Home Authors Posts by Alex Hitzemann Media & Advertising
Alex Hitzemann Media & Advertising
AAM: First, I want to quickly thank you for taking the time to consider these questions. I believe there is a great story here. There have been scores of articles written on this topic over the past couple months. We’ll begin with a brief summary of the facts we already know about Spinlet. But then hopefully go a little deeper, I have the following questions:
First I have a personal question directed at you. I read that gender empowerment is an issue close to your heart. What are your thoughts on the effects emerging media and mobile accessibility could have on gender issues in developing nations? In my opinion the accessibility of technology as leveled the playing field in some regards. I’m curious as to what you think.
Nkiru Balonwu: Gender empowerment is indeed close to my heart, as an African woman. Historically, and not just in Africa, women have had fewer opportunities than men and have only recently increased in self reliance. I think emerging media and mobile accessibility have democratized (or leveled the playing field) in many aspects of African living. Previously inaccessible content/information has become available as a result of tech advancements opening up a wide array of resources and increasing opportunities in many areas including education, business and healthcare.
Questions on Spinlet
AAM: What are the potential roadblocks for Spinlet? More specifically what makes your model different than the existing mobile music services (i.e Spotify, iTunes, Rhapsody, Beats Music) and, furthermore, tell us about the predicted demand for your project in Africa.
Nkiru Balonwu: The streaming and downloads business, as it mostly operates today, is structured for societies with reliable and affordable mobile internet, rigorous intellectual property prosecution and enforcement, seamless online payment systems and being accustomed to spending considerable sums of money on building a music library. With mobile Internet and payments still in their infancy, streaming and buying music in Africa is not quite the same experience as in Europe or the US. We think however that with a strong focus on African content, we have ready markets in Africa and Africans in the diaspora, and we also see increasing demand from non-English speaking countries like Mozambique and Angola.
AAM: You said in an interview with Forbes that “We found there was about 85% of music landscape (in Africa) was undiscovered.” is this a core concept for your business model in Africa? Do you plan to monetize this undiscovered talent? Can you tell us some more about how you’ll integrate that staggering statistic into your platform.
Nkiru Balonwu: Well, it certainly is a huge part of our strategy going forward. We think that increasing the quantity of indigenous music that is available will drive subscription numbers up, particularly when you consider that a lot of this music is old, nostalgic music that is yet to be digitized and simply isn’t widely available anymore. We certainly plan to monetize as much of the content as we can, not just for ourselves but also for the benefit of artists who haven’t earned royalties since music stopped being widely distributed on vinyl and 8-track tape in Africa.
The key to integrating the music on our platform is assisting with remastering and conversions to digital formats, and possibly producing such collaborations as we did in 2013 with the hugely successful “Baby Mi Da” by veteran musician Dr Victor Olaiya, featuring modern day sensation 2Face Idibia. We think this is a model that will prove as successful across other African countries as it has in Nigeria.
AAM: The service you’re providing sounds quite like Rhapsody (est. 2001), a company which has it’s ups and downs. Is your team in communication with their leadership, or the leadership of any other established music streaming services?
Nkiru Balonwu: The music streaming industry is part of a fairly small ecosystem, so we’re well aware of the different challenges each unique model is facing and how some services are trying to innovate away from pitfalls previously experienced by others.
AAM: I’ve read that Spinlet wants to move beyond just being a music platform, but also supply news and other media. Would there be any possibility for partnership with Africa Agribusiness Magazine to help supply media content for the new dynamic Spinlet app?
Nkiru Balonwu: We’re looking at delivering a more rounded entertainment package – a one stop shop, if you like, for music and related media. This is still in its development phase but yes, we would be looking to partner with publications such as yours in achieving this target.
AAM: There is no denying that mobile banking is on the the rise in Africa, however, “On Device Research” found that “25 per cent of users say they do not make mobile payments because of slow network speeds” and “those with 4G connections only 64 per cent have made a mobile payment,” (Human IPO) What are your thoughts on this?
Nkiru Balonwu: Not being in the mobile banking industry per se, my perspective is the layman’s, but I would say that apart slow networks and other issues of poor infrastructure, there’s also a lack of trust in the system coupled with a perceived inability to fix problems quickly. For example, where a mobile payment is declined and yet the payer is still debited, the fact that reversing such a transaction is often a cumbersome and lengthy process does not help in building trust in the system.
AAM: Do you think mobile infrastructure is expanding at a sufficient rate to support you current venture’s goals?
Nkiru Balonwu: The rate of expansion could be quicker but we can’t really complain. We also expect that as more African countries establish more stable and regular supplies of electricity and, consequently, telcos spend less on backup power and have more to invest on infrastructure, things will improve.
AAM: In your opinion what are some of the pros and cons of mobile banking as opposed to the conventional “western style” of commerce?
Nkiru Balonwu: The biggest pro, as seen in the success story that is Mpesa, is that people in the urban centres can send money safely to friends and relatives in the rural areas. In the wide support structure that African culture promotes, this is a welcome development. Another is the way in which it brings “informal” money into the formal economy, seeing as a significant segment of the African population is unbanked or without access to financial services. To my mind, the pros far outweigh any cons. Mobile banking is increasingly safer, more convenient, faster and more accessible for many, a win-win situation all round.
AAM: Is mobile banking safer, more secure and faster than conventional payment methods?
Nkiru Balonwu: I wouldn’t say that mobile banking is safer or more secure but I would think that it is significantly faster yet offering a good standard of safety and security.
AAM: Do you think there is a role for mobile banking outside of the developing word, say in the US or EU?
Nkiru Balonwu: Yes, I definitely think there’s a role for mobile banking in developed economies. Don’t forget there are a not insignificant number of people living in similar situations as the unbanked or informal economies found in the developing world. But also interestingly, mobile banking in the west is relevant for a different reason, more advanced customer service i.e. deeper customer relationships and superior customer experience. In the end, whether developing or developed, mobile banking can play a pivotal role in increased customer satisfaction. It is also particularly attractive to the younger more tech-savvy generation. And, really what easier way is there to check your balance or pay a bill.
AAM: Is it possible that once a safe banking infrastructure is in place will this mobile banking revolution could be a fad that fades away?
Nkiru Balonwu: I doubt it. It seems to me that the more convenient and efficient mobile banking becomes, the more likely that it would become less a fad and more the norm.
AAM: Topics I would like to discuss could include Spinlet’s plans for rapid expansion in Africa during 2014-15.
Nkiru Balonwu: Content acquisition drive, diversification of product offering and product interface, working with artists to promote their on-platform music more.
AAM: Additionally, I would like to talk about the role of digital media in emerging markets.
Nkiru Balonwu: Digital media is extremely relevant in emerging markets and the developing world primarily because it solved the distribution problem. Until recently, viewing 24-hour news, drama series, movies etc required expensive, and often unreliable, satellite TV equipment and high subscription costs. Original music also required expensive physical medium for mass delivery. For books and magazines, it was paper or you were out of luck. These constraints essentially placed a very low upper bound on the size of the entertainment market. Digital media eliminated these limitations and enabled the concept of content streaming. While distribution was a major headache for large scale content providers, the smaller players and individual consumers faced a crisis of access. Prior to the introduction of digital media it was nearly impossible to put out material without incurring prohibitive costs. The requirements for advertising, placement, and promotion meant that this sort of activity was entirely in the domain of large providers. Digital media has also enabled the on-demand paradigm which has been a revolution in its own right. The notion that a consumer can only access content at a time predetermined strictly by the provider is counterproductive from a business standpoint and unnatural from a philosophical point of view. Finally, digital media has greatly simplified content consumption by eliminating the assortment of incompatible standards that proliferated during the analog era. For example, there were more than a dozen standards for delivering color information in television broadcast such as NTSC 3.58 (US), PAL B/G (Australia, NZ), PAL I (UK), SECAM (France) etc. These standards all required dedicated equipment and very often meant that even when content was physically available it was still inaccessible. Digital media essentially unified the content space freeing the consumer from the tedious chore of managing hardware compatibility requirements. All these fall within the mission and business profile of Spinlet which is to provide an on-demand content stream.
