BLOG Tags: Sustainability

One Acre Fund’s Progress Towards Sustainability

one acre fund revenue expenses

Sustainability is an indicator of the efficiency of our operating model. We calculate sustainability by measuring the percentage of our direct service model and agrodealer program costs that is covered by farmer repayments.

The more sustainable we become, the fewer donor dollars we need per farmer to support our operations. It also means we generate more impact for every dollar invested, which improves our Social Return on Investment (SROI).

one acre fund revenue

With the exception of 2013, when a devastating maize virus in Kenya affected farmer enrollment and revenue, our financial sustainability has been steadily increasing each year. In 2015, our financial sustainability was at 79 percent, up from 74 percent in 2014.

To improve sustainability, we focus on levers like transaction size per farmer and farmer loan repayment rate, as well as staffing ratios like clients per field officer. Each country’s path to sustainability depends on its operational context. For example, because Tanzania has a much lower population density than Rwanda, field officers in Tanzania are responsible for fewer clients. On average, farmers in Tanzania also have more land than Rwandan smallholder farmers. As a result, to improve sustainability, Tanzania will focus on increasing transaction size per farmer.

2012 2013 2014 2015 2016(p)
14.1M 14.9M 19.5M 29M 39.6M


We continue to have strong repayment performance across our operations, so we’re focusing our efforts on increasing transaction size and impact per farmer, and clients per field officer. The scale innovations team trials operational modifications to improve those metrics, while the finance team suggests areas for cost efficiency.

Sustainability is an important organizational goal, but achieving sustainability at the expense of customer service or farmer impact is not something we’re willing to consider. Our operations have dedicated customer engagement teams to ensure that we provide quality customer service year-round. We remain as committed as ever to developing country operations that achieve financial sustainability objectives while maintaining operational excellence.

Note: As of May 1, 2016, our financial sustainability number was updated to reflect audited figures. Additionally, revenues from previous years have been adjusted to more accurately reflect our core and farm input sales business results.

The Case for Farm Finance

Feb 04, 2016 Category: Microfinance Tags: microfinance smallholder sustainability

Maximize your potential and help farmers just like Wilbroda access the tools they need to grow their way out of hunger and poverty. Apply today to join our family of leaders!

When you enter Wilbroda Nafula’s living room in rural western Kenya, you might be surprised to see three solar lamps, all charging cell phones. Wilbroda, a Kenyan farmer and mother of three, doesn’t advertise her business with a sign outside her home. She doesn’t even live close to other shops or at the village center. But word has spread among her neighbors that she has a cell phone charging business, and there is plenty of demand for her services.

“I tell you, in this mobile phone business, I eat well!” says Wilbroda, laughing aloud.

Just four years ago, Wilbroda wasn’t eating well, and neither was her family. Her only source of income was the maize she harvested from a half acre of land, and she was never able to harvest enough maize to feed the family through to the next harvest.

In 2011, she decided to take a seed-and-fertilizer loan to try to improve the production on her land. Along with the loan, she received training on correct agriculture practices, including food storage and market price fluctuations. That year, she produced an excellent harvest, stored enough food to feed her family, and started saving money to replace the roof on her house. By 2013, she had replaced her roof, invested in chickens, and purchased her first solar light. By 2014, she had a calf, a second solar light, and enough money to put her children in private primary school. This year she purchased her third solar light, and she’s planning to expand her poultry business.

With access to microfinance, Wilbroda can support her family through agriculture and her solar lamp business.

Wilbroda is like hundreds of millions of smallholder farmers all over the world, with one critical difference: the agriculture loan she received in 2011 changed the trajectory of her life. She is now part of the tiny percentage of smallholder farmers who have access to finance.

Smallholder farmers are the largest group of people living in poverty, and they are also the most financially excluded. Roughly 70 percent of the world’s poor are farmers, and the majority of them are unbanked. These 500 million farmers are in turn supporting as many as 2.5 billion people. Although most smallholder farmers are struggling to produce enough food, they have the potential to produce dramatically more. The Global Yield Gap and Productivity Atlas, developed by the Daugherty Water for Food Institute at the University of Nebraska and Wageningen University in the Netherlands, estimates that crop yields in Sub-Saharan Africa are 70–90 percent below their potential, the largest yield gap in the world.

Reducing the yield gap in Africa will boost global food production, but it will also have a dramatic effect on the continent’s poverty levels. Agriculture growth has been demonstrated to be as much as 3.2 times more effective than non agriculture growth at reducing extreme poverty in low-income countries.When farmers increase their incomes, they spend it locally. Agrodealers, seamstresses, furniture makers, motorbike drivers, and health workers all benefit. These individuals then spend their increased incomes, perpetuating a cycle of consumption that benefits all actors in the rural economy.

If we seek to end hunger by 2030, as articulated in the Sustainable Development Goals, if we seek to reach global financial inclusion by 2020, or if we seek to make significant gains in economic growth in developing countries, we must target smallholder farmers. They sit at the intersection of our ambitious global food security, financial inclusion, and economic growth targets. If smallholder farmers are able to unlock their potential, they will be a “triple threat,” collectively driving progress on global food security, financial inclusion, and economic growth. If they remain neglected, progress will stall. Given the strategic importance of smallholder farmers, the world should be laser-focused on how to provide them with the tools they need to move from subsistence farming to sustainable livelihoods. Therefore, the single most important tool we can offer them is farm finance.

