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7 Posts authored by: jamieh

Smallholder farmers represent a huge and largely untapped market segment for agricultural companies. Despite there being 500 million smallholders in the world, most of these farmers lack commercial access to inputs, storage, loans, and other products and services that would increase their productivity and incomes, and build strong agricultural sectors in countries across the world. But smallholder markets are risky to enter, being poorly understood and producing small margins, so even companies that want to expand into these markets are hesitant. Donor funding, such as United States Agency for International Development (USAID) funding through Feed the Future Partnering for Innovation, can help offset the initial risk of entering or expanding in those markets, providing companies with the ability and confidence to invest their own money in new products, services, and strategies in smallholder markets.

 

Many of Partnering for Innovation’s partnerships help companies implement new distribution and marketing activities targeted at smallholder farmers, unlocking this massive market segment for these companies. Once companies are established in smallholder markets, they serve as a sustainable, long-term presence (unlike most development projects), providing access to agricultural products and services that are essential for smallholders to produce at a commercial level, increasing the amount and quality of food available as well as incomes for farmers and others working in agriculture like input suppliers and aggregators.

 

With a program investment of $25.8 million, Partnering for Innovation has generated $42.2 in private sector investment through its partnerships. For example, Partnering for Innovation’s $6.4 million investment in commodities trader Export Marketing Company Limited (EMCL) in Mozambique spurred EMCL to invest $13.6 in building 23 new agricultural hubs in underserved rural areas, providing smallholder farmers with access to inputs, mechanization, and storage, and greatly expanding EMCL’s commodities sourcing. With Partnering for Innovation’s support, EMCL is both expanding its business and providing smallholder farmers with the products and services they need to build productive and profitable farms.

 

Donor funding can be key in enabling companies to expand in emerging and developing markets. By helping offset the risk of entering these market, donors like USAID are spurring sustainable, private sector-led development that puts US taxpayer dollars to good use building markets and increasing incomes across the world.

Although most rural families keep chickens in Ethiopia, the most common breeds are highly susceptible to disease and have low weight gain and egg-laying productivity. Because of low productivity and high demand, farmers have been missing a key opportunity to improve nutrition and generate income. One Ethiopian poultry company, however, is changing that.

 

EthioChicken is addressing this market gap by commercializing improved chicken breeds and expanding its network of sales agents to reach rural farmers. Agents raise chicks for the first 40 days and receive a commission for each sale thereafter. In addition to training its sales agents and providing last mile access to more productive chickens, the company also expanded its sale of high-quality poultry feed.

 

In two years, with support from Feed the Future Partnering for Innovation, EthioChicken sold 3,073 MT of feed and more than 3 million day-old chicks, well over its goal of 2.2 million, to almost 350,000 rural households, and employed an agent network of 1,500 entrepreneurs.

 

A few keys to EthioChicken's success were:

  • Developing a strong training program for its sales agents that included both proper poultry raising strategies and savvy business practices. This program enabled EthioChicken to reduce losses and increase productivity.
  • A strictly for-profit business model that allowed it to effectively attract investors in addition to donors.
  • Working in close partnership with the Ethiopian government and Ministry of Agriculture, which helped EthioChicken market its products to rural customers.
  • Flexibility in its marketing model. In addition to focusing on economic benefits, it advertised the nutritional benefits of poultry, especially for women and children, making chicken more attractive for smallholder consumers.

  In addition, EthioChicken also noted a couple of trends: 

  • It found that smallholder farmers care a lot about value for money, and thus are willing to pay more for a high quality product.
  • Because of the limits of working in a developing country, EthioChicken had to take on more of the value chain operation - producing both chickens and chicken feed - than it might have in a different country. Companies operating in similar circumstances should be prepared to expand operations vertically.

 

Have you found that these are important factors to consider when working in smallholder markets? What are some of the lessons you've learned for commercializing a new product aimed at smallholder customers?


Andrew Bracken David Ellis Ethio Chicken

Last week, we examined how to read, understand, and respond to funding opportunities. In this final blog post on applying to funding opportunities, we explore how doing research and outreach can help your proposal succeed!


Research and outreach is a critical component of acquiring funding that should be done at every stage of the process. Research and outreach can help you identify future funding opportunities, build relationships with partners and donors, and strengthen your proposal.


While identifying funding opportunities, research your competitors and similar projects to see who they have acquired funding from in the past. Their donors can be potential sources of funding for your organization as well. You should also pay attention to trends in funding, but be careful not to go beyond the scope of your organization. If you notice that donors have a tendency to fund projects focusing on women farmers, than you may want to consider incorporating a stronger gender strategy into your organization in the long term.


