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Growing a Profit: How to Make Improvements Along the Value Chain
February 13, 2019

Sylvie Sangwa spends her time looking at the problems that small-scale farmers face in Rwanda. The biggest problem is land scarcity.

Before starting her company, Sybash Ltd., the 2017 Mandela Washington Fellow says, she would see farmers “exploiting” their 1 hectare plots of land by implementing the same conventional agricultural methods that their families had used for generations.

Doing this, she says, “you just keep not getting out of poverty. You just keep reducing your productivity.”

Sybash Ltd. helps small-scale farmers implement sustainable agricultural practices to increase their soil quality and productivity at limited cost.

Social entrepreneurs across the continent are finding simple, attainable and sustainable ways to turn struggling farms into thriving businesses with smart value-chain management.

A value chain is what gets a product ready for market. A value chain is what makes a product worth more than the sum of its parts. Smart value chain management maximizes the amount of value added at every stage of production.

Value chain management

Value chain management begins with paying attention to every step to see where there is room for improvement. Follow how changes affect steps further down the line. Here are some different ways to add value:

#1 — Offer something different

Abdourahmane Diop, a 2018 Mandela Washington Fellow in Senegal, works at the very beginning of the value chain as an agricultural inputs consultant. Agri Lux Consulting and Services, the company he co-founded, sells fertilizer and irrigation equipment to small-scale farmers. What sets Agri Lux apart on the market, Abdourahmane says, is its service model.

“There are many fertilizer providers, but once they sell their product, they don’t care what happens after.”

The Agri Lux service model aims to improve farmers’ output by providing the best input to meet their needs.

“First we go to the farms, and if we find that there is a need, we go back to our partners, the producers of fertilizers or other inputs, to match this need with what the companies are offering,” he says. “It’s very efficient, so the farmers won’t waste their money.”

Abdourahmane trains farmers to use the products he sells them so they produce the best results. If the farmers have a good crop yield, then he has made a good sale.

#2 — Decrease input

Another way to increase value is to cut down on the cost of inputs. That cost could be in the form of time, money or energy.

As a Mandela Washington Fellow at Purdue University in 2017, Kangoma Turay encountered a lot of farming equipment that could save a farmer time and energy. Most farmers in his home country of Liberia cannot afford a lot of fancy equipment for their small plots of land. This makes their work very labor-intensive. Kangoma thinks simple mechanization could help improve production on small farms.

At Purdue, he saw a manual wheel hoe that would be relatively inexpensive and easy for the farmers he works with to operate.

“These simple machines are very good,” he says. “They could make the work easier.”

#3 — Increase output

Increasing output could mean producing more, or cutting down on loss. Abdourahmane sees a lot of lost produce in his work.

“I can say that at least 40 percent of the banana growth in Senegal is lost because the techniques that farmers use are not the right techniques.”

If farmers had more training in value chain management, he thinks it would cut down on food waste.

“People don’t know what to do with it because they don’t have skills to process these mangoes,” he says, referring to one of Senegal’s key exports.

By learning techniques like distribution logistics, or proper storage and handling for food conservation, farmers can increase their profit margins without having to grow more bushels of bananas or mangoes.

#4 — Offer a solution

Sylvie’s solution to land scarcity is to make the most of every plot of land by creating favorable conditions that allow them to produce at maximum capacity. In a word: diversification.

She begins with chickens. Not only will the chickens supply the farmer with eggs to sell, their droppings serve as an excellent, free fertilizer to replenish the nutrients in overworked soil.
Two or three years after the soil has recovered, she incorporates fruit trees to further enrich the land and provide the farmer with a second source of income. Once those trees begin flowering, she suggests starting a bee farm for honey production. The fruit from the trees can be made into jam.

“Each enterprise will be complementing the other, so you don’t need to bring in any effort or any other input that would be costly or hard to get.”

That, she says, is when a farmer starts adding value in a way that is sustainable for the Earth and for business.