This blog is an excerpt from The Case for Farm Finance, an article written by Stephanie Hanson for the MIT Innovations Journal's issue on financial inclusion. Click here to read the full piece.

Not an Oxymoron: Financial Sustainability for Nonprofit Social Enterprise

Historically, the prevailing belief in the development community was that achieving financial sustainability meant sacrificing a high level of impact. While the debate still rages, more and more social sector leaders are agreeing that impact and sustainability aren’t mutually exclusive.

One Acre Fund, along with a growing number of nonprofit social enterprises, is coming to realize that pursuing financial sustainability, far from hurting social impact, is actually one of the best ways of achieving impact on a transformative scale.

One Acre Fund offers a market bundle of farm inputs, delivery, training, and market facilitation to 180,000 smallholder farmers in East Africa—and we ask those farmers to repay us in full. It may sound counterintuitive, but we think that insisting on repayment from farmers actually helps them dramatically. Here’s how:

Repayment makes us more responsive to our customers’ needs. If our service in a village declines, repayment there will suffer, and we can address the problem quickly. Similarly, if we offer a product that clients aren’t interested in, farmers won’t pay for it!

Seeking earned revenue increases One Acre Fund’s overall resource-base. This allows us to serve more farmers, expand more rapidly, and return to serve our customers year after year. Our overall social impact is a function of our impact per customer, multiplied by the number of customers we serve. Expanding impact requires large investments, which can only be made over the long-term with at least some earned revenue.

Achieving sustainability in our direct service operation frees up donor dollars to focus on potentially game-changing innovations. With donors no longer caught in the cycle of fully subsidizing service delivery, they can fund innovations and “public goods”— for example, agriculture microfinance innovations and agricultural R&D.

Many social entrepreneurs agree that earned revenue should be part of their program model, but are left with the question of how to actually go about incorporating it. This is a particularly pressing question for organizations serving the bottom of the pyramid, where it can be hard to envision even some earned revenue, let alone break-even.

One Acre Fund hasn’t reached full financial sustainability yet, but we think there are some common strategies organizations can employ which make this an achievable goal. These strategies boil down to economies of scale—as organizations grow bigger, not only do they serve more clients overall (which drives impact) but they are able to serve them more efficiently.

Social enterprises should think about sustainability in the way that best suits their model—we define financial sustainability as the portion of field costs (things like seed, fertilizer, and field staff salaries) covered by farmer loan repayment. Currently, One Acre Fund operates at 77 percent financial sustainability.

One way we improve our sustainability is by increasing the ratio of farmers to field officers who serve them. Each One Acre Fund field officer serves a group of farmers, training them, ensuring they receive their inputs, and troubleshooting issues in the field. Increasing the number of farmers that each field officer serves—without sacrificing service quality—allows us to serve more farmers with the same staffing and cost footprint.

Mobile repayment is another area we’re exploring as a means to improve operational efficiency in Kenya. Instead of field officers handling cash repayment, mobile repayment allows farmers to repay their loans directly to One Acre Fund’s accounts. This frees each field officer’s time to serve more clients and allow them to focus on high-impact activities like agricultural trainings—a win-win for sustainability and impact.

We’re also looking for ways to responsibly increase average transaction volume, which is the value of the goods each farmer purchases from us. We take a margin on the products we sell, in order to cover the cost of our services. Each of our product offerings is also proven to generate returns for farmers, so that if farmers take on larger transactions, we can deepen our impact on their livelihoods, while improving our own financial sustainability.

One way to increase transaction volume that minimizes risk for clients is assigning credit scores to our farmers. We think credit scoring will help set appropriate transaction volume limits for clients, allowing us to increase transaction sizes for farmers with a proven ability to handle more risk, while offering less experienced farmers loans they can manage.

One Acre Fund isn’t alone in coming to realize that high impact and financial sustainability go hand-in-hand. Bridge International Academies, Living Goods, and Sanergy are examples of nonprofit social enterprises that place a high premium on financial sustainability, and have some creative ideas for how to achieve it. While our strategies are always evolving, we’re increasingly convinced that the pursuit of financial sustainability actually helps drive social impact, rather than undermining it.

This piece was written by Jake Velker and Hilda Poulson, and was originally published by Devex Impact. To view the original post, click here.

Solar Survey Yields Valuable Insights

Nov 25, 2014 Category: Trials Tags: smallholder solar sustainability trial

Practically none of the smallholder farmers that One Acre Fund serves have access to electricity. This is not unusual where they live. 88 percent of people living in rural sub-Saharan Africa lack electricity. That’s why low-cost solar lamp technology is such a boon for Africa’s smallholder farmers.

Solar lamps allow farmers to charge their cell phones, light their homes at night so their children can do schoolwork, and even generate extra income by charging neighbors a small fee to recharge their cell phones. They cost about $20, which is a lot less than the $80 per year farmers spend on fuel for older kerosene lamps. When you live on an average of $2 per day, this represents big savings. 