AAM: I would like to like to show how the use of mobile technology in the developing world differs from that in the western world.
Nkiru Balonwu: The use of mobile technology does not particularly differ geographically presently and that is because there has been significant success in creating a universal user experience for commercial products. Perhaps the only place that a marked difference exists is why the technology is relevant. In the western world it has become dominant mainly owing to convenience and portability – compared to the developing world where existing communication infrastructure was, at best, poor. However, the unifying theme in the mobile technologies today is on-demand presence and user behavior is shaped around that irrespective of geographical location. In any case, the world is becoming more of a global marketplace so consumers are being targeted with, broadly speaking, the same products and solutions.
AAM: Finally, I would like to know his opinions on “Africa as a 99 percent pre-paid economy,” I am veryfascinated about how this effects the economic climate in these regions.
Nkiru Balonwu: Prepaid was probably the best option to break digital services into the continent because of the following reasons:
· No credit histories (but this is gradually changing)
· Very few national identification schemes
· Poor address mapping
· Slow, laborious judicial process (for enforcing contracts)
These factors affect not only services but such things as rent (payable in advance, sometimes 2-3 years), acquisition of assets (e.g. Electricity generators, vehicles, etc., all payable in advance).
And even where credit is presently available, the payment spread is much shorter, with bigger deposits required.
It is often said that in business success never comes easily, nowhere is this principle more fitting than with the story of Liberia Cocoa Corporation (LCC). Founded in late 2009, LCC is a 100% Liberian owned agribusiness nestled in the Northeast corner of the country near the Guinea border. Like its name suggests, LCC specializes in the production of the high quality commercial grade cocoa for the export market. The company’s socially conscience business model incorporates both community out-grower farmers as well as plantation style farming for its cocoa development. With an ambitious development plan to establish 6,000 ha of hybrid cocoa within the next 5 years, LCC will likely be the largest privately owned cocoa plantation in the Africa and certainly one of the largest in the world, if successfully implemented.
The company is the brainchild of its founder and CEO, Mr. Momolu (Lu) Tolbert (a western educated Liberian entrepreneur) who simply dared to challenge the perception that African run businesses are neither serious nor viable. Despite its many social and governmental challenges that confront Liberia, unique business opportunities still do exist – albeit not for the faint at heart. For what should have been a rather straight forward business implementation model, for the first two years, LCC was heavily bogged down by many challenges including having to deal with corruption, a culture in which people were unaccustomed to working in a professional environment and the difficulties of funding such a pioneering project.
As the CEO recently explained, “I never imaged that planting trees and creating jobs would be so difficult”. Part Hollywood movie, part political thriller, the story of LCC is one of survival, unwavering perseverance and the sheer will to succeed against all odds. Though the company has had many setbacks, it has had even more achievements. One such example is the company’s corporate social responsibility programs that have developed over 15 kilometers of new feeder roads, a 6 classroom primary school, local bridge construction, local scholarships, boreholes as well as plans to begin construction of a community clinic in mid 2014.
Like that of LCC, Liberia itself has experienced some turbulent times. After gaining its independence 1847 (the first African nations to do so), Liberia was for a while considered a beacon for economic and social stability. Though its economy was largely based on extractive industries such as iron ore mining and precious metals, the country also had vibrant agriculture sector that included ) rice production, poultry, timber, cocoa and coffee. At the time, Liberia was home to the largest rubber concession in the world (owned by Firestone) but also had locally owned commercial fisheries that exported processed fish and shrimp as far away as Japan, United States and the United Kingdom – as early as the 1960’s and 70’s. Despite its many industrial gains, Liberia , as with many other African nations during the 1960’s through 1980’s, the geo-political pressures of the Cold War coupled with the home grown movements for self determination and national identities brought with it social unrest and in extreme cases – bloody regime change.
Such was the case in Liberia when its 133 years of peace was abruptly ended in 1980 with a coup d’état that deposed of the then president William R. Tolbert and his administration. In the preceding years intermittent and protracted civil wars raged on until the signing of the Comprehensive Peace Agreement in 2003. Though peace was in place, the country was in virtual ruins and with it the once burgeoning commercial cocoa sector. Neglected during the war years much of the country’s cocoa trees were lost to the forest and its once internationally renowned research center (CARI – Central Agriculture Research Institute) completely destroyed.
Like neighboring Ivory Coast, the world’s largest cocoa producer, Liberia has ideal conditions for cocoa cultivation. With its rich soils, warm climate and over 170 inches of rain per year, Liberia has the very real potential to become a serious player in the world cocoa export market. Recognizing this potential, LCC has begun positioning itself through its outreach to thousands of out-grower farmers and the direct hiring and training of community based local labor for its nurseries and nucleus plantation. The wider social benefits of LCC’s business operation are palpable and can be seen in many ways but more significantly in the reduction in the number of food insecurity cases as many community household heads now earn regular monthly incomes.
Asoka Ranaweera, who is advising LCC on the development of its concession and marketing and sales, says that the company has a clear vision for producing the finest cocoa beans and in ensuring that its product is ethically sourced and fully traceable. This is a project whose success will revive Liberia’s prewar cocoa sector with big implications for the economy and the population at large most of whom are subsistence farmers according to Asoka.
Asoka who trades cocoa beans from different origins in Africa on behalf of a number of clients says the cocoa market is in a structural deficit during which years of neglect has resulted in falling supply. This coupled with increasing demand from countries such as China and India as well as revived demand in the U.S. and Europe has further contributed to a deficit in supply.
LCC is therefore primed to grow into a market in, which there is already significant demand and the forecast is for increasing demand years out. “Lu, the founder of LCC is typical of a new generation of African entrepreneurs, who have returned to their countries determined to make a difference. These guys want to make things happen, are resourceful and in the process are changing the image and perception of African businesses.” said Asoka. “Its people like Lu that are transforming Africa and its going to be private enterprise that is going to deliver the biggest impact because its self generated growth, not aid dependent” he added.
In a country and region where unemployment rates have in the past reached upwards of 80 percent, the need for private sector investment like that of LCC is crucial to the long-term peace and stability of the country. When asked about the challenges of doing business in Liberia, Mr. Tolbert was quoted as saying…“conditions in Liberia are extremely tough and this is primarily because the normal support structures that exist in other countries do not function well in Liberia. For example the country’s physical infrastructure, roads, bridges and power generation services all need major rehabilitation and without public investments to these areas, the country will have difficulty attracting the private sector especially in the area of agribusiness.
Another serious constraint, is acquiring access to financial capital. Most banks require a minimum of 150% collateralization on loans and often impose 12-24 months payback periods which as you know does not work for tree crops. ” With the exception of Bridgestone firestone and a few of the Malaysian oil palm giants such as Sime Darby and Golden Veroluem, there are no other companies quite like LCC and its companies like these that are at the forefront of reviving the country’s agricultural sector.
For more information on LCC
The story of Mamadou Edrisa Njie
If someone had told me that a few years ago that using the social media will one day land me in a job, I would have totally disagreed with that person, be it an expert, a researcher or a fortune teller. In fact, this wasn’t because I didn’t know what social media was all about but mainly because I was ONLY passionately on Facebook to chat with friends with some that I don’t know.
Here I am, have signed a six month-contract with one of the best IT Service Providers in The Gambia to be its “Social Media Administrator”. A post I only knew existed during the signing of the contract.
Being born and brought up in the rural community of The Gambia where young people trek several kilometers to access internet to use the social media-Facebook and Skype, today, I count myself as one of the luckiest to have had the opportunity to access the social media anytime, anywhere with thanks to an IPAD provided by Global Youth Innovation Network (GYIN) International.
Training counts a lot in life and it is the turn-key to potential opportunities, with great thanks to the International Fund for Agricultural Development (IFAD) Communications Division, me and some colleagues were given practical training on social media 101 on how to use Twitter, Google+, blog post and LinkedIn. I was particularly excited for this training opportunity and as a result, today I am a very happy young digitally connected person in and beyond my country.
My sincere gratitude and sincere appreciations goes to Moses Abukari (IFAD Country Programme Manager for The Gambia) who first helped me to use an IPAD and encouraged me to be sharing agricultural and rural development stories focusing on rural youth; to Roxanna Samii (IFAD Manager Web, Knowledge and Internal Communication) and Roxy for exposing me to more social media (twitter, Google+, LinkedIn) at a training organized by GYIN Gambia for Gambian journalists, bloggers and online reporters at the Kairaba Beach Hotel prior to the IFAD 7th Regional Forum in Banjul in November 2012. Since then, I regularly participate in major public events and share information on social media platforms.
Facebook, Twitter, LinkedIn and Google+ have been my favorite’s social media. I have been using the following sites to communicate with the wider world on events happening in The Gambia and beyond with more attention on youth and development in rural areas.
Again, been among the leading bloggers in The Gambia, I manage my blog Mansa Banko http://mansabanko.blogspog.com
With the training and tools, my passion has been driven to reporting and sharing widely with issues of youth, agricultural development, development projects, environmental issues and more general news of public worthy. Sometimes, I feel nobody is reading or even aware of whatever I share with the public. I occasionally get feed-back from one or two peers or audience who say they like what am sharing with the public.
I only started realizing how valuable these little services of sharing information with the public were seen by some entities as opportunity to have wider outreach through real-time information flow. One opportunity led to another and this was the point that I said “is social media such a powerful tool to empower me economically?’’ and why me?
- I have become the key media and communication focal points for all the IFAD-financed projects in the country.
- So on 1st October, 2013, I signed a contract with Biodiversity Action Journalists-Gambia (BAJ-Gambia) as their “ Online Manager” to manage their Facebook, Twitter, Google+, and LinkedIn platform for a period of one year.
- I also signed a contract with Nifty ICT Solutions in The Gambia for a six-month period as their “Social Media Administrator”. This is what the portion of the contract reads… “To advance our strategy and execute more quickly, more efficiently, with greater excellence and profound learning, we need to transform how we organize, plan, work and collaborate. It is a big undertaking that changes our group structure, but will help us achieve our mission, in web designing, and training.
“You have been contracted as one of the individuals we feel has the capability, drive, and commitment to achieve Nifty ICT Solutions’ goals. We would like to welcome you to our team.
“Once again, we congratulate you in your new position and you will be responsible for developing and managing the relationship with the media, general public….and creates a strategy that will drive communications through social media pages- Facebook, and Twitter and other modes of distribution.
“We appreciate your tireless effort and dedication to Nifty ICT Solutions. We look forward to working with you in the upcoming year and ensuring the success of Nifty ICT Solution and a better life for young people.”
With these recognitions and tasks ahead, I have accepted these opportunities and will continue to remain committed to providing the invaluable services for these institutions as well as to advocate and promote further opportunities for youth especially those in rural Gambia to embrace social media as means for their self-empowerment.
For 70 percent of the developing world, agriculture is the main source of income and employment. In Ethiopia, agriculture accounts for almost half of the
country’s GDP and 90 percent of its exports. However, agriculture in Ethiopia is often characterized by low productivity, with most smallholder farmers having limited access to inputs, information and services. While the demand for these ingredients for successful agricultural production is high, access and delivery is often
An innovate solution to these constraints, the USAID-funded Commercial Farm Service Program (CFSP) is establishing a network of private, retail supply and farm service businesses called Farm Service Centers (FSCs) throughout the Oromia region of Ethiopia. The program was designed by CNFA, a U.S. international development organization that focuses on stimulating economic growth by empowering the private sector. CFSP adapts CNFA’s market-oriented, private sector model for a sustainable enterprise-based delivery of farm supplies and services. The Farm Service Centers are one-stop-shops that provide smallholder farmers with agricultural and veterinary inputs, services and technologies that will help them produce surpluses and become better linked to end markets. This highly adaptable model, with support from CNFA in capacity building and training, has already been proven successful in Afghanistan, Georgia, Moldova and Romania. Building off the success of these enterprises in previous countries, CNFA is adapting the model to build a Farm Service Center network in Ethiopia – the first of its kind.hampered by a variety of factors including high transaction costs, inadequate infrastructure, the lack of commercial distribution networks and limited financing. In addition, many smallholder farmers have a poor understanding of the productive benefits that would be achieved through the use of quality inputs and improved cultivation practices.
Setting out for Success
Launched in the fall of 2012 through a partnership between the United States Agency for International Development’s (USAID) Innovative
In the initial phase of the program, staff worked to survey target Woredas (counties) for a viable year-round market demand for agriculture and veterinary products and services. Outreach events were then held in targeted towns and cities to generate interest in applying for the opportunity to work with CNFA and USAID in establishing these new enterprises. Applications were reviewed and ranked on a competitive scale that evaluated their technical capacity, proposed business plan, and potential impacts. CNFA then selected six of the applicants for the matching grant award and subsequent Farm Service Center development. Of these six, one is a woman-owned proprietorship, three are privately owned and two are owned by Cooperative Unions. The six selected CFSP grantees include:Fund for Ethiopian Agriculture (IFEA) and CNFA, CFSP kicked off its two-year operation with the goal of creating six locally-owned Farm Service Centers in Ethiopia’s Oromia regional state and establishing a wholesale buying cooperative owned by and dedicated to serving the inventory needs of the Farm Service Centers and linking them to national and international suppliers.
- Bishoftu – Alema Farms PLC
- Shashamane – Barite Agricultural Inputs Trader
- Fiche – Biftu Salale Farmers Cooperative Union
- Nekemte – Etafa Mekonnen Crops Trade
- Ambo – Gadissa Gobena Commercial Farm Products PLC
- Dodola – Raya Wakena Farmers Cooperative Union
Leveraging Investment from the Ethiopian Entrepreneurs
In addition to encouraging a competitive business plan evaluation in its grant award process, CFSP places an equally important emphasis on investment on behalf of the selected entrepreneurs. For each of the new Farm Service Centers, USAID has dedicated a $40,000 grant to be used for branding costs (uniform shelving and signage), environmental mitigation measures, worker safety measures, farmer outreach activities, and office and/or service-providing equipment. But the investment into this agribusiness start-up does not end there. To promote buy-in and sustainability, CFSP also asked that each selected grantee “match” USAID’s investment to the dollar. As a result, each grantee has contributed a minimum of $40,000 to the project in the form of construction/renovation, inventory and salaries for newly created jobs. By leveraging private sector investment, the Farm Service Centers will have a minimum initial value of $80,000 – a first for an Ethiopian business dedicated solely to serving the needs of s
Appreciating the potential as well as recognizing the need for improved capacity of these new business ventures, CFSP has also provided targeted training to all Farm Service Center staff which includes an Owner/Operator, General Manager, Accountant, Agronomist, Veterinarian and two Sales Clerks at each Farm Service Center. Trainings ranging from business management, to integrated pest management, to environmental mitigation, to marketing and communication have developed the business and technical capacities of all Farm Service Center staff members and helped to ensure the sustainability of the Farm Service Center network.
Open for Business
By January 2014, five out of the six Farm Service Centers held ribbon cutting ceremonies and were formally open for business. At the Bishoftu Farm Service Center opening ceremony USAID Mission Director Dennis Weller expressed his optimism by commenting that, “these Farm Service Centers provide increased access to high-quality, reasonably priced inputs, training, technical advice and output market linkages to at least 30,000 smallholder farmers. At the same time, they also serve as an innovative model for scaling up private farm supply and service networks in other regions of Ethiopia and other nations of Africa.” Ribbon cutting ceremonies were held at the five locations and attended by officials from the Government of Ethiopia, USAID, input suppliers, local media and eager customers that were ready to shop. Delayed due to land acquisition and construction, the sixth Farm Serve Center is slated to hold its ribbon cutting ceremony in April.
