The Northern Bio-Fuels Association (NBSA) in Zambia has big plans for farmers who produce jatropha, a raw material for bio-fuel. It could be that the plans are too ambitious and unrealistic. Therefore Bart Hellings, consultant for Capgemini, travelled off to Zambia to advise the association on how to draft a good, realistic, business plan and produce a step-by-step scheme.
Ethiopia is an interesting growth market for beer breweries. Dutch beer breweries too, like Heineken and Bavaria, have started operating in that country. Its large and rapidly growing population combined with improved economic and political stability are creating a growing beer and beverage market. One of Agriterra’s new clients is Tsehay Multipurpose Cooperative Farmers’ Union, a union of 51 cooperatives, among which many member farmers cultivate barley. Beer breweries in Ethiopia still import much of their barley due to shortages on the local market. Both farmer and brewery can profit significantly by improving and increasing the production locally as well as improving the chain of supply from farmer to glass of beer.
Roughly a third of the Kenyans is undernourished. Dairy products with all their essential nutrients can prove to be the solution. Dairy farmers in Kenya produce five billion kg of milk a year. About a billion of it is wasted because of shortcomings in the dairy farming chain, such as the lack of cooling systems or of sales. Agriterra and FrieslandCampina want to stop the wasting of milk and want to provide the whole population with the nutrients of milk. With a plan for micro franchising, they compete in the Partnership contest: a competition for business plans in development countries.
The latest issue of Farming Matters pays special attention to farmers’ organisations. In what different ways do farmers organise? What problems exist in farmers’ organisations and how are these dealt with?
Since 15 January 2012, Bas Prins has been working for Agriterra as a business economic advisor in Peru. He advises various farmers' cooperatives to help them draft their business plans and manage their agribusinesses effectively and efficiently. This advice translates itself into, amongst other things, better financial management, more involvement and participation of the farmers in decision making processes of the cooperative, increased capital, gaining more access to external capital, improved productivity, and gaining access to new markets.
In Peru Bas provides support to eight small producers' cooperatives in the coffee, cocoa, corn, quinoa, cotton and alpaca sectors. These cooperatives are spread throughout the entire country: in the coast, the Andes mountains and the Amazon region, in the North, in central Peru and in the South. Most collaboration alliances started in 2011. That is why in January, Bas directly hit the road to evaluate the projects from the previous year, which he did together with a qualified accountant. This evaluation shed much light on the strengths and weaknesses of the organisations, and action plans were drafted aimed at overcoming the identified weaknesses in 2012. Below he describes one of these cooperatives.
Cooperativa Agraria Cafetalera y de Servicios Oro Verde
The Oro Verde Cooperative (Spanish for green gold) has 1,046 active members from the San Martín region in North-eastern Peru. These farmers mainly produce coffee and cocoa. Oro Verde was founded in 1999 by only 56 farmers in a region that at the time was suffering greatly from drug related criminality and terrorism.
2011 was a very active year for Oro Verde. Compared to 2010, sales increased tremendously with 73% to reach a total of 4.3 million euros, which was partly due to high coffee prices. The operating profit increased threefold. An impressive fact is that, during their general assembly, the Oro Verde farmers decided to reinvest a large portion of this in the cooperative, which led to an equity growth of an astounding 224%, to reach 850,000 euros. Steps were also taken to continue making the business activities of Oro Verde more professional, and these activities will probably be included in a new limited liability company that will be established, and in which the cooperative will keep on being majority stockholder.
Agriterra supported, amongst other things, drafting a financial plan for the 2012 to 2016 period, as well as a marketing plan for ground coffee. Oro Verde and Astrid Gutsche, famous throughout the country, together were the image behind a social marketing campaign carried out by the Banco Continental. Astrid is the wife of world-famous Peruvian chef and owner of various restaurants, Gastón Acurio. Together, they introduced in the market a Christmas chocolate bread (called panetón) made with cocoa beans from Oro Verde.
That same Banco Continental granted Oro Verde substantial financing for working capital that totalled approximately 750,000 euros. Oro Verde initiated negotiations with Plaza Vea, a Peruvian supermarket chain, through a marketing agency in the capital, Lima. And this proved successful. Since March 2012, Oro Verde coffee can be bought from supermarket shelves in Lima. For the time being, this is done under the "Balanze" Plaza Vea brand for its organic and healthy products line. However, plans are well under way to also sell, in the short run, Oro Verde coffee under its own label in these supermarkets.
This year Agriterra will also continue supporting Oro Verde to help it realise the ambitious growth it has planned. For instance, they want to set up their own factory for processing coffee beans for export, which requires financing that amounts to approximately 250,000 euros. A study will also be conducted to examine the possibilities of opening a store in the Lima airport in order to benefit the most from the current brand recognition it enjoys. The store will not only offer the Oro Verde products, but will also promote Oro Verde as a tourist destination. Agriterra is providing support so that a Peruvian student from Wageningen University can draft a business plan for the "Oro Verde Ecological Centre". Here, tourists will be able to learn more about organic coffee and cocoa production. They will also be able to sleep there and enjoy the delicious local delicacies that the restaurant offers.
Kiambaa Dairy and Ndumberi Dairy are faced with a tough decision: if they want to have a chance at survival as small cooperatives in the dynamic dairy market in Kenya, then they will have to join forces. That is why during the dairy study tour in the Netherlands from April 17 to 25, the intended merger between both dairy cooperatives will be a central subject of discussion. During their visit to the Netherlands, not only will they get to know the dairy sector and farms in the country, but the route will be clearly defined that must lead to one single, strong cooperative with more than 4,000 members who together produce some 40,000 kg. of milk daily.
The Mbadifa business in Uganda, winner of the Agriterra 'Farmers in Business Challenge' is growing day-by-day. Mbadifa invested the 15,000 euro prize money in starting an agro-inputs store, thus catering to the true needs of farmers: good quality agricultural inputs, like seeds, fertilizer and pesticides. According to Kiwanuka Richard Ntambi, business manager of Mbadifa, "the prize money has boosted us tremendously". He foresees to reach the break-even point this financial year and has plans to expand their business activities.
At the opening session of the fourth meeting of the Farmers Forum 2012 on February 20 in Rome, the Asian Famers' Association (AFA), a steering committee member of the forum, asked the International Fund for Agricultural Development (IFAD) to partner with farmers organisations in upscaling and mainstreaming sustainable agriculture.
After almost 3 years of hard work, the website www.agriculture-my.coop was launched in the International Year of Cooperatives, along with four training modules on building and managing cooperatives (My.COOP), for trainers and managers and staff of cooperatives. The package also includes a training manual for trainers and a toolkit for mobile phones, especially for farmer cooperatives who have little or no access to the internet, but who do have a mobile phone.