Based on the question raised in this forum, we at Vestergaard wanted to share a practical example of how we see agriculture being able to lift the most vulnerable out of poverty in rural areas. We are currently focused on supporting the poorest families, with a very small amount of land, living below the poverty level or 1.90 USD/ Day (693.50 USD). We wanted to share with this forum, for input, a possible platform for an anti-poverty starter kit and a new strategy for local warehousing that we are developing together with local partners in Kenya.
In Kakamega Western Kenya, at Vestergaard, we are challenging ourselves to show that using the Farmer’s Starter Kit we can lift 10,000 rural families out of extreme poverty. The kit dynamics are based on over 90% of families’ prefer to grow and consume their own food, and the average storage time is 2 months, with over 70% storing at home. Storage is typically in woven new or used bag (costing USD 0.80 – USD 0.40). As many as 50% are “in the market and net sellers” and know quality gives better prices. Financing institutions require smallholders to sell upon harvest to minimize credit risk, this is exacerbates the poverty cycle. There are now initiatives from various banks allowing farmers an additional 3 months storage subject to proper safe storage (due to revenue upsides of >100% by storing for few months extra).
Working closely with Kenya Seed Corporation we are focusing on providing an anti-extreme poverty starter kit for farmers. This kit will initially focus on providing all the tools needed for maximizing production of maize of high quality and then also the opportunity of storing the maize produced safely. This not only allows the farmer to grow more but also keep the grain longer, selling the surplus at a price higher than the one available during the harvest period.
The families will then be provided a connection to a warehouse storage program being set up in the region, a simple decentralized profit sharing warehousing system designed on the “Uber” model, to provide a place for farmers to confidently sell the maize close to home. The system, like Uber, is managed through a block chain phone application, it enables quality classification, spot price agreement, weight documentation and a sales agreement. The ZeroFly® Storage Manager stores and sells at the optimal pricing, and shares profits with family via the app (based on the m-pesa/ cryptocurrency system).
Then Uber Warehouse owner is then connected with the key markets through East African Grain Council & the National Cereals Board to bring this maize to market for the most optimal prices.
Case study: The Otienos are a family of five, father working as a farm laborer outside of the home, mother working part time and taking care of two young children and managing the family’s 1/3 acre plot of land with the help of her mother – the family lives close to the poverty line and has an income of approximately 540 USD per year – approx. earning 1.50 USD/ per day. Mrs Otieno cannot afford high quality seeds or fertiliser, they grow maize twice per year, but yields are low and she never manages to grow enough for the family to eat for the year, and the maize that is grown needs to be sold or consumed within 2 months or it will be completely spoiled by insects and rodents. The 100kg of maize that that her husband carries 20 km to the nearest market sells at the lowest market price as it is at the harvest period.
Vestergaard proposes to provide a family such as the Otienos an Anti-Poverty Starter Kit for Farmers – the kit contains enough high quality maize seeds from Kenya Seed Co., top dressing & fertiliser, and ZeroFly® Combi Bags (allowing safe storage of grains within patented hermetic coated storage bags protected by insecticide and rodent repellent) for two seasons – 12 months. This kit not only provides additional income and high quality nutrition, but also – since the Uber Warehousing scheme will be much closer to the homestead, <7km, Mrs Otieno will be able to carry the grain to the warehouse, providing an opportunity for gender empowerment. Additionally, after sometime the family will have more disposable income to grow their farm and provide opportunities for the younger members of the family, and members of other neighboring families to stay in these rural areas, instead of having to leave to find work.
A cheap starter pack can generate on average 400 kg of maize per season, and the investment needed for this pack is under 20 USD per family and will bring them out of extreme poverty within two harvest seasons (12 months), and break the cycle of poor farmers always having to sell first or at least provide an opportunity to store for better profits.
Calculation (estimated):
*Two seasons of seed for 400 kg maize, fertiliser and 4* ZeroFly® Combi Bags; With KES 1,700 approx. 17 USD / household, a family’s food security and financial needs will be met for the year.
*One acre of land requires 12 kg of seeds and produces on average 20 bags of 100 kg, equivalent to 2000 kg. Most of the target farmers have less than 1 acre of land for planting. Therefore, 800 kg have been used as the average and 5 kg seeds are needed for producing this much maize.
*Poor soils require both planting and top dressing fertilizer; 50 kg fertilizer of both basal and top dressing approx. 25 kg fertilizer is able to work for the 5 kg of seeds
*A minimum of 4 bags will be provided for each of the farmers; x4 ZeroFly® Combi bags are able to ensure the farmers can store the equivalent of enough grains to earn an additional income of 125-150 USD x2/ year ; After 12 months generating 250-300 USD lifting the family out of extreme poverty.
*Outreach and distribution of kits; the infrastructure and resources are already available to distribute kits in the Kakamega region through Vestergaard’s LifeStraw team and can provide the necessary initial training.
Many thanks for comments and thoughts.
Georgina V Bingham PhD FRES
教授 Georgina Bingham Zivanovic