Thoughts from an agricultural development gal in Ghana

Posts tagged “finance

Agriculture As a Business

This is a bit of a monster post, sorry! But I haven’t posted for a few weeks (which was how long it me took to write this whopper) so I hope you’ll forgive me. I’m especially looking for lots of comments, questions and feedback on this one. So find a quiet space, a few minutes, and dive in!

Update: quick acronym check!

EWB = Engineers Without Borders Canada (the organization I’m working for)

AAB = Agriculture As a Business (the tool EWB has developed)

MoFA = Ministry of Food and Agriculture (Ghanaian government)

AEA = Agricultural Extension Agent (the field staff for MoFA)

FBO = Farmer-Based Organization (a group of farmers who work together, like a co-op)

The main product of EWB’s last few years of work with MoFA is the Agriculture As a Business curriculum. As I mentioned in a previous post, AAB is a field tool for AEAs (Agricultural Extension Agents) to help them to develop stronger, more business-minded FBOs (farmer-based organizations). The AEA takes the tool to the field and, over the course of 10 meetings with the FBO, builds the group’s capacity to run their farms as businesses. The tool consists of 10 laminated cards containing facilitation questions, tips, stories and photos to lead the AEA through the following topics:

  1. Group Strengths to build a vision for the group;
  2. Group Meetings for the group to hold regular meetings to discuss and solve issues;
  3. Group Finances so the group is regularly contributing dues and their group savings;
  4. Group Project so the group designs an agriculture project they will do together;
  5. Group Marketing so the group accesses markets together (e.g. buy or sell together);
  6. Market Planning for the group to analyze and decide on a profitable market;
  7. Business Plan for the group to plan the expenses and expected income of their project;
  8. Record-keeping so the group is recoding actual expenses and income to later analyze profit;
  9. Loan Preparedness to ensure the group can manage credit successfully to repay;
  10. Business Evaluation to calculate profit from the group project, and decide how to increase profit next year.

The Cheshei Suhiyini Women's Group

Building strong FBOs is a big trend in agricultural development these days. For one thing, it’s easier for businesses and extension agents to reach all farmers if they’re organized into groups. For another, FBOs are more likely to undertake semi-commercial or commercial farming, which contributes more productively to national food security – another big concern. Finally, NGOs and donor projects love to work with FBOs because they can reach more farmers and count them as beneficiaries of their projects. All in all, there’s a big push for districts right now to build lots of strong FBOs.

Aside from the “trendiness” of FBOs, farmers can actually gain huge benefits by working together in a group. First, farmers are more likely to share their problems and solutions with each other in an atmosphere of collective knowledge and learning. Second, farmers can do many things more effectively as a group, like buy inputs or market their produce in bulk. In particular, they can save tons of money on transportation costs when getting goods to and from the farm and market. Third, it’s way easier to get credit for an investment to expand your farm business if you apply as a group. Banks are way more comfortable giving a loan to a group, where members can hold each other accountable for repayment, than to an individual farmer. Fourth, illiterate farmers can reap huge benefits by banding together with a literate friend who can read, write and keep records for the group. Finally, as I mentioned above, groups are far more likely to get regular visits from an AEA than individual farmers, simply due to time constraints and the number of farmers each AEA is responsible for (which is around 3000).

The AAB curriculum addresses all of these benefits and encourages the group to take advantage of them. AAB starts by building the strength of the FBO itself, encouraging members to meet regularly and contribute dues to their bank account. Then it moves on to the more technical business training, including budgeting, planning, marketing and record-keeping. Throughout the program, the AEA is seen as a “facilitator” rather than a “trainer” – the group is encouraged to discuss issues and come to their own conclusions. There is no “right answer” that the AEA is leading the group towards; rather, the group is in charge of making a plan that best suits their strengths and weaknesses.

Each card takes the group through what is called the “Action-Learning Cycle”:

  • Reflection on a story, proverb or photo about the topic.
  • Analysis of the topic. ie. What is the benefit of keeping good records?
  • Planning based on the group’s analysis. ie. who will keep the records, what will be recorded, where will the records book be kept
  • Actions to carry out the plan.

This process allows the group members to engage with the topic and internalize the learning through taking immediate action.

A participatory budgeting exercise using local materials

So, AAB is awesome. Right?

There are still 3 main issues that our team is grappling with around AAB: Quality, Sustainability and Scale. I’ll tell you a bit about each one.

