Editor’s Note: Earlier this month, the Engineers Without Borders (EWB) Calgary Chapter hosted a visit from Samuel Wachieni, a Kenyan social entrepreneur. Samuel’s visit was part of EWB’s Kumvana Program – an annual exchange in which top entrepreneurs and leaders from sub-Saharan Africa visit Canada to learn from and share their own experiences with Canadian leaders in their respective sectors.
Samuel is the co-founder of Crowd Farm Africa, a business that seeks to unlock the potential of Kenya’s agricultural sector by pooling investment and resources to support commercial farming in his country. During his visit, Samuel shared with us some of the challenges he seeks to address, including the economic and social constraints that keep Kenyan farmers locked into subsistence farming, and the difficulty of attracting younger generations to the sector.
While in Calgary, Samuel engaged in several insightful exchanges with local farmers, investors, non-profits, and entrepreneurs, and delivered two public presentations on his business venture. The following is a sample of the discussion members of our chapter had with Samuel regarding his motivation and experience in running a social enterprise, and the systemic challenges he seeks to address.
Q: How did you start your career in social change work?
A: I started my career in the non-profit sector. This started after college and has been my professional life. I worked in community health, education programs and humanitarian programs… we were doing a lot of good.
What happens in the non-profit sector in Kenya is that you get money from donors including bilateral grants, which is sometimes taxpayers’ money from other richer countries. Through this funding, you work with local communities in your country, improving their health indicators and all that. You support what we call OVCs – orphans and vulnerable children – to get their education and supplement their food rations, you work with Community Health Workers and you work with youth peer educators to mobilize communities for the adoption of health behaviors. So, that is what I did every day.
A lot of the people – we call them “beneficiaries” – served by this programs are farmers. This is a farmer who comes to you because they need food. This is a farmer who cannot afford to take his children to school. And this is a farmer who