e-warehouse initiative. david ruchiu, farm concern
TRANSCRIPT
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
Farm Concern International, FCI. GROUP
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
To 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
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
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 Year Production trend for Maize and Beans
0
1000000
2000000
3000000
4000000
5000000
6000000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Pro
du
ctio
n (
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 Technology)
• Business Model with superior features
• Replicate and scale up to all over Africa and the rest
of 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
Village Knowledge Workers (VKW)
• Trained on production, commercialization & market development
• Offer onsite Technical support to Commercial Villages
• Equipped with training Kits – Mobile platforms, Moisture metres, Aflatoxin kits etc
Winning Markets for the Poor!
FOR MORE INFORMATION VISIT
www.farmconcern.org