Quality

One of the biggest concerns of most EWB volunteers who are implementing AAB in a district is quality. Are field staff using the tool correctly? Are they giving the group enough time to answer questions and create plans? Are the group members really getting the concepts, and are they going to change their behaviour as a result? These are all important questions if we truly want to have impact with this tool. Unfortunately, it’s difficult to ensure quality at any level. The MoFA field staff all have varying capacities: some are master facilitators, while others can barely read English. It also depends on their motivation and desire to help their farmers. Are they carrying out the activities because someone told them they’d be docked pay if they didn’t, or do they truly see the value in the program and want their farmers to get the most out of it? Usually the answer is somewhere in the middle. EWB can’t go to the field with every single AEA to every single AAB meeting; if that was our plan, we should just be implementing the program on our own. Instead, we have to face a certain loss of quality when we hand the program over to MoFA and believe that they can continue to understand and improve the program.

That said, while the team has temporarily put a hold on changing any of the content in the tool, the quality can still be improved. Would this question on this card be more impactful if we asked it a different way? What if we rearrange the order of the cards? Should we bring outside actors in to meet the group, such as banks and input suppliers, or rely on them to take initiative? What if we added a card on Managing Assets, or Value Chains? The quality of the tool itself has reached a point where it’s “good enough” – we are willing to spread it widely and believe it will have good results – but there is always room for improvement.

An AEA facilitating an AAB meeting

Sustainability

The second biggest challenge of AAB is sustainability. Right now we are concerned with sustainability on a district-by-district level. Most NGO projects will come into a district, use field staff to implement a project, then finish the project and get out, hoping the impact has taken place. But EWB wants the AAB tool to be used in the long-term by district staff, even after we leave. This requires a fundamental shift in the way districts normally interact with NGOs. We are trying to get district staff to take over the AAB program themselves, filling the role of the EWB volunteer to support the tool.

At first, we tried to attain sustainability by simply leaving the district and seeing whether AAB continued without us. The result was that most districts stopped using AAB after a certain amount of time. Without EWB there to encourage and support the program, districts were unable to sustain AAB. Why was this happening? In some cases, there just wasn’t enough will in the district to sustain AAB. But in other cases, even though the staff wanted to continue the program, they didn’t exactly know how. So EWB volunteers looked objectively at the roles they themselves were playing in the district, and externalized these roles. By clearly articulating what is necessary to support AAB, it makes it easier for the district to take on these roles and sustain the program. There are four main roles:

  • Leadership: provide a vision and maintain a focus on FBO development while holding staff accountable
  • Scheduling: plan, schedule and set goals with AEAs to achieve their AAB targets
  • Backstopping: monitor AEAs in the field, provide useful feedback and invest in their professional development
  • Reporting: track AAB progress, collect data on present and past AAB groups and feed back data for AEAs’ learning

Now we are trying to encourage officers in the district to fill all of these roles and hoping it will lead to AAB sustainability in that district. But we are already running into some management and logistical barriers that reach beyond the decision-making power of the district, so we’ll have to wait to see whether this model can be successful!

A woman drying parboiled rice in her compound

Scale

The final challenge is to build a successful scale model for AAB. At first, the vision was to have a copy of the AAB tool in the hands of every field staff in Ghana. But after some time, it became clear that this approach won’t work. AEAs need proper training and support to successfully implement AAB. The scale-up plan would have to be a bit more realistic. Next, we moved on to the idea that the “principles” behind AAB could be scaled to every district in Ghana. The principles were summed up as the following:

  • AEAs are regularly developing groups (beyond formation) – this means letting the group drive their own development by having the group take decisions and act on them;
  • AEAs find ways to get the group analyze their farms as businesses (budgeting, marketing, record-keeping, etc.);
  • AEA learns about promoting agric as a business and is able to refer to decisions in their regular work.

However, it was difficult to imagine just what this scale-up might look like. We are still working on this at a National level, but don’t yet have enough traction to bring it to every district in Ghana.

Finally, our current sort-of scale-up model is the idea of creating “model districts” that can be learning centres for other districts in Ghana. The vision is to make some districts kick-ass, including a whole host of changes beyond AAB, then get other districts to come and learn from them, thus spreading AAB all over Ghana. This model still has to be really worked out, but this is a great chance for input! What do you think of this idea? What are the strengths, weaknesses, opportunities and threats that we could face? Is this a good way to invest our resources, or should we focus on hitting more districts at once?