The positive reaction from Ethiopian Farm Service Center customers has been astounding. Chaltu Senbetu, a customer of the Nekemte FSC commented that she has, “never seen any other shop in town that is as appealing to shop in, that is very clean and safe for medicines and that provides quality products on a timely basis.” She also expressed gratitude that the shop provides everything she needs “without having to travel as far as Bishoftu or Addis Ababa.” Even from Chaltu’s testimony, it is clear to see that the Farm Service Centers alleviate the traditional input supply bottlenecks by reducing the time and money spent typically spent for traveling to find the relevant products. Now, customers can purchase relevant, high-quality products that are available at the time the farmers need them.
Complimenting a diverse agriculture and veterinary product line, customers can also visit uniformly branded and environmentally sound stores to receive agronomic and veterinary consultations and training from highly trained staff. When describing the immense value of accessible expert advice Atsede Abate, a customer of the Ambo FSC, stated, “I bought a calf and it became so sick and very close to death. I lost all my hope before I came to this center and got treatment for my animal. Now my calf is more than well and is even running around. I believe this center brings hope to many of us in the town as it is accessible, knowledgeable and welcoming.”
By providing quality inventory and expertise that is tailored to the demands of their respective local customers, the six Ethiopian FSCs are helping improve the productivity, incomes and food security of the smallholder farmers that they serve. And because each FSC is locally owned and operated, it is a sustainable model that showcases the success of harnessing the power of private sector entrepreneurs to help solve development problems.
Few farmers in Mozambique’s Manica province could have predicted the tremendous impact joining a dairy cooperative would have on their lives, considering their resounding skepticism when they were first presented with the opportunity to expand beyond growing crops. And their concerns were completely understandable, considering smallholder dairy farming had never before been seriously attempted in this part of Mozambique, near the Zimbabwean border, and many residents had been burned by their past engagements with cooperatives.
But, after hearing about the successes of the farmers who had worked with Land O’Lakes International Development under the first phase of a USDA-funded Food for Progress Program, which ran from 2008-2012, the fears of many Mozambican farmers were allayed, and clients began enrolling. Through the latest iteration of the program, which runs through 2016, Land O’Lakes will link 4,050 smallholder farmers in Maputo, Sofala and Manica provinces to a commercial dairy value chain. Moreover, through a partnership with Tillers International – which works to preserve, study, and exchange low-capital technologies that increase the productivity of rural communities – innovative farming tools focused on animal traction and transport are being made available to 20,250 farmers. Through the program, Land O’Lakes provides Milk Collection Centers (MCCs) with working dairy infrastructure, such as a cooling tank and generator, to ensure the constant flow of uninterrupted power needed to keep their milk fresh, and each member with a cow and training in dairy farming.
“Our biggest challenge in trying to mobilize members was just proving there could be different results through a cooperative system,” explained Marcelino Manuel Francisco, Secretary of the Gondola Dairy Cooperative, which was formed in 2010 and registered as a cooperative in 2011. He explained, “Many of us used to be part of a trading cooperative that was involved with buying and selling products. With that old system, it was mandatory to join, and the income was divided equally among all members, regardless of performance. Now, membership is voluntary, and earnings are commensurate with effort and yields. If you sweat more, you earn more.”
Despite residents’ reticence to join another cooperative and unfamiliarity with dairy, the farmers were ultimately lured by the promise of having a cow – which was universally recognized as an important asset – and the difficult life they would continue to have just growing crops like maize, cowpeas and cassava for their livelihoods. Farmers grappled with the fact that insufficient rainfall could quash their best efforts at reaping a good harvest from their crops. Even more confounding, since they were only paid once a season for an entire year’s effort, they struggled with how to ration their limited money.
According to Gondola Dairy Cooperative Vice President Curruissa Zinanga José, “I used to earn about 7,000 MZN ($232) a year from farming crops. I sweated a lot to make ends meet, and to pay for medicine and school fees. But, sometimes, there was simply no more money left, and it placed my family in a very tenuous and vulnerable position.” Curruissa and other Gondola farmers are now making about 5,000 Mozambican Meticals (MZN) in one month alone, about US$165, just from delivering their morning milk. “The extra income has made a huge difference in my ability to care for my family and sleep peacefully at night.”
Gondola’s President Jaime João Tobias added, “We’re now actually planning and budgeting for our household needs. Before, there was no planning. And, even if plans were made, there was no way to achieve them. These days, we’re able to create viable budgets and plans for growth in the years to come.”
Beyond mobilizing members, an equally large challenge for Gondola Dairy Cooperative at the outset was finding a reliable market for their milk. Most farmers had an ever-changing group of customers that they sold their produce to at small markets or at the farm-gate. Without a guaranteed buyer, they often risked having their milk spoil before it could be sold.
That problem was alleviated in large part after Land O’Lakes established a relationship with the processor DanMoz, which agreed to purchase every drop of milk that the farmers’ cows could produce.
Curruissa explained, “Initially, we had an ever-changing group of customers, and engaging in dairy wasn’t providing us with guaranteed income. But, when DanMoz partnered with Land O’Lakes and agreed to buy all of our milk, it significantly raised the confidence of Gondola’s members, and they began delivering more milk to us on a regular basis.”
USDA Program Incentivizes Private Sector
The important role the USDA-funded Food for Progress Program played in developing Mozambique’s nascent dairy industry cannot be overstated, explained the Chairman of DanMoz, Henrick Ellert. One of several partners who collaborated in buying the processing plant in 2012, Ellert noted, “One of our main incentives in purchasing the plant was the existence of the Land O’Lakes program, and knowing that program farmers could provide a growing source for fresh milk.”
DanMoz is primarily processing yogurt, and to a lesser extent Gouda, Mozzarella, Halloumi and Feta cheeses. The company recently purchased an ice cream machine, as well, in the hopes of expanding into frozen treats later in 2014. DanMoz is also working to expand their geographic footprint into the capital of Maputo and the Tete Corridor – which connects Mozambique to neighboring Malawi – and they’re staffing up and hiring managers to lead their marketing and sales efforts. Indeed, building local demand for a diversity of products will be a key challenge for their new marketing staff. “Mozambicans tend to like sweet yogurt and ice cream, and so we want to do more to promote milk as a healthy, nutritious option. We’re also looking at infant feeding supplements and think there’s a lot of opportunity on that front,” Ellert noted.
The plant is currently operating at only 10 percent of its 18,000 liter/day capacity, but production is rising exponentially, as Land O’Lakes farmers learn how to increase their animals’ yields with improved nutrition and animal husbandry practices. As of November 2013, they were receiving 1,000 liters a day from farmers supported by the Land O’Lakes program. Another 15 percent of their milk comes from a handful of dairy animals owned by DanMoz that are being raised outside the processing plant, and the remainder is met by expensive milk powder imported from New Zealand and South Africa. “We are trying to encourage farmers to also deliver their evening milk, as this would greatly increase the capacity of DanMoz and improve the incomes of farmers, but right now only one cooperative is delivering in the evening,” added Ellert.
Although DanMoz is not currently providing farmers with bonus premiums for meeting Grade A quality levels, the processor is supporting the farmers in other ways, including providing the cooperatives with stock feed and other needed inputs, which farmers can purchase on credit and have deducted from their milk payments.
Ellert and his partners are excited about the development impact of the program, but are understandably focusing their efforts on commercial sales. Considering the USDA-funded Food for Progress program is slated to culminate in 2016, the leadership of DanMoz is already ruminating about potentially hiring Land O’Lakes’ staff to continue their work with program farmers, which would help ensure that the dairy development efforts USDA has catalyzed can continue to grow and flourish.
