Posts Tagged ‘agriculture’

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Acumen Fund Invests in BASIX Krishi to Increase Agricultural Productivity Of Smallholder Farmers in India

Friday, May 11th, 2012

Innovative model offers affordable extension services for crops and livestock to smallholder farmers through a wide network of trained personnel.

Mumbai, India, May 11, 2012 – Acumen Fund, a pioneering nonprofit global venture firm addressing poverty in South Asia and across Africa, today announced an equity investment of INR 9 crores (~$2M) in BASIX Krishi Samruddhi Limited (BASIX Krishi).

BASIX Krishi delivers productivity enhancing extension services—such as soil testing, seed treatment, vermicomposting, pest management and good harvesting practices for crop farmers; and livestock vaccination, para-vet services, fodder demonstration and milk market linkages for dairy farmers. The company provides this service to its customers through a network of trained Livelihood Service Providers who visit each customer at least twice per month. Incorporated as a public limited company in April 2010, BASIX Krishi is part of the BASIX Social Enterprise Group promoted by Vijay Mahajan, an accomplished social entrepreneur who is considered a pioneer in the areas of financial inclusion and rural livelihood promotion.

“The BASIX Krishi model can increase smallholder farmer incomes by an estimated 30% through a combination of improved productivity and reduced input costs,” said Siddharth Tata, Acumen Fund’s Agriculture Portfolio Manager. “In addition to helping improve farmer livelihoods, this investment allows us to build on our knowledge base in the agri-inputs sector, providing valuable insights into how smallholder farmers make decisions on improving their farm productivity.”

Of the more than 100 million farms operating in India, nearly 85% are managed by smallholder farmers with less than two hectares of land. Most of these farmers have no access to quality extension services, making it very hard to access simple tools and engage in practices that help improve farm productivity.

“Acumen Fund’s investment will help us scale BASIX Krishi’s activities to 67 branches serving nearly 350,000 farmer customers over the next two years,” said Arijit Dutta, CEO, BASIX Krishi. “Through our model, farmers receive personal visits from trained extension workers who support their productivity needs and provide on-call assistance for any questions or emergencies. Eventually, we envision a world in which all smallholder farmers have access to agricultural extension services that empower them to improve their own lives.”

For additional information on Acumen Fund India and its investment in Basix Krishi or in the Agriculture sector, please click here or contact Molly Alexander at malexander@acumenfund.org

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About BASIX Krishi

BASIX Krishi Samruddhi Ltd (Basix Krishi) is a BASIX Group company, and was incorporated in April 2010. Basix Krishi trains and employs a network of Livelihood Service Providers (LSPs) who provide services that enhance farmers’ productivity and reduce the cost of cultivation, thereby increasing farmers’ overall income. The services cover a wide range- vaccination, de-worming, fodder management for livestock and soil testing, vermicomposting, pest management for crops.

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Mapping the Agriculture Sector

Monday, April 9th, 2012

The agriculture sector in Sub-Saharan Africa and South Asia is expanding as population continues to grow and demand for food increases in-step.  In Sub-Saharan Africa, relatively large tracts of arable land are attracting investors seeking to establish large-scale mechanized primary agriculture production while smallholders’ productivity remains relatively low.  In many cases, smallholder farmers are under increasing land pressure as they subdivide small properties among their family.  But as these plots are subdivided, many young would-be farmers find agriculture to be a decreasingly compelling value proposition and look to urban communities for other opportunities.

Against this backdrop, there is real innovation that is accelerating smallholder farmers’ ability to close the production gap and improve their ability to achieve real market returns for that which they produce.  Acumen is committed to making investments that improve smallholders’ productivity and their access to markets which, we believe in turn, will help to address issues of local food security for farmers and their families, and issues of national food security that affect these rapidly growing geographies.

Acumen’s work in the agriculture sector is led by deep on-the-ground experience in West Africa, East Africa, Pakistan and India.  Working together, this sector team began to first focus on the issue of agricultural inputs.  Our first investments in the agriculture sector—Jassar Farms and Western Seed—reflected this focus.  Maize farmers in Kenya are five times less productive than their fellow farmers in Iowa, and dairy farmers in Pakistan produce over six times less milk than their counterparts in the US.  Lack of access to inputs is one key driver behind this, and Western Seed, Jassar Farms and others are working to innovate on product development and distribution to help bridge the productivity gap.