The Kpanman Kawuni Song Women's Group

The tricky part is that even though the AAB curriculum is finalized (to a certain degree), there are still a lot of improvements to be made. Let’s think of the AAB curriculum as a “product” that EWB has developed. We’ve spent a lot of time doing research and field trials, revising and refining that product. It’s still not perfect, but we think it’s at a stage where it’s “good enough”, meaning that we’re pretty confident that the delivery of this product will benefit farmer groups. We can call this stage “product development”. However, now that our product is finished and we’ve offered it up on the “market” (telling MoFA districts about it), we’re finding something startling: no one wants to buy our product! That is, no one is knocking on our office door asking for AAB (with the exception of one district in the Upper East). So what happened??

Ben has been reading a lot about the idea of “customer development” lately, and thus I’ve been hearing a lot about it. It’s an interesting idea. In a start-up, instead of just doing product development, you have to do customer development. This means taking your product to customers early on, asking them whether or not they would buy it, and if they wouldn’t, what features would make them buy it. It’s an iterative cycle of product and customer development, with the two going hand in hand to provide lots of feedback along the way. By the end, you should have a product with a ready market that is desired by your customer base (or maybe even beyond). What you DON’T want is to CONVINCE your customer that they want to buy your product, or tailor your “sell” to each different customer. This is shooting yourself in the foot, because unless you have time to handhold each customer through the sales process, you won’t be able to sell your product on a wide scale.

This seems to be the case with AAB. Don’t get me wrong, there is definitely excitement around AAB at the district level – my Director can’t stop raving about how important and useful it is for his staff. He’s made it his AEAs’ “number 1 priority because developing strong FBOs is our core MoFA work” (at least until he gets an urgent call from the Regional Director). AEAs rave about how they used to hear the phrase “agriculture as a business” and didn’t know what it meant until EWB put a tool in their hands. Farmers love the interactive meeting style and are dedicated to implementing their projects. The more they use AAB, the more bought-in they become to the impact of the program. But are they willing to “buy” the product? – put their own brains, money, time and other resources toward making it work?

We did consult our customers along the way (MoFA staff and farmers), but I think at a more select level (only the ones that were easy to work with). We handheld every district we’ve worked in so far through the process of adapting AAB, convincing them to take it up, tailoring the program to suit their needs and filling gaps until they were willing to make the commitment themselves. As a result, we have a product that doesn’t have a strong pull from the market, and we find ourselves pushing it instead. (Who is our market anyway, farmers or MoFA? And do market mechanisms really exist in this environment?) If we were a company with profit as our bottom line, we might take one of a few options: keep iterating, put more resources into marketing, or scrap the product. Patent archives are full of great products that never “made it”, even if they’re brilliant. But we’ve seen AAB work, if only AEAs would use it. We’ve put lots of resources, both human and financial, into the program so far over the past 3 years. And really, it hasn’t been that long yet, only a few years; we know real change takes time. But what are the go/no-go criteria for a program like this? How long do we keep refining and marketing our original product? When do we decide to move on to something else, something possibly more (or less) impactful? How (and when) do we take that decision?

So help me out: where should we go from here??


Too Cool for Fuel

This post is about FRUSTRATION, but it’s also about OPPORTUNITY! (And you may even find out a little about my work.)

MoFA (the Ministry of Food and Agriculture in Ghana) is built from the bottom up on a network of Agricultural Extension Agents (AEAs). These are the people who actually carry out the Ministry’s work by traveling around to visit farmers and disseminate all kinds of information, such as weather forecasts, market opportunities, NGO projects and technical advice. They are at the bottom of the hierarchical pyramid, but they are the crucial link to farmers that MoFA needs if they want to have any success in improving farmer livelihoods in Ghana.

Ghana is divided into 10 regions, each of which is subdivided into several districts. Each district has a MoFA office, with several AEAs working out of each office. Each AEA is assigned an Operational Area within the district and is responsible for knowing and working with all the farmers in that area. According to their job description, AEAs are supposed to move around for 4 days each week, doing “home visits” (visiting farmers at home), “field visits” (visiting farmers in their fields), and “group visits” (visiting farmer groups). The remaining 1 day each week is reserved for reporting and any office work. Each AEA should also be provided with the means to move to their Operational Area, usually in the form of a motorbike, but sometimes a sturdy bicycle. In addition to their salary, each AEA is supposed to receive a quarterly fuel allowance to pay for the fuel required for all this travel.

