Plant Ownership & Legal Structure
Whenever people ask us about what the ownership structure of our intended plant would be, two things come to mind: 1) public-private partnership, and 2) communal ownership (together with all the rural smallholder farmers that the UCF works with).
But both ideas are hard to process, in an environment like ours.
1). Running this plant as a public-private partnership in a place like ours would be about nothing but an invitation of the most bureaucratic processes possible. It would be about an invitation of extortion in everything we plan to do, and eventually failure.
2). Communal ownership with all the farmers that the UCF works with?
Uganda has previously had lots of communally-owned farmers’ cooperatives, including some that even managed to set up processing plants like the one we are striving to develop, but which have since collapsed, just because they were communally owned.
The painful fact is: we are not in a place like Denmark where some farmer-owned cooperative will live on for decades, and only go on to expand. Here, many people are primarily motivated by what they can immediately get from something, not what they can put in. This couldn’t be more true for our intended plant, where every other local farmer will have had no hand in creating it. The whole thing may only be a disruption.
Here is what will guide the ownership structure for this plant, instead:
First, a quick look at our business model. The UCF is a nonprofit social enterprise.
Besides, most of 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.
The UCF’s business model is that of a pure nonprofit, but a nonprofit with a business approach to putting the extreme poor on a self-sufficient path from poverty. And while it is generally assumed that most “social enterprises” operate by turning a profit from their constituents, the only social enterprise aspect in our work is that the UCF is constantly seeking ways of ultimately making our overall work fully self-sustaining, but without making our participating farmers pay for anything, or repay us in any way.
To run our plant in a flexible and creative way, and without subjecting our operations to the bureaucratic processes that have stalemated similar ventures here today, our plant shall be wholly owned and managed by the UCF, with any incomes thereof being used to scale our work with rural poor farmers, and to expand the plant’s own work.
Think of the same way Oxfam and The Rockefeller Foundation (both of them nonprofits) could run a charity shop in London, or some real estate in New York, respectively, from which they raise the money that they use to end poverty in Africa. Our plant will both create markets for the rural farmers we work with, while using its own incomes to support our work with local farmers in a self-sustaining way — in an environment where people like us usually have no source of funding for our work.
The UCF is located on 12 acres in Namisita, a village in Kamuli, in eastern Uganda. That is where our intended plant shall also be physically located. If deemed necessary, e.g. for accessibility reasons, part of this plant (such as the site where we will raise saplings that will be given out to our farmers) may be moved to a separate location.