Training in Transparency
With only 87 members currently delivering milk, as well as some inactive members, the leadership of Gondola Cooperative realizes work remains to attract additional members into the fold. Still, they’ve already made a number of transformative changes that are making a broader impact on how community members interact with and trust one another.
According to Jaime, Gondola’s president, “Much of the cooperative development training we’ve received from Land O’Lakes has focused on transparency. This means that if we want to make a decision, they must involve all producers in the decision-making through a participatory process. Thinking and acting in democratic ways is a new model for us all, but it is working. Our farmers appreciate that all members can vote and be elected, and that women’s voices are just as important as men’s. They’re also learning that along with rights, each cooperative member also has certain responsibilities and obligations to the broader group.”
But beyond the cooperative, the focus on transparency and accountability has built broader community cohesion, too. Curruissa summed up the sentiment by saying, “Everyone is united by the fact that we are all dairy farmers with cows, and we’re now working together as real neighbors, sharing ideas and resources, because we know working together will help each of us improve.”
Digital Green is a not for profit international development organization that uses an innovative digital platform for community engagement to improve livelihoods of rural communities across South Asia and Sub-Saharan Africa. We partner with local public, private and civil society organizations to share knowledge on improved agricultural practices, livelihoods, health, and nutrition, using locally produced videos and human mediated dissemination. In a controlled evaluation, the approach was found to be 10 times more cost-effective and uptake of new practices seven times higher compared to traditional extension services.
Till date, we have produced over 2800 videos in more than 20 languages, reached 2,200 villages and over 130,000 farmers. We currently implement projects in eight states in India and in select areas in Ghana, Tanzania, Mozambique and Ethiopia in Africa in partnership with over 20 partners.
We engage with and empower rural communities to produce participatory localized videos, leveraging pre-existing group structures to disseminate these videos through human mediation. These videos are of the community, by the community and for the community. The approach includes: (1) a participatory process for video production on improved livelihood practices, (2) a human-mediated learning model for video dissemination and training, (3) a hardware and software technology platform for data management customized to limited or intermittent Internet and electrical grid connectivity, and (4) an iterative model to progressively address the needs and interests of the community with analytical tools and interactive phone-based feedback channels
Our data management software called Connect Online | Connect Offline (COCO) and Analytics dashboard suite customized to low resource settings are used to collect and analyse near real-time data on dissemination, adoption, and community interest.
Ministry of Agriculture, Oxfam America, Sasakawa Africa Association Geography: Three districts (Arsi Negele, Gumer and D. Libanos) in Oromia and Southern Nations Nationalities and Peoples Regional State (SNNPRS) Regions
We are collaborating with Oxfam America (OA) and Sasakawa Africa Association (SAA), along with the Ministry of Agriculture (MoA), to implement a pilot project to use participatory, mediated videos to promote key agricultural behaviors among rural community members. This pilot adapts our approach to the Ethiopian MoA agricultural extension context to reach approximately 1,000 farmer households.
We aim to amplify the effectiveness of government extension systems for agriculture by building the capacity of Ethiopian Development Agents (DAs), Ethiopia’s cadre of agricultural extension officers working in every kabele (clustered village) location, as well as Government-supported Farmer Training Centers (FTCs), also set up in each kabele. By training DAs in our video production and dissemination techniques, and by providing technical operational support of low-cost mediated, instructional video as a method of extension services, we aim to ensure the sustainability of the project.
The key behaviors disseminated through videos relate to locally relevant agronomic practices to help farmers increase productivities and save costs. Videos are being produced by local intermediaries trained in each of the 3 engaged districts on topics such as land management, pest and weed management, harvesting, post-harvest care and market linkages. Existing farmer groups, each consisting of approximately 20 farmers, attend disseminations conducted by trained DAs
International Development Enterprises (iDE)
Geography: 3150 households, 105 villages, seven districts of Rift Valley and Highlands in Oromia region.
We partnered with iDE in 2012 to leverage our approach in two districts of the Rift Valley to gauge its efficacy in communicating good agricultural practices and technologies in the Ethiopian context. The project elicited strong interest and support
from the 335 households in 19 villages participating in the pilot. This encouraged the scaling up and expansion of this approach to enable food security and livelihoods promotion.
The project is operational in seven districts where we provide training and supportive supervision to iDE staff and community intermediaries in project design, introduction of low-cost technologies, capacity building in video production and dissemination, quality assurance and monitoring and evaluation. iDE is primarily responsible for executing activities through their existing network of domain experts and community intermediaries by making use of our standard operating procedures and technology stack to implement the project.
The key behaviors disseminated through videos relate to low-cost irrigation technologies and locally relevant farming practices to help farmers increase productivities and save costs. In Ethiopia, many small-plot farmers cannot afford to irrigate their land and therefore have to rely on rain-fed cereal crops. iDE has developed low-cost irrigation technologies such as rope and washer pump and suction only treadle pumps to support farmers in irrigating their land. iDE employs local community marketing agents (CMAs) in ensuring easy access to these technologies as well as to spread awareness about its benefits and use. To support the CMAs in this, approximately 50 instructional videos on topics such as benefits of rope and washer pump are developed. Existing farmer groups, each constituting of approximately 15-20 farmers attend human mediated screenings of such 8-10 minute long videos conducted by CMAs. Regular adoption verification visits to assess behavior change are also conducted with a target that at least 1500 farmers adopt at least 1 practice successfully through the project.
Alliance for a Green Revolution in Africa
We have partnered with Alliance for a Green Revolution in Africa (AGRA) to build the capacity of existing extension personnel within four Sub-Saharan countries – Ethiopia, Ghana, Tanzania and Mozambique – to amplify the effectiveness of AGRA’s Soil Health Program. The project will integrate videos showcasing farmers who have begun innovating with AGRA-supported blended fertilizer and lime inputs across various staple crops. The project will roll out in 30 different villages, engaging approximately 2,500 farmers. In Ethiopia, our trainers conducted video production and group facilitation trainings for MoA DAs. In Tanzania, our trainers will work with community facilitators engaged with Faida Market Link, an organization working to improve linkages between producers and market value chains.
Alliance for a Green Revolution in Africa
We have partnered with Alliance for a Green Revolution in Africa (AGRA) to build the
capacity of existing extension personnel within four Sub-Saharan countries –
Ethiopia, Ghana, Tanzania and Mozambique – to amplify the effectiveness of
AGRA’s Soil Health Program. The project will integrate videos showcasing farmers
who have begun innovating with AGRA-supported blended fertilizer and lime inputs
across various staple crops. The project will roll out in 30 different villages, engaging
approximately 2,500 farmers. In Ethiopia, our trainers conducted video production
and group facilitation trainings for MoA DAs. In Tanzania, our trainers will work with
community facilitators engaged with Faida Market Link, an organization working to
improve linkages between producers and market value chains.
Sasakawa Africa Association – Nutritious Maize for Ethiopia project
Digital Green aims to increase the consumption of protein in 3000 vulnerable
households in the Amhara region by engaging communities with locally relevant
instructional videos on quality protein maize (QPM). By working with Sasakawa
Africa Association within three woredas (districts) in the region, Digital Green will
build the capacities of health extension workers (HEWs) as well as development
agents (DAs) to produce and showcase the videos to farmer groups as well as
health development armies (HDAs). QPM consumption recipes, nutritional
components of the maize crop itself, cultural practices affecting nutritional
Sasakawa Africa Association – Nutritious Maize for Ethiopia project
Digital Green aims to increase the consumption of protein in 3000 vulnerable
households in the Amhara region by engaging communities with locally relevant
instructional videos on quality protein maize (QPM). By working with Sasakawa
Africa Association within three woredas (districts) in the region, Digital Green will
build the capacities of health extension workers (HEWs) as well as development
agents (DAs) to produce and showcase the videos to farmer groups as well as
health development armies (HDAs). QPM consumption recipes, nutritional
components of the maize crop itself, cultural practices affecting nutritional child-feeding, and the best QPM-related agronomic practices are examples of some of the
video topics that will be shared with households to promote healthy diets through the
consumption of QPM. Digital Green aims to integrate agriculture and nutrition-centric
messages into the videos that will be produced for this pilot project. Each of the three
engaged woredas will serve as video production hubs to produce these locally
relevant videos. The videos will be produced by a mixed team of technical health and
agriculture experts and will leverage the strengths of HEWs, HDAs, DAs, and farmer
Digital Green’s collaboration with PATH will reach approximately 4000 households in
2 districts of Oromia region – Wuchalle and Dodata. Pregnant and lactating mothers
will be targeted through the Ethiopian health development army structures, as well
as pregnant women’s conferences located in each kabele.
