One Acre Fund

Location
Kenya, Rwanda, Burundi, Tanzania, Malawi, Uganda
Sector
Agriculture
Type of Investment
Grant
Project Stage
Length of Investment
2016+
Website
Investment Overview
A $15m grant to drive income improvements for smallholder farmers by accelerating One Acre Fund’s testing and scaling up of new farming innovations.
The Development Challenge
There are an estimated 500 million smallholder farms in the world. Two-thirds of sub-Saharan Africa’s population resides in rural areas, and the majority can be considered as smallholder farmers. As a group, smallholder farmers are among the most disadvantaged and vulnerable in the developing world: half of the world’s undernourished people, three-quarters of Africa’s malnourished children, and the majority of people living in absolute poverty can be found on small farms.

The Innovation
One Acre Fund has developed an innovative system for testing, evaluating, and scaling critical farm technologies and practices that increase the productivity and income of rural smallholder farmers across Sub-Saharan Africa. To date, One Acre Fund serves 400,000 smallholder farmers per year and is on pace to reach 1m farmers by 2020.

Our Investment
GIF’s investment will co-fund several key areas of One Acre Fund’s work including:
Testing and scaling of new farming innovations through One Acre Fund’s extensive farmer network.
Funding initiatives by One Acre Fund’s model innovation team to improve cost-effectiveness and long-term sustainability of One Acre Fund’s core model.
Supporting ecosystem adoption and improvements through either government partnerships and/or private sector agribusinesses.
Conducting an RCT in Kenya.

Investment Objective
Potential to drive improvements to the agricultural systems of entire countries by (a) conducting systematic and rigorous investigation to discover ‘what works’ in each country, (b) create initial scale through core farmers who serve as a ‘market anchor’, and then (c) drive rest-of-system adoption for critical farm technologies and practices.

Why we invested
One Acre Fund is a sector-leading organisation with a proven track record of driving measurable impact at scale.
An opportunity to accelerate the adoption of new farming innovations by millions of GIF’s target beneficiaries leading to a potentially large social return on investment.
One Acre Fund’s commitment to utilising evidence to drive its decision making and operations, as well as its track record of sharing its learnings and failures.
One Acre Fund in numbers
Smallholder farmers in the world
The average amount of increased income of 1AF farmers
One Acre Fund Impact Brief
One Acre Fund, or 1AF, has developed an innovative system for testing, evaluating, and scaling critical farm technologies and practices to increase the productivity and income of rural smallholder farmers across Sub-Saharan Africa.
1AF’s core model consists of lending smallholder farmers a package of farming inputs, such as seeds and fertiliser, worth approximately $80, delivering the package to rural access points, and then providing effective farmer training and market linkages. Within its target countries, the firm also drives significant improvements throughout the entire agriculture ecosystem by utilising 1AF’s extensive farmer network to prove the business case for commercial businesses to serve smallholder farmers for the first time. In addition, 1AF works through national governments’ extension services to drive countrywide adoption of the group’s farming training. This hybrid pathway to scale in both the public and private sectors, depending upon the country and intervention, is nearly sustainable, covering between 70% and 75% of its programme costs through earned revenue.
Compared to others in the field, 1AF stands out in the frequency of evaluation and the diversity of impact measurement methods employed, ensuring confidence in their internal monitoring system. Annually, they conduct more than 10,000 harvest measurements in the field, testing new products with increasingly larger groups of farmers as a core element of their model and then using those results to create a feedback loop and serve as checkpoints in determining whether to scale up experimental products further.
Use of GIF Funds
GIF invested in 1AF to fund key areas of 1AF’s work uniquely aligned to GIF’s mission. These are also areas least likely to be supported by most donors. $7.8 million of GIF’s grant funded the testing and scale up of new farming innovations through 1AF’s extensive farmer network across Kenya, Rwanda, Burundi, Tanzania, Uganda, and Malawi. $4.3 million of GIF’s grant funded 1AF’s model innovation team focusing on improving the efficiency of 1AF’s model as it drives towards full sustainability. $1.7 million of GIF’s grant supported ecosystem adoption and improvements through either government partnerships and/or private sector agribusinesses, and the final $750,000 funded a randomised controlled trial, or RCT, in Kenya on 1AF’s maize and bean operations, in addition to strengthening its internal evaluation capabilities.
Impact to Date
By the end of 2019, 1AF has provided direct services to over one million farmers and indirect services to another 1,376,000 farm families in Kenya, Rwanda, Burundi, Tanzania, Uganda, Malawi, and Zambia. A further 670,000 farmers are estimated to have benefited from learning spillovers. Results from the GIF funded RCT and 1AF’s internal monitoring and evaluation found that 1AF farmers increased their capacity to withstand shocks and stressors and earned on average $96 more per year than comparable farmers. Results also showed that non-participating, neighbouring farmers were learning from 1AF farmers and earning $17 more in income.
Social benefits generated by 1AF from 2017 to 2020, the period of GIF’s investment, can be estimated at $174 million in discounted net social benefits and, accounting for the fact other investors also invested in 1AF, we can estimate that $24.5 million in discounted net social benefits was generated by GIF’s investment of $15 million.[1] The 2015 discounted value of GIF’s investment is $11.5 million, which means GIF’s investment in 1AF returned over $2.12 to date in net social benefits per dollar invested.[2]
Innovating for Climate Resilience
Two and a half billion people - among them half the world’s poor - live on smallholder farms. Small-holder farmers in developing countries are disproportionately exposed to the effects of climate change that undermine their livelihoods and exacerbate food insecurity. At the same time, unsustainable agricultural practices, such as deforestation, used to increase yields accelerate these climate trends further.
GIF is supporting One Acre Fund with a $15m grant to drive small-holder farmer income improvements through accelerating testing and scale up of new farming innovations. They address the above mentioned vicious cycle by prioritising work on resilience with the over 1 million farmers in their network by focusing on promoting strategies that enhance small-holder adaptation, and implementing practices that mitigate climate change. Adaptation initiatives include crop diversification, micro-insurance, and improvements to soil health, and mitigation activities that cover agroforestry, conservation agriculture, and increasing soil carbon stocks.
[1] The social benefits calculated only include monetary benefits generated by farmers from their crops and trees. It does not include additional benefits such as improvements in household consumption and assets, hunger reduction, and improved resilience.
[2] Refer to GIF (2021) for more details on how the social benefits and GIF’s return on investment were calculated.