Friday, September 17, 2010

Finish Your Beer, there are Poor People in Africa, Pt. II of II

“Here we just plant anyhow.”

--TechnoServe-supported farmer explaining the typical unorganized farming method of villagers

Each morning around 5:30 am, 42-year old Grunja Jamomi wakes, and after eating a traditional breakfast made from black-eyed peas, heads out to his fields of yam, peanuts, and now, four acres of sorghum. This past year he harvested 875 kg of sorghum on one acre (that's a lot), twice what non-TechnoServe-supported farmers are getting. Regardless of what feelings you may harbor about the poor having too many kids, with the $360 he earned from his harvest, according to him, he’s able to send all seven of his school-age children to school (In total he has 10…count ‘em, 10 children!). Grunja, pictured with his wife and…well…some children, told me, “Before I went into the program, whenever I harvested, I would only sell in bits…I couldn’t use it for anything concrete. Sometimes I would run out of money and I couldn’t exactly tell what I had used it for.”

I met Grunja, in Tindando village, two hours west of Tamale in the Northern Region. After a couple days in Wa, Steve and I headed out to the capital of the region and set up camp at a nice hotel, from where we made our way to Tindando over some roads nastier than month-old hair clogged in a drain into one of the most isolated places I’ve ever been. There I met Kingsley Kayan, the animated nucleus farmer, and George Biligon, his miracle-worker who does all the ground-levelwork with the outgrowers. In the picture in the previous post, I’m pictured with Kingsley on the left and George on the right in front of Kingsley’s second tractor, which he purchased without TNS support to increase his profits and better serve his outgrowers (in the first pic in this post I'm with George who, as the only person who speaks English in the village, is my translator).

Kingsley, however successful, is where the shortfall of the project is centered on. These nucleus farmers are still not at a point where they can supply direct to Guinness. TechnoServe still acts as the aggregator and single marketing point, and is in effect a crutch. Said Steve, “The project is successful, but it’s not yet sustainable.” Guinness doesn’t want to deal with 13 small nucleus farmers for one raw material, a very small portion of its overall production (the brewery produces three beers, plus other beverages). The next steps in the project need to be to attract bigger commercial farmers and/or group these nucleus farmers together. Anticipating this, Kingsley and others have already started doing this on their own, as six of them have formed a marketing company.

From Tamale we traveled to Kumasi to visit the Guinness brewery, where I chatted it up with employees about the project and even got to hang out at the company bar (see pic). Employees get a monthly allotment of beer – not a surprising, or bad, perk. That night, full of Guinness suds and exhausted from a week’s work, I spent some time out and about exploring the city’s nightlife before flying out the next day.

Despite the project’s shortcomings – they wanted it to be self-sustainable after five years – I like the approach of the project: linking the poor into supply chains with commercial entities that have a vested-interest (profit) in seeing them succeed. 1/3 of the funding for this $3 million project is coming from Guinness to develop this supply chain, and if the project is extended they are expected to put in a larger proportion. This is opposed to disconnected efforts like village-level standalone businesses which, certainly, have their own merits.

And supplying to a company like Guinness isn’t the only way this approach of plugging the little guy into a larger system can work. In another project I’m working on, TechnoServe’s Cocoa Abrabopa (meaning “A Better Life”) project, an input company (fertilizers, fungicide, insecticide) is selling its products to enlisted farmers. The company has an incentive to train the farmers to make sure the inputs are applied correctly to attain the huge yields that are possible, which in turn convince the farmers to keep buying more. Some farmers claim the inputs are too expensive (those who leave often come back), but in the end it's the best option when they get the enormous net profit increases. I’m not at liberty to say how big they are because the results aren’t yet public, but man, it’s incredible. It looks like the input company will fund most, if not all, of the project’s extension.

As Steve explained to me on one of our many drives, in the late ‘90s there was a big shakeup at TechnoServe as they made this change in organizational direction. People with open minds like him stayed; the stubborn ones were asked to leave. I think efforts on standalone businesses are probably more worthwhile when dealing with promising, high-powered entrepreneurs doing something bigger than village-level business, more like SMEs. When dealing with the small guys, it might be better to plug them into a system – not all of them have business capability, though certainly some should be given a shot (read: microfinance). I’m not going into the microfinance question, again. I think we’ve worn the tread off those tires.

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