1. What is the scope of your cooperation with the Howard G. Buffett Foundation?
How will you prioritize the longer-term governance changes required with the shorter-term hunger and poverty needs to be addressed?
The Howard G. Buffett Foundation is a funder of AGI and we have worked very closely with them for over a year; they are very supportive of our approach towards governance and are of course especially interested in the work we are doing to foster agricultural reform in the countries AGI works in. Our collaboration has further expanded this autumn with the announcement of the 40 Chances Fellows Programme where AGI; the Howard G. Buffett Foundation and the World Food Prize will encourage the development of new ideas to address food insecurity. Fellowship funds will support social entrepreneurs who are addressing issues of hunger, conflict, or poverty in Liberia, Malawi, Rwanda, and Sierra Leone, four of the countries where AGI works.
With regards to prioritising longer-term governance changes with shorter-term hunger and poverty needs, we would argue that these two challenges are not mutually exclusive. Food security is imperative for any country but mitigating against famine does not preclude governments from also trying to move beyond hunger prevention towards more structural changes within the agricultural sector. For example in Rwanda, where we work, the government has successfully reduced the threat of food insecurity and is now focussing on increasing private sector investment in the agricultural sector. This investment will be targeted at factors which lead to raised productivity and sustained growth. The leveraging of private finance allows the government to concentrate on managing food security while allowing private investment to drive an expansion in productivity and value addition through attracting agro-processing investments. This shift results in options for farmers to commercialise their production as well as growth in off-farm job opportunities.. This is how agricultural policy can move beyond simply dealing with food security towards becoming a driver of economic growth.
2. How is AGI’s model different from other charities in the countries you work?
One-off projects versus sustainable initiatives where locals “take off and run with” the new structure in place? What are your plans to involve African entrepreneurs either social or private, in your development work?
AGI is unique in that we work directly, side-by-side, with our counterparts in central government. We passionately believe in government ownership and in every country we work in it is the government that has the vision and plan for how to improve the lives of their citizens, our role is to help strengthen the capacity of the government to implement that vision. This also relates to your point about ‘one-off projects’ versus sustainable initiatives. We believe that development reforms will only be sustainable if they are implemented and owned by the government in question. We are focussed on supporting government-led reforms which will improve the lives of a country’s citizens for the long-term.
Finally, in terms of involving African entrepreneurs either social or private in development work, in every country we work in our overriding goal is to increase the capacity of a country’s institutions to lead their own development. For example in Rwanda we support the government’s new Strategic Capacity Building Initiative (SCBI) which is aimed at recruiting and training young Rwandans to work in and, ultimately , become experts in four critical sectors of the economy; agriculture, mining; private sector development; and energy. The initiative currently has over 60 recruits with more joining each month. By recruiting and training a new generation of policy makers and deliverers countries like Rwanda are building a much stronger and more resilient government system not reliant on external assistance. And, notably, in each of the priority sectors, the government of Rwanda’s overarching aim is to facilitate increased private investment via local and foreign entrepreneurs.
3. In the countries where you work, 70%+ of the population is employed in agriculture, but only Malawi has allocated at least 10% of its national budget to agriculture, per the Maputo declaration. How will you persuade leaders in your countries of operation to raise budgetary ag spending to at least 10% if not more, to reflect employment realities?
How a government allocates its resources is its own decision. AGI is not a campaigning organisation and we do not take a position on levels of individual government expenditure. Where a government does focus on agriculture our role is to help them manage their reforms effectively to get the most from their investment.
4. You have talked about ending Africa’s dependence on aid in a generation. What is your message to charity workers in the UK who risk losing their incomes, as African countries begin to attain food self-sufficiency? How should charities reorganize for increased program efficacy and sustainability? And away from being in continuous crisis or emergency mode?
It’s not our place to advise UK charities. Our focus is on supporting sustainable improvements to governance which will ultimately lead to reductions in poverty and dependence on aid.
5. What are your 3 implementation priorities in 2014? How will you define their success?
In countries where AGI works in which the government has identified agriculture as a priority, the support is focused primarily through two channels – support to avenues for private sector development and the setting up of delivery units. Throughout 2014 this will continue to be a dual focus for us in agriculture. It also reflects AGI’s wider aims of supporting improved policy delivery across government to improve the lives of citizens in the countries we work in, and to increase private sector investment which will ultimately drive growth and employment.
“The Single Greatest Challenge in Human History”
November 23, 2013
Yesterday, November 22, was a day of exhilaration at the United Nations as the Food and Agricultural Organization and other UN agencies inaugurated the International Year of Family Farming. But, it was also a day during which Americans recalled the tragic assassination of President John F. Kennedy. In looking back 50 years, it seemed appropriate to note that on June 4, 1963, five months before he died, President Kennedy addressed the UN-FAO organized World Food Congress, a global conference that attracted huge international press coverage. In his remarks, the President said – “We have the ability, we have the means, we have the capacity to eliminate hunger from the face of the earth in our lifetime. We only need the will.”
That same summer, the UN FAO took another step that received no media attention, but ended up changing the world. It had reached out to a little known agricultural scientist working in remote villages of the Yaqui Valley in Mexico, and now urged him to travel to South Asia, which at that time faced the specter of extreme food deficits that could result in hundreds of millions facing famine, starvation and death. His name was Norman Borlaug, born and raised in my home state of Iowa, and he brought with him a miracle wheat variety he had developed that was disease resistant and produced triple the yield. When transplanted to India and Pakistan it allowed both countries to achieve self-sufficiency, and then surpluses in food production in just a few years. It was the beginning of the Green Revolution, which would eventually lead to Borlaug receiving the Nobel Peace Prize in 1970, and being heralded as the man who saved more lives than any other person who has ever lived.
As a young development adviser in a remote village in the Mekong Delta during that same period, I was personally involved in facilitating the miracle rice that had been developed in the Philippines and which had the same impact throughout Southeast Asia, as Borlaug’s wheat did. I learned of the transformative power of rural roads in bringing this new technology to family farmers and in building healthy food systems. I take great pride in having served as a “foot soldier in the Green Revolution.”
Mr. Director General, it should be a matter of great pride to you and everyone at the FAO that it was your organization that provided that critical connection to Dr. Borlaug that would lead to the single greatest period of food production and hunger reduction in all human history.
But now, 50 years later, we again need Dr. Borlaug’s legacy and the critical leadership of the United Nations, for in the coming decades we must confront the single greatest challenge in all human history: whether we can sustainably feed the more than 9 billion people who will be on our planet by the year 2050. Greater than going to the moon; greater than preventing nuclear war; greater than curing cancer. Indeed, I would argue it is the most difficult issue ever confronted by the United Nations.
Dr. Norman Borlaug said that “Food is the moral right of all who are born into the world.” Because he believed that, he created the World Food Prize that I head in 1986 with the hope that it one day might come to be seen as the “Nobel prize for food and agriculture.” He vision was that it would recognize and inspire those breakthrough achievements that would allow us to meet this greatest challenge.
