15 January 2013

Africa: Distributing Life-Changing Innovations Into the Hands of Africa's Poor

opinion

Photo: Stuart Price/UN
A market vendor in Southern Somalia.

The world theoretically ended poverty decades ago.

Advances in health, financial services, and pro-poor technology have illuminated a clear development path for the poor. Unfortunately, development theory alone never fed a child - the great challenge now lies in the hands of entrepreneurs - to *distribute* these interventions across vast areas with no infrastructure.

For example, advancements in seed and fertilizer have enabled most of the world to more than double their farm productivity. For the 75% of Africa's poor who depend on agriculture for their livelihood, a 2x bump in harvest would mean the difference between subsistence and profit-generation; hunger and surplus; poverty and opportunity. Yet even the most basic and simple of agricultural technologies are not reaching a significant number of African farmers. There is a massive distribution failure.

One Acre Fund believes that the greatest humanitarian challenge of our era is to *distribute* life-changing technologies to rural and ignored places, where the vast majority of poor people live. In agriculture, two primary barriers make distribution challenging. First, product distribution is difficult in rural areas that span vast physical distances.

Second, rural areas operate in a total "market void." Even where improved seed and fertilizer are available, less than 10% of farmers have access to credit, rendering the technologies unaffordable. And in the absence of training, farm inputs are largely ineffective. These multiple barriers make it difficult for a new intervention to succeed.

One Acre Fund has developed an innovative new model for distributing agricultural technologies directly into the hands of Africa's poor farmers.

We have set up more than 800 rural "market points" that bring our services within walking distance of the people that we serve. For example, in the country of Rwanda, our market points will make our services available within walking distance to more than 50% of the population within the next four years.

We don't just dump off development technology and expect it to work, though. We "bundle" seed and fertilizer together with a small, $80 loan - so farmers can afford it.

We provide training, so farmers actually realize improved productivity from these new technologies. And we help farmers to sell their surplus, so that they can move from subsistence to a commercial mindset. Our "market bundle" produces hard results: our farmers on average double their net farm profits within one planting season.

Since inception, we have worked to scale our model as quickly as possible. In six years, we have grown to serve 130,000 rural farm families across Kenya, Rwanda, and Burundi, with more than 600,000 children living in those families. Our local field staff is 1,300 people strong and drives our growth at a rate of 50-90% per year. Within the decade, we expect to serve over 1.5 million farm families directly.

Across Africa, there is no shortage of opportunities for entrepreneurs. Take any example country and any example industry, and there is room for literally thousands of businesses that need to be created as Africa continues along its explosive development path.

In agriculture alone for example, we could still use thousands more businesses doing everything from farm input manufacturing, input wholesale/ warehouse/ transportation, input distribution, business finance, consumer finance, weather insurance, crop insurance, training, market price information, harvest commodity storage and wholesale, harvest value addition, etc. - multiplied across two dozen different crop families. The sheer scope of businesses that still need to be created is breath-taking.

At the same time, we believe that the barriers to entrepreneurship are rapidly eroding. Government is often seen as a barrier - but rather, we believe it can be an opportunity. Businesses and NGOs with proven solutions often have opportunities to scale up their work very rapidly by proactively engaging and partnering with government.

By partnering with our host governments, we have seen significant opportunities to extend the impact of our work. As with any other region of the world, Africa has unique challenges - but these can be adapted to. And overall the incredible breadth and depth of opportunities far outweigh the challenges.

Andrew Youn is Founder of the One Acre Fund

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