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| Frequently Asked Questions |
Farmers Own is a charitable not-for-profit organisation in Kenya with a
commercial orientation, which counts the government as one of its supporters.
- We are a market-led initiative and we carry out market research to identify what crops need to be grown in order to satisfy demand.
- We facilitate the organisation of farmers in the west of Kenya into economically-viable groupings.
- We organise the supply of seed and the transportation and sale of produce.
- We provide fair trade supply contracts and make the market for the farmers.
Listed below are questions which have been asked, relating to Farmers Own. In order to assist in locating the information required, the questions have been grouped under the following headings.
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| General |
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What is special about Farmers Own? |
| We really do eradicate poverty at large group scale a by provision of supply contracts for agricultural produce and provision of fair trade market services |
| Why not donate money to a larger organisation (eg OXFAM) |
| Farmers Own is a substantive credible Kenyan charitable company, with a hands on market led business approach that delivers benefits to the poor who need your help directly. If you want to help Kenyans to a decent livelihood put your money in Farmers Own (donate button) |
| If it is such a good scheme, why doesn't the Kenyan Government run it? | | The government is a regulatory agency not a fair trade business. The Western Provincial Government and the National Poverty Eradication Commission continue to play support roles. The endeavour is in fact seen as a flagship model for future initiatives by the Kenyan Government
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How do you know the ideas work? |
| In 2002-2005 a successful pilot was conducted starting with a few hundred farmers and building to 5,000. The first season of the new target is already a success with 2000 farmers putting cash in their pockets after delivering sunflower for marketing |
| What is Farmers Own doing at present? |
| See the programme section of this web site to obtain details of the work and the news section provides latest updates |
| Accountability and Governance |
| What records are kept to justify to donors that money is being well spent? |
| Narrative and financial reports are produced quarterly after in house audit and performance reviews. There is an annual report and externally audited accounts are produced. |
| Are you a registered charity? |
| Unlike the UK Kenya has no specific charity law. Farmers Own, with articles that experts declare would satisfy the UK charities commission and the IRS in the USA is registered as a not-for-profit company. The company has a licence from the Attorney General to omit the word limited. This means that the company is accepted as a charity working for the public interest |
| Can we see your accounts or annual report? |
| The latest accounts and narrative report can be made available to donors, genuine potential donors and commercial investors |
| How much of the money donated goes to administration? |
| More than 85% of money received as grant/loan is spent in actions which directly support the poor in the field, whether it be building support capacities within the company or the Framers Action Associations |
| What is the remuneration of directors? |
| Two executive directors each work 75% of fulltime and pay at modest rates by any standard is currently capped at 5 days month. Two non executives serve pro-bono. |
| Benefits |
| How does a farmer benefit? |
| Firm market by contract, increased income and food, diversification of farm economy, better land management, sustainability, improved life quality, social cohesion. Farmers receive advice and training from agronomists and increase their skills also. Independent smallholdings benefit families. |
| How does the community benefit directly? |
| Business development levers for capitalisation to attain social needs – mosquito nets, care for aids orphans, clinics, school feeding programmes. Nutrition levels improve with new crops and more crop; with poverty alleviation there is improved community cohesion & female participation. |
| How do women benefit? |
| Farmers Own has a gender balanced policy and a 1:1 ratio is mandatory for all decision-making units in the action associations. Women form circa 60% of the active membership. |
| What are the indirect general benefits to the community? |
| Transparency and stakeholder meetings is already demonstrating rapport and some better governance benefits. As business grows people will lever better governance and less corruption forward through the power of unified voice in organisations. |
| How many farmers will you work with? |
| In the first season 2000 active men and women participated. Step by step the target of 40,000 will be realised. |
| Business Plan |
| Does a Business Plan exist? |
| Yes. A very comprehensive 2-volume plan 5 year strategic business plan exists and there are various feasibility data and projections in outline for ten years. The document ‘A Programme Overview’ provides a summarised version. |
| How are operations managed? |
| Kenyan management makes day-to-day decisions based on an Operating Plan detailing current planned activities. The operative plan is detailed for six months and indicative for one year. Biannual reviews are undertaken in February and September. |
| What has happened since the successful pilot ended in 2005l? |
| After obtaining a public-private sector planning and mandating process, and fundraising, the new enlarged programme was launched successfully with almost 2000 actives coming forward, signing contracts and delivering around 150 mt of crop. The producers gained a fair trade price in their pockets. |
| Crops and Quality |
| Is the produce certified organic? |
