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Farmer Cooperatives




         First know people.
Then you can work together.
                         1
Problems/Opportunities   Food, Farmers,
                                          Coops are
                          and Hunger
                                           Solution
                            Problem




                                                      2
50% of food production wasted, severe
malnutrition, substantial imports (big
market, trade imbalance)

      Farmers are majority of poor but are
      small and fractured; forming coops
      opens opportunities to BUILD MARKETS

          Increasing production (5x typical) is
          resource to make investments
Summary




          (processing, storage, marketing)

              Turning crops into cash creates village
              economy; once there is an economy,
              development can occur sustainably
Coops are the Answer:
• Cooperatives have been a model for
  lifting farmers for over 200 years
  (1810 in USA) and almost all
  cultures
• They provide sharing of production
  expenses and joint marketing,
  financing and purchasing



      They fail in Africa for two
      primary reasons:
      • Corruption and lack of trust
      • The need to BUILD MARKETS (of
        size!)
                                        4
Muundo wa Ushirika                         New Org
    Organizational Structure
    Wakulima              Wakulima
                                                Structure
                                     Farmers
               Wakulima                           Accountability and
     Timu                  Timu                 management through
                                     Team
                Timu                           small groups (Teams) of
                                                5-15 farmers that self-
C                                                      organize
r
o        Ushirika,
                                               Cheetah can’t join coop
p       Association                              but coop can join
                                                  Cheetah in Joint
s                                                     Venture
                                 Cheetah
                               Development
                                               JV is unifying point for
                                                all coop marketing. It
         Ubia, Joint                             controls crops so is
          Venture                               how investments are
                                                       secured.
Summary: Coop Components

   Ag Services -                          Member Support
                         Financial - JV
      Coop                                   Services
• Extension            • Direct           • Group Health
  services for           marketing of       Insurance
  seeds, fertilizer,     goods            • Upgrade Health
  training             • Warehousing        Care
• Microfinance           and other
• Simple post            investments
  harvest              • Coop financial
  processing             mgmt by
                         Cheetah
Preparing to Scale
Working in 3 village areas representing around 20 villages

Starting with dry, wet and export crops (corn, potatoes, and tea) to learn
about different challenges

Doing hard work of building markets


Key farmer message: trust each other or trust middle-men


Largest buyers also want to eliminate middle-men


                                                                             7
Economic
                       Development



        Value
Crops           Cash
        Chain



                         Human
                       Development
Business
      Model
• Make investments that
  can achieve 3 year
  repayment
• Let farmers self-
  organize
• Investor joins
  cooperative and
  manages finance and
  marketing
• Turn CROPS into
  CASH!
Development Process                                  Select a Target Village
                      Choose target villages based     Let villages compete with      Choose one that shows
                          on high production           business plan discussions   highest likelihood of success




                                                             Organize
                           Recruit members                   Write bylaws           Define commitments, etc.




                                                      Do Test Marketing
                                                                                   See if village responds with
                         Find temp warehouse                 Find market
                                                                                     total crop commitment




                                               Begin to make investments
                      Improve agronomy (provide
                                                           Build warehouse            Manage cooperative
                          microfinance link)
Summary




  Most of the poorest        So most food rots       Because businesses have
  people on earth are       because lack of food      no investment capital in
 farmers because they     preservation, processing    $20k to $500k range to
are small & lack access        & distribution        get started – and needed
      to markets                businesses             leadership mentoring
Impact!
1.5% more
African
economic
growth
in the ‘80s
would
have saved
500,000
children by1990

   10% increase in
   income                                              Economic growth
   = 6% decrease in                                     saves more lives
      infant mortality                                      than income
   = lower birthrates                                      redistribution
   = higher education rates                            - and it is created
   = less child oppression                                      with small
   = less domestic violence & more stable families           businesses
   = more rights for women                                            12

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Cooperatives

  • 1. Farmer Cooperatives First know people. Then you can work together. 1
  • 2. Problems/Opportunities Food, Farmers, Coops are and Hunger Solution Problem 2
  • 3. 50% of food production wasted, severe malnutrition, substantial imports (big market, trade imbalance) Farmers are majority of poor but are small and fractured; forming coops opens opportunities to BUILD MARKETS Increasing production (5x typical) is resource to make investments Summary (processing, storage, marketing) Turning crops into cash creates village economy; once there is an economy, development can occur sustainably
  • 4. Coops are the Answer: • Cooperatives have been a model for lifting farmers for over 200 years (1810 in USA) and almost all cultures • They provide sharing of production expenses and joint marketing, financing and purchasing They fail in Africa for two primary reasons: • Corruption and lack of trust • The need to BUILD MARKETS (of size!) 4
  • 5. Muundo wa Ushirika New Org Organizational Structure Wakulima Wakulima Structure Farmers Wakulima Accountability and Timu Timu management through Team Timu small groups (Teams) of 5-15 farmers that self- C organize r o Ushirika, Cheetah can’t join coop p Association but coop can join Cheetah in Joint s Venture Cheetah Development JV is unifying point for all coop marketing. It Ubia, Joint controls crops so is Venture how investments are secured.
  • 6. Summary: Coop Components Ag Services - Member Support Financial - JV Coop Services • Extension • Direct • Group Health services for marketing of Insurance seeds, fertilizer, goods • Upgrade Health training • Warehousing Care • Microfinance and other • Simple post investments harvest • Coop financial processing mgmt by Cheetah
  • 7. Preparing to Scale Working in 3 village areas representing around 20 villages Starting with dry, wet and export crops (corn, potatoes, and tea) to learn about different challenges Doing hard work of building markets Key farmer message: trust each other or trust middle-men Largest buyers also want to eliminate middle-men 7
  • 8. Economic Development Value Crops Cash Chain Human Development
  • 9. Business Model • Make investments that can achieve 3 year repayment • Let farmers self- organize • Investor joins cooperative and manages finance and marketing • Turn CROPS into CASH!
  • 10. Development Process Select a Target Village Choose target villages based Let villages compete with Choose one that shows on high production business plan discussions highest likelihood of success Organize Recruit members Write bylaws Define commitments, etc. Do Test Marketing See if village responds with Find temp warehouse Find market total crop commitment Begin to make investments Improve agronomy (provide Build warehouse Manage cooperative microfinance link)
  • 11. Summary Most of the poorest So most food rots Because businesses have people on earth are because lack of food no investment capital in farmers because they preservation, processing $20k to $500k range to are small & lack access & distribution get started – and needed to markets businesses leadership mentoring
  • 12. Impact! 1.5% more African economic growth in the ‘80s would have saved 500,000 children by1990 10% increase in income Economic growth = 6% decrease in saves more lives infant mortality than income = lower birthrates redistribution = higher education rates - and it is created = less child oppression with small = less domestic violence & more stable families businesses = more rights for women 12