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Farmers Own has structured itself in a manner conducive to doing business
in Kenya and also taking into account the needs of the small holder famer as
well as cooperate buyers. Detailed below are the guidelines that Farmers Own
adheres to :
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| Company Structure |
| Farmers Own is a not for profit legal entity, established in Kenya and
registered under ther Kenya Companies Act (Cap 486) as company number
101678 by the senior registrar of companies. The company is subject to
its own articles and memorandum of association. These documents were
drawn up in the context of the company law of Kenya and set down the
legal parameters within which the company must operate.
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Farmers Own is also licensed by the Attorney General of Kenya to omit
the word Ltd from its name. The effect of this is to confirm not for
profit charitable status.
Subsequent to a vetting procedure Farmers Own was approved and is now a
registered member of the International Federation for Alternative Trade
(IFAT) Always providing that Farmers Own complies with IFAT
conditionality all goods supplied are fair trade.
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The company is managed effectively 'in trust' for the farmers, but
farmers themselves will not be members or shareholders. As is required
by law equity is held by individual directors but under a trust deed
such that shares held are automatically passed on to the succeeding
director.
It is projected that by the end of a five year contract period of
engagement the groups of farmers (Farmer Action Associations, FAAs),
will be assisted to private company status and a long term fair trade
contractual relationship will be established to mutual satisfaction.
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Creation of a Trustee Foundation is planned for implementation by the
end of 2009 after further consolidation of process, function and
structure. The foundation will hold the equity of Farmers Own Trading
in perpetuity for the people of Kenya. The Foundation will deal with
fundamental development functions requiring investment while Farmers
Own Trading will continue with not for profit commercial development
activity on a fair trade basis.
Farmers Own has two operational centres, one in Nairobi and one in
Bungoma Two sub-offices are maintained in the UK.
A board of directors manages Farmers Own.
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| Operation of the board |
The board is composed of three executive (one vacancy) and two
non-executive directors, and all have worked at senior levels in
business and are able to provide a combination of relevant business
experience covering the range of key activities of the companies.
In addition to the board members the company accesses specialist
advisors and consultants on a paid and pro bono basis.
The board is headed by an executive chairman.
The board is responsible for the successful development of Farmers Own
through implementation of Business Plans with all plans being developed
and driven by priorities and needs of the poor and the Kenyan company.
Efforts are made to ensure that business plans match market opportunity
with smallholder group interests, skills and ability.
The Key matters that are reserved for
review and decision making by the
board of the Kenyan company encompass the establishment of the business
plan and review of performance against it; the supervision of accounts
and financial control processes; the adherence to best practice;
the monitoring of critical processes, placing of contracts,
communications with stakeholders and the implementation of corrective
action where needed.
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| Organisation of the companies |
The directors of Farmers Own have responsibility for the all the
development; management of Strategy, Business Development and Growth,
Partner Affairs, PR, Fundraising, Advocacy, HR, Finance and
Administration within Kenya and outside Kenya. They are also directly
responsible for Field Operations including full compliance of fair-trade
contracts, production, processing, trading, marketing and sales as well
as effective communication between all stakeholders.
The company, directors, employees, the FAAs and wherever possible other
stakeholders with whom Farmers Own does business are governed by the
General Business Principles.
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| General Business Principles |
The companies’ operations are governed by guidelines founded upon the
principles and practices of fair-trade as set out by the International
Federation for Alternative Trade (IFAT). The guidelines place great
emphasis on transparency, accountability, fair dealing, fair terms for
labour including wages, protections for women and child labour, and
environmental safeguards.
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| Objectives |
The objective of Farmers Own is to improve the livelihoods of subsistence
farmers whose families largely live below the poverty line, specifically:
- to engage efficiently and responsibly in the development of farmer producer groups and development of their small and larger businesses;
- to train farmers in best farming and business management practices, assisting groups towards private business status and profitable operations;
- to provide market services, identifying markets and customers and facilitating the transport of produce to these markets and the sale of produce at fair prices;
- to add value to produce, by the introduction of processing operations;
- To develop products and assure successful fair trade marketing of them under the Farmers Own fair trade brand so as to build the business in favour of the poor and establish a premium brand for commercial purposes;
- To further the programme development by taking up commercial alliances and partnerships whenever and wherever the Kenyan board and the partner agree commercial advantage to mutual satisfaction;
- In all respects to assure premium quality by product specification and traceability, compliance with standards such as fair trade, organic, best practice, assure sound HACCP and environmental policies;
The producer groups, with the advantage of economic, marketing and farming
advice plus direct hands-on support, will become part of a self-sustainable
farming economy that will directly benefit their families, communities and the
environment. Farmers Own will establish high standards of performance in the
business and farming activities that in conjunction with fair prices for produce
will lead to their long-term prosperity.
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| Stakeholder Responsibilities |
Farmers Own recognises seven important areas of inseparable stakeholder
responsibility and the necessity to communicate effectively and
transparently with each stakeholder. Its responsibilities are:
- The Kenyan Government
To work in close collaboration with the Government to ensure the mutual
goals of the Government and Farmers Own are met, discussing strategy,
reporting progress and resolving issues as needed and as indicated in
the Business Plan.
- Donors / Finance Providers
To protect the investment entrusted to Farmers Own; to report on how it
is utilised and to deliver the targeted benefits.
- Customers
To establish a solid customer base by providing produce which offers
value in terms of price and quality, by means of organic, sustainable
farming whose environmental impact is positive and by assuring fair
trade and impeccable service.