Once you have identified a particular funding opportunity, research other successful projects and competitors that the donor has funded. You can even contact these projects or organizations with questions. Use these examples to identify what the strengths and weaknesses of the projects were, what parts of their structure the donor liked, and what the donor’s funding trends are. These insights can make your proposal more appealing to the donor.


You should use outreach to build a relationship with the donor by attending events, question and answer sessions, contacting the donor’s local office, and contacting the point of contact for funding proposals directly with questions. In addition to strengthening the relationship, you may also be able to acquire additional information. This networking should be an ongoing process, not just when a funding opportunity is released.


It is also important to make partnerships with other organizations early. If it is your first time seeking funding, it is especially valuable to make partnerships with organizations that have received funding in the past. For smaller business, these partnerships can also help solve problems of limited scope and capabilities.


Before you write the proposal, take field trips to the target country so you can meet with stakeholders and understand the unique context you will be working in. An important quality that donors look for is that your solution is tailored to meet the specific needs of the country and community you will be working with.


Finally, if you do not win a funding opportunity, you can still contact the donor to ask for connections or technical expertise. In many cases, the donor will refer you to other organizations or have experts on staff that can give you additional support. You should also apply multiple times to the same donor organization!


Now that you’ve finished our series on understanding funding opportunities, you can apply your new skills and find funding on the AgTechXChange!

Last week, we looked at how to identify an appropriate funding opportunity. Now, we will learn how to read, understand, and respond to funding opportunities.


When donors review proposals, the two most important qualities they look for are: compliance, or how well the applicant follows the requirements; and responsiveness, or how well the applicant understands what the donor wants and how to effectively address the problem. Given this, it is critical to understand what all the requirements and details of the funding opportunity are and, in writing the proposal, completely meet them. 


Once you have identified your funding opportunity, the first step is to read the document thoroughly and highlight all of the requirements. Different types of funding opportunities have different documents: grants usually have requests for applications (RFAs), and contracts usually have requests for proposals (RFPs).Their requirements are often indicated by command words, such as “must, will, shall, and should.” In addition to content requirements, make note of any formatting requirements such as font size, length, or margins. Other examples of common requirements include technical specifications, program management qualifications, or commitments from any partners.


Once you have marked all the requirements, the second step is to look through the donor’s scope of work, objectives, and evaluation criteria for the proposal. The evaluation criteria will vary by donor, but scoring is typically done by section and may be numerical (e.g. out of 100) or descriptive (e.g. good or excellent). Use these requirements and the evaluation criteria to build your outline and shape your proposal. Indeed, it is recommended to have your proposal mirror the structure of the evaluation criteria.


The third step is to tackle each section of your proposal in turn. It is helpful to first write the scope of work, which can double as a work plan. In this section, it is important to include your timeframe, staff, scheduling, resources, and objectives. Then, you can build your budget based on your scope of work/work plan.


Be very careful when writing a budget, as you will be stuck with the budget that you propose. If you low-ball or try to tackle too much without accounting for it financially, you could end up in trouble in the long-run. Also keep in mind that donors generally look for the best value proposal, not necessarily the cheapest.


Throughout the proposal writing process, be sure that you are completely following the evaluation criteria and meeting all the requirements. Go through the original document and mark which requirements you have met. Writing proposals is not the time for creativity; if your donor specifically requests size 12 font and one inch margins, then your proposal should be in size 12 font with one inch margins. Make the proposal as clear and easy to follow as possible by using headers, sub headers, and the donor’s language, although also avoid jargon when possible. Finally, be timely, as most donors will not consider an application once the deadline has passed.


Next week, we will be exploring how doing additional research and outreach can boost the strength of your proposal and open up new opportunities.

The first important step in applying for a funding opportunity is to have a strong understanding of your own organization: its capabilities, needs, and long-term objectives. This understanding ensures that the funding opportunity is a good fit and benefits your organization, instead of overwhelming your abilities. Here are three things that are important to know about your organization before you apply for funding:

 

First, winning a donor’s contract means that you are subject to all the policies, regulations, and requirements of that donor. Especially for large donors like USAID, the requirements and reporting duties of the contract can be very demanding. To manage them, your organization must have its internal infrastructure in place, including robust financial, data collection, and human resource systems. If your organization does not have these capabilities, you will not be able to successfully manage the contract and could burden your business.

 

For this reason, smaller companies seeking to work in emerging markets should consider applying to grants from family foundations, leveraging connections with wealthy individuals, using online kick starters, or winning a subaward. A multi-million dollar contract with USAID could overwhelm your capacities and cause the contract to be canceled, instead of benefiting your organization. In contrast, family foundations offer a more flexible, manageable source of funding. Often times, they will be more willing to work with you and to tailor their grants to your proposed project. Do not hesitate to reach out to them with a proposal!

