The pilot project (2015-18) in Tanzania involved a lot of experimentation to discover what works and not, our key success factors, and possible pitfalls. To verify that our ideas had a practical potential, we needed to prove that both our target group and our own organisation could get results within the given constraints. In order to proceed, we need a scalable approach able to be replicated.
PROOF OF CONCEPT
Affordability is a core feature since we do not want to use handouts, but instead ask farmers to risk money that has been incredibly hard to save. By bringing the cost below $10, we found the level of investment that defines affordability for our target group. At this level, those with motivation and ability to join, come forward and take the risk, an act that is foundational for the concept. It qualifies the farmer as an investor, a customer and a business partner with every party involved in our approach. The farmer is our key decision maker, and affordability makes or breaks the deal.
The market-based sustainability of the concept has been proven by the fact that without further support, smallholder farmers continue to make money from their investment kit. A substantial percentage of them have invested in additional kits whereas some have experienced setbacks that we address as risk scenarios below. Local demand absorbed the increased production in the beginning, allowing the complicated issues of logistics and market access to be addressed at a later stage.
KEYS TO SCALABILITY
There are several levels of scalability. Focus on making the rollout itself scalable is what we could call the NGO perspective. Even if public funding can be obtained for rolling out the concept, the scale of the challenge commands the same eagerness for cost-cutting here as with the investment kits. It is crucial to find ways to exit and move on to new target groups once market-based sustainability has been established.
More farmers get started by keeping the onboarding as simple as possible, and the pilot roll-out team was at its best able to reach a customer acquisition cost (CAC) as low as $33. By coordinating with existing civil and governmental officers, by holding community meetings, and by setting up demonstration sites, a go-to-market strategy has been tested which can be standardised and streamlined. An effective rollout also depends on population density, since the free agronomist support is the main cost of the rollout.
Although the scalability of the NGO-led rollout itself is important, our main focus is on the long-term scalability seen from the smallholder farmer’s perspective. Affordable investment kits provide a low barrier to entry (growth in number of participants), and the investment kit’s profitability is the key to its scalability for each individual farmer. Even with a very small start, a quick and substantial return on the investment creates an opportunity for exponential growth provided the habit of reinvesting some of the profit is established as part of the new investor’s mindset.
The farmer, the NGO with its implementing partners, and NCA’s head office all meet obstacles. The pilot project helped identify some of them.
The farmer could experience loss of harvest caused by failure to plant or to do other necessary work in time. Lack of needed inputs and support could ruin an entire season and become a major setback. Lack of profit could also be a post-harvest loss due to poor handling of the produce or lack of market access. A general countermeasure here is that rather than focusing on one-to-one support, the rollout’s agronomists should conduct regular meetings to build community forums with knowledgeable lead farmers that can become clusters of producers. The investment kits and the step-by-step upgrade path should be designed to avoid big losses.
For the NGO, and the implementing partner and its employees, handling cash can easily cause problems. Carrying payments in cash creates temptations for delayed transfers and financial mismanagement that could lead to loss of integrity. Commercial activities as part of the NGO-led operation, like wholesale purchasing, kit production and sales, should
be handed over to market-based players as early as possible. Thereby the NGO-led roll-out activities will not depend on profits from market-based activities. Instead, clear milestones when it comes to transferring pilot activities undertaken by the NGOs to commercial players will give the NGO recognition for moving to its own exit quickly.
Here a general countermeasure would be financial transparency and the use of digital payments. A clear separation between the NGO-led rollout and the activities that will become 100% market-based should be maintained from the start.
International coordination faces a risk scenario where the overall performance does not meet the criteria or deadlines set by funding partners. Discontinued financing, even for a single year or for a few months might remove motivation and even cause key personnel to leave. The risk of discontinuous funding from year to year is detrimental to the scalability. Rebuilding lost momentum can be costly if at all possible. Inability to keep up with the project in terms of timely decision-making can have similar effects. A general countermeasure is to establish conversations, at all levels and with regular intervals, keep communication open and let facts, stories and questions flow both top-down and bottom-up. A standardised approach with unified metrics and performance management will enable program results-based funding at the international level and more flexibility to handle country-specific problems.
The takeaways from the pilot project has been analysed to create a model for further scaling. Identifying keys and barriers to growth, as well as ways to effectively manage risk has been used to define roles, work processes and key performance indicators needed to manage a scalable operation. Anecdotal evidence is to a large degree behind what we seeas proof of concept. However, this gives us a rich background when defining data collection and performance indicators for a model to be reused.
Kibiti, Tanzania, 23.2.2019: Training course with KKKT. KKKT (Evangelical Lutheran Church in Tanzania) is a federation of Lutheran churches in Tanzania with more than 6 million members.
Photo: Agatha Shao