| Not yet. However virtually all cultivation is organic by default. We expect to progress towards formal certification in some locations. |
| Which crops are being grown? |
| At present sunflower, soya and groundnuts are the main phase 1 crops. Nurseries for Capsicums, pineapples, passion, avocados and macademia are about to start up. Fresh export produce is under scrutiny. |
| Disadvantaged Groups |
| Do the disadvantaged benefit? |
| Yes – it is a main focus. Disabled groups of farmers performed very well in the pilot; women’s groups also. And increased and improved food helps HIV sufferers. The community provides a role when enabled – e.g by employment and with family and group schemes for the disadvantaged – e.g. orphans |
| Economic Sustainability |
| Will farmers continue to be dependent on handouts? |
| No! A key feature of the business model is no handouts. Certain recoverable and non recoverable investments are made as incentives during the start-up phase as the number of crops grown increases, farmers will be able to invest and obtain loans |
| Will Farmers Own continue to be dependent on donations? |
| No. As crop volumes build, the 15% charged as brokerage will cover the cost of operating Farmers Own at the phase 1 level and this is projected to occur after three full years of operation. Further capital will be required to deal with phase 2 + 3 operations that include processing. |
| Who is the competition and how have they fared? |
| Farmers Own is one of very few market led poverty eradication schemes in operation. This is a sad truth What precedents suggest large scale participation business will work There are numerous precedents in the key cash crop industries, tea, coffee, pyrethrum. Tea has some fine examples of organised out-grower groups working with a tea production company. |
| Will the scheme stand on its own in 5 years? |
| In the context of phase 1 and the first 40,000 targeted financial projections suggest that breakeven will be passed by the end of five years. With much growth ahead and the needs great more grant will have to be found for start-ups and more loans to do business. |
| Environment, Standards, QC and Traceability |
| What impact will the farming have on the environment? |
| Impact is all positive. By research plots and filed days farmers learn conservation by stealth, as organic inputs show increased yield. Fundamental to on farm development is the creation of two/three tree enterprises and these bring benefits to in respect to soil and in the context of climate change – tree planting is carbon positive. Compliance with standards such as organic levers positive environmental actions. |
| Why promote new crops? |
| The additional crops promoted by Farmers Own will be beneficial in diversifying away from maize, the dominant crop. A new and better environmental and economic sustainability results. |
| How is good land husbandry assured? |
| Farmers Own developed a standard for this purpose – Conservation Supreme. It is used internally but due to force majeur there will be compliance with Eurepgap. |
| What standards are employed? |
| Fair trade standards and conventional crop specifications are in use. There is a movement to comply with Eurepgap, Organic standards and an HACCP policy will be brought under development
| | What are the QC measures? |
| There is emphasis upon Production group peer pressure, monitoring and recording. Farmers Own monitors and supports improvements. |
| How will your product be traced to source? |
| A GPS reliant coded system if geoghical identity with appropriate labelling on crates,cartons and bags is already under development. |
| Fair Trade |
| What is fair trade? |
| Fair trade is not necessarily a market distortion but in monetary terms it always mean a decent price paid, often by means of a price and bonus scheme. Farmers Own complies with IFAT conditionality. |
| How do farmers receive fair prices? |
| Farmers Own can negotiate a good price with purchasing organisations (e.g. those who use food ingredients) on the basis of dealing in bulk. Prices will still vary, but Farmers Own pays the farmers a contracted ‘minimum price’ when receiving the crop and then a bonus depending on the price obtained when the crop is sold on. |
| How does the proposed system improve the current situation? |
| Currently, farmers have no option other than paying the price traders (eg from Nairobi) offer which can fluctuate widely and often gives farmers a very poor deal – less than the price negotiated by Farmers Own. |
| Farmers |
| How will farmers achieve the benefits? |
| They are organised into Farmers Action Associations, each run by farmer representatives and contracted to produce an agreed volume of assembled crop in stage 1. First payment is at the farm gate and second after sale is completed. All other benefist are gained by interactions with Farmers Own agronomists and business specialists. |
| How does operating together benefit the farmers? |
| The Farmers Action Association groups will have between 100 and 500 members who will benefit from shared purchasing, knowledge, farming practices, scaling up and contracted delivery to market. |
| How much of the gross revenue do farmers receive? |
| As example in this latest season and with a millers price for sunflower of K18/- kg. farmers received 13/- kg (72% of the gross). Close to 3/- kg was absorbed by loadings and long haulage (close to 500 km) |
| Farming Practices |
| How is conservation being promoted? |
| Sustainability is a key objective, with advice provided on getting optimum benefit from organic recycling, ground cover, contour farming and more. All is backed up by research/demonstration plots in each Farmers Action Association. As tree planting comes on stream conservation will receive a boost. |
| Funding and Finance |
| How does Farmers Own raise income? |
| Currently, Farmers Own operates due to provision of a substantial grant from the Inter Church agency for Co-operation and Development and various smaller grants. 15% of the gross income from crop sales is received and contributes to working capital.