So what’s the frustration? There has been no fuel money disbursed to any AEA in Ghana since Oct-Dec 2009. They missed the 1st quarter, Jan-Mar, and we’re now well into the Apr-Jun 2nd quarter. This seriously limits an AEAs ability to do his or her job. An AEA’s salary, which is meagre to begin with, doesn’t stretch far enough to cover 5 months of fuel. Furthermore, AEAs shouldn’t be expected to sacrifice any of their small salary for something that’s supposed to be covered by their employer (and in fact, many of them can’t afford to sacrifice any of their salary).

The impact of this lack of funds is huge. Here are a few of the major problems that have come as a result:

1) AEAs can’t do their jobs.
This is serious! Like I said above, AEAs are the ones who provide the link between MoFA and farmers. So if AEAs aren’t going to farmers, then MoFA isn’t fulfilling its mandate to improve farmer livelihoods. An AEA’s knowledge is particularly crucial for farmers at the beginning of the farming season – like right now. Farmers are just figuring out which crops to plant this year, which types of seeds they’ll use, whether or not they should use fertilizer and which kind. The AEA is the advisor for all these decisions, helping a farmer to make the most of his farm and bringing new information about what’s out there in the agric world. Furthermore, when an AEA just disappears for months at a time, there can be a huge loss of trust between the AEA and his or her farmers. And trust is one of the core underlying factors to being a successful AEA! These people spend years developing relationships with their farmers. Each farmer has different strengths and challenges, and it takes time to develop a trusting relationship that will allow the farmer to benefit fully from what the AEA has to offer. Finally, there is also a detrimental effect on farmer group development. Imagine you are taking a course on starting up a new business, with a project that is integrated into each class. Then all of a sudden the teacher stops coming and classes are suspended for 3 months. Do you think you’ll be on track when the teacher suddenly decides to return? Probably not – you’ll need a few refresher classes to remember all the things you’ve already learned, and some of the momentum for your project has probably disappeared. This is what happens to farmer groups when AEAs are unable to keep investing in their development – concepts are lost, momentum wanes and the group loses interest.

2) Supervisors can’t hold AEAs accountable to doing their jobs.
The bottom line: when AEAs aren’t given the resources to do their jobs, they really can’t be expected to do them. There are a few exceptional AEAs (mostly the single ones who don’t have families to support) who are stepping up and using their own money in order to continue serving their farmers. However, not every AEA can be expected to do this. As a result, no one can be held accountable. So right now an AEA can receive their salary by doing absolutely no extension work!

3) Work for donor projects that come with fuel money are prioritized over core extension work.
The Tamale Metro office (where I’m working) is both lucky and unlucky that we are an easy target for NGOs and other implementing agencies. Tamale is the capital of northern Ghana and one of the only easily-accessible districts in the area. So when an NGO wants to pilot a project, they come to us! This is good because it means that some really innovative projects are reaching our farmers first. It also exposes AEAs to a range of ideas and approaches. Most of all, it brings in extra resources – if an NGO is asking AEAs to carry out field-work on their behalf, AEAs are often given fuel money as well as an honorarium for their time. However, on the other side of things, many of these projects are NOT innovative and really just add a whole lot of work to an AEA’s schedule. (For example, 2 separate projects currently have AEAs walking around the same farmers’ fields to map them with GPS. Seriously?? The AEAs are doing the exact same thing twice, once with each organization’s GPS unit! And they’re doing this for over 100 fields each!) Smart AEAs use this money to carry out both the project work and their core work at the same time by strategically planning their routes to and from the field. But since the money is intended for the project work, that work is prioritized over all core extension work. And when it’s as time-consuming as walking around hundreds of farmers’ fields, there’s often no time for anything else! Unfortunately, this effect also extends to EWB’s work with the Agriculture As a Business (AAB) program. We don’t give out fuel money as an incentive for AEAs to participate in the program (there is a long and heated debate about this decision), which means that there has been virtually no activity in the AAB program in Tamale since January. And like the supervisors, since I’m not offering AEAs any fuel money to do the work, I can’t hold them accountable!

4) Directors can complain but are powerless to affect change.
This one is tough. I wrote earlier on this blog about the (lack of) culture of upward feedback in MoFA. It is fairly rare for a District Director to outwardly complain about programs or policies in MoFA. In this case, the money has been delayed long enough that many Directors are raising a stink about it at the national level. But what difference does it make? There are piles of excuses being made by MoFA at a national level about why the money hasn’t come. As for the Directors, they don’t have access to any discretionary funding that they could allocate temporarily as fuel money (so much for the concept of decentralization). They could dig into their private stashes, but wouldn’t that set an interesting precedent… yikes!

