TRANSFORMING AGRICULTURAL BUSINESS MODELS TO
IMPROVE PROFITABILITY &
LIVELIHOODS 1
CURRENT APPROACH TO SMALLHOLDER INVESTMENTS
2
IDH’S JOURNEY WITH PARTNERS: FROM SMALLHOLDER TO SMALL BUSINESS
3
CONVENING TO CO-DESIGN THE FUTURE: SEPTEMBER 26-27, AMSTERDAM
4
RESULTING SHARPENED VISION AND COMMITMENT
1 CURRENT APPROACH TO SMALLHOLDER INVESTMENTS
ROI for investors (including farmers) CHALLENGES Low adoption rates Low productivity
Economically viable business models
Market
1
Capital
Improper use of agrochemicals
3
2
Convening
People
Farmer livelihood improvements
Impact
Creating plans
High deforestation
Implementation Mitigation of deforestation
How can I improve the sustainability of my supply?
How can I get access to the inputs I need for a productive farm?
Companies
Farmers
PAIN POINTS
Financial Institutions
Donors
How do I know this approach will create impact?
This is too risky, I'll find another opportunity
We can do this better
IDH can help transform these pain points into
BETTER BUSINESS...
...by applying a data driven approach, to help service providers set up
FINANCIALLY SUSTAINABLE BUSINESS MODELS
2 IDH’S JOURNEY WITH PARTNERS: from smallholder to small business
We analyzed models of service delivery to smallholder farmers
Products
Buyers
Payments
Co-funding training
SDM Operator
Crop payments minus pre-financed inputs
Crops
Research Standard procedures
Field staff
Set-up Working capital Salaries
Input distribution centers
Farmers own & operate Sell (organic) inputs
Gap training
R&D
Seed research station
Inputs on credit
IDH, Investors, donors
Seeds Knowledge
Public research institutes
Land for production Feedback
Seeds on credit
Farmers & Cooperatives Cash flow
Flow of goods and services
Analyze outcomes Click here to dive deeper!
Identify key success drivers
Enabling environment challenges Funding needs
Opportunities for innovation
Potential to upscale
First insights report Click here to dive deeper!
This is a promising approach, let’s do more!
30+ SDMs in 16 countries
Covering a range of crops
Coffee Cashew Cocoa Cotton Maize Vanilla Chili Rice Sorghum
Varying in size
Largest 500K farmers, cost of $8M
Smallest 166 farmers, cost of $133K
Executive summary of second insights report Click here to dive deeper!
OUR KEY LEARNING Farmers as clients Financially sustainable service delivery Reducing information asymetry Sound enabling environment Technology & innovations
Can we improve & scale this?
With these insights I can… prototype, innovate
We need to get more people on board and hear what our partners think
We can work together
3 CONVENING TO CO-DESIGN THE FUTURE: September 26-27, Amsterdam
Have you thought about developing human capital for the future??
Have you thought about ICT?
I need a data system.
TAKE AWAYS FROM THE WORKSHOP
Click here to watch!
Click here to enlarge!
Interest in benchmarking against a growing database to speed up internal adoption of best practices Need for “deep dives” into the insights Looking for insights to bundle services to farmers for efficiency gains Need to link service providers operating in the same geographies with different types of farmers Upscale digital approaches; from mobile payments and financial services, to inter-operability of data systems Development of human capital for the future Create visibility for FIs and donors into the relationships at farm level, that help to identify feasible opportunities to invest Significant funding available for scaling efforts, but short supply of farmer-focused business models- SIP is seen as an important source of “deal flow” Multiple funding opportunities can create competition between banks, driving innovation in service offerings
Report from Co-Design Forum Click here to dive deeper!
Thanks for the input!
4 RESULTING SHARPENED VISION AND COMMITMENT
SHARPENED
VISION PATHWAY FOR SERVICE PROVIDER IMPROVEMENT
SMALLHOLDER
INNOVATION
PLATFORM 1
ANALYTICS INFLUENCING GOVERNMENTS TO IMPROVE ENABLING ENVIRONMENT AND TRIGGERING LOCAL ENTREPRENEURSHIP
Snapshot of service delivery model
P&L Farm
Convening
EXPERTISE CENTER FOR CROSS CUTTING INNOVATION Best practice in farmer engagement Technology & data
Advocacy
P&L of Entity
Unconventional partnerships
Mobile payment & financial services Development of human capital
SENSITIVITY ANALYSIS BENCHMARKING FINANCING NEEDS & STRATEGY
2
INNOVATION Expertise Coinvest Prototype 3
SCALE WITH INNOVATIVE BLENDED FINANCE
OUR
COMMITMENT STAFF GROWING CONSULTANT BASE CO-INVESTMENT FUNDS FOR INNOVATIVE SERVICE PROVIDERS LINKING TO BANKS & FUNDS FOR BLENDED FINANCE DIGITAL PROGRAM COUNTRY SPECIFIC ADVOCACY TO BUNDLE LOCAL SERVICE PROVIDERS CULTIVATE UNCONVENTIONAL PARTNERSHIP
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