A farmer in Ghana sorts through his crop

As we built out our work in agricultural inputs, we came to understand that farmers do not necessarily adopt productivity improving inputs just because appropriate technology exists and is available.  Farmers are often reluctant to make an investment in a new technology due to a skepticism that fair markets will purchase the agricultural goods that they produce.  Many farmers sell to middlemen, and for years unscrupulous brokers have taken advantage of farmers—sometimes offering  a price to farmers at their farm-gate that is three times lower than that being offered at the market center.  These middlemen use the advantage of transportation and market pricing knowledge to put farmers in a price-taking situation.  Farmers are in need of the cash, and they understand the risk of leaving crops and produce on the farm, so dominant logic often forces them to sell. Reflecting on this, our agriculture team began to explore how investments in innovative and responsible agricultural processors could help change the way markets work in rural communities.  With investments in Gulu Agricultural Development Company in Uganda and GADCO in Ghana, we are seeing the potential to dramatically change the lives of thousands of smallholder farmers.

In addition to agricultural inputs and agricultural markets, there are important cross-cutting business models that help to stitch together an effective agricultural value chain.  Chief among these are access to finance and access to information.  Acumen has also explored business models that provide farmers with the information to chose the right agricultural strategy, the financing to purchase inputs and agricultural assets, so that they can close the productivity gap and access responsible markets for their produce.  Acumen has made investments in Juhudi Kilimo (Kenya) and NRSP (Pakistan) that are helping to change the way that farmers access capital and assets, and we are seeking to explore investments in the agricultural extension space as well.

Moving forward, Acumen will continue to seek investment opportunities in the agricultural inputs, agricultural processing, and livestock value chains, as well as other cross-cutting technologies such as financial services at agriculturally oriented IT business models.  Agriculture has been one of Acumen’s fastest growing portfolios in recent years, and we are excited to continue this growth in the years to come.

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Amon Anderson is a Portfolio Manager for Acumen Fund’s Agriculture Portfolio.

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Agriculture: Investing in Empowering Millions

Tuesday, March 6th, 2012

Highlights of how Acumen Fund’s Agriculture Portfolio is changing the lives of farmers and their families, featuring GEWP, Western Seed, Jassar Farms, NRSP, and Juhudi Kilimo.

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Your Coffee, Their Lives, Our Planet

Friday, February 17th, 2012

I recently attended a conference on “Sustainability as a key factor for mitigating risk in agricultural supply chain finances,” co-hosted by the Rainforest Alliance and Citi Foundation. A pretty specific topic, for sure, and you may be asking yourself, “how many people are there trying to figure that out?”

Well, you’d be surprised. There were at least 80 people there, and potentially many more that would have come if they could. Why, you may ask?

A simple answer, really: a lot of the things that people consume come out of the ground – coffee, tea, chocolate, cotton, and almost everything we eat. What many don’t realize is that in the majority of the world, the people who grow the stuff we consume are among the world’s poorest, and the way commodities are produced is having a bigger and bigger impact on the environment. Our global supply chains now matter more than ever.

Most of the world’s poor are small scale farmers. And a major reason they remain poor is because they struggle to get their products to market. Even when they do, because of a multitude of reasons – lack of transportation infrastructure, lack of access to capital, lack of accurate market information – they are often abused by exploitative middle men in the process and fail to capture the true value of what they produce.

A Western Seed customer

At the same time, conventional agricultural practices are creating a perfect storm of environmental challenges: decreasing water tables, loss of arable land, deforestation, loss of habitat, and pollution from pesticides and fertilizers.

People need the stuff that comes out of the ground, but we also need to get it in a way that enables producers to have stable and adequate incomes, and that creates the environment to sustain life in the long-term. Without both conditions, the system cannot be considered sustainable. One of the best ways to achieve both is to develop new supply chains and new business models that fairly compensate farmers and reward sustainable agriculture. At the most basic level, engaging smallholder farmers – farmers with tiny plots of land – in global agricultural supply chains may be one of the most powerful ways to reduce global poverty and ameliorate environmental degradation.

So things like Fair-Trade, organic, and certified sustainable are not just hip new ways to show you care – they are actually the beginning of an effort to transition our agricultural systems into a means to meet customers’ needs, but also to address critical social and environmental issues.

What’s exciting is that major brands and retailers— Wal-Mart, Coca-Cola, Pepsi, Starbucks, Unilever –recognize the value of sustainable supply chains (short hand for this effort). But huge challenges stand in the way of improving these practices, especially among the millions of disaggregated smallholder farmers. OK- reality check – it’s anything but simple. Tensie Whelan, who leads the Rainforest Alliance and co-hosted the event, mentions the growing role of companies in her blog on the event:

Hundreds of companies are working with civil society (and occasionally, governments) to help millions of producers to invest in sustainable practices-helping them to become more viable small businesses and, not incidentally, more stable long-term suppliers.

