Tag Archives: James Wire

From Subsistence to Commercial Farming. Smallholder farmers at crossroads


Muniru, a rice farmer from Leresi in Butaleja district has been growing rice for over fifteen years. He however doesn’t know why he’s still a poor man. His story was no different from that of other farmers I met during a Rice Value Addition training organised by The Pearl Foundation for Children and Widows supported by the Skills Development Facility (SDF), a project under the Private Sector Foundation of Uganda (PSFU).

As urban elites, we tend to have a lot of theories on how to transform our largely peasant dominated small holder farming population into a more prosperous one. Unfortunately, until we get to understand the psychology of these farmers, we shall keep shooting off target with our noble but poorly thought out solutions.

sorghum

Sorghum crop

Over the past twenty years, the ever growing urbanisation and industrialisation has led to a vast increase in the demand for all types of crops including those that were never considered cash crops three decades ago. Produce like cassava, simsim, soya beans, millet, groundnuts and rice are now leading cash crops for most farmers.

Among the over one hundred farmers I had a chance to train in this PSFU initiative, all of them confessed to selling off at least 85% of their produce. This got me to realise that these farmers are actively delving into commercial farming.

 

If they are earning money, why then do they still lament about poverty?

My overall conclusion was that, these small holder farmers are approaching commercial farming with a subsistence mindset.

Their subsistence mindset is betrayed by the fact that;

  • They freely grow any crop for as long as there is someone to buy it.

  • Growing crops usually takes on the traditional approach that has been tried and tested over the centuries.

  • They spend as little money as possible on growing the crop while expecting to get as much as possible from the produce sale.

  • They sell most of their produce and use the money earned to meet various needs in and outside the home. Little or nothing is put aside for the production process.

  • Little effort is made to store food since it might get spoilt or better still the possibility to earn money from a quick sale outweighs the storage option.

  • There is minimal use of technology.

  • The land farmed is little. Hardly over three acres.

  • There are a lot of post harvest losses due to poor produce handling.

  • They operate as individual farmers right from production to produce marketing.

  • They have little or no understanding of the eventual consumer of their produce.

While I do applaud their move towards commercial farming, I have a lot of discomfort about the way they have chosen to approach it. Many of the mistakes currently being made are borne out of ignorance about commercial farming as well as third party forces like manipulation by the middlemen, poor mobilisation by the local leaders among others.

Any commercial engagement is usually premised on some of the following tenets;

  • A good understanding of the consumer’s expectations

  • A quality offering (service or product)

  • Use of appropriate inputs

  • Supply guarantees

  • Market access

  • Value addition

It’s the lack of knowledge about the foundational requirements of commercial farming that seems to be one of the biggest letdown for these smallholder farmers.

active_participation

Eager Learners

These farmers are not fools nor are they resistant to change, they simply do not know better. They exhibit a high affinity for acquiring new knowledge, and this should be closely followed up with implementation support.

 

 

old_learner

The elderly study too

Old and young, these farmers will surprise you by their openness to new ways of doing things. I found farmers who were simply comfortable with the way they grew and sold their rice under the belief that there was no better way.

Following a well structured training that traversed the entire process from seed selection through the transplanting process, to weeding, harvesting and eventually produce sale, they were able to identify numerous ways of improving their product offering.

 

elderly

Packaged rice by the farmers

Farmers that had always been content with selling stone filled broken rice to traders at the mills are now empowered both skills wise and psychologically to add value to their produce upto the level of branding and packaging ready for the eventual consumer. 

Using this experience, I now realise that efforts aimed at improving farmer livelihoods especially under the various wealth creation programs that we are bombarded with need a shake up.

An approach that does not focus on merely availing free inputs to farmers but goes ahead to integrate tailored trainings and mindset change is likely to deliver much better results.

Right now, my challenge has graduated from making these farmers appreciate value addition of their rice produce to seeking out urban markets for their high quality graded rice.

Thanks to the World Bank funded PSFU project, I have had a chance to contribute to the betterment of farmer livelihoods through this Pearl Foundation for Children and Widows initiative.

James Wire is a Small Business and Technology Consultant

Blog: wirejames.com

Twitter: @wirejames

Email: lunghabo (at) gmail (dot) com

Blockchain might render you Jobless or out of Business


The buzz lately is about Bitcoin and cryptocurrency trading. People are trying to figure out how to make a killing from the volatile appreciation of Bitcoins whose price hit US$ 20,000 a while back. Some governments are fighting cryptocurrencies while others have adopted the wait and see approach. Top business leaders have come out to make comments in support of or against Bitcoin.

