Akumah: We’re Helping Small-scale Farmers to Actively Stay in Business

Onyeka Akumah is co-founder and chief executive officer of Farmcrowdy, Nigeria’s first and leading digital agriculture platform that helps Nigerians, through crowd-funding and mentorship, to go into and also sponsor agriculture. Launched about a year ago, Farmcrowdy is the only African start-up from the 2017 class of Techstars Atlanta, a worldwide network dedicated to helping entrepreneurs succeed. Farmcrowdy connects small-scale farmers with sponsors, who invest in farm cycles. The company has so far recorded about 1,000 unique farm sponsors from Nigerians in Nigeria, the United States, and United Kingdom. Akumah, a serial entrepreneur, speaks on how his latest agritech brainchild is incentivising and revolutionising agriculture, in this interview with Vincent Obia. Excerpts:

Farmcrowdy is described as Nigeria’s first digital agriculture platform. Where did you get the inspiration for this project?

The inspiration for Farmcrowdy came sometime in February 2015, following a challenge I had witnessed first-hand. At the time, there were on-going conversations around how to reliably channel resources into agriculture and the government had also urged individuals to put resources into this sector as a means of improving food production and security. Participating in agriculture seems to come naturally to a lot of Nigerians, particularly on a small-scale basis, but the question we had to answer was, “How do we channel our resources into agribusiness in a sustainable way that would both create the opportunity to earn a decent return while impacting positively in the lives of over 38 million small-scale farmers in Nigeria?”

We are the only ones who can solve the challenges of food security in our nation, but how does the average middle-income person invest the resources he has in agriculture, although he/she does not have any prior experience in farming? Even if one might know of a few farmers to partner with, how are we sure of making profit at the end of the day? These were some of the realities that confronted us.

On the other hand, Nigeria has many small-scale farmers who live in rural areas and farm about 2.5 – 7.5 acres of farmland. A typical issue they confront is having the funds to grow their farm operations from subsistence to commercial farming. Also, some small-scale farmers have difficulty using smart farming methods and getting to the right market for their farm produce to make a decent profit.

Looking for the solutions to all the questions we asked ourselves led to the idea of Farmcrowdy – an online platform that connects small-scale farmers with farm sponsors who will fund their farms to increase their production capacity through the guidance of our technical field experts to grow their production. Then, prior to harvest, we get pre-arranged buyers to purchase the farm produce so that we can sell for a decent margin to all stakeholders involved.

How would you evaluate your acceptance by Nigerian farmers, your market penetration, generally, since the over one year of your launch?

So far, we have managed to establish presence in eight out of 36 states in Nigeria since we launched about one year ago. We have also been able to work with about 2, 000 farmers in rural farming communities. Whenever we enter a new farming community we meet community leaders and through them, engage a select few farmers to work with us, initially. This first set of farmers then serves as our ambassadors, especially, because they end up doing better by working with us – this tends to encourage other farmers to sign up to Farmcrowdy.

How are you affected by the low level of digital penetration in Nigeria, especially, among the rural dwellers, which largely form your target market?

In addition to impacting the lives of rural farmers by providing resources for them to farm successfully, we educate and train our farmers on basic skills and modern farming techniques relevant to their practice. Although digital penetration among rural farmers is still low, we serve as a bridge between them and the farm sponsors. 

Our Technical Field Specialists, who are always on ground at our various farm locations, achieve this by constantly informing and educating them on trends in the agriculture space, innovations in farming techniques, best practices in their farm processes, etc. By doing this, we enable them to maximise the value they get out of their produce and farmlands. So, rather than be affected by the low level of penetration, we are happy to introduce innovations to them.

Who provides the land for the farms?

When we identify communities we can work with to improve food productivity, we meet with the community leaders who help us identify the right farmlands and farmers to work with. So, essentially, the land is provided by the farming community and at the end of the farming cycle, the farmers continue to own their farmland.

In your profit sharing arrangement, the sponsor gets their original sponsorship, before profit sharing, plus 40% of the profit from the harvest, the farmer receives 40% of the profit, and Farmcrowdy receives 20% of the profit. Don’t you think this arrangement exerts a lot of pressure on the farmers, leaving them in a situation where they only manage to squeeze through?

To explain the model, let us assume we meet a farmer who has the capacity to grow 5,000 chickens per cycle, but has consistently grown only 1,000 chickens because this is where all his resources can take him. 

What we do in Farmcrowdy is to engage the farmer on the 4,000 extra slots, then provide these online for sponsors to partner with the farmer. At the end of the farming cycle, the 40% of the profit on 4,000 chickens goes back to the farmer as against what he or she would have made with 1,000 chickens without Farmcrowdy. In addition to this, we provide technical field specialists to train the farmer on growing their capacity and then provide the market for them to sell their harvest at the end of the cycle.

This speaks to why 2,000 farmers have worked with us in our first year, recommended other farmers to join us, and 80% are looking to start off with us in 2018. We can say that our profit sharing formula does not exert pressure on our farmers. Instead, Farmcrowdy is a welcome development that helps them actively stay in business.

You recently announced the receipt of $1 million seed funding from foreign and local investors. Are governmental institutions at federal and state levels part of the investors?

Government institutions have provided indirect policy and infrastructural support but we have not received any direct investment from any government institution or parastatal. That said, we must applaud the effort of the government to continue to educate the public about the potential agriculture presents for Nigeria; as this becomes the foundation for getting people involved with our work and our farmers.

What is your relationship with the Federal Ministry of Agriculture?

As mentioned earlier, the government of Nigeria and the Federal Ministry of Agriculture, in particular, is one that we admire for the great work they are putting into agriculture and rural development, as well as the support of agricultural innovations across the country. Our relationship with them is one of respect and admiration for the institution, and we hope that they can work at improving the regulatory policies and infrastructure guiding the Nigeria agriculture sector. 

Recently, I was inducted into the e-Agric Initiative at the Federal Ministry of Agriculture to continue providing support and knowledge about the use of technology to foster agriculture developments in Nigeria. We look forward to continuing doing more with every opportunity the ministry presents.

Do you have raw material supply arrangements with foreign or local companies?

We have partners that supply us with seeds, chicks, fertiliser, vaccines and other relevant farm input. Depending on the state, we work in per term; and do our best to get the best farm input from partners that have a track record of professionalism in service delivery.

What are your plans for expansion going forward?

In 2018, we have ambitions to surpass our current achievements. We were able to penetrate eight states last year, but this year, we intend to be present in 18 states in Nigeria and impact the lives of 4,000 rural farmers directly. We also intend to expand beyond the shores of Nigeria to other parts of Africa very soon as we keep growing this community model where Nigerians sponsor Nigerian farmers to grow Nigerian food for Nigerians to eat. We intend taking it to Ghana, Kenya, Rwanda and basically, any country where the necessary structure to support small-scale farming is lacking. This becomes an opportunity for us and the addressable market is vast.