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 aren’t so easy, 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.
Here is what will guide the ownership structure for this plant, instead:
The main point of having this plant is to enable us move as many rural farmers from poverty as possible, with zero friction in the running of the plant itself. That is exactly what will inform the ownership of our plant, and — to put this in context — here is a quick look at our business model. First, the UCF is itself a nonprofit social enterprise.
Most of the farmers that we work with are too impoverished and have no means of getting started on their own. Many are chronically poor that even the idea of giving them 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 here, which provide 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.
To sum up:
The UCF’s business model is that of a pure nonprofit, in that all the support that we provide to the farmers we work with (be it seed, tarpaulins, training etc.) is entirely free, but a nonprofit with a business approach to putting the poor on a self-sufficient path from extreme poverty, hence our designation as a “nonprofit social enterprise”.
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 looking for ways to ultimately make our overall work 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 how Oxfam and The Rockefeller Foundation, both of whom are nonprofits, could operate a charity shop in London and some real estate in New York respectively, from where they then draw the means to end poverty in Africa. Similarly, our plant will both create markets for the rural poor farmers we work with, while using its own incomes to support our work with these farmers in a self-sustaining way — in a part of the world where people like us virtually have no source of support 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.