more importantly a partner. Where others see farmers as a means to an end we see them as the lifeblood and backbone of the YouFarm Crowd Farming Platform.

Agriculture is a science

Back in the day farmers used to plant seeds and pray for rain. But now we have so many ways to maximize yields. The use of agri chemicals, fertilizers and irrigation are the most commonly used methods. But there is so much more that can be done in order to mitigate the risks associated with agriculture and maximize yields and profits. YouFarm provides farmers with the latest farming technology and access to accurate weather data. One of our company goals is to transfer technology to Zimbabwean farmers. Imagine small-scale farmers having access to satellite technology, accurate weather data and mechanization. Add to that, our expert agronomists. This is a recipe for success and financial inclusion!

mech

Insurance

Crop insurance is a critical part of any farming project. Unfortunately in Zimbabwe we do not take it seriously enough. At YouFarm we make sure that all crops are insured. We do this to protect the investors money and because it makes good business sense. We insure against force majeur (pests, disease, fire etc) and political risk.

Change of culture

YouFarm has a variety of risk mitigation strategies in place in order to protect the investors money and maximize yields. Through extensive research we have gained some valuable insights as to why farmers behave in a certain way and what may tempt a person to side market. We aim to change the farmers mindset. As I said before, one of our core goals is to transfer technology to African farmers. We believe that any farmer can be successful if they have access to finance, guidance and technology. Next week I shall talk about agricultural finance and how it has held back new 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.

 

Participatory Agriculture: Time for the consumer to have a say in how their food is grown!

Last week I spoke about how cellphone farming was the solution to unlocking ways of financing farmers who have access to land. Some of the main reasons why farmers can not get access to finance for farming operations are:

  • high cost of finance;
  • predatory lending practices by banks and microfinance institutions;
  • lack of immovable property (collateral) to borrow against; and
  • lack of farming experience.

reasons for loan rejections

Solving these challenges requires some outside the box thinking. The YouFarm Crowd Farming Platform exists to square the playing field for people with access to land by providing a solution that does not ask for collateral and provides farmers with training, technology and experienced agronomists.

Having a say

Agriculture has evolved tremendously from when man first domesticated plants and animals in the fertile crescent thousands of years ago. We now use all sorts of methods to increase yields and fight off pests and diseases. These methods range from fertilizers and pesticides to genetic modification of plants and animals. Unfortunately some of these chemicals find their way into our diets. For example a pesticide know as Roundup has been linked to gluten intolerance. The jury is still out on Genetically Modified Organisms (GMO’s) and some effects are still not known. For example if a gene that makes groundnuts resistant to a particular disease or pest is taken and spliced into maize, in order to make the maize resistant to said disease, will the maize affect people with peanut allergies? This is why you see labels for things that have the disclaimer that it may contain peanuts yet its not even remotely related to peanuts.

Another concern with farms in Zimbabwe and Africa in general is the use of child labour. In a report titled “Bitter Harvest”, children as young as 11 are reported to be working on farms. This practice needs to be stopped.

Its time people have a say in how their food is produced. Participatory agiculture is just one way in which people can take back the power of determining what they put into their bodies. If you believe in organic non-GMO food then you need to invest in organic non-GMO crops. If you believe in grass fed beef then invest in a herd. YouFarm gives people a chance to determine how their food is grown by getting them to become cellphone farmers, who invest in crops that are grown organically and ethically, without the use of child labour.

How do I become a farmer without land?

Easy! All you need is an internet connection and your laptop or a smartphone. Then register as an investor with YouFarm. YouFarm gives you all the information you need to know about the crops you want to invest in. We tell you how they will be grown, the chemicals that will be used and the labour force. YouFarm thoroughly vets the farms and farmers producing detailed reports. You can then make the decision to support that farmer and have a say in how your food is grown.

Participatory agriculture

By choosing which crops to invest in, you are participating in the agricultural value chain. You are also participating in the economy, we all know that Zimbabwe is an agro based economy, so you also have your say in what direction the economy takes. By joining the YouFarm Crowd Farming Platform you automatically become a beneficiary of the Zimbabwean Land Reform Program. Its no longer something that is reserved for farmers or politicians. Its something for all Zimbabweans home and abroad.

Next week we will look at the risks associated with 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.

Making Cellphone Farming Sexy

So last week I spoke about how the idea of YouFarm was conceived. I had to deal with a reality that many farmers in Zimbabwe face, and that is lack of access to capital. According to a study on demand for financing by Mapfiza (2010), 45% of small holder farmers, 65% of small scale A2 farmers and 70-80% of medium to large scale farmers, expressed an interest in seeking finance if it was available.