Each year we present our $250,000 award to an individual who has made a breakthrough achievement in increasing the quality or availability of food in the world. The ceremony takes place as part of our Borlaug Dialogue symposium which draws over 1100 people from 60 to 70 countries to Des Moines. It has been referred to by international experts as “the premiere conference in the world on global agriculture.” And we have a Global Youth Institute, with over 150 high school students and teachers, because Dr. Borlaug believed that inspiring the next generation was one of his and our most important missions.
In the 15 years since I assumed leadership of the World Food Prize, we have endeavored to maintain and build upon this special connection to the United Nations.
In 2000 as United Nations launched the Millennium Development Goals, I brought the World Food Prize to New York for a special event with the President of the General Assembly to introduce our World Food Prize Laureates – Dr. Evangelina Villegas of Mexico and Dr. Surinder Vasal of India.
One year later, it was two World Food Prize Laureates, Dr. M.S. Swaminathan of India and Dr. Pedro Sanchez a native of Cuba, who were appointed the cochairs of the UN Hunger Task Force.
In 2003, the World Food Prize was awarded to Undersecretary General Catherine Bertini for her role in leading the UN World Food Program, the single most effective organization in history in delivering food to hungry and starving people all around the globe. And it has been my great privilege to see my friend Ambassador Ertharin Cousin for whom I have enormous respect, continue that inspired leadership.
One of the most significant moments of this special connection came in 2011 as we presented the World Food Prize to two former presidents: His Excellency John Kufuor of Ghana and His Excellency Luiz Inácio Lula da Silva of Brazil, for their magnificent leadership in propelling their countries to attain Millennium Development Goal Number One – reducing hunger and poverty by 50% prior to the 2015 target date. They had demonstrated that will that President Kennedy spoke of.
Mr. Director General, I well recall your personal participation in our symposium and the discussion of the Zero Hunger program that President Lula had pioneered and in which you had provided critical leadership in structuring and implementing it. And now the momentum of that achievement has been carried over and adopted by Secretary-General Ban Ki-moon. Zero Hunger will mean Zero Malnutrition and Zero Stunting.
>Dr. Borlaug passed away in 2009. His very last words were “Take it to the farmer.” In recognition of Dr. Borlaug’s great accomplishments, following his death, the UN-FAO presented to his family its highest honor – the Agricola Award.
World Food Prize laureates have been building healthy food systems and taking their achievements to farmers: including uplifting poor women through aquaculture in Bangladesh and Laos, eradicating cattle plague in Africa, initiating reformed agricultural policies in Egypt and China, developing new high yielding sorghum and rice in Ethiopia and Sierra Leone, advancing agro ecology in Kenya, promoting micronutrients in Guatemala, and developing the storage and technology to reduce post-harvest waste and permit the shipment of nutritious fruits and vegetables between South America and Europe.
In 2013, we honored three of the pioneers of agricultural biotechnology whose new seeds are being used by over 17 million farmers worldwide, 90 percent of whom are small resource-poor farmers in developing countries. Biotechnology and genetic modification continue to be controversial issues. But it was the view of Dr. Borlaug that if we want to have healthy food systems and enhanced nutrition, we must ensure that all of the tools of that science will be available to the family farmer. For it will be those smallholder farmers, those poor women farmers who will be most severely impacted by the droughts and the floods and the intruding salt water from the rising seas, caused by increased climate volatility. And it is the new genetically enhanced seeds that offer these family famers the chance to overcome these ecological impediments.
I want to conclude by recalling a story that Dr. Borlaug told me when we were together in Oslo in 2001 on the 100th anniversary of the Nobel Peace Prize. When he was a young boy he attended elementary school in a small one room schoolhouse. Dr. Borlaug recounted that about half of the students were of Norwegian heritage who followed the Lutheran religion, while the other half of the class were Czech or Catholic immigrants. These were very big differences in 1920 America. Dr. Borlaug said that each morning the students would all be made to stand up and sing together about the one thing they have in common – being from their new home state of Iowa. They would sing the Iowa Corn Song which was Dr. Borlaug’s favorite song in the whole world. They came to see that the others were not so bad. He learned the lesson of his life: people who could stand and sing together and work together could live in peace together.
I saw this lesson in practice in October 2012 when my foundation had the extraordinary privilege to host Secretary-General Ban Ki-moon and Ambassador Ertharin Cousin, at our Laureate Award Ceremony in Des Moines as we celebrated United Nations World Food Day. It was a ceremony at which we were honoring Dr. Daniel Hillel, the Israeli pioneer in the field of micro irrigation who, as a result of his work in Palestinian villages and throughout the Middle East, had been nominated for our Prize by individuals from three Arab countries. As the ceremony concluded, I introduced a UN-FAO Ambassador of Goodwill, a young Israeli performer named Noa, who sang a song from her Yemini family roots. As she sang, the audience stood to applaud, including the Secretary-General and Mrs. Ban, Ambassador Cousin, Princess Haya bint Al Hussein, a UN Messenger of Peace from Dubai, His Excellency Sheikh Hamad Al-Thani, the Deputy National Food Security Director of Qatar, standing next to a senior Israeli diplomat. All of this took place in Iowa at the same time there was considerable fighting and violence in Gaza.
More than anything else it demonstrated that the World Food Prize and the United Nations can bring individuals and countries together across even the broadest political, ethnic, national or diplomatic differences, when our common goal is to alleviate hunger and human suffering.
Mr. Director General, Excellencies, ladies and gentlemen, 2014 is the year of Family Farming but is also the year in which we will celebrate the 100th anniversary of Norman Borlaug’s birth. This is a powerful combination. I believe Dr. Borlaug’s spirit is here with us today, and that he is telling us there is no time to lose. He is telling us to inspire that next generation; he is telling us to build those roads and that information infrastructure, so that we can “Take it to the farmer”; and he is telling us that this meeting room is our one room schoolhouse, where the members of the United Nations, so different in so many ways, can come together and, at last, find the will to ensure a sustainable and nutritious and healthy food system for all of the people of our planet. Dr. Borlaug is telling us just what President Kennedy told the UN World Food Congress in 1963: that if we have the will, we can overcome that greatest challenge in human history, and forever eradicate hunger, poverty and malnutrition from the face of the earth.
[quote align=”center” color=”#999999″]“The developing world…faces a dearth of risk capital that has and will continue to constrain growth. Donors need to face the reality that the young companies that can really move the needle on innovation, inspiration and employment need high-risk, reasonably-sized, equity investments to grow.”
– Alan J. Patricof and Julie E. Sunderland, Venture Capital For Development[/quote]
A key area of mutual interest between economic development actors and venture financing is building successful small and medium enterprises (SMEs) and business ecosystems that have a significant positive impact back into their economic environment. In emerging markets, even growing and growth oriented SMEs with strong potential for expansion often have difficulty accessing capital and overcoming the challenging business climate. A lack of internal capabilities and the limited capacity of their backers can stunt innovation and competitiveness.
Focused technical assistance (TA) to venture backed SMEs, working to address local ecosystem gaps and improve competency in order to be internationally competitive, can help alleviate systematic weakness, attract more venture financing to such firms, and generate more sustainable and higher quality employment opportunities.
In the past twenty years or so, across most emerging and frontier markets, a class of venture investors have emerged that are seeking to invest in local SMEs that are poised to grow. Despite the clear benefits of growth-focused SMEs to emerging and frontier markets, potential venture investors face significant challenges with investment and business climates that make it very difficult to profitably invest. In general, overall profits (or returns) to equity investors in SMEs and entrepreneurs from venture investments are not covering the losses or are not attractive enough to pull money away from “more certain bets” like real estate.
For the venture investor, technical support represents a better chance to achieve the impact-investor level of returns needed to attract further outsider investors and thus increase available intelligent funding to this category of SME.
