The Topic: An agricultural enterprise uses some of its excess capacity to provide support to smallholders in Ethiopia
The Owner: Amare Abebaw Woreta (Frag Agro Industry)
The facilitator/blogger: Riff Fullan (HELVETAS Swiss Intercooperation)
The session: Amare told the story of how he - after graduating from school - established a small agricultural enterprise which became profitable after some time. But Amare noticed that the vast majority of farmers in the Amhara region where he was located were not improving their lives, they were only just getting by. They only had around 1/2 hectare of land per family and mostly relied on rain-fed agriculture. Amare's company decided to invite farmers to see what the company was doing and - for those who were interested - take up interest-free loans (based on a group of farmers, so the group would collectively have responsibility for repayment) to buy inputs and take up some of the company's practice of focusing on more profitable crops. The company also helped 'graduates' of its demonstration activities to form cooperatives and worked to ensure the coops had access to market information and could take advantage of the best prices. Half of the target group were female-headed households, half male-headed.
Following Amare's story, we decided to have a short Q&A followed by a loosely structured peer assist. The idea was to have a conversation triggered initially by immediate questions and observations from participants in the group, then to move on to a couple of key questions from Amare's side for which he was seeking input.
What did participants have to say? One of the first questions was why Amare did not charge interest on the loans. How could it be sustainable? Amare responded that it was a trust issue: farmers were used to seeing microfinance institutions providing loans - often at high interest rates - that also required collateral (e.g. a goat, a cow), which represented a huge risk for the farmers. Amare wanted to invite interested farmers to take part in the innovative behaviour based on their experiences of seeing how things were done on the company farm, and without having the risk overhead.
Still, there was a feeling that the company could charge a small amount of interest in order to support the continuing program of farmer training, especially after its initial success with several groups of farmers over several years (totalling around 70 farmers so far). What else? Maybe forming a marketing company that could help farmers and coops link up more effectively to markets. Other ideas around sustainability included:
In a nutshell, both approaches work to engage community members in describing/perceiving and transforming the contexts in which they live. They aspire to a high level of ownership and definition of the problematique and approaches to overcoming key challenges by those whose lives are most directly affected. This could be a way for the farmers in this Ethiopian case to incorporate climate change issues and solutions into their own worldviews and ways of living.
All-in-all, a very interesting and wide-ranging conversation. I know Amare will go home with lots of ideas to try out!
The Owner: Amare Abebaw Woreta (Frag Agro Industry)
The facilitator/blogger: Riff Fullan (HELVETAS Swiss Intercooperation)
The session: Amare told the story of how he - after graduating from school - established a small agricultural enterprise which became profitable after some time. But Amare noticed that the vast majority of farmers in the Amhara region where he was located were not improving their lives, they were only just getting by. They only had around 1/2 hectare of land per family and mostly relied on rain-fed agriculture. Amare's company decided to invite farmers to see what the company was doing and - for those who were interested - take up interest-free loans (based on a group of farmers, so the group would collectively have responsibility for repayment) to buy inputs and take up some of the company's practice of focusing on more profitable crops. The company also helped 'graduates' of its demonstration activities to form cooperatives and worked to ensure the coops had access to market information and could take advantage of the best prices. Half of the target group were female-headed households, half male-headed.
Following Amare's story, we decided to have a short Q&A followed by a loosely structured peer assist. The idea was to have a conversation triggered initially by immediate questions and observations from participants in the group, then to move on to a couple of key questions from Amare's side for which he was seeking input.
What did participants have to say? One of the first questions was why Amare did not charge interest on the loans. How could it be sustainable? Amare responded that it was a trust issue: farmers were used to seeing microfinance institutions providing loans - often at high interest rates - that also required collateral (e.g. a goat, a cow), which represented a huge risk for the farmers. Amare wanted to invite interested farmers to take part in the innovative behaviour based on their experiences of seeing how things were done on the company farm, and without having the risk overhead.
Still, there was a feeling that the company could charge a small amount of interest in order to support the continuing program of farmer training, especially after its initial success with several groups of farmers over several years (totalling around 70 farmers so far). What else? Maybe forming a marketing company that could help farmers and coops link up more effectively to markets. Other ideas around sustainability included:
- the notion that support for the whole value chain needed to be considered (finance, marketing, information, logistics, etc), and that part of the sustainability equation was capacity building of these new coops (where most members might be illiterate and/or have little education or experience along the value chain);
- another is that farmers needed to have a sense of ownership for such coops to thrive. In this context, the voluntary and low-risk nature of the venture really helps;
- a third is the possibility to mobilize educated youth who could help with some aspects of running/organising activities and thereby generate a bit of income for themselves while filling some of the skills gaps the farmers have;
- in terms of changing production processes, the idea was raised that processing of agricultural outputs (e.g. mangoes into mango juice) and selling a higher value-added product could help on the sustainability front.
In a nutshell, both approaches work to engage community members in describing/perceiving and transforming the contexts in which they live. They aspire to a high level of ownership and definition of the problematique and approaches to overcoming key challenges by those whose lives are most directly affected. This could be a way for the farmers in this Ethiopian case to incorporate climate change issues and solutions into their own worldviews and ways of living.
All-in-all, a very interesting and wide-ranging conversation. I know Amare will go home with lots of ideas to try out!
