Business Model — for our Intended Plant
Below is a detailed overview of how our intended plant will run its operations, from farmer engagement, to provision of technical training and ongoing extension services, to production of the saplings farmers will grow, to gathering produce, to marketing.
1). Development Process (for the plant itself):
Although the plant that we are envisioning is indeed a big one (which is itself more than warranted considering the ever-spiraling grip of poverty in our region), what we will do, if only we raise the needed support, is to install one component at ago (e.g. a cassava starch facility); get farmers oriented on everything (like the right crop species; what our business model would be, etc.), and then move on to the next component.
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 another. 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, technical training and ongoing follow-up:
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 white current 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). Production of saplings that local farmers will plant.
As soon as we begin installing our intended plant, we will raise large volumes of fruit saplings (mango, oranges, pineapple and passion fruits) that we will give out to all our participating farmers at no charge. These saplings will be directly raised by the UCF (not by farmers) all year round, and will only be given out to farmers when 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 cuttings; sorghum and maize.
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 purpose of having all fruit saplings for our participating farmers directly raised by the UCF itself is to ensure that all farmers grow the right variety/species as well as quality of fruits that they won’t have to cut down once our intended plant is in place.
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 have no market? The answer to this is twofold:
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). These farmers’ scope of production is currently very low, partly due to the absence of a reliable market that could have motivated them to produce even more, or as the UCF often puts it, “to become more productive”. Once our intended plant is installed, the goal of providing local farmers with even more seed/saplings is both to increase the scope of production, and to ensure that even those farmers who have no 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?
Practically, all the farmers that we work with 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 inputs that the UCF currently provides to all the rural poor farmers we work with (be it seed; tarpaulins, training, or the fruit saplings that we will give out to all our participating farmers once our plant is developed), are free.
In this, our most important goal (in particular once our 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.
That is, with a ready market now in place, the free inputs that each farmer will get from us will only last 1 – 4 planting seasons, depending on the crop each farmer has chosen to grow, after which they will then be able to attain a functional level of self-sustainability. This is essentially what will constitute the graduation period (from extreme poverty) for each farmer. Specifically, all farmers who choose to grow fruits like mango; oranges, pineapples and passion fruits will get free inputs for only 1 – 2 planting seasons. Farmers growing cassava will only get free inputs for one planting season, and those growing sorghum/maize will get free inputs for 4 planting seasons.
6). Location of fruit nurseries
If there is enough space at the plant itself, we will have a large nursery right at the plant, where we will raise fruit saplings, all year round, that will be provided to the farmers who live close the plant. For accessibility purposes, we will also have a major nursery in every catchment area that is far from the plant, for farmers who live there.
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, e.g. in the hopes that these will work together and bring their produce to the plant, could be more inconveniencing to individual farmers, or their individual interests.
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.