David RUCHIU , Farm Concern International. E-warehouse Initiative - - PowerPoint PPT Presentation

Brussels Development Briefing n.35

Revolutionising finance for agri-value chains

5 March 2014

http://brusselsbriefings.net

E-warehouse Initiative.

David RUCHIU, Farm Concern International.

E-warehouse Initiative

Farm Concern International

David Ruchiu

Africa Director, Farm Concern International

Far arm Conc ncer ern n Int nter erna nation ional al, FC

• FCI. GROUP

UP

• FCI wins markets for Africa for economic development

and business partnerships

• FCI models are benchmarked to private sector approaches

to enhance smallholder competitiveness

• FCI models adapted to addressing global dynamics

(changing trade patterns, climate change and changing policies)

• FCI promotes technologies and innovations that enhance

smallholder competitiveness and resilience

• FCI is partnership oriented organization
• FCI responds to food security, nutrition security and

Income growth

FCI Mission & Vision

Our Mission T

• build and Implement innovative pro-

poor market and Business Models that catalyse solutions for smallholder commercialization and Competitiveness in the value networks for household economic growth and Community empowerment in Africa and Beyond Our Vision Commercialized smallholder Communities with increased incomes for improved, stabilized and sustainable livelihoods in Africa and Beyond

FCI Regions & Countries

FCI Programmes

200 Km

Commercial Producer Groups (CPGs) within Commercial Villages

• Organized based basket of value chains
• Structured governance
• Business partnership with buyers
• Focus is village collective action
• Information exchange platform

established

Efficiencies in out-sourcing / marketing systems through of CV model Wholesale market

E-warehouse Initiative

Why eWarehouse?

• Smallholder farmers are often isolated from markets and lack access

to financial services that would allow them to smooth their income

• Lack of appropriate financing for smallholder farmers. Only 17.6% of

those living in rural areas have access to formal financial services, and many of the financing options available to farmers are not well- suited to their needs and farming cycles.

• At harvest time, when prices are lowest due to excess supply, most

smallholder grain farmers cannot afford to wait for optimal prices before selling to buyers

• Large grain warehouses are not generally available to smallholder

farmers, and many risk losing their entire crop yields by not following proper storage practices

eWarehouse purpose

eWarehouse intervention seeks to address ;

• Identified market gaps through an integrated and mobile-

enabled system

• Designed to support smallholder farmers to properly store

and manage their grain post-harvest and virtually bulk grain during harvest time,

• Facilitate linkage to financial services to provide partial

advances against the value of the stored grain

• Link smallholders with markets when prices increase.

e-warehouse Strategic Objectives

• Enable farmers to collectively store and sell grains at higher prices through

use and development of appropriate technology;

• Utilize technology and information as collateral by smallholder farmers.
• Increase the value retained by smallholder farmers for their crop by

facilitating access to mobile financial services

• Enhanced market access for smallholder farmers
• Leverage on technology as the basis of increasing efficiency in payment

processes

• Leverage on technology to provide actionable agronomic and market

information to farmers;

• Build capacity of smallholder farmers in proper post-harvest storage

practices to minimize risk of post-harvest waste

Background and Grain /Pulse Trends

Source: GRIPS Policy Research Center, 2010

• Low prices during

harvesting for grain and pulses

• Post harvest losses of up

to 50%

• A very vibrant mobile

telephony sector

• Existing Business Model-

Commercial Village Model

10 0 Yea ear Pr Producti duction

• n tren

end d for Mai aize e an and d Bea eans ns

1000000 2000000 3000000 4000000 5000000 6000000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Production (MT) Year Maize Beans, dry Maize Beans, dry Kenya Tanzania SOURCE: FAOSTAT, 2013

e- WAREHOUSE

COMMERCIAL VILLAGE COMMERCIAL VILLAGE

FARMER’S M-

PESA

• CENTRAL DATABASE –

INFORMATION ON TOTAL QUALITY & QUANTITY OF GRAIN STORED,

• INDIVIDUAL FARMER

DETAILS AND CONTRIBUTION

FINANCIAL INSTITUTION

INFORMATION ON COLLECTIVE & INDIVIDUAL AMOUNTS AND VALUE STORED IN WAREHOUSE – SHARED WITH FINANCIAL INSTITUTION

ISSUE ADVANCE OF 50% ON VALUE OF GRAIN STORED (BASED ON PREVAILING MARKET PRICE)

VILLAGE KNOWLEDGE WORKERS (VKWs)

QUANTITY AND QUALITY VERIFIED THROUGH MOBILE PHONE

GRAIN FARMERS

Each village has a number of (household/group-level) post-harvest storage solutions community owned

COMMERCIAL VILLAGE

Information and Data through Mobile Phones; E-platform

FCI with BDS PROVIDERS facilitates collection of grain and managing collective market transaction

e- WAREHOUSE

COMMERCIAL VILLAGE

COMMERCIAL VILLAGE

COMMERCIAL VILLAGE

MARKET

INFORMAL, FORMAL, INSTITUTIONS

Mobile Money

(individual farmer) FINANCIAL INSTITUTIONTIONS Grain value is adjusted based on actual sale, advance & fees deducted = balance owed to farmers transferred to their agro-wallets

Payments based on incremental value

19

E-warehouse Financial Access Market Support

Disbursement of credit to farmers Farmers biodata and Volume of stored grain Grain Commercial Villages Stores

Commercial Villages

e-warehouse Initiative Targets

• Develop an integrated model (Markets, Finance,

Private Sector Partnership and T echnology)

• Business Model with superior features
• Replicate and scale up to all over Africa and the rest
• f the word
• Increased incomes by target household by at least

50%

Enhanced Value delivery mechanisms New marketing Landscapes Higher investment levels Reduced post- Harvest losses Enhanced efficiency Technical Service provision Increased value Chain capacity

VALUE PROPOSITIONS

eWarehouse Partners

• Financial Institution
• Government Agencies
• Mobile Communication Service provider
• Grameen Foundation
• Input companies
• Grain buyers
• Commercial

Villages

Vi Village llage Kno nowledge wledge Work

• rker

ers (VK VKW) W)

• Trained on production, commercialization & market development
• Offer onsite Technical support to Commercial Villages
• Equipped with training Kits – Mobile platforms, Moisture metres, Aflatoxin kits etc

Commercial Village Stores

One e on

• n One

e Suppor

• rt!

t!

Winning Markets for the Poor!

FOR MORE INFORMATION VISIT www.farmconcern.org