Since the 2011 season, One Acre Fund has offered solar lamps as an optional part of our loan package alongside seed and fertilizer. Over time, we’ve adjusted this program to better meet the needs of our farmers.

Recently, we met with groups of farmers in Bungoma, Kenya to gauge their interest in buying different types of solar lamps and the option to buy more than one. To better understand what our farmers were interested in purchasing, we held “demonstration days” where farmers could test out various types of solar lamps and see how well they worked in a dark indoor space. Afterwards, we surveyed half the attendees on their interest in the lamps, how much they were willing to pay for them, and their previous experience with solar lamps.

The survey uncovered some valuable information. We learned that many of the farmers surveyed were interested in purchasing a second or even a third solar lamp. Farmers preferred the less expensive Solo and Mobile models as a secondary light in addition to the more costly Pro II. Farmers liked the Mobile because it was cheaper, but still offered some phone charging capability.

When it came to use of lights, farmers primarily used them for charging mobile phones, though many also mentioned that their children would use the lamps for studying. We also learned that farmers valued 'brightness' the most in solar lights. The Solo was popular because it’s up to five times brighter than traditional kerosene lamps.

Previously we had only offered the Pro II solar lamp, made by a company called Greenlight Planet. We were a bit worried that if we started offering the company’s Sun King Solo and Mobile models, sales of the Pro II would drop off significantly. However, in a trial program we found that while there was only a 7 percent decrease in sales of the Pro II, there was a 20 percent increase in overall sales.  In our 2015 season, we’ll offer our clients all three models of solar lamps.

A key part of One Acre Fund’s model is using farmer feedback to improve operations. It’s how we find out what products and services best meet farmer needs. In this case, the cost efficiency improvement from selling the solar lamps farmers want is better for One Acre Fund, and better for farmers.

In other words, it’s all about solutions that increase impact and improve sustainability at the same time.

One Acre Fund Reports Strong Progress towards KPIs

On Monday, September 30th, One Acre Fund hosted its bi-annual open analyst call. These calls are an excellent opportunity to learn about One Acre Fund’s progress towards achieving key impact, scale, and sustainability targets, and to ask senior leadership questions about the organization’s plans for the future.

On this quarterly call, Andrew Youn announced that the One Acre Fund core program is reaching over 180,000 clients today, and that we’re on target to serve our 200,000th client (1 millionth person) by the end of 2014. He also presented on operations goals achieved over the last six months, and outlined goals and projects for the next six months.

Below are the KPI targets that were announced on the call:

Scale: One Acre Fund anticipates growing by 50%, to serve ~300,000 farm families, with pilots in Malawi and Uganda.
Impact: One Acre Fund seeks to put $135+ of incremental income into the hands of each farm family, from our crops and add-on products such as solar lights and Grevillea trees.
Sustainability: One Acre Fund seeks to cover at least 80% of our field costs through farmer repayments, driven by staffing efficiencies and greater transaction size.

At the end of the call, Andrew Youn shared a story about Beatrice, a smallholder farmer and current One Acre Fund client living in Karongi, Rwanda. After years of struggling to feed her family of six, Beatrice joined One Acre Fund in 2010. That year, thanks to the quality inputs and training she received from One Acre Fund, her harvest was the largest she’d ever had— 200 kilograms of beans (440 pounds) and 100 kilograms of maize (220 pounds).

Beatrice with her bean harvest.

Beatrice was not only able to feed her family for the entire year, she also used her harvest surplus to invest in a neighborhood savings association. When it was her turn, Beatrice used the money from the group savings association to buy a bull. She bought another bull the following season, then sold both bulls to buy more land for planting.

To read more about Beatrice’s life and plans for the future, click here.

One Acre Fund’s open analyst calls are an important time for us to benchmark our progress and share future plans for achieving our number-one goal: making more smallholder farmers more prosperous.

To receive notifications for the next open analyst call, visit the One Acre Fund homepage and join our newsletter mailing list.

Fin4Ag Conference Highlights

On July 17th, One Acre Fund participated in the Fin4Ag conference in Nairobi, Kenya. The conference, organized by the Technical Centre for Agricultural and Rural Cooperation, brought together over 500 people from the public, private and civic sectors to discuss ways to improve agricultural finance.

George Osure, Program Director at the Syngenta Foundation, and George Waigi, National Projects Officer at the International Labor Organization, joined One Acre Fund in presenting at a session that explored the role of technical assistance in lending products for smallholder agriculture.

Waigi described the importance of business trainings in giving unemployed youth the confidence to take loans for new commercial ventures, and emphasised the importance of a favourable-lending environment that fairly balances the relationship between borrower and lender.

Osure discussed the Syngenta Foundation’s approach to technical assistance by outlining the work he’s been involved with in areas such as rural extension, seed systems, agricultural insurance, and policy development. He stressed the need to take a holistic approach that listened to the needs of smallholder farmers and communicated with them in a language they understood. In particular, Osure commended One Acre Fund’s service bundle as an example of an appropriate vehicle to reach farmers in some of the remotest parts of rural Africa.

