Business Model — for our Intended Plant

 

Here is how our intended plant will run its operations, from farmer engagement, to provision of technical training and ongoing extension services, to ensuring all farmers have the right planting materials, to gathering our farmers’ produce and marketing.

 

1). Development process (for the plant itself):

We will initially install a seed cleaning facility (i.e. the cereal/grain drying, sorting and threshing system); followed by a cassava starch facility, and then High Quality Cassava Flour (along with two greenhouse-type solar food dryers), and the needed accessories.

But since the above 3 components are relatively small in scope, we may install one at ago, or one concurrently with the other. For instance, a cassava starch facility could be installed at the same time as the High Quality Cassava Flour facility (since the work that we will do with farmers on cassava starch will be the same as with cassava flour).

Our fruit processing facility will be installed last, but raising fruit saplings, and having these saplings planted by farmers, will begin right from the very start of our activities.

 

2). Farmer orientation, training and ongoing extension services:

Right now, the UCF virtually has no source of funding, but we have a field team that works with local farmers, running village-to-village meetings about our current white sorghum project; providing agronomic training; making ongoing field visits; giving out tarpaulins at harvest, and supporting them until their sorghum is collected from them.

Once our intended plant is developed, we will have a dedicated team that will train local farmers on every crop we are working on; make sure these farmers are planting the right species; ensure crop healthy/quality; coordinate the supply of saplings/seed to farmers; and work with them from planting to bringing their produce to the plant.

 

3). Ensuring ALL farmers have the right planting materials:

As soon as we begin developing our intended plant, we will source large volumes of planting materials (fruit saplings; cassava cuttings, sorghum and maize) and give them out to all our target farmers, regardless of whether those farmers already have the crops that our plant is working on or not. Our planting materials will also be provided to all our farmers at no charge, but each farmer will only need to receive these free inputs for 1 – 4 planting seasons, depending on the type of crop they are growing.

Why? The biggest challenge currently facing farmers in the Teso region, where Uganda’s government with funding from KOICA (Korea International Cooperation Agency) recently installed a similar fruit processing plant like the one we want to install, is that most farmers ended up planting varieties of mangoes and oranges that aren’t suitable for juice production, and these have been rejected by the plant.

Many farmers even decided to cut down their trees; others have opted to export their fruit to Kenya and South Sudan, but this became impossible when the pandemic came.

So, the reason for having all our farmers’ planting materials directly sourced by the UCF is to ensure that all our farmers are growing the right variety of crops that won’t be rejected once our plant becomes operational. And the reason for providing these planting materials to all farmers at no charge is because the vast majority of farmers in our region are chronically poor, and many can’t afford initial inputs on their own.

For pineapples alone, we will source suckers that are already mature, and which our farmers can plant right away. This is because, for pineapples, it is easy to tell if they are the correct variety, by simply looking at the plantations where these suckers are being sourced from. Nonetheless, we will also still have our own pineapple nurseries.

All other saplings (mango, oranges, and passion fruits) will be directly raised by the UCF all year round, and will only be given out to farmers when they are ready for planting. The only planting materials that we will give out to farmers as they are (i.e. without initially putting them in a seedbed) are cassava cutting; sorghum and maize.

 

4). Why provide farmers with more seed/saplings, when they only lack a market?

Farmers already have sufficient produce for which they simply have no reliable market.

So, why do we plan to provide them with even more planting materials when they already have lots of produce and only lack a market? The answer to this is threefold:

a). As we have seen above, most of the produce local farmers already have may not be a good fit for the purpose. Even with traditional crops like cassava, newer varieties (like Nase11, Nase19, Narocass1 and Narocass2) have not only been lauded to be both disease-resistant and climate resilient, but also, they are said to produce better High Quality Cassava Flour, as well as cassava starch, because they have more flesh, and less wrinkles. So, for a better chance at getting a market, a farmer must have these.

b). The other reason for providing all our target farmers with new planting materials at the beginning, is that most of the buyers that we have in mind, e.g. all breweries in East Africa, require that all the participating farmers secure new planting materials (especially for cereals/grains) each planting season, but the biggest number of farmers in our region are chronically poor, and many can’t afford initial inputs on their own.

c). At present, the local farmers’ scope of production is very low, partly due to the absence of a reliable market that could have motivated them to produce even more, or to become more productive. So, once this plant is installed, the goal of providing farmers with even more seed/saplings is both to increase their scope of production, and to ensure that even the poorest farmers who are unable to afford initial inputs can participate equally, this time with a ready market for their produce at harvest.

 

5). Our seed/saplings will be provided to all participating farmers at no charge. Why?

