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Farmshine: Market-based solutions for smallholder farmers

Farmshine connects smallholder farmers directly to buyers, while helping them to conserve soil and mitigate the effects of climate change.

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Explain your project idea (2,000 characters)

Farmshine is an agriculture trading platform that enables smallholder farmers to aggregate and sell their harvests directly to commodity trading companies. Our goals are to i) at least double farmers’ income through a combination of higher prices paid by buyers, increased crop production per acre and increased acreage under production; and ii) help farmers mitigate the effects of climate change, and conserve and optimize their soil and water resources through training in conservation agriculture.

To achieve these goals, Farmshine combines a mobile app with on-the-ground support from experienced field agents, whose role is to support the farmers throughout the entire growing season. The app provides farmers with a digital identity, traceable production history, and direct access to input suppliers, credit providers and buyers. In this way, our platform transforms subsistence farmers into market-connected traders. This transition is the essence of sustainable economic development.

The problems we solve:

1. Middlemen traders take a disproportionate amount of the profits. Moreover, due to their limited individual purchasing capacity, middlemen discourage farmers from increasing production. Farmshine enables farmers to bypass the middlemen and keep more profit for themselves. Because the farmers can sell directly to buyers, they are incentivized to increase the production of those crops which are in highest demand.

2. Many smallholder farms are characterized by poor soil quality and lack irrigation. Farmshine’s trained field agents provide training and ongoing support in conservation agriculture techniques (particularly in the semi-arid regions, which are most vulnerable to the effects of climate change).

3. There is no end-to-end solution that farmers can rely upon in lieu of the middlemen. In addition to connecting farmers to buyers, Farmshine connects them with seed suppliers, low interest loans from reliable banks, and crop insurance providers.

Who are the beneficiaries? (1,000 characters)

Farmshine’s beneficiaries are smallholder farmers in Kenya, particularly those located in the semi-arid regions of Tharaka Nithi, Kitui, Meru and Makueni counties. These farmers typically have 1-2 acres and earn an average of $2 per day.

Under the current system, smallholder farmers sell their crops to middlemen traders after each harvest. Although the middlemen offer below market prices, the farmers have few or no alternative options: they need the money immediately to pay for food, school fees, etc., and often cannot afford to transport their crops to larger markets or aggregation points. Moreover, farmers borrow money from the middlemen during the growing season at interest rates ranging from 40-200% per year. Farmshine solves both of these problems by enabling smallholder farmers to connect directly to legitimate commodity buyers and low interest bank loans.

How is your idea unique? (1,000 characters)

Farmshine’s business model is focused solely on one client: smallholder farmers. Our strategy is to identify each broken link in the agriculture supply chain – the points where smallholder farmers are underserved or even exploited – and replace them with beneficial goods and services providers. Without such a comprehensive solution, farmers are unlikely to escape from the middlemen or, ultimately, from the cycle of poverty perpetuated by the current system.

Part of this process involves establishing trust between each actor. Our platform accomplishes this by providing full transparency:

• Farmers’ records of production are fully traceable. This enables farmers to establish themselves as trusted producers, while giving buyers the confidence that they will provide the quantity and quality needed for each crop.
• Service providers offer transparent pricing, including the forward prices offered by buyers, bank interest rates, and the prices of seeds and other inputs.

Idea Proposal Stage (choose one)

  • Early Adoption: I have completed a pilot and analyzed the impact of that pilot on the intended users of the idea. I have begun to expand the pilot for early adoption.

Tell us more about your organization/company (1 sentence and website URL)

Farmshine is a global agriculture platform where farmers, buyers and service providers can trade on mutually beneficial terms.

http://www.farmshine.io

Expertise in sector

  • 3-5 years

Organization Filing Status

  • Yes, we are a registered social enterprise.

In 3-4 sentences, tell us the inspiration or story that encouraged you to start this project.

Farmshine’s operational model was tested and proven over four years at the Food and Agriculture Organization of the United Nations in Kenya. This project trained 2,000 field agents in agri-business and conservation agriculture techniques, who in turn trained 80,000 farmers and connected them to buyers. The problem with UN/NGO projects, however, is that they are not sustainable. After each project ends, the beneficiaries are left with nothing. Farmshine was created to solve this problem.

Please explain how your selected topic areas are influenced, in the local context of your project (1,000 characters).

The farmers we work with are located primarily in the semi-arid regions of Kenya. They are affected by frequent droughts, sub-optimal soil conditions and limited access to water. The effects of climate change will further intensify these challenges. The techniques of conservation agriculture – including no-till farming, mulching, integrated pest management and crop rotation – are well suited to help farmers improve the soil condition and maximize limited water resources.

Farmers’ prosperity is also impact by the above climatic factors, as well as the fragmented agricultural supply chain mentioned above. Both of these issues result in lower annual incomes for farmers, which in turn drives many youth to look for better work in large cities, where jobs are few and living expenses are very high. Farmshine’s platform aims to solve each of these problems, with a goal of reaching one million farmers over the next five years.

Who will work alongside your organization in the project idea? (1,000 characters)

In addition to farming communities, Farmshine works with NGOs, UN organizations, local governments and service providers to optimize our platform for smallholder farmers.

NGOs and UN organizations often provide training and supplies to farmers, but do not usually connect them with buyers. Moreover, their projects are finite and often lack a sustainability component. Farmshine partners with these organizations to provide a long-term solution for farmers. Our first collaboration is underway in Kitui.

Local governments have a vested interest in helping their farmers to produce and sell more crops. County extension workers, therefore, are natural partners for Farmshine, and work in tandem with our field agents.

Large banks are interested in providing loans to smallholder farmers, but lack the resources to determine their credit risk. Farmshine facilitates low interest loans by working with both banks and buyers to collateralize farmers’ loans against the forthcoming harvest.

Please share some of the top strengths identified in the community which your project will serve (500 characters)

The farmers we work with have already been trained by either an NGO or UN organization. As a result, the training provided by our field agents can be offered at a more advanced level, and the farmers are prepared to produce the quantity and quality of crops required by large buyers.

Geographic Focus

East Africa. Initially Kenya, with plans to expand into Uganda, Ethiopia and other countries.

How many months are required for the project idea? (500 characters)

The first season of our project is currently underway. Thus, we could implement this project in one season (about 3.5 months), or over the course of several seasons, depending on the funding and resources available.

Did you submit this idea to our 2017 BridgeBuilder Challenge? (Y/N)

  • No

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Photo of Willoughby Eunice
Team

The major area we are tackling is the coalition between the farmers and middlemen, distinguishing real farmers and suit farmers, and having a reputable cordial relationship with the farmers. That will be a major breakthrough.
Another thing to put into consideration is training of farmers using the mobile app and as it is, we are employing the use of GIS and Remote Sensing.

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