One Acre Fund also had the opportunity to present. Nick Daniels, One Acre Fund’s east Africa government relations manager, drew attention to the importance of packaged services for smallholder farmers, exploring how One Acre Fund has managed to grow to serve over 180,000 smallholder farmers in just eight years.

One Acre Fund is committed to disseminating information on its model to enable other financial service providers to better serve Africa’s smallholder farmers. This Fin4Ag conference was a not only a chance to support this goal, but also to learn from our peers, many of whom are doing phenomenal work in the space.

Solutions for the BoP

Last month, One Acre Fund participated in a panel discussion hosted by iDE and Business Fights Poverty. The discussion was part of the Design Expo, a weeklong, online exposition of products and business models designed specifically for the BoP.

The phrase BoP refers to the largest and poorest economic group, people who are literally at the “bottom” of the economic pyramid. If someone lives on less than $2.50 per day, they are considered part of the BoP. Right now, close to three billion people belong to the BoP.

Three billion people represent over forty percent of the world’s population, meaning the BoP represents a huge opportunity for business-minded social innovators driven by impact rather than profit. Smallholder farmers are the largest group of people in the BoP, which is why One Acre Fund believes economic growth opportunities for the BoP must prioritize smallholder agriculture and food security.

The discussion, entitled “Building Livelihoods,” covered a wide variety of topics, from the most innovative models for people at the BoP, to key challenges facing innovators designing for rural and urban poor, to the importance of gender in marketing and distribution models.

Here are some discussion highlights:

Extension and best practice dissemination is key.

“When it comes to agriculture and rural livelihoods, I think the most impactful innovative models have to do with extension and best practice dissemination. They are essential to closing the yield gap. By increasing production smallholder farmers can increase their profits, have more disposable income, and invest in better inputs and technologies. This trickle-down effect can significantly improve livelihoods for families and especially for women and children. Once smallholders become more productive, women farmers can spend less time working the fields or bringing water and have more time to diversify their activities.”

-Morgane Danielou, co-chair, Farming First.

Sustainable impact can be achieved through smallholder agriculture.

“We’ve found that sustainable impact, from a business perspective, is based upon our targeted customers achieving a measurable ROI. This ROI provides a definable capability to both re-invest and drive livelihood increases.  In understanding a first point of entry, relative to an asset generating profit, smallholder agriculture provides an focusable strategy.”

- Keith Teichmann, Director of Innovative Networks and Marketing, Xylem Inc.

One of the biggest challenges is distribution.

“Once you develop an amazing product or service for the BoP, how do you actually get it within walking distance of where they live? There are some amazing low-cost solar lights that have been designed in the last few years, but all solar companies face the challenge of how to distribute their lights. In agriculture, there are excellent high-yield seeds and high-quality fertilizers available, but it's a huge logistics challenge to get that seed and fertilizer deep out into the rural areas where farmers need it most. One Acre Fund has developed a rural distribution network to serve 180,000 smallholder farmers, and we receive tons of inquiries from people who have developed energy and health products who want to know if they can use our distribution network! This shows us how challenging it is to develop a rural distribution network that is scalable.”

- Stephanie Hanson, SVP of Policy and Partnerships, One Acre Fund

Solutions for the BoP have to consider women.

“One of the biggest challenges facing innovators is how to involve women in BOP distributionsy stems in a meaningful way.  Generally, it’s much easier to involve women at the lowest levels (e.g. saleswomen) rather than at higher levels of managers.  CARE’s social enterprise Jita has doubled the incomes of its 3,500+ saleswomen- which is great- but the people who run the wholesalers which supply the women are almost universally men. Breaking this barrier is the next great challenge.”

-Alexa Roscoe, Private Sector Advisor, Care International.

To read the full panel discussion, visit the Business Fights Poverty Design Expo 2014 page.

Celebrating World Environment Day

In honor of World Environment Day, we celebrate farmer Valerie Mukahirwa, who has invested income from her increased harvest sales into a soil-enriching composting business.

Valerie Mukahirwa is a 55-year-old farmer in Kavumu, Rwanda. She began farming when she was just a child, and has been farming ever since.

Valerie with beans she grew using One Acre Fund fertilizer and planting techniques.

A widowed mother of five, Valerie has worked hard to provide for her family over the years. While it is easier now that she only has one child still at home, she has struggled to produce enough maize for food and income.

Early last year, Valerie's 27-year-old son Diogene convinced her to enroll with One Acre Fund. Diogene had farmed with One Acre Fund before but had not been able to convince his mother to join. Eventually, she agreed to test out One Acre Fund's planting methods on a small plot of land.

"Before I didn't know about spacing plants, selecting seed type, or using fertilizer," Valerie says. "That is why my harvests were almost nothing. The maize I grew would only last one week."

On her test plot, Valerie planted beans and waited from them to grow. The beans flourished early, and after just two months, she enrolled with One Acre Fund.

"I first planted beans with the fertilizer, and because of how nice the beans were looking, I decided to enroll with One Acre Fund without even waiting to count the harvest."