Amidst all this, we seem to be missing the point. The issue of focusing on Bitcoin while ignoring Blockchain is akin to getting excited about the cars being driven without appreciating the road on which they are driving. Blockchain is the road on which the likes of Bitcoin and other cryptocurrencies are driving themselves to public appeal.

The advent of Blockchain has redefined technology and it will likely take a couple of years before its massive impact is felt. Blockchain is a technology that replaces the middleman when it comes to transactions through the use of direct peer to peer interactions.

We have big businesses and prominent professions that have been curved out to purely act as middlemen between producers and consumers. The financial industry is littered with banks whose primary role is to enable Person A pay Person B or aggregate money from multiple depositors and lend it out to the borrowing few. In the process, they get a commission.

If you take the example of an international money transaction where an individual in Uganda is paying a supplier in China for some goods. This individual will initiate a transfer through his bank and the intermediaries are; the Ugandan’s local bank, a correspondent bank, an international clearing house, another correspondent bank and finally the Chinese supplier’s local bank. Each of these intermediaries slaps a financial surcharge on the transaction. Time is another factor that features prominently in these transactions, taking between two and four days before maturing.

This is a classic case of middlemen creating a higher burden of transacting. The effect of Bitcoin is to erase the necessity of middlemen between producers and consumers by replacing them with peer to peer systems. The infographic below illustrates this.

blockchain_diagram

Apart from the financial industry, some of the industries likely to be grossly impacted by Blockchain include the Real Estate, Insurance, Global Logistics and Shipping, Advertising and Crowdfunding.

In Uganda, if you are in need of purchasing land or renting a house, you have to engage brokers who identify the various plots of land ready for sale by their owners, pay a site visit, establish the land ownership, haggle over the price and then upon agreement, pay up before transfer of the title is effected.

Often times, there are loopholes in this process, like;

  • The land ownership could have been tampered with thereby falsely presenting someone else as the owner

  • The owner could be simultaneously peddling the same land to another buyer who might end up paying too.

  • The documentation on the land could be tampered with to hide the existence of caveats that may have been placed on the land.

  • And many more …..

Enter blockchain and its ledger approach that clearly chronicles all transaction changes of a system without giving room for illicit alterations. Software based solutions can now be developed to address the loopholes as well as ease the customer experience in this real estate sector.

Property listings can be made available on a blockchain enabled system that allows users to upload information of their property like the physical address, ownership, title information, selling or rental price among others.

The same blockchain enabled system could act as a storage of information on ownership status and history. This would then quickly allow an interested party to identify the true ownership status of the property as well as a history of transactions. Any encumbrances on the property can also be revealed at this point. Currently, this process is largely paper based and time consuming. One is expected to physically visit the Lands office, submit a request, make payments in a bank and then wait for the officials to carry out the manual search.

When it comes to agreements, Blockchain supports Smart Contracts. These are self executing contracts with the terms of the agreement between buyer and seller being directly written in the programmed software. They permit trusted transactions and agreements to be carried out among anonymous parties without the need for a lawyer. They also render the transactions traceable, transparent and irreversible.

I was once involved in a land transaction where I was given the land title for verification with the lands office, a process that took a couple of days before I could revert to the seller. During that time, he got so scared and thought that I had duped him. My delay was largely caused by the various individuals we had to go through to confirm the title ownership. All these manual steps can be circumvented by blockchain enabled systems.

In this real estate example, it is evident that land brokers, search agents and lawyers are likely to be edged out if they do not find ways of redefining their roles.

In the financial sector, money transfer agents and forex bureau operators are likely to be heavily affected.

I advise you to study your profession, see how you can take advantage of the emerging Blockchain technology and begin riding the wave before everyone else. Blockchain is the future, just like the World Wide Web was correctly predicted as the future towards the end of the last century. If you hope to remain relevant as a business or a professional, it’s time to reposition yourself.

Don’t be fooled by cryptocurrency trading because it is just a niche area displaying the massive potential of the Blockchain technology. There are a lot more opportunities yet to be unearthed. Like the Basoga say, Wakatolera (It’s just beginning).

James Wire is a Small Business and Technology Consultant

Blog: wirejames.com

Twitter: @wirejames

Email: lunghabo (at) gmail (dot) com