Zimbabweans have always been interested in agriculture, after all our economy is agri-based. Here are some stats on what agriculture contributes to Zimbabwe’ economy:

  • 15-19% of GDP ( 30% at its peak);
  • 60% of agricultural output goes to the manufacturing sector in the form of raw materials;
  • Consumes nearly 40% of the manufacturing sectors output in the form if fertilizers, farm implements;
  • Provides employment for 60-70% of the working population;
  • Accounts for one third of export earnings

Perhaps it was the propaganda that was fed to us during the land reform program or the fact that we all have a rural home where our relatives live off the land as subsistence farmers, but Zimbabweans have always had an attachment to agriculture and the land.

Land Redistribution

Following the land reform program in 2000, Zimbabwe found itself with a new breed of farmers. Many lacked an understanding or an appreciation of farming or agriculture in general. Having a farm became a status symbol and perhaps this is how the cellphone farmer emerged. This was the guy who would put on his floppy hat, jump into his Toyota Prado and go take a look and the vast tracts of land that he had been given by government. The cellphone farmer did not realise that farming was a full time job and that taking friends out on a weekend to go and see one hectare of maize was not successful farming.

Some of these cellphone farmers who saw the potential in agriculture moved to their farms full time. Barking orders on the phone to a farm manager is a recipe for disaster. Would you run a multi-million dollar company like Old Mutual or Delta Beverages using your phone and only visiting your office on weekends? I think not! Farming is potentially a multi-million dollar operation and should be treated as such.

Participatory Farming

People are now becoming more and more conscious about what they consume. Is it organic, was it ethically farmed and is child labour used in the production. YouFarm gives consumers a say in how their food is grown. If you do not support the use of chemicals in agriculture, YouFarm gives you the opportunity to invest in organic produce. You get to do your part and have a say. One of my goals is to create farmers who do not own any land.

The Irony

Cellphone farmers have always annoyed me, but it turns out that cellphone farming is the solution to financial inclusion for farmers and getting agriculture going again in Zimbabwe. The YouFarm Crowd Farming Platform is web based and our mobile application allows people to participate in the agricultural value chain by investing in crops and livestock. By providing the finance for inputs they automatically become farmers. Additionally, by allowing people to select the type of crop they want to invest in they get to have a say in what is produced. YouFarm makes being a cellphone farmer sexy!

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 YouFarm Crowd Farming Platform

YouFarm was launched in response to an unmet need for funding for small scale and commercial farmers. Towards the end of 2016 my mother became a beneficiary of the Zimbabwean land reform program. She then turned to me and asked me to do something with the farm. I was suddenly faced with the same problem that a lot of beneficiaries of the land reform program are faced with including, new farmers, young farmers and women in Zimbabwe.

I had no previous farming experience and I did not own any immovable property so I had no collateral to borrow against. The harsh economic environment and high cost of finance in Zimbabwe further reduced any chance I had of getting the farm going.
These factors alone affect thousands of Zimbabweans and the cards are stacked against the farmers. Instead of giving up, I began to think of a solution. How could I get funding without collateral or any farming experience? And how would I cope with the cost of finance? After doing a lot of research and thinking I came up with the YouFarm Crowd Farming Platform.

The YouFarm Crowd Farming Platform

I believe that every Zimbabwean deserves to benefit from the land. We may not all be farmers and we may not own land but we have a right to benefit from it. The YouFarm Crowd Farming Platform  allows all Zimbabweans to participate in the agricultural value chain through our unique model of participatory agriculture.

How it works

YouFarm provides collateral free funding for farmers by getting people to invest in crops and livestock. When the produce goes to market they share the profits with the farmer. YouFarm then protects the investors money by:

1.Providing all parties involved with a digital platform to manage investor risk and crop performance.

2.Making sure that money meant for inputs is used for inputs. No farmer is given cash.

3.We make sure that all crops farmed have a market before the seeds are even planted.

4.Provision of accurate weather forecasting using low earth orbit satellites.

5.Providing our customers with cutting edge satellite imaging and advice so that we can maximize yields and savings.

6.Ensuring all crop is insured against force majeur and political risk so that that the investors money is protected.

7.Working closely with the farmers and seasoned agronomists to maximize results

By doing all of this YouFarm has a created a way that every citizen can become a part of the Zimbabwean agricultural value chain.

Follow us on face book 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.