In her first official season with One Acre Fund, Valerie planted maize on her one hectare of land. She says this was the first year she had ever had enough maize to eat, along with a surplus to share and sell. And with only one child to feed at home now, she was able to sell the majority of her harvest for 300,000 Rwandan Francs ($440 USD).

With the additional income, Valerie invested in manure, grasses, soil, and ash. She soon began producing organic compost and was able to sell it to the Rwandan Ministry of Agriculture, which purchases compost from farmers to distribute among the villages.

Valerie sits next to her compost pile.

Since she began her compost business, Valerie has earned 1,300,000 Rwandan Francs ($1,900 USD) and could not be more thrilled.

"This was my first time to have my own million Rwandan Francs," Valerie exclaims. "And I think in this village there is no other widow or woman who has been able to find such money!"

Since launching her compost business, Valerie has been able to take steps to improve her home and further invest her capital. She was able to buy tin sheets to build a new roof on her house and to repay a loan she had taken out a year earlier.

Valerie also purchased three goats and a cow. She plans to breed the cow to sell its calf and milk and she has already begun breeding and selling the goats.

Valerie with the cow she purchased with her extra harvest income.

Her latest project is to install a pipe to bring drinking water into her home. She has already purchased and laid 100 meters of plastic tubing for the effort. She needs to purchase 10 meters more for the pipe to reach her kitchen, but once completed, she will have treated water from a town supply. For the time being, she walks the 10 meters to where the pipe spurts out clean water, and she collects it there.

Valerie retrieves water from the pipe she installed. She hopes to be able to complete the pipe so it can reach her kitchen.

Valerie says she never had imagined possessing a million francs, being a business owner, or having running water before this year. Now, she says she only has bigger plans for the future.

Quantifying Impact on the Road to Sustainability

May 22, 2014 Category: Operations Sustainability Tags: data impact m&e sustainability

Interested in working with One Acre Fund? View openings on the M&E team.

At One Acre Fund, we’re awash in data. We use it constantly — to inform decisions, to plan new programs and trials, and to measure One Acre Fund’s impact.

Data – collecting it and analyzing it – is the job of the monitoring and evaluation team (M&E). We decide which data is needed, when it’s needed, what it can tell us, and what it can’t. Everything we do boils down to impact: our goal is to help One Acre Fund improve its impact on farmers.

When choosing which data to collect, we focus on the end goal. What are the key answers we are looking for? How will these answers affect our operations? And how can we use this information to improve the impact we have on farmers?

We spend time to make sure that staff is invested in the process of M&E, from designing surveys to training field surveyors. Commitment to high quality data means more eyes and ears checking for oversights. This leads to higher quality output and better analyses.

A big part of our work is collecting information on the basics, like figuring out the yields our farmers are getting at harvest time. But another part of our work focuses specifically on how we can do better. We want to know: are farmers using innovations like the new fertilizer scoop we provided effectively? Does distributing a planting flyer help increase both knowledge and practice of accepted agricultural techniques?

Another focus of ours is helping to make One Acre Fund’s operations more sustainable. For example, we recently completed an analysis to identify which farmers are most likely to default on their loans. This analysis informs operational decisions about where to intervene, and helps decrease the number of defaults.

All this work requires high-caliber skills. With this in mind, the M&E team recently began a series of trainings for staff across departments. These trainings cover the use of specialized statistical analysis programs as well as basic boot camps on statistics and data management. Having a thorough understanding of data and statistics is vital to identifying what we should do when. It’s a prerequisite for using M&E to improve One Acre Fund’s impact on farmers.

At the end of the day, it’s all about the results. Is One Acre Fund’s program efficient and impactful? Should One Acre Fund change its operations, or should we investigate an unanticipated new area? These questions drive M&E from beginning to end.

Celebrating Earth Day: Planting 10 Million Trees in Kenya

In 2010, we introduced Grevillea trees into our core loan package in Kenya. The following year, One Acre Fund farmers successfully planted 437,000 Grevillea trees. Three years later, we’re setting our sights higher: plant 10 million Grevillea trees in Kenya by 2015.

Why Grevillea trees, and why so many? The trees grow quickly and require less water and land than many other varieties. Farmers can use the trees for firewood, livestock fodder, crop protection, medicine and shade, and can earn extra income from sales. Farmers know they are making a good investment, which is important. If farmers hold on to the trees and continue to grow them for several years, they can realize a 50-fold increase in profit (see graph).

One Acre Fund is also making a good investment— in environmental sustainability.  Grevillea trees prevent soil erosion and remove CO2. It is estimated that 5 million trees remove +25,000 tons of CO2 annually over five years.

We chose to offer Grevillea trees only after running extensive forestry trials, studying tree varieties, and experimenting with planting techniques. We’ve invested heavily in testing and improving our Grevillea tree product through careful trials run by our very own One Acre Fund Innovations Team.

In the months leading up to the 2014 season, the innovations team ran six separate nursery trials. They tested everything from combinations of soil, sand, and manure, to the effectiveness of fertilizer, timing of transplanting into the field, and the effect of planting seeds in tree bags and planting sockets.

