Thursday, 16 September 2010 13:21
| ||To provide a 'total production/marketing package' to 2,000 smallholder and commercial farmers at affordable prices for the production of food crops – maize, soya, beans and wheat (where irrigation is available). This includes a rural finance component. |
|Contract growers scheme with small scale and commercial farmers to produce and sell food and seed crops |
|Grant Amount USD 300,000.00 |
Repayable Grant Amount USD 400,000.00
Matching Funds USD 3,200,000.00
Amount of Grant awarded by AECF US$ 700,000.00
Duration: July 2010 to July 2016
Northern Farming is a new enterprise of the owners of Northern Tobacco, Zimbabwe's biggest hub & contract grower operation in the country's major export crop. The business idea involves the provision of a total production and marketing package to both smallholder and commercial farmers at affordable prices for the production of food crops – maize, soya, beans and wheat (where irrigation is available). This includes a rural finance component: provision of inputs on credit, recoverable against produce sales, with Reserve Bank registration under the Moneylenders Act. With food crops this is a much riskier proposition than for tobacco, which has its own marketing channels limited to a small number of players. Grain markets on the other hand are much more diverse, with opportunities for diversion (side selling) to avoid credit obligations. The project will grow the relationship between farmers and the company around strategic agricultural hubs in farming areas along the same lines as the tobacco out grower scheme. 2,500 small scale households by 2016 (12,500 people) will each benefit by about US$427 per year by 2016. It will also result to revival of domestic food crop markets by the creation of a large new player
The project is suitable for AECF funding because: -
- Large numbers of out growers/workers, by comparison with other AECF out grower experience
- Applies out grower contracts (usually found in export crops) to staple food crops, which is innovative
- Proposes to operate at scale (c. 50,000 tons), giving it potential to influence a market now made up of very many (price taking) smallholders, with relatively few commercial-scale producers.
- If the model succeeds it could lead to widespread replication by others
|Northern Farming's (NF) small-scale and commercial farmers were encouraging with an output of ±9,000MT - estimated at 25% of the local crop. NF has expanded their production to include 670HA Maize and 100HA Soya with the small-scale farmers. NF has undertaken significant production and achieved 3,300MT which is 10% of the countries requirements based on pre land reforms estimates. |
A Project management team has been set up. Due diligence has been conducted and contracts have been signed with 500 small scale and 26 commercial farmers. Inputs including seed, fertilizer, chemicals and fuel have already been provided for the outgrowers. To date 1,300 tons of seed, lime, fertilizer and agrochemicals have been delivered. Support for contract growers, particularly small scale, has begun with field extension support being put into place.
A total of 19 fulltime jobs and 2 part-time jobs were created at NF. The farmers who have been contracted by NF are benefitting by US$ 178 compared to subsistence farming where they would benefit by an annual income of $82.00/annum. The field support team spans 2 project coordinators and 10 field officers of which 7 have undertaken training in conservation agriculture.