 

Second, ensure that the funding opportunity meets your needs and goals. In general, you want to find a funding opportunity that plays to your organization’s strengths and fits into its scope. The funding should be strategic and help to achieve your future goals. Be careful of chasing funding for the sake of money; doing so could force you to reshape your organization or add unwanted new areas.

 

For example, if your organization specializes in commercializing a type of fertilizer, then you should find funding opportunities that focus on fertilizer. If there is a funding opportunity that is trying to promote nutrition through improved varieties of potatoes, then that funding opportunity would not be a good fit for your organization. Unless your long term goal is to eventually expand into nutrition, pursuing the funding would force your organization into a mold in which it ultimately would not be successful. 

 

Finally, it is also important to understand the type of funding opportunity and how it affects your organization. In general, funding opportunities fall into two categories - grants and contracts – with each determining what regulations must be followed and who owns the final project. Grants tend to be the most open and flexible, and the recipient owns the final product. Organizations with a specific project idea in mind should look for grants. In contrast, contracts tend be stricter and have more demanding regulations. The donor owns the final project, and specifies a project they would like to have done through the contract. As a result, larger organizations or organizations seeking to take on new projects should apply to contracts.

 

Now that we’ve discussed how to identify the appropriate funding opportunity, the next step is to understand the request for proposals itself! Next week, we’ll be exploring how to read and respond to funding opportunities.

jamieh

Marketing Poultry for Nutrition

Posted by jamieh Jan 23, 2017

In Ethiopia, few families have access to sufficient protein sources. Poultry, an important source of protein and other essential nutrients, is common across the country, but most farmers raise local breeds that do not produce as many eggs or grow as quickly as improved, imported breeds. To address this gap, Ethio Chicken is expanding commercial access to improved poultry breeds through a network of rural sales agents and a multi-pronged marketing campaign that focuses on how eggs and chicken can help improve nutrition.

 

EthioChicken began operations in Ethiopia in 2010, with the acquisition of a government-run poultry farm. Within several years, the company had become the largest poultry producer in Ethiopia, and through a partnership with Feed the Future Partnering for Innovation, sold more than 3 million improved breed day-old chicks and more than 3,000 MT of high quality feed through a network of 1,000 sales agents.

 

EthioChicken’s successful entry into the Ethiopian poultry market required hard work, flexibility, and responsiveness to its target customers. EthioChicken initially thought customers would want to purchase chickens for the economic opportunity of egg and meat sales. However, EthioChicken later adopted a multifaceted marketing approach, one that also emphasized the nutritional aspect of its chickens and their eggs. EthioChicken worked with a local marketing firm to develop brochures, banners, billboards, and a radio advertisement, depicting Ethiopian women with chickens and eggs, with messages like, “Chicken meat makes my baby grow up strong!” and “My children’s health improved from eating eggs!” These resonated with families that typically lack quality protein in their diets.

 

EthioChicken’s multipronged approach to marketing provides important lessons to other companies that wish to expand into emerging markets. Through various marketing channels and the use of several simple and powerful messages, EthioChicken reached a broader group of customers, and gave them multiple reasons to purchase its chickens. By engaging a local marketing firm attuned to the Ethiopian consumer, EthioChicken could focus on its core business, the production of day-old chicks and feed. Perhaps most important of all, EthioChicken recognized that smallholder customers demand high quality products, and will spend their limited resources accordingly.

 

Learn more from EthioChicken’s CEO, David Ellis, in this interview with Voice of America-Africa.

Private sector companies play a significant role in creating a food system that helps people access nutritious food, yet the connection between nutrition and commercial agriculture is rarely discussed. As sellers of food and the inputs that are used to grow food, companies can have a major impact on the availability and accessibility of nutritious food. It is therefore important for development practitioners working in agriculture, nutrition, and public private partnerships to understand how commercialization and nutrition can intersect, and how incorporating nutrition in public private partnerships can increase nutrition in vulnerable populations.

 

The attached overview demonstrates the important role the private sector can have in improving nutrition, using several examples from Feed the Future Partnering for Innovation, a USAID program that commercializes agricultural innovations in smallholder farmer markets. From improved poultry breeds to legume inoculants to orange-fleshed sweet potato snacks, Partnering for Innovation's partners are showing that nutrition and commercialization can be a great mix.

 

What are your experiences incorporating social goals with business goals? Do you consider nutrition when developing new products or marketing strategies? Let us know in the comments section below!

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