- Farmer Groups (FAAs)
To recognise that the success of Farmers Own is directly dependent on
the full commitment of the producer groups with whom it works in the
field; to work proactively with them, establishing business plans with
them, providing advice, training and management support to ensure that
skills and confidence are developed. The aim is to provide a well-trained
and seamless team of producer groups, Farmers Own line staff and managers
that shares a common vision and business objectives and is committed to
providing produce of excellent quality.
To inform and educate the men and women of the farming communities and
help them build a self-perpetuating farmer-to-farmer training capacity
and to actively encourage gender involvement and balance.
To encourage the farmer groups and their communities to invest a portion
of their financial surpluses in the improvement of their community
services in particular the provision of improved water supply, health
and education.
- Employees
To respect the human rights of employees as defined by the UN
declaration; to provide good and safe conditions of work which comply
with local labour laws; to provide competitive terms and conditions of
service; to strive for gender equality and balance; to develop human
talent by effective training and to ingrain these principles so that
they become a daily part of the work.
Farmers Own recognises its success is dependent directly on the full
commitment of its employees.
- Business Partners
To establish mutually-beneficial relationships with all those with whom
it does business i.e. government departments and their representatives,
customers, suppliers, the farmer groups and joint venture partners,
and to promote the acceptance of these principles as a basis for the
development of these business relationships.
- Society
To conduct business relationships as responsible members of society
within the laws of the countries in which Farmers Own works in pursuit
of its legitimate objectives.
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| Business Integrity |
| Farmers Own insists on honesty, integrity and fairness from all its
employees in all aspects of its business and expects the same in their
relationships with those with whom it does business.
The direct or indirect offering of bribes in any form is regarded as
unacceptable practice. Employees must avoid conflicts of interest
between their private financial activities and those of Farmers Own.
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| Political Activities |
| Farmers Own has no party-political affiliation.It does not make payments
to political parties nor take any part in party politics. |
| Health & Safety |
| Farmers Own is committed to the provision of healthy, safe work environments in all its activities. |
| Environment |
Farmers Own is an innovator and leader in the maintenance and
rehabilitation of environmental qualities. Conservation is achieved by
stealth, by compliance with standards and by promotion of tree planting.
Farmers Own actively encourage implementation of good farming practices
with its conservation farming methodogy for better land husbandry to
protect the environment, reduce the need for fertilisers and ensure
ongoing sustainability. Conservation skills and practise on small
farmers is encouraged by support to farmers own research plots, field
days and training with materials in support. The thrust of work is to
show that conservation practise increases yield and money in the pocket.
Bringing on stream standards (e.g. fair trade and organic) and
assuring compliance as a necessary action to assure trade is pro-active
for environment.
With market opportunities found for fruit and nut trees and poles these
business opportunities are promoted within the framework of bringing
forward seven sustainable cash crop enterprises on the farm. Tree
planting brings environmental benefits (e.g. soil stabilisation) and
is a contributor in the fight against global warming.
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| Transparent and accountable management |
Farmers Own directors are committed to transparent and accountable
management which is fundamental in building effective working
relationships with its stakeholders, in particular the farmer producer
groups and its Government partners. The successful growth of the
business, which is a common goal of the stakeholders, is dependent on
the full agreement and commitment to the key business objectives,
strategies and operational targets.
Progress reports on initiatives undertaken will be produced quarterly
unless agreed otherwise and will report against the review measures
outlined in Business Plans.Annual audited accounts will be made
available to all partners and in compliance with statutory needs.
All business transactions on behalf of Farmers Own are recorded
accurately and fairly in the accounts in accordance with established
international accounting standards and procedures which are subjected
to external, independent quarterly audits, spot audits and the annual
statutory audit. December 31st is the year end. IN addition to external
audit the company implements a quarterly in house spot audit system and
controls are assisted by compliance with the financial controls and
rules as written into the financial operations manual.
Budgetary control principles based on expense codes will be practiced,
with all expenditure and income recorded against expense codes as
approved by the Kenyan company. Financial control and management of the
day-to-day business activities is conducted in compliance with internal
policies and procedures, the results of which are reflected in the
management accounts of the company and subjected to regular review by
management and directors.
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| Board review and decision-making |
The matters that are reserved for review and decision-making by the
board are:
1. Approval of the annual directors’ report and statutory accounts.
2. Appointment and remuneration of auditors.
3. Appointment and remuneration of advocates.
4. Appointment, removal and remuneration of directors and secretaries to the boards. Committees may be established to address specific issues. Non executive Directors are appointed for a three-year term and may be re-elected. Executive Directors may be appointed for a period at the discretion of the Kenyan board for a maximum period of ten years.
5. Establishment of statements of best practice and policy to which the board of directors is committed, in particular:
· General Business Principles that cover the companies’ principal objectives, responsibilities to stakeholders, business integrity, fair trade and organic farming, political activities, stakeholder communication.
· Mission and vision statements
· Health, safety and environment.
6. Establishment and review of Business Plans that cover a predetermined period. The plans establish the over-riding business objectives of Farmers Own, strategies to deliver success, operational and financial targets and budgets. The plans and supporting documents cover trading, overhead expenditure, funding, capital expenditure and working capital management, and clearly define responsibilities for delivering against target.
7. Half yearly review of Business Plans and determination of corrective action. Quarterly operational and financial performance reviews will also take place internally and be phased into operations with principal stakeholders of FAAs and Government representatives such that a multi-tier formal performance review is conducted biannually with FAA and Government partners.
8. Review of company funding and cash flow management.
9. Review of external audit reports and determination of corrective action.
10. Review of the internal controls of business processes that provide operational and financial control of the companies activities.
11. Review of all major commercial contracts.
12. Review of communication and contract processes with stakeholders.
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