The team also conducted seed storage method trials. We learned that storage methods can dramatically affect germination rates for tree seeds and that storage may have been a factor in poor germination percentages in past seasons. This year, we implemented an improved storage system: seeds are repackaged immediately into paper bags, placed into hermetically-sealed GrainPro bags, and then stored in a climate-controlled storage facility.

Currently, the One Acre Fund Innovations Team is running surveys to measure tree survival over time and looking at farmer behavior around tree sales.  We’re looking at whether low-cost farmer incentives and trainings are effective in getting farmers to wait until trees mature to sell them.

To better understand the market for Grevillea trees, the team has also recently launched a survey with Tree Traders. Tree Traders typically canvas farms looking for trees to buy, so we hope that in-depth discussions with these entrepreneurs will provide us deeper insight into the general market for trees and tree trader behavior. We will share what we learn with our farmers so that they’re in a better position to increase their potential to profit.

So here’s the math: top-notch products + tested planting/storage techniques = more farmer interest. More farmer interest = more trees planted, which is good for the environment and farmers’ bottom line.

How Can Smallholder Farmers Sustain the Environment and Farm More Intensely?

This post was originally published on, a space for agriculture specialists and practitioners to access current information and resources on important agriculture and food security related topics and issues.

At One Acre Fund, we aim to put farmers first in everything we do. We offer 180,000 farmers in East Africa a simple four-part operating model: (1) improved seed and fertilizer, (2) financing, (3) training, and (4) market facilitation - and we deliver these services to the areas where our farmers live. This model allows us to achieve our mission to help more farmers grow more food. However, we are keenly aware that bringing fertilizer, hybrid seeds, and other new technologies and techniques into agricultural systems carries potential risks to the environment such as land and water degradation, and loss of natural environments.

Land and water degradation is mostly associated with increased inorganic fertilizer use, which can result in negative environmental effects such as soil acidification, disrupting a crop’s ability to absorb nutrients essential to plant growth. Runoff from intensive inorganic fertilizer use also can result in the contamination of rivers and streams used by communities for drinking water, fishing, or bathing.

One Acre Fund limits fertilizer use by advocating a micro-dosing approach. Fertilizer micro-dosing involves applying a very small amount of fertilizer around each seed at optimal times in the planting season. This approach uses 95 percent less fertilizer for maize than fertilizer applications typically used in the Midwest on U.S. corn crops and can double yields from nutrient-depleted sub-Saharan Africa soils. Additionally, we provide training on organic composting to our clients, which increases organic micronutrients in the soil, leading to long-term soil fertility as well as healthier crops and improved yields.

Some critics of input-intensive agriculture also argue that the practice creates perverse incentives for farmers to clear more land for agricultural purposes, potentially destroying natural vegetation and biodiversity. While clearing wild land can harm the environment, low land productivity actually requires farmers to clear more land to realize greater production. By increasing yields on existing farmland through the responsible use of agricultural technologies, One Acre Fund helps reduce farmers’ need to clear wild land.

We also help farmers diversify their crops. In western Kenya, where maize monoculture is the norm among the region’s many smallholder farmers, One Acre Fund offers packages with as many as nine different climate-resilient and highly nutritional crops including millet, sorghum, sweet potato, and others. In addition to these food crops, One Acre Fund offers grevillea tree seeds to farmers, which allow farmers to practice agroforestry, increasing the biological diversity of farmland and further contributing to long-term soil fertility.

Increasing agriculture productivity does not have to be at the expense of the environment. In fact, “sustainable intensification” can have long-term environmental benefits. As One Acre Fund grows to serve hundreds of thousands of farmers in sub-Saharan Africa in the next few years, we will continue to teach the principles of sustainable intensification to our clients, and to promote best practices in environmental management.

Creating a Sustainable Organization: Repayment at One Acre Fund

At One Acre Fund’s Kenya operation, we serve farmers by providing impactful agricultural inputs on credit.  While delivering agricultural inputs and training farmers on tried-and-tested farming techniques is a key service we provide, our field officers also must ensure that farmers repay their loans over the course of the farming season.

Collecting loan repayment is one of the most important tasks at One Acre Fund because it allows us to make loans to more farm families the next season. The process begins with our farmers. All One Acre Fund farmers belong to farmer groups, which are “managed” by one member of the group who volunteers to act as a group leader.  Bit by bit over the course of the farming season, the group leaders collect repayments from farmers and tracks them in a passbook, which has one page dedicated to each farmer.  When field officers meet with group leaders, the field officers review each farmer page in the passbook, collect the money from the group leader, and give him or her official One Acre Fund receipts.  Finally, field officers convert the cash collected into a mobile money system that allows money to be transferred from cellphone to cellphone, and send the amount collected to One Acre Fund’s finance office.  One Acre Fund lets farmers decide their own repayment schedule, meaning that farmers can choose to pay back the loan gradually in small installments every week or in bigger block payments whenever they have the cash.