This is not simply because we aim to do good. But, practically, the vast majority of farmers in our region are too impoverished, and have no means of getting started on their own. Many are chronically poor that even the idea of providing them with inputs (like seed etc.) in the form of a microloan where they have to repay at harvest, only impoverishes them even the more. We have seen this happening with a few global antipoverty charities operating in our region, which provide poor farmers with loaned inputs. Many farmers end up selling their livestock in order to repay the microloans.

For this reason, all the support that the UCF currently provides to all the rural poor farmers we work with (be it seed; tarpaulins, training), as well as all the support that we will provide to our target farmers once the intended plant is developed, is free.

In this, our most important goal (in particular once the intended plant is developed), is to put these farmers on a self-sufficient path from extreme poverty, not by giving them a handout, but a hand-up that simply takes 1 – 4 planting seasons to produce self-sufficiency, and this will depend on the type of crop each farmer chooses to grow.

Specifically, with a ready market now in place (once this plant is installed), the free inputs that each farmer gets from us will only last 1 – 4 planting seasons, after which they will then be able to attain a functional level of self-sustainability. All farmers who are growing fruits like mango; oranges, pineapples and passion fruits will only get free inputs for 1 – 2 planting seasons. Farmers growing cassava will only get free inputs for one season, and those growing sorghum/maize will get free inputs for 4 seasons.

 

6). Location of fruit nurseries

For accessibility purposes, we will have a major nursery in every catchment area that is far from the plant, for farmers who live there. If there is enough space at the plant itself, we will have a nursery right at the plant, where we will raise large volumes of saplings, all year round, that will be provided to the farmers who live close the plant.

For pineapples alone, we will source suckers that are already mature, and which our farmers can plant right away. This is because, for pineapples, it is easy to tell if they are the correct variety, by simply looking at the plantations where these suckers are being sourced from. Nonetheless, we will also still have our own pineapple nurseries.

 

7). Focus crops:

One of the most precious goals of our intended plant is to create market linkages for more than one type of crop. This is intended to help rural poor farmers diversify their income sources, or simply to give each farmer the chance to exit poverty by growing the crop that they think is easier for them, or one that is more suitable for their land.

Our intended plant will primarily work on six crops: cassava; sorghum; maize; mango; passion fruits, and pineapples, with oranges acting as a possible substitute for one of the aforementioned three (3) fruits. These are the crops our farmers will choose from. Our farmers’ graduation period from poverty, as well as the length of time for which we will provide them with free inputs, will also depend on this, as described above.

 

8). Gathering our farmers’ produce, and bringing it to the plant:

One thing we have learnt both from the UCF’s own previous community work, and from those farmers who are currently supplying fruit (mango and oranges) to the Soroti Fruit Factory which was recently installed by the government in the furthest part of eastern Uganda (Teso), is that bundling farmers into groups or cooperatives, in the hopes that they will then work together and get their produce to the plant, often turns out to be more inconveniencing to individual farmers, or their individual needs.

In the case of Soroti Fruit Factory, in particular, an umbrella farmers’ cooperative named “Teso Tropical Fruit Growers Cooperative Union” (or TEFCU), which consists of 59 smaller farmer cooperative societies under it, was formed for exactly this purpose. TEFCU was even given a 20% ownership in Soroti Fruit Factory. Barely two years from the time this plant was launched, the only thing that remains of TEFCU is its ownership in the plant, but the envisaged business model has all but stalled.

In our own case, once our plant is installed, first, we will have an in-house team that will work with local farmers at every stage, from ensuring that farmers have planted the right crop varieties/species, to getting their produce to our plant. We will also certainly have a number of community activities for farmers to learn from each other, exchange ideas and transfer best practices from those farmers who are doing better.

But, in the whole process, we want to give each farmer the flexibility to market their produce in a way that doesn’t bind them to rigid rules or commitments, as follows:

a) An individual farmer will be free to bring their produce to our plant if that works better for them, b) a number of farmers, at their own choosing (rather than at the urging of our plant), may form a group or cooperative that brings their produce to our plant, c) individual entrepreneurs may collect produce and bring it to us, on terms agreed on by them and the farmers, d) farmers can ask our plant to collect their produce, less transport costs, and e) farmers are free to sell their produce elsewhere.

 

9). Building market linkages:

We will have our own inhouse team whose sole work will be that of building market linkages for our final produce/products across the East African region. Besides, we will also keenly seek assistance from people who have extensive connections, and a strong background in building market linkages for rural smallholder farmers — in particular TechoServe, Partners in Food Solutions, and the Africa Innovations Institute (AfrII).