Engaging Business in the InteriorAugust 18, 2015 by Diana Coombs
The small and often localized economies in rural Kenya make it very challenging for remote farmers to source their agriculture goods to viable markets. A single farmer has little to no leverage in negotiating prices with the middlemen who come to their farms with pickup trucks to buy their crops, relocate them about 50 miles and cash in after buying grains cheaply from the farmers and selling them at a higher price in town. As a result, collectives of farmers have come together as community-based organizations (CBOs) or farmer-based organizations (FBOs).
Jim Caya, sustainability advisor and business consultant to ELI, has recently been able to meet with over 20 CBOs to discuss our ELITE Bags. He was asked to participate in a farmer meeting facilitated by a large multinational nonprofit organization. The meeting included directors, managers and leaders from eight different CBOs and FBOs from Elgeyo-Marakwet, Uasin Gishu and Baringo counties. These regions struggle with diverse ecologies, climates and lack of large markets.
The goal for the session was to encourage and motivate these participants to take the next step in organizational infrastructure. We want to see them begin to engage their own business activities. As they currently only bulk their goods for larger contract orders, they still don’t have much leverage. The current concept that we are trying to press upon them is that by engaging their own local business processes, they can increase their overall income while also providing value addition (making something more valuable) to their own contexts.
The primary business model we suggest is the creation agrovets. These are farm input and supply stores where farmers buy their seeds, fertilizers, small-scale equipment, animal medicine and so on. One of the products that the aforementioned nonprofit is attempting to introduce as a legitimate product for sale is our ELITE Bags for grain storage. The surrounding areas are considered the interior, meaning that there are no paved roads and no formal infrastructure. Product distribution is nearly impossible. Yet, the majority of Kenyans live in these types of environments and only travel to the large markets and towns a few times a year. Creating legitimate supply chain linkages into these communities through registered and financially insured CBOs and FBOs is a very valuable opportunity.
Additionally, Jim (along with one of the ELITE Bag sales representatives) attended a farmer field day in a remote area of Nandi County last month. There, he connected with the county’s deputy governor and discuss economic challenges facing his county’s farmers. They were able to solidify partnerships and strengthen relationships with various NGOs who want to further facilitate marketing and distribution of ELITE Bags.