A Microloan Model That Can Revitalize Agriculture in Sub-Saharan Africa

Stephanie Hanson/One Acre Fund
One Acre Fund farmers in Chwele District, Kenya, work together to plant a field. One Acre Fund provides training and support to smallholder farmers in Africa.

Christine Walela is a smallholder farmer in Kisiwa, a village in western Kenya. She has four children, and, as is the case for many women in western Kenya, her husband does not support the family. He lives with his second wife, and Christine hardly ever sees him.

Christine depends on farming for food and income. In 2009 she planted one acre of maize and harvested six bags, just enough to feed her family, but not enough for school fees or other expenses. Later that year, Christine took a loan from One Acre Fund, an agricultural nongovernmental organization (NGO), to plant a quarter acre of beans. She had a good harvest and was able to sell it for U.S.$130. When I first met Christine, about a year and a half ago, she showed me a cow that she had purchased with her bean income. That cow now produces nine liters of milk a day for a profit of $60 per month. This additional income pays for private school fees for her two youngest children, Eugene and Frazier.

Christine is one of the millions of smallholder farmers in sub-Saharan Africa who struggle to grow enough food to feed their families and pay their expenses. About 80 percent of people in sub-Saharan Africa are farmers, and the majority are smallholders. They have difficulty accessing quality seed and fertilizer, financing, education and training, and markets. One Acre Fund addresses these challenges through a complete service model that enables farmers to double their income per planted acre. We started with 40 farm families in Bungoma, Kenya, and now serve over 55,000 in Kenya and Rwanda.

After one season with One Acre Fund, Christine had significantly increased her income. She was glad to have two children in private school, but she had other goals: she farmed land owned by her husband, and she wanted to buy a piece of land of her own. In 2010, she took a loan to plant one acre of maize. She followed One Acre Fund’s planting technique and harvested 20 bags of maize, more than triple her previous year’s harvest. She stored all 20 bags, with plans to sell ten bags when the price spiked about six months after harvest.

At the end of February, I met Christine as she was picking up her maize seed and fertilizer for the next planting season. She excitedly told me that she had sold ten bags of maize for a profit of $280, and had used this money, along with some savings from the cow’s milk production, to buy half an acre of land. This year, for the first time in her life, she will plant maize on her own land.

“I never thought I would have my own farm or my own cow,” she said. “Now, I feel no stress.”

A Focus on Smallholder Farmers

At its start, One Acre Fund’s field staff spent many hours talking to farmers to understand what tools they needed to succeed. Four main themes emerged. First, farmers did not have access to quality seeds or fertilizer at planting time. Most farmers were not within walking distance of a shop that sold farm inputs, and those that were said the shop was often out of stock when it was time to plant.

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Stephanie Hanson/One Acre Fund
Christine Walela in Kisiwa village, Kenya, with the cow she purchased using her bean harvest income.

Second, farmers did not have access to finance. At planting, farmers often do not have the money to purchase seed and fertilizer in cash. And most commercial banks and microfinance institutions do not operate in rural areas. The few microfinance institutions that are in rural areas generally do not give agricultural loans, which are considered to be very risky.

Third, farmers did not have access to education and training. Most sub-Saharan African governments have extension agents that are supposed to provide training to farmers. In practice, these extension agents are underpaid and are expected to cover a geographic area that is too large for quality service provision. Many of the farmers we surveyed did not know how to apply fertilizer correctly.

Finally, farmers had trouble accessing markets. There is a lack of transparency in rural markets and farmers often sold for a low price to the first trader who came to their farms, instead of determining what was a fair price through consultation and bargaining.

Based on these discussions with farmers, One Acre Fund developed a service model that addresses each of these needs: farm inputs, financing, education, and market access.

When a farmer enrolls with One Acre Fund, she joins as part of a group of six to 12 farmers. She receives an in-kind loan of seed and fertilizer, which is guaranteed by her group members. One Acre Fund delivers this seed and fertilizer to a market point within two kilometers of where she lives. A field officer provides in-field training on land preparation, planting, fertilizer application, and weeding. These trainings are standardized across One Acre Fund’s entire operation, and include interactive exercises, simple instructions, and group modeling of agricultural techniques. For instance, after a field officer teaches a group of farmers how to use a planting string to space rows of crops, he asks them to model the technique in the field so that he can offer immediate feedback.

Over the course of the season, the field officer monitors the farmer’s fields. At the end of the season, he trains her on how to harvest and store her crop. One Acre Fund also helps farmers who are interested in selling part of their harvest link to local traders. Our farmers are doubling their farm income per planted acre. Final loan repayment occurs several weeks after harvest. Ninety-nine percent of farmers repay their loans.

The Field Officer–Farmer Relationship

The field officer is the most important part of the One Acre Fund service model. Our field officers are recruited from the communities in which they work. Unlike most NGOs, One Acre Fund does not hire university-educated horticulturists for its field staff. We find that most of what farmers need to know can be conveyed in a few simple lessons. We, therefore, prefer to employ down-to-earth, hardworking staff—typically, farmers themselves—who have strong leadership potential within their communities.

Our field officers each work with roughly 160 farmers, and they visit each of their farmers on a weekly or biweekly basis. At these meetings, they conduct trainings, check germination rates, troubleshoot problems in the field, and collect repayment. Over the course of the season, they cultivate a strong bond with their farmers. They respect farmers’ feedback about farming techniques and One Acre Fund’s program. In turn, One Acre Fund farmers appreciate their field officers’ agricultural knowledge and their hard work on their clients’ behalf. Many farmers call their field officers “teacher.”

Research and Innovation

One Acre Fund learns a lot from its farmers. Farmer ideas and feedback, channeled through field officers, are an integral part of the organization’s growth strategy. A great deal of information already exists about which agricultural technologies and strategies work; what is lacking is information on how to adapt and distribute these technologies and strategies to rural smallholder farmers. One Acre Fund has a 15-person research team focused on testing successful techniques for adaptation and distribution to smallholders. Many ideas for research trials come from the field. For instance, many farmers were asking their field officers about the best way to grow bananas. One Acre Fund is now running trials on banana cultivation.

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Ebrahim Kigme/One Acre Fund
Kennedy Wandati, a One Acre Fund field officer in Webuye District, western Kenya, leads a planting training session in March 2011.

Before being integrated into core field operations, any new, potential innovation developed by the research team must prove that it can have a significant effect on One Acre Fund’s results metrics: scale (can this technique reach a lot of people?); impact (can it generate significant increases in farmer income?); and sustainability (is it cost effective?).

The innovations generated by our research team, tested in the field, enable One Acre Fund to expand to meet the growing demand for services among rural smallholder farmers. For example, the research team has tested different methods that will allow field officers to increase the number of farmers they can serve without detracting from the quality of service. The most successful methods have been integrated into core operations. In the past two years, the average number of farmers served by a field officer has increased from 100 to about 160.

One Million Farmers by 2020

We currently operate in two countries with 55,000 smallholder farmer clients. In the next three years, we will grow to serve more than 200,000 farmers. By 2020, we aim to reach one million farmers through our core program model. Africa’s smallholder farmers are increasingly the focus of major donors, including USAID, the World Bank, and the UK Department for International Development. We are eager to share what we are learning in the field to help improve agricultural development policy. One Acre Fund’s model is helping thousands of farmers feed their families, pay school fees, and invest in new income-generating opportunities. Given the right tools, millions of farmers can achieve the same goals as Christine Walela.