One Acre Fund has many different types of expenses – from buying seeds and fertilizer, to paying our staff, to transporting farm inputs to our farmers – but we only have two sources of revenue: farmer loan repayment and grants.. Repayment is therefore extremely important for One Acre Fund’s financial sustainability. All our farmers are protected from unfortunate events through crop, death, and funeral insurance, which we provide as a part of our package of services, but if they don’t experience these events, we expect to be repaid in full. In Kenya, we use a mixture of official (enforceable) and unofficial (not enforceable) policies to motivate repayment and to ensure that farmers do not view our products as a handout.

Official policies, enforced by One Acre Fund in Kenya, include:

  • Farmer completion policy – If a farmer does not finish repayment by the end of our operating season, he or she is not allowed to join our program the following season.  If that farmer later finishes paying off the loan, they are welcomed back into the program.
  • Group completion policy – If a group does not finish repayment by the end of our operating season, none of the farmers in that group (even those who have paid off their individual loans) are allowed to join our program the following season. If that group later finishes repayment, the farmers in that group are allowed to rejoin the season after.

Unofficial Policies, created by farmer groups and not enforced by One Acre Fund, include:

  • Group constitution – We encourage each farmer group to create their own “group constitution” where group members set their own policies and deadlines for repayment.
  • Group collateral – Farmers pledge to sell a small asset that they own (like a chicken or a goat) if they are unable to pay  off their loan.

We will use these systems to collect repayment from over 100,000 farmers in 2014. But we are always looking for ways to innovate and improve our operations. This year we are trialing three exciting new systems that have the potential to improve repayment collections and operations: group leader mobile repayments; farmer mobile repayments; and farmer credit scores.

  • Group Leader Mobile Repayments - Instead of field officers converting farmer payments (made in cash) to mobile money and sending it to One Acre Fund, we are trialing a system in which field officers train group leaders to send mobile money directly to One Acre Fund. This will be trialed with over 3,500 farmers.
  • Farmer Mobile Repayments - We are also trialing a more aggressive payments system in which we ask farmers (instead of field officers or even group leaders), to send mobile money directly to One Acre Fund. This will be trialed with about 400 farmers.
  • Farmer Credit Scores - We are trialing a system that would allow farmers who made their repayments fully and on time last season to be eligible for more credit (in the form of farm inputs) than would be otherwise allowed. This will be trialed in 9 sites (about 2,000 farmers), with a selection of those farmers being eligible for higher credit.

These trials test whether the new systems are operationally simpler or more cost-effective for the field officer or for the finance team.

Collecting repayment is one of the most important functions of One Acre Fund’s field operations. We hope to continue to improve our loan repayment system so that we can reach full financial sustainability and continue to do what we do best: serve our customers.

Rwanda Country Director Eric Pohlman on Self-Reliance Radio

Click below to listen to the full interview!

Starting at the End: Food and Farming in 2030

The post below was written by our friends at Farming First, a coalition of organizations that exists to articulate, endorse and promote practical, actionable programs and activities to further sustainable agricultural development worldwide.

When you begin a journey, you need to focus on where you are trying to arrive at.

In just over one year, the Millennium Development Goals (MDGs) that were put in place to tackle the most pressing issues on the planet, from fighting hunger to improving environmental sustainability, will expire. The ‘post 2015’ agenda will take over, which we expect to take the form of several Sustainable Development Goals (SDGs) which in turn will expire in 2030.

To highlight the key areas that these SDGs must address – Farming First has produced an infographic that explores what the world could look like in 2030 for food and farming. Agriculture plays a unique role in feeding the growing population, and if managed well, can protect the environment and mitigate climate change. Yet there are many challenges that this sector will face.

For example, as the infographic highlights, per capita consumption of food is going to increase greatly. People consuming 2,500 – 3,000 calories per day in the developing world will increase by 66%:

Yet as consumption rises, global crop yields are predicted to go down. The growth rate of rice in particular could decrease by 23%, at least in part as a result of climate change. Furthermore, prices of these vital food crops are set to rise between 75 and 90% by 2030.

So if this is where we are heading, what can we do now to make sure we are prepared? Take a look at the full infographic at and see what 2030 has in store for food, people and the planet.

Patiently Planting Grevillea Trees in Kenya

James Shadrack of Bungoma South has been a One Acre Fund farmer for 5 years. Since joining One Acre Fund, he has planted 1,500 grevillea trees.

James’s neighbors were surprised when they heard he was planting grevillea trees.

“Many people in this area are not interested in planting trees, and when they do they plant eucalyptus, which dehydrates the soil. Grevillea trees rejuvenate the soil and don’t hurt other crops growing on my land,” says James.

James is going to wait for his trees to mature before selling them. His neighbors use firewood for cooking, which is becoming scarce. Gas and kerosene are expensive. James hopes that if he waits a few years, he will be able to sell the trees for firewood and make a hefty profit.

He explains, “If I cut the trees when they are still young I will end up earning about 200 shillings ($2.30 USD) per tree, but if I give them time to mature then I end up earning a minimum of 3,000 shillings ($35.70 USD) per tree, so it’s definitely worth the wait.”

By selling his trees when they are mature, he hopes to make enough money to pay school fees for all his children who are still in school and to start a business buying and selling cattle.

Innovation for Sustainable Intensification in Africa

The post below is courtesy of The Chicago Council on Global Affairs Food for Thought blog, and was written by Sir Gordon Conway, Professor of International Development at Imperial College, London and Director of Agriculture for Impact. The original post is available here.

Innovation is at the heart of sustainable intensification, helping African smallholder farmers produce more with less impact on the environment while also improving agriculture’s sustainability.

Yet food production remains well below its potential in Africa. Consider these facts:

  • Africa has a quarter of the world’s arable land, but only generates 10% of global agricultural output.
  • Over 200 million Africans (nearly 23% of the population) go hungry, and the population continues to grow at around 2.5% per year on average.
  • The African population is set to double to 2 billion by 2050, and per capita incomes are beginning to rise – both of which will create extra demand for food.
  • In addition, more than 75% of total arable land in SSA is degraded with nearly3.3% of agricultural GDP lost annually because of soil and nutrient loss.
  • Climate change is also expected to reduce cereal production levels by up to 3%, contributing to decreased food availability in the region by 500 calories per person and increasing the number of malnourished children from 33 to 52 million.

Tackling hunger, malnutrition and poverty while at the same time protecting and improving the environmental base will require human ingenuity, creativity and innovation, especially in the face of severe resource constraints and global warming. Donors and policymakers can play a key role in supporting African agricultural systems based on science and innovation.

Much can be achieved by utilising existing knowledge whether derived from other regions or from indigenous sources but because of the nature and scale of the challenges we face we also require innovation. A new paradigm for African agriculture is needed, one that can help address food and nutrition insecurity as well as spur growth, reduce poverty, create wealth, and protect the continent’s natural resources.  Sustainable Intensification (SI) offers a robust solution to this challenge as it is all about producing more outputs with more prudent use of all inputs – on a durable basis – while reducing environmental damage, minimising greenhouse gas emissions and building resilience, natural capital and the flow of environmental services.

What will future innovation look like?

Today the challenges we face and solutions we need are more complex than hitherto by an order of magnitude. We will need to go beyond sector silos in academia, business and government, and think more strategically and holistically about how we can cope with inter-connected issues that require integrated approaches and solutions. We need to re-think our research and innovation systems to facilitate multidisciplinary, collaborative research at a range of scales.

Multiple benefits

We must focus not only higher yields and production and more nutritious foods, but also more selective use of inputs, reduced environmental impact, greater resilience, minimised emissions of greenhouse gases and improvements in natural capital.

Multiple partners

We must ensure all benefits are considered and that we utilise different approaches (including gender equity and balance) and partner with the public and private sectors, Civil Society Organisations (CSOs) and NGOs.

Multiple approaches

We must combine, often concurrently in an integrated fashion, the application of agricultural ecological processes (ecological intensification), the utilisation of modern plant and livestock breeding (genetic intensification) and socio-economic intensification, that provides an enabling environment for technological and institutional innovation and technology adoption.

Multiple scales

We must broaden our scope to include everything from the individual field, to the farm, to the community, to the watershed and to whole landscapes so that we ensure multiple benefits are fully realised.

A Future Agenda for Change

We still are far from having all the answers, but there is growing consensus on the set of questions which we should prioritise.  Itemised here are a set of observations and questions which I regard as imperatives for further research, dialogue and policy making in the coming years:

  1. We have focused on innovations that are relatively successful. How do we avoid unsustainable intensification?
  2. The culture and institutions for innovation in Africa are evolving in the right direction. But what further changes are needed?
  3. Appropriate policies in support of innovation are being developed in a number of African countries. How are they working and how do we accelerate this process?
  4. We know that innovation can come from a variety of sources – international organisations, the private sector, National Agricultural Research Systems (NARS), Non-Governmental Organisations (NGOs) and farmers themselves. But which of these and/or their combinations are most likely to deliver not only multiple benefits but also resilience and sustainability?
  5. We know that multiple benefits can be built up on the basis of an initial innovation. Is this the best way to proceed or is it better to have multiple benefits as objectives right from the beginning of projects or programmes?
  6. We have examples of reducing costly and damaging inputs but often these may be at the expense of yield performance. What principles and practices will prevent this?
  7. Some innovations are clearly resilient, but often this arises from innovations breaking down and having to be redesigned. Other innovations will increase natural capital or reduce greenhouse gas emissions but often this appears to be serendipitous. How can we ensure these objectives are built in from the beginning and have no significant yield penalty?
  8. We have plenty of evidence that farmers are great innovators. But how can their innovations be brought to scale, to the community, district and nation?
  9. Going to scale involves an appropriate enabling environment and the participation of many stakeholders. How can this be achieved?
  10. Finally engaging in a participatory learning agenda involving African and donor governments, the private sector, NGOs and farmers themselves is a priority. How do we initiate and facilitate this?

Embracing innovation – both in existing and future forms – at the heart of African agricultural development will be essential to ensure that the momentum which the agricultural sector has felt in recent years continues to boost productivity, improve livelihoods and build sound environmental management into African rural communities in the future.

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