VEGA’s F2F Pilot Bridges the Gap in Morocco
The USAID funded Farmer-to-Farmer (F2F) pilot project Engaging Venture Capital to Strengthen Agricultural Value Chains in Morocco that VEGA implemented from 2012 to 2013 arose from two key observations initially made by Program Advisor William Fellows, a former venture investor and long-term advisor to venture/risk capital funds in the Maghreb region:
- Despite bringing ‘smart’ capital to growth oriented SMEs in Morocco, Venture Funds face real and impactful constraints. VC funds in emerging markets are typically staffed by purely or largely financial staff, ex-bankers, or chartered accountants who do not have the expertise necessary to help solve pressing industrial challenges, whether in production, technology, or management.
- Local markets can have decent basic expertise to develop and call on, but often lack in depth expertise to support industrial innovation, particularly for new markets. It is usually cost and time prohibitive to search out and bring in specialized expertise on their own, and typically the investor teams lack the time and networks to address specialized issues that a firm may face, such as specific certification issues for a given market or improvement in industrial processes.
The project established a partnership between the Moroccan national venture capital association (AMIC) and VEGA as an important screening mechanism to identify technical assistance needs for high-potential, innovative agribusinesses. It also was conceived as a mechanism to assist the agribusiness sector better understand the long-term business and economic value of equitable win-win relations, in particular with small holder farmers. The key rationale behind this is that serving as positive business role models for the agriculture sector, newly competitive agribusinesses engaged in win-win solutions will contribute to improving the overall sector and laying a positive basis for scaling agricultural productivity and opportunity.
Association membership response was strong, with three to four times as many eligible projects being proposed as the pilot could handle. Needs focused particularly on issues where the entrepreneurs and investors saw themselves as being weak, such as issues around international certifications, related market development for export and in adopting new, energy efficient production technologies. Three quarters of the beneficiary firms were early stage firms setting up methods of production and processes that are new and innovative for Morocco.
The pilot project’s focus on delivery of shorter-term senior level voluntary expertise in specific industrial and management areas, matched well with the needs of entrepreneurs. Response was strong, with 3 to 4 times as many eligible projects being proposed as the pilot could handle. Straddling mentorship and expert advisory missions, the project brought advanced insight to skilled entrepreneurs to help them overcome potentially fatal issues in setting up their industrial processes or entering new markets. Longer-term expertise, either using local consultants or long-term international advisors to transfer competency, was also identified as being useful to build firm management capabilities and help champions emerge.
Poor returns among SMEs in emerging markets are holding back impact investors. The VEGA F2F pilot in Morocco has shown that by providing targeted technical assistance to agribusiness start-ups with growth potential risk can be reduced and profitability improved. By transferring skills and expertise and assisting management to overcome hurdles, performance is enhanced and thus the overall financial return is more attractive. Not only does the technical assistance improve performance at the firm level, it is also helpful in strengthening the local staff of venture capital funds to incorporate analysis and support that goes beyond mere accounting and financial factors for success.
Despite the popularity of entrepreneurship-focused development programming over the past decade, insufficient attention has been paid to the sustainability and scalability of efforts. Active collaboration with the world of venture finance can help stakeholders put their time and money where they will be able to make a real difference in the economy. Venture capital funds with investments in emerging markets will in turn see improvements in their returns as the supporting environment for innovative, risk-taking entrepreneurs across all sectors is steadily improved.
This article is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of VEGA and do not necessarily reflect the views of USAID or the United States Government.
VEGA, the world’s largest consortium of economic growth volunteer organizations, with 23 member NGOs has assisted 140 developing countries & mobilized more than 25,000 experts to promote economic growth activities over the past 5 decades. VEGA’s track record includes over 36 programs worth more than $275 million. VEGA is a 501(c)3 nonprofit organization and was founded in 2004 by the US Agency for International Development through a Leader with Associate (LWA) award cooperative agreement. Find out more: www.vegaalliance.org
Given the current political situation in Somalia, do you believe it is a good place to potentially invest?
There is an incredibly dynamic investment climate in Africa which I think we completely underestimate in our understanding from this side of the world. Even a place like Somalia is good at making miracles out of stone. Somalia exports more than five-million livestock—which is more than double many other African countries. The animals come from Ethiopia, Kenya, etc and head out.
They have been investing in sesame production that passes through Dubai on to Europe…this is produced in a very high quality way because it is produced for bakeries in Northern Europe. They are doing all of that near the conflict in South Central Somalia.
Where do you see the livestock industry headed in Somalia?
There is quite little of transformation in Somalia which could be done quite more. Just the transformation of meat as opposed to live animals would be quite interesting just in terms of technology, know how, and business opportunity—especially to the Arab states. This is becoming more and more of a business opportunity especially because a couple years ago meat from Australia was not able to export livestock…There is an increasing demand of live animals in the Gulf and Saudi Arabia but still there is a huge market for processed animals.
How about Somalia’s fisheries, do they have potential to propel Somalia’s growth?
There are a number of agreements that are not being utilized properly. The current problem with fishing near Somalia is that the existing laws are not easily enforced. Somalia only gets ten percent for the value of the fish as far as licensing fees. Somalia’s exporting fleet is poor but for large vessels this would work quite well. “In the North of Somalia there are coastal towns so something there is feasible.
Somalia was recently awarded 1.3 billion US dollars, from the UN, for development. How much of this money is anticipated to go to agribusiness activities?
Under twenty million US dollars, or 10% will go to agriculture. The government plans to intervene with substantial support for the small producers which are in need of more capacity and we help the big producers with the proper legal framework to help them invest properly n the area where they want to invest. Most of the 20 million will go to the poorest of the farmers.
What is currently happening in Somalia to protect the livestock farmers already have?
Every few years there is a high risk of major disease for livestock…we are on the last year of an initiative which covered sixty percent of sheep against PBR, which is a pest, and was very important for protecting the small producers which for us as an international agency is more important.
Do you think that in the future Somalia could greatly benefit from free trade, how so?
We are working out free trade on a regional level. There are quite a lot of needs and opportunities to be made inside the region and that should be done tax free. Imagine sugar, where Sudan makes enormous amounts of sugar, Somalia which is a he importer of sugar, and Kenya which fluctuates”.
What is being done to ensure Somalia is prepared to deal with famines?
During the last famine, we decided as a way to intervene, to use cash for work program. Basically, we convinced the poorest not to emigrate from rural areas. By giving them cash for a few weeks and later cash for work. This work consisted of excavating 1/3 of a cubic meter per day, of dirt, for a canal. To increase their productive capacity later on.
How were these workers able to purchase food if there was such a critical shortage?
Well, I kind of shocked the system by gong to Dubai and setting up a deal to get food to retailers in proper quantities relative to the paid workers. It was just information sharing.
There has been some criticism about humanitarian assistance hurting local farmers, how does the international community adapt to these complaints, are they valid?
We realized there were a number of agencies trying to target the same people. The three biggest agencies of the UN decided to work together on this concept of resilience. Most of our resources were used on that objective and sequencing the different types of intervention with the proper logic. Going local when we can and international when it can’t be done locally. Because that is what the community needs.
How has Somalia’s food security improved?
Since last year’s drought the food security situation has improved a lot. We have moved from 4.2 million in extreme need to 2.12 million. However, we are still talking about 28% of the population. A large amount of the population is flat on the poverty scale—where a small thing can push everyone into a serious problem. This is why we need to focus on resiliancy of people. Without a state, the people are losing their communities and we need capacity to keep them up to a certain level. Internationally we need to help the government strengthen. Need sustained support for two or three years to prevent the people from collapsing. When it gets better we can start to pull out and they can go ahead. Give them some support and they can be strong and pick themselves up.
What advice would you give to potential investors?
As far as investment areas in Somalia, there is quite a lot that can happen in livestock and fishing. Agriculture is weak but things could change quite well. Unfortunately, a solid legal framework to protect investment is missing.
Honestly, I would be ready to invest in most of Africa. Look at how much GM is investing in Africa, and they are getting a humongous amount of money. China’s investments, even in places like Sudan, which you would not expect to be good, are huge. Furthermore, China does not add conditionality to their investments and they support and protect local governments while the West adds too much conditionality.
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