| | Why is grant needed? |
| Clients are poor beyond belief and have no capital or access to it. Without a start up scheme funded by grant to enable seed, training, organisation and action on the ground the poor cannot progress. Grant is a carefully targeted and limited tool to provide incentives for business start up and there is a transition to loan after a three year review of each Action Association. All second phase activity is funded by loan. |
| Who are the donors to Farmers Own? |
| Presently there is one major donor, ICCO (Interchurch Organisation for Development Co-operation) and a number of smaller donors. Farmers Own is actively looking for further funds
| | Why is Farmers Own, a market services company necessary? |
| A common misconception is the notion that all that is necessary is to link the farmers to the market. This is not the way big business works. All market channels have intermediary organisations and the farmers need one to work with them and for them. Without the intermediary large scale participation, the big need, is impossible. With Farmers Own grown up and stabilised the farmers groups have a market services agency with brand and standards that big business will accept and deal with. You can help us grow to serve the poor better (donate button) If we truly want large scale poverty. |
| Is Farmers Own viable? |
| Funding is presently in place to fund an Operating Plan which will support farmers through 2007, 2008, 2009. In the context of this plan Framers Own is projected to pass breakeven. However, Farmers Own aspires to a more ambitious overall business plan and further funding is needed for this. |
| Geography |
| Where does Farmers Own operate? |
| Farmers Own operates in Western Kenya. In an atlas you may see the town of Kisumu on the shore of Lake Victoria. Farmers Own operates in Western Province to the north
| | Why does it operate there? |
| It is a very poor area with many of smallholder farmers. Absolute poverty is believed to be the burden of 85% of the people. But the area is well watered and crops will grow (mainly maize at present) so there is genuine potential for improvement. |
| Will drought affect the scheme? |
| The agriculture is dependent on rainfall. During the pilot, there was a drought in one season, but it illustrated that the crop diversification achieved provided a much better chance of resisting it. Both soya and sunflower did better than maize. |
| How will global warming impact the scheme? |
| The programme is the areas of production will most definitely be carbon positive due to tree planting. Thus far the impacts of crop movement has not been assed though the use of 20+ mt lorries and railcars will have resulted in emissions as low as can be achieved. |
| Kenyan Government |
| What support does the Kenyan Government provide? |
| The Commissioner of Western Province and the Chief Executive of the National Poverty Eradication Commission strongly support the initiative both in words and actions and see it as a model for future development. There is assistance in Kind from government agencies. |
| Markets |
| How do you identify crops to be grown? |
| Market research is implemented in Kenya (eg with food processors) in the UK and to some extent in the rest of Europe and Japan. For the UK a reputable agency commission by us provided comfort to our propositions in their report. |
| Where will the crops be sold? |
| Initially in Kenya (mainly Nairobi) but strong interest has been shown in the UK (eg by supermarkets). |
| Stakeholders |
| How are the farmers involved in decisions? |
| Each FAA conducts plenary meetings with its managers and the local chief to decide on key issues – e.g. content of the business plan. The programme is moving to include all stakeholders in decision-making by developing stakeholder forums comprising farmers, public officials and commercial interests. |
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