Farmer Cooperatives

1

First know people.

Then you can work together.

Pro

ble

ms/O

pport

unitie

s

Food, Farmers, and Hunger

Problem

Coops are Solution

2

50% of food production wasted, severe malnutrition, substantial imports (big market, trade imbalance)

Farmers are majority of poor but are small and fractured; forming coops opens opportunities to BUILD MARKETS

Increasing production (5x typical) is resource to make investments (processing, storage, marketing)

Turning crops into cash creates village economy; once there is an economy, development can occur sustainably

Sum

mary

Coops are the Answer:

• Cooperatives have been a model for lifting farmers for over 200 years (1810 in USA) and almost all cultures

• They provide sharing of production expenses and joint marketing, financing and purchasing

They fail in Africa for two primary reasons:

• Corruption and lack of trust

• The need to BUILD MARKETS (of size!)

4

Crops

New Org

Structure Timu

Wakulima

Timu

Wakulima

Timu

Wakulima

Team

Farmers

Ushirika,

Association

Cheetah

Development

Ubia, Joint

Venture

Muundo wa Ushirika

Organizational Structure

Accountability and management through

small groups (Teams) of 5-15 farmers that self-

organize

Cheetah can’t join coop but coop can join Cheetah in Joint

Venture

JV is unifying point for all coop marketing. It controls crops so is

how investments are secured.

Summary: Coop Components

Ag Services - Coop

• Extension services for seeds, fertilizer, training

• Microfinance

• Simple post harvest processing

Financial - JV

• Direct marketing of goods

• Warehousing and other investments

• Coop financial mgmt by Cheetah

Member Support Services

• Group Health Insurance

• Upgrade Health Care

Preparing to Scale

Working in 3 village areas representing around 20 villages

Starting with dry, wet and export crops (corn, potatoes, and tea) to learn about different challenges

Doing hard work of building markets

Key farmer message: trust each other or trust middle-men

Largest buyers also want to eliminate middle-men

7

CropsValue

ChainCash

Economic

Development

Human

Development

Business

Model

• Make investments that

can achieve 3 year

repayment

• Let farmers self-

organize

• Investor joins

cooperative and

manages finance and

marketing

• Turn CROPS into

CASH!

Dev

elo

pm

ent

Pro

cess

Begin to make investments

Improve agronomy (provide microfinance link)

Build warehouse Manage cooperative

Do Test Marketing

Find temp warehouse Find market See if village responds with

total crop commitment

Organize

Recruit members Write bylaws Define commitments, etc.

Select a Target Village

Choose target villages based on high production

Let villages compete with business plan discussions

Choose one that shows highest likelihood of success

Summary

Most of the poorest people on earth are

farmers because they are small & lack access

to markets

So most food rots because lack of food

preservation, processing & distribution

businesses

Because businesses have no investment capital in $20k to $500k range to

get started – and needed leadership mentoring

Impact!

12

1.5% more

African

economic

growth

in the ‘80s

would

have saved

500,000

children by1990

Economic growth

saves more lives

than income

redistribution

- and it is created

with small

businesses

10% increase in

income

= 6% decrease in

infant mortality

= lower birthrates

= higher education rates

= less child oppression

= less domestic violence & more stable families

= more rights for women