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A few weeks ago I joined these 80 people from companies, financiers, foundations, non-profits, and academics, because Acumen Fund has developed a portfolio of companies dedicated to improving farmer productivity, and we’ve begun to find innovative business models that we think will contribute tremendously to the advancement of socially and environmentally sustainable agriculture. Companies like Global Easy Water Products, which distributes low-cost irrigation technology tailored to small-holder farmers in India, and Western Seed, which sells high-quality hybrid seeds to farmers in Western Kenya who for generations have used farm-saved varieties.  Or companies like GADCO, one of Acumen Fund’s newest investments from our new operation in West Africa, which engages smallholder farmers in Ghana in the production of rice for local markets, increasing their productivity through improved inputs and linking them to a higher value market by managing the whole supply chain.

I was there to better understand how we can partner with companies, NGOs, and multilaterals to make sure that these innovations truly achieve scale, both for individual companies in our portfolio, and for the broader network of global supply chains.

My big ‘Aha’ at this conference is that a challenge this complicated takes the networks, expertise, and capital of a whole constellation of actors. Acumen’s niche here is, I believe, in finding and supporting innovation in the sector, and whenever it makes sense, to be a great partner to those organizations who need this challenge addressed in bold, new ways:  to corporations who know they must move in the direction of sustainability for a myriad of reasons, and to foundations (such as the Bill & Melinda Gates Foundation, which helped us launch our agriculture portfolio), who have made it their business to tackle the world’s biggest challenges.

Making sustainable supply chains the new norm and not just a niche or fad will require tremendous effort on the part of these diverse actors, and the creation of whole new systems that can support, expand and monitor sustainable practices. In all of this Acumen Fund aims to be a source of innovation through the business models we invest in. And always, we strive to be a champion for entrepreneurial solutions and for the entrepreneurs themselves, recognizing that transforming markets and raising standards can just as easily create new barriers for farmers and entrepreneurs that are already struggling.

At this event, I was humbled by the complexity of the issue and impressed by the commitment and expertise of all those gathered. I left convinced that Acumen Fund and our agriculture portfolio has a unique role to play through our continued investments in enterprises that unleash new ideas for a system that must evolve – for producers, for the planet, and for all those who consume and know they must do so in ways that are sustainable. That is, for you and me.

Yasmina Zaidman is Director of Communications at Acumen Fund. Yasmina works with diverse audiences and strategic partners in the international development, philanthropic, academic and corporate sectors to share insights and replicable models from Acumen Fund’s investment portfolio.

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Acumen Fund Expands into West Africa

Wednesday, February 15th, 2012

Acumen Fund Expands into West Africa, Investing In Pioneering Entrepreneurs Supporting Land Rights and Agriculture in Ghana

New Office in Accra, Ghana Led by Godfrey Mwindaare Builds on Acumen Fund’s Decade of Innovation in East Africa and South Asia

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Accra, Ghana, February 15, 2012 – Acumen Fund, a pioneer of impact investing working to create a world beyond poverty, today announced its launch in West Africa, with new investments in innovative companies supporting land rights and agriculture in low- income communities across Ghana.

Acumen Fund’s first investments in West Africa include a US$1 million loan to Medeem Ghana, Ltd (Medeem), which aims to strengthen property rights for the poor, and a US$1.5 million equity investment in GADCO Coöperatief U.A. (GADCO), an integrated agri-food company. The new Acumen Fund West Africa office based in Accra, Ghana builds on the social venture fund’s decade of leadership supporting entrepreneurs who create businesses that provide affordable housing, healthcare, education, clean energy and water, and agricultural goods and services to the poor across South Asia and East Africa.

“We have a strong foundation in place and ambitious plans for growth and impact in West Africa,” said Catherine Casey, Global Expansion Manager, Acumen Fund. Ms. Casey led the start-up of the Acumen Fund West Africa office in the first year including building operations, establishing an investment pipeline and making two investments. She will lead Acumen’s global expansion to at least 3 new regions by 2015.

Acumen’s West Africa office will now be taken over by Godfrey Mwindaare. Mr. Mwindaare brings over 12 years investment experience in more than 30 African countries with Barclays Capital, Standard Bank and the African Development Bank. Mr. Mwindaare also brings deep commitment to Acumen Fund’s mission and is well-equipped to build a strong community of local entrepreneurs, donors and advisors in the region.