5) Everyone is demotivated and frustrated (including me!).
Yeah, it’s really just a bummer. Nothing is happening (except lots of NGO project work) and no one can do anything about it.

So who holds the purse-strings to the fuel money? I have no idea… someone at “the top”. MoFA National blamed Parliament for a while for not passing the budget in time, then passed the blame to some development partners who are funding agricultural work. There are even rumours of a Canadian connection to the hold-up – the horror! Even then, much of development funding is contingent on the beneficiaries demonstrating some level of capacity or “readiness” to receive the funding, which places the blame squarely back on MoFA (or on the donor policies, depending on how you look at it). The bottom line is that while “the top” argue amongst themselves, it’s poor farmers who are paying the price.

The main frustration is in seeing all these AEAs missing out on serving their farmers; the opportunity is what they are capable of if resources are provided on time. AEAs care about farmers, and they want to be interacting with them out in the field. Supervisors also care about farmers (most used to be AEAs themselves), and want to hold their AEAs accountable to serving farmers. And farmers value MoFA’s assistance! There is a huge opportunity for MoFA to do good work, but they need the resources to carry it out.

This week, Sarah Grant, the Director of Agribusiness for EWB in Ghana, will be traveling to Accra to meet with MoFA National and their development partners on the topic of farmer group development. There is a huge opportunity to influence these players and bring field realities, such as the effects of the late arrival of funds, to those making the decisions. EWB is uniquely placed to offer these insights and it is our responsibility to make the most of these influence opportunities. We want to see the development world flipped on its head, with implementing actors like MoFA being held accountable to farmers rather than donors. It’s a complex system, but somebody’s gotta change it!


I’d like to open a savings account, please.

Crack – crack – crack

Cracking groundnuts

My fingers are tingling and my thumbs are covered in small punctures. I pick up another groundnut (peanut) from my lap, crack open the shell and drop the nuts into a bucket beside me. I drop the shells on the ground, then scoop another handful of groundnuts from the huge bowl in front of me and start again. Around me, under the shade of a huge mango tree, the men and women talk and laugh while they do this work. They have been at this all day, shelling bowl after bowl of groundnuts. In fact, they have been at it all week, processing the groundnuts and selling them at the market.

But why do this work now? These groundnuts were harvested last October and stored in big sacks for the last 6 months. Why weren’t they cracked and sold after harvest, instead of waiting until now? I posed this question to Salifo, my host in the village of Zuo. He responded that he needed the money from the groundnuts to buy inputs for his farm this year, such as seeds, fertilizer and rent for a tractor to plough the land. He said that he knew if he sold them last year, he would have spent the money by this time and he wouldn’t have any money to buy those inputs. So instead, he saved the groundnuts.

This is an important form of savings for Ghanaian farmers. Since Salifo doesn’t have his own savings account at a bank – most people don’t – he has no way to protect his money when he earns some. And in Ghana, when you have any amount of cash, friends and relatives start dropping by to borrow it until, little by little, it’s all gone. Storing crops, or any other liquid asset, is a better way to save that money until you want to spend it.

Salifo and his savings

The other added bonus to selling groundnuts now is the increase in price. After harvest, when the market is flooded with fresh goods, the prices are at their lowest. At that time, a bowl of groundnuts will earn you 1.5 GhC (about $1.20 CAD). But now, at the beginning of the farming season, the market has cooled down and the price has risen to 2.5 GhC ($2.00 CAD). This is another reason to store your crops and sell at a later date. But while this seems like a good strategy, often the more urgent need for cash is what will determine whether a farmer saves or sells his crops.

Of course, not everyone has the option of saving. Often families reach the end of the farming season with nothing left in their stores to eat (and sometimes they run out even earlier). The market is not flooded with crops after harvest because people are stupid and they don’t want to earn the higher price by selling later. It floods because people are desperate for money to buy food and feed their families. This is what it is like to live hand-to-mouth in a country like Ghana. Only those who start with something – a good business plan, proper farming inputs, or a bit of luck – can afford the luxury of waiting to sell their goods after harvest.

My work here is about increasing the number of people who wait to sell their groundnuts. It’s about changing the decision from one of necessity to one of strategic business planning. Overall, it’s about reducing the number of people who don’t even have a choice.