GIF was delighted to host almost 100 participants to a learning event focused on scaling agricultural technologies, where local innovators and entrepreneurs showcased their perspectives and operational experience in the settings of our target beneficiaries.
The webinar featured leaders in the agricultural sector representing GIF-supported innovations at different stages of the scale spectrum who shared stories as their businesses continue to grow.
The event kicked off with each company giving a short presentation summarising their experiences, challenges, and lessons learned from scaling and commercialising their agricultural innovations.
Matt Forti, Managing Director of One Acre Fund (OAF), highlighted the importance of investing in resilience given how susceptible agriculture is to shocks that can hinder scale such as declining and more sporadic rainfall, higher temperatures, and crop diseases.
OAF offers farmers a yield-based, loan-bundled crop insurance and promotes correct seed choice (drought-resistant and high yield varieties, for example) along with tips and expertise on: precision agriculture, soil health, intercropping, and crop diversification.
Measurement, and Monitoring & Evaluation (M&E), have been major scale drivers for OAF. Matt explained how the organisation calculates a social return on investment – the additional farm profit farmers achieve due to OAF services divided by donor costs – in the nine countries they currently operate. This measurement is critical to evaluate the impact efficiency of the programme.
The power of harnessing suitable technology was hailed as vital on the path to achieve scale. This point was emphasised by Adwitiya Mal, Co-Founder and CEO of EM3, who stated that for EM3 efficient systems have enabled them to drive operations and logistics internally, and observations via drone-based monitoring and satellite imagery have allowed for better crop and farm management. EM3 offers a platform for smallholder farmers to access end-to-end farming services including machinery to which they would typically not have access.
Adwitiya added that being physically present within communities is a huge part of building up trust with clients and scaling operations; and that partnerships of all types played a huge role in EM3’s success – these include governments, farm equipment providers, farm input suppliers which provide EM3 better prices and credit terms, maintenance services, and agricultural produce processors which provide EM3 access to their established farmer networks. Adwitiya also highlighted the importance of recognising that the agriculture sector is characterised by lumpy cash flows. It can be complex for farmers to access credit support from lenders, resulting in them often being unable to afford prime farm services and equipment. To respond to this challenge, EM3 offers financial services to farmers.
Risk management has been high on Babban Gona’s agenda and a key success factor to the company’s scale, reported Adaeze Usoh, the company’s Head of Corporate Finance. Babban Gona offers a comprehensive agriculture franchise model to sustainably improve the lives of smallholder farmers through the provision of end-to-end farming services. Their risk management strategy includes several levels of risk mitigation, including: the necessity for farmers to enrol onto the Babban Gona programme via group enrolment (known as trust groups), which mitigates against wilful repayment default; the offer of in-kind lending which prevents diversion of funds; specific insurance products to prevent low productivity; and commodity price insurance to protect against commodity price fluctuations.
Adaeze shared that Babban Gona has embarked on a strategy of digitization of operations and processes, partly to transfer certain responsibilities from the business to the franchises. This includes monitoring tools for early detection of yield issues, building business support tools for members recruitment – including GPS and facial recognition software – and the development of AI and machine learning solutions. They have also digitized logistics and inventory to gain efficiency and decentralise operations management.
Social networks, specifically Farmer Producer Organizations (FPOs) in India, were central to Kamatan’s approach to scale. On their own, small farms are disadvantaged when it comes to accessing markets, credit, and agricultural resources. Through FPOs, farmers work collectively to reduce costs and improve market access, helping drive higher agricultural productivity, enhanced food security, and livelihood development.
Pravesh Sharma, Kamatan CEO and Director at Samunnati, explained how India is home to over 114 million smallholder farmers, however the majority have less than five hectares of land so aggregation in the form of FPOs is often critical to their success. Kamatan works with FPOs to source produce for direct supply to agricultural enterprises, processors, and retailers. Pravesh stressed the importance of treating social networks as partners to the business rather than clients. If currently there are none, organisations should invest in the creation of social networks, or revive existing networks such as farmer cooperatives. The cost of building such networks should be seen as a market development cost and essential on the path to scale. These types of interventions can be financed by allocating some of the business’ generated profits towards dedicated funds for institution building. Pravesh added that FPOs need to see an invested partner organisation that is going to be around for several years and will support them to move up the productivity and profitability ladder. Pravesh concluded by stating scale requires an element of localisation, and organisations must listen to partners on the ground and adapt their approaches accordingly.
All panelists highlighted the important role GIF funding has played on their path to scale.
Matt Forti praised GIF’s patient grant capital which allowed OAF to be innovative, especially in the areas of farmer resilience and the ability to scale directly through partners.
Adwitiya Mal highlighted how GIF’s funding allowed EM3 to build a strong team, core technology, and execute the right growth strategy.
Adaeze Usoh emphasised the difficulty of accessing affordable capital domestically and how foreign investment from GIF and other investors allowed Babban Gona to achieve their current level of scale and impact.
Pravesh Sharma shared how GIF funding allowed Kamatan to prove their model and achieve a positive margin. The critical timing of GIF investment enabled Kamatan to scale from 30 FPOs to 300 FPOs within a year.
Many thanks to all event participants, who contributed great energy and insights. We would especially like to thank the speakers: