One Acre Fund Skoll Awardee Profile

Organization Overview

Key Info

Social Entrepreneur Andrew Youn

Year Awarded 2010

Issue Area Addressed Economic Opportunity

Sub Issue Area Addressed Financial Services, Livelihoods, Smallholder Productivity

Countries Served Burundi, Kenya, Malawi, Rwanda, Tanzania, Uganda, Zambia

Website http://www.oneacrefund.org

Twitter handle https://twitter.com/oneacrefund

Facebook https://www.facebook.com/oneacrefund

Youtube http://www.youtube.com/user/oneacrefund

About the Organization Farming is the dominant economic activity of the world’s poor. One Acre Fund makes that activity significantly more productive. One Acre Fund supplies smallholder farmers with the tools and financing they need to grow their way out of hunger and poverty. Instead of giving handouts, they invest in farmers to generate permanent gains in farm income. One Acre Fund supplies a complete service bundle of seeds and fertilizer, financing, training, and market facilitation and they deliver these services within walking distance of the hundreds of thousands of rural farmers they serve. One Acre Fund began in East Africa, and they currently work in Kenya, Rwanda, Burundi, Tanzania, Malawi, and Uganda. They organization serves more than 800,000 farmers annually, helping grow income on supported activities by an average of 40 percent per year. By 2020, One Acre Fund will serve at least one million farm families, representing more than five million people. And these farmers will produce enough surplus food to feed another five million of their neighbors.

Impact

Demonstrating continued growth, by 2018 One Acre Fund has directly served 809,000 farm families, up from 31,800 in 2010. Farmers that work with One Acre fund see an average increase in income of 40 percent in comparison to similar farmers that do not. Working towards more systemic change for smallholder farmers, since 2014 One Acre Fund has partnered with several national African governments who are seeking to reform their agricultural systems. As of 2018, these partnerships have reached 1.2 million farm families. In addition to yearly staple crops, One Acre Fund is shifting more energy into supporting farmers in the accumulation of long-term assets, most notably trees, that enable a farm family to chart a realistic path towards one day advancing out of poverty.

Path to Scale

Program Expansion

Program services delivered by local farmers hired as field staff, and supported by national networks of distribution and marketing points. Increased income enables farmers to repay loans and purchase future supplies and service.

Social Entrepreneur

After serving as a strategic consultant to Fortune 500 companies, Andrew Youn returned to school to study an MBA at Northwestern’s Kellogg School of Management. During his MBA, he had the opportunity to travel to Africa where he met with local farmers and learned about their quality of life. The trip exposed him to the barriers to successful smallholder farming in Africa – including the lack of inputs, training on how to best utilize these inputs, and access to markets – and how the low yields resulting from these challenges led to hunger and poverty. Youn founded One Acre Fund (1AF) to address these challenges and provide a comprehensive bundle of services to improve the productivity and income potential of these farmers. Andrew’s 1AF initial business plan won first place in business plan competitions at Stanford, Yale and Kellogg, and he has gone on to win Draper Richards, Echoing Green and Mulago fellowships as well as the Schwab Social Entrepreneur of the Year (2013). In 2016, Andrew delivered a TED talk about 1AF entitled "Three reasons why we can win the fight against poverty," which has since been viewed more than one million times.

Equilibrium Overview

Current Equilibrium

Seventy percent of the world’s poor are smallholder farmers who live in remote, rural areas, isolated from basic agricultural tools and trainings. They are dependent on the environment for food and income. As a result, subsistence farm families often struggle to grow enough to feed their families. In the current equilibrium in rural East Africa, a typical small holder farms between 0.5 and 2.5 acres of land, and her family cannot meet the need for consistent food. They suffer a 2-6 month hunger season of meal-skipping and substitution, and one in ten children die before the age of five. One in three children are stunted. On average, these families consume $0.50-$0.75 per day per capita, with 56-87% of their total income being earned through farm activities. With cash often scarce, they cannot consistently pay school fees, which results in children – more often girls – missing school. These same farm families are increasingly vulnerable in the face of global climate change. Each season’s harvest determines how much food and income they will have in the following year - and smallholders' crop yields are extremely sensitive to even minor changes in temperature or rainfall. Research suggests that every 1°C increase in average temperature above 25°C results in a 10% decrease in average cereal yields; the World Bank projects temperatures rising by 2°C by as soon as 2040, significantly increasing the incidence of flooding, drought, and unpredictable pest and disease cycles. These impacts are already being felt by smallholders around the world, and particularly in Sub-Saharan Africa. A number of factors contribute to the current equilibrium. Farmers lack training, access to inputs, and access to markets. Companies that distribute inputs, such as seed and fertilizer, focus on centralized distribution centers (i.e. major towns) and on larger- scale agricultural producers. More isolated rural areas dominated by subsistence farmers are expensive and logistically difficult to serve, making it harder to realize a return on investment. Despite substantial expenditure, government agricultural training and distribution systems often do not reach subsistence farmers – due to limited resources, poor performance incentives, and in some cases, tampering. In need of cash, farmers often sell their crops during or just after harvest when prices are lowest, and tend to buy food back before the next harvest, when food is scarce and expensive.

New Equilibrium

In the new equilibrium, every African farm family can access the proven products and services they need to feed their family, educate their children, ensure their health, and survive shocks - such as weather volatility - along the way. Private sector actors including seed and fertilizer companies, agrodealers, and commodity traders, will discover a viable commercial base in smallholders as both customers and suppliers; they will invest more in relevant product and service offerings and expand the reach of their operations through proven rural distribution and service delivery techniques. Public agricultural research and extension (training) systems will be managed more effectively, interacting more frequently with more farmers and providing more tailored recommendations that address the complex range of variables determining what farmers can grow. As a result, farmers' livelihoods will be more productive, more profitable, and more resilient, allowing their families to exit the cycle of poverty.

Innovation

By 2030, 9 of 10 extreme poor will be in Africa - the vast majority of these individuals will be smallholder farmers who are fairly concentrated in 8 countries. One Acre Fund believes that this presents a clear path for meaningfully addressing extreme poverty, and they are working to change the current equilibrium in three ways: Through its Core Program, which will provide a bundle of products and services directly to 1.25M farmers by year-end 2020Through its Systems Change work, which engages in implementation partnerships with both private and public sector actors throughout agricultural ecosystems to serve farmers more effectivelyThrough Field Building efforts, which influence policymakers, researchers, microfinance institutions, and other actors to change or expand their strategies in ways that benefit smallholders Core program One Acre Fund addresses the challenge of low farm productivity and poverty directly by offering an integrated bundle of products and trainings that enable smallholder farmers to intensify production, increase farm profitability, and build resilience in the face of weather volatility and other shocks. This package consists of four key elements, which the organization provides together. Finance of productive agricultural (and non- agricultural) inputs. Many smallholder farmers simply cannot afford a large payment for inputs or other products at the beginning of the season. One Acre Fund provides its bundle on credit, with flexible repayment schedules, in order to help its clients manage household cash flows. One Acre Fund’s bundle includes soil amendments like fertilizer and lime, as well as improved seeds for crops including maize, common beans, millet, Irish potato, and a variety of vegetables. To help build climate resilience, One Acre Fund also bundles crop insurance into each of its loans; the organization has also dramatically expanded its smallholder agroforestry activities to help clients protect their natural environment (e.g., mitigating soil erosion and absorbing carbon) while building a long-term asset base.Rural distribution. One Acre Fund delivers its entire model to within walking distance of farmers’ homes. Timing of delivery is critical, ensuring farmers are prepared to plant their crops when weather conditions are optimal.Training. One Acre Fund's network of thousands of local field staff deliver over 20 hands-on trainings throughout the growing season to ensure its clients get the greatest return possible on their investment. Training topics range from basic planting trainings to Integrated Soil Fertility Management, to child nutrition.Market facilitation: One Acre Fund provides training on proper storage techniques, and in many countries, offers products like hermetically- sealed storage bags to assist farmers in home storage. For certain crops, One Acre Fund also ensures market access through negotiating for fair prices on behalf of its farmers Systems change One Acre Fund scales its impact beyond the farmers it serves directly by working to improve the agricultural ecosystem of whole countries. One Acre Fund engages a wide variety of ecosystem actors, who value the organization's competency in rural distribution, the quality of its product research and trials, and the network of farmers it represents. These actors include private seed companies, private fertilizer companies, public crop research systems, and public extension systems.Improving the agricultural ecosystem requires changing the incentives and behavior of these actors to overcome market failures. One Acre Fund does this by finding what works, demonstrating what works, and helping others implement what works. After several years of iteration, One Acre Fund has prioritized a set of six platforms for its systems change work - interventions with strong existing partner relationships, proven projects that are ready to deploy, and a high potential for impact. These platforms are: Seed – supply side: One Acre Fund's supply-side product platform helps existing seed companies produce more high-quality hybrid seed. Projects to date have helped establish “out-growers” (Ethiopia), started new seed farms (Rwanda, Nigeria), and improved seed importation from other African countries (Burundi).Seed – demand side: One Acre Fund's demand-side projects encourage farmers to adopt professional seed (e.g., through advertisements and/or vouchers). By stimulating demand, One Acre Fund then paves the way for local seed companies take over. (Tanzania, Rwanda)Micro-dosed fertilizer availability: One Acre Fund supports local agrodealers that sell farm productivity factors such as fertilizer, providing inputs, financing, quality-control, and guidance on farmer training.Soil carbon, lime, and erosion-control: One Acre Fund works with local companies to develop and make available agricultural lime products, which reduce soil acidity. (Kenya, Rwanda)Nationwide training: One Acre Fund improves the impact of existing agricultural extension systems, incorporating high-quality pictorial curricula, performance management, and technology (Rwanda, Uganda)Nationwide tree-planting campaigns: Tree- planting is a major priority for both African and donor governments. One Acre Fund helps local nurseries produce high-quality tree seedlings, and helps governments provide mass-scale agroforestry training. (Malawi, Ethiopia, Rwanda) The purpose of partnership work is not solely to direct impact through partners – it is the opportunity to create lasting, economy-wide change. Field building One Acre Fund also works to serve farmers indirectly by influencing key ecosystem actors to change or expand their strategies in ways that benefit smallholders. To- date, this work has focused on encouraging the world’s 1,000 microfinance institutions to expand their footprint to rural areas and on influencing agricultural policy in East Africa and globally in favor of smallholders’ interests. For instance, in 2016 One Acre Fund was one of two NGOs to testify before a US Congressional Committee to support passage of the Global Food Security Act, permanently authorizing the US government's $1Bn Feed the Future Program. Also in 2016, One Acre Fund worked with top microfinance institutions BRAC, Opportunity International, and four others to launch Propagate, a coalition that will coalesce the microfinance industry on best practices and joint investment opportunities to expand finance to smallholder farmers.

Ambition for Change

Eradicate hunger among smallholder families in sub-Saharan Africa by supplying farm inputs, training, and access to markets that enable farmers to increase production and income.