“I am delighted to join such a pioneering organization,” said Godfrey Mwindaare, West Africa Director, Acumen Fund. “With 10 years history and operating experience, we’re seeing real impact around the world, and believe that patient capital has an important role to play in West Africa. I look forward to building on our early success in Ghana, and developing a strong community of entrepreneurs and partners for Acumen Fund West Africa.”

Acumen Fund believes that building social enterprises can transform society and create more inclusive markets that serve the poor. “We created Acumen Fund to find the enterprises, leaders and ideas that would create more dignity and more choice, unleashing more of the human energy behind all lasting solutions – that of the people who face poverty and yearn to solve their own problems,” said Jacqueline Novogratz, CEO and Founder, Acumen Fund.

Medeem, a Ghanaian majority owned and operated social enterprise, has developed an innovative and sustainable approach to the formalization of land rights in Ghana. Medeem’s proprietary ParcelCert™ product provides a package of evidence that documents a client’s claim of rights with respect to the land, including a government standard land survey. With the aim of providing access to land tenure security, Medeem’s offering is targeted to solve the long-standing issues of access and affordability of land rights documentation especially for society’s most vulnerable. Medeem’s unique private sector solution brings the process to the client’s doorstep and is designed to maximize efficiency and lower costs by utilizing advanced mobile geospatial technologies developed by Medeem in conjunction with its program partners – ESRI and Trimble Navigation.

Documentation of land tenure affords individuals the dignity, legal empowerment and peace of mind to occupy, use and invest in the property, enabling access to services critical to economic development, including credit and basic public infrastructure. Individuals are also provided with the information necessary to make informed decisions regarding inputs and investments in their property. Further, Medeem readies its clients for the formal land registration process should they decide to take that step.  Acumen co-invested in Medeem with the Lundin Foundation.

“By making the process of formalizing land rights both affordable and accessible to all segments of society, Medeem’s program holds the promise of effecting real change in the lives of many of Africa’s farmers, small business entrepreneurs, women and families,” said Craig DeRoy, CEO, Medeem.

Another ground breaking investment, GADCO, aims to transform opportunities for smallholder farmers, develop reliable local food markets, and ensure the environmental sustainability and responsible stewardship of Ghana’s agricultural land. The company plans to operate a modern hub farm, with an initial focus on rice production, and a program that leverages the resources and infrastructure of the hub farm to provide small-holder farmers located on the periphery of this core farm with production services, inputs, improved seeds and access to end markets.

Rice has become an increasingly important staple in the Ghanaian diet, particularly among the low-income population. Despite its importance, Ghana currently imports almost 70% of its rice from abroad at a cost of more than US$500 million, presenting food security concerns. Through its Copa Jasmine rice, GADCO has demonstrated that African grains can be successfully cultivated locally. Other investors in GADCO include Root Capital and Summit Capital.

“A confluence of challenges has led to low productivity in the cultivation of rice in Ghana estimated to be 40% below world averages. These challenges are exacerbated for smallholder farmers, who represent over 80% of domestic rice production and lack access to markets, often forcing them to take below market prices for their product,” said Toks Abimbola, Co-Founder, GADCO.

“GADCO will work with farmers to overcome these challenges by dramatically increasing their yields and income, and we eventually expect to engage 7,000 smallholder farmers, improving an estimated 35,000 lives, at our current site in Ghana,” added Iggy Bassi, Co-Founder, GADCO.

With these two investments in place and a strong local team led by Mr. Mwindaare, Acumen Fund West Africa is positioned to grow quickly in support of Acumen Fund’s global goal of impacting the lives of 150 million people by 2015. For additional information on Acumen Fund West Africa and its investments in GADCO and Medeem, please visit www.acumenfund.org.

About Acumen Fund

Acumen Fund is working to create a world beyond poverty by investing in social enterprises, emerging leaders and breakthrough ideas. We invest patient capital in business models that deliver critical, affordable goods and services to the world’s poor, improving the lives of millions. Since 2001, Acumen Fund has invested more than $70 million in enterprises that provide access to water, health, energy, housing and agricultural services to low-income customers in South Asia and East Africa. And we are building a global community of emerging leaders that believe in creating a more inclusive world through the tools of both business and philanthropy. For more information on Acumen Fund’s activities and investments, visit www.acumenfund.org and www.acumenfundblog.org.

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