Good Nature Agro
Good Nature Agro uplifts Zambian smallholder farmers into the middle class by training them in legume cultivation and guaranteeing them a market. Their business model covers the entire value chain, starting at the breeding of seeds.
To start, can you briefly introduce yourselves?
Sunday: My name is Sunday Silungwe. I co-founded Good Nature Agro with Carl Jensen and Kellan Hays in 2014 to uplift smallholder farmers into the middle class. Now, I am Director of Marketing and Communications.
Joseph: I am Joseph Phiri and I work as lead field supervisor. I lead 2,000 farmers and five field supervisors.
Susan: My name is Susan Ng'ombe. I manage the Source program.
What does Good Nature Agro do?
Sunday: There are about 1.6 million smallholder farmers in Zambia who cultivate maize in monoculture and are among the poorest of the poor. Good Nature Agro enables farmers to grow. On the Seed side of our business, we provide them with training, input loans and reliable markets to plant legumes. Then, we purchase the seeds they produce at a premium price.
Susan: The seeds are then sold to farmers on the Source side of our business. Before starting to plant, we identify purchasing companies. They tell us what kind of product they need, and our seed breeders identify a variety that fits or create a new one. These seeds are then multiplied at our foundation farms and – later – by our seed farmers. Then, we sell them to farmers in the Source program, who also receive training and input loans. We guarantee to buy everything they produce and sell it on to the companies.
Sunday: They are magical. Legumes revitalize the soil, have a high nutritional value, and fetch a large margin on the market. Some of them, like pigeon peas, can also be used as shade trees.
What is the special value you create for smallholder farmers?
Sunday: We provide them with different forms of support. At the start of the season, we give them training and small input seed loans, which they repay in seeds after harvest. In addition, for our Source leads, we try to link them to microfinance institutions so they can finance additional inputs like fertilizer.
Susan: Farmers are always wondering: Where am I going to sell this and how profitable will it be? We answer this question for them. With maize, farmers earn around 116 dollars per hectare. Legumes sold through GNA fetch up to 600 dollars per acre.
Sunday: We also provide training on topics like production, record keeping or financing. We cluster farmers into groups of forty that select one member to be trained as a private extension agent. He or she then provides bi-monthly training sessions to the other group members. Training a field supervisor in seed production costs about 1,000 dollars through an annual seed inspector course. We train our farmers for free, and the knowledge of seed production is great value-add we put into the community.
Joseph: It is unusual that GNA provides both inputs and markets. Other companies are not willing to do that – I have heard testimonies from the farmers.
What additional benefits do you create for consumers?
Sunday: If you zoom back seven years, there was a huge undersupply in the sector. There still is, but we are making a dent in it. Each year, we produce at least 4,000 metric tons of seeds. In addition, we are improving the retail system for legumes by entering into long-term relationships with buyers.
How does your business model include women?
Sunday: We aim for a fifty percent female rate when we register new farmers. In addition, 43 per cent of the trainers are women. However, we try as much as possible to regard farmers as households. Whenever we enrol a family into our programmes, we ask them to set targets like sending their child to school or university. We then monitor whether the goal has been achieved and who has been taking responsibility for it. This helps change the culture and give women more of a say in household decisions.
Joseph: Working with women also makes business sense for GNA. From my experience, women tend to do certain tasks better then men.
How many smallholder farmers do you work with?
Sunday: We started with forty farmers in 2014. Now, we work with 4,400 farmers in Seed and 6,000 farmers in Source.
How do you measure the impact you create?
Joseph: We use an app called “Smallholdr” to track the income increase of our farmers. All the private extension agents receive smartphones with the app installed. Then, they ask the farmers in their groups for their financial goals and track their progress.
What makes your business model viable?
Sunday: The legume market is at about 39 million USD in Zambia alone and still underserved. We also export to Southern African countries like Malawi, South Africa and Botswana. Also, we don’t leave things to chance but talk to our Source customers in advance. This is why our revenue has been growing year on year, and why we have been profitable since 2016. This year, we are expecting a turnover of about five million USD, a 1.5 million dollar increase over last year.
Do you receive any support from outside the company?
Sunday: We raised 2.1 million USD with various investors last year. In addition, we have won some grants, like a one million USD grant from the EU. We also collaborate with NGOs, mostly on trainings and specific projects. For them, this guarantees their long-term impact after their projects have been terminated.
What are your plans for the next few years?
Susan: We are planning to reach 20,000 farmers by the end of the year. Now, we are out in the field recruiting them, taking all due precautions against Covid-19. Within the next two or three years, we want to reach over 100,000 farmers.
Sunday: Source is the most scalable part of GNA. When we have identified more organisations to sell legumes, we will also produce more inputs in Seed. Now, we are looking to expand into new markets in Africa, but also in Europe. In Malawi, we have registered and have been operational for two years. Now, we also want to set up offices in other countries in southern and eastern Africa.
What do you need to realise these plans?
Sunday: What we need most is long-term strategic partnerships. Right now, we are developing a technology platform that will support our farmer engagement and marketing. The EU grant is helping us take a huge step, but we are still looking for more partners. In addition, we need partner organisations to realise our expansion plans into other African countries.
Susan: In Source, we are looking for partners to help us set up a mobile payment system for farmers. We also need them to train the farmers in digital literacy.
What challenges have you already overcome?
Susan: The biggest challenge is to build trust with the communities. It is challenging to enter places where other companies have worked before and failed to follow through on their promises. When farmers see that we are there for the long run and pay on time, this becomes much easier.
Sunday: In some localities, the infrastructure is challenging, too – especially in terms of IT technologies. We are trying to partner with mobile service providers to tackle this issue. In addition, Covid-19 has slowed many processes down.
Joseph: We have also faced climate challenges and plant diseases. For example, we battled the rosette virus by introducing new and resistant seed varieties.
Sunday: We have overcome most of these challenges because our team members are up to the task. They are constantly looking for solutions.
What inspires you to keep going despite of these challenges?
Sunday: Ambition is one of our core values. We can only be as big as the challenges we fight.
What advice do you have for other companies?
Sunday: A business like this comes from the heart. You are dealing with lives, so it is not just business as usual. You also need grit to be strong and ride the winds that come. Rely on your team, don’t compromise on quality, and stay innovative in finding solutions.
The Impact Stories are produced by the Inclusive Business Action Network (iBAN). They are created in close collaboration with the highlighted entrepreneurs and teams. The production of this Impact Story has been led by Susann Tischendorf (concept), Hong Anh Dao (video), Katharina Münster (text and infographics), Christopher Malapitan (illustrations), and Alexandra Harris (editing). The music is royalty free. All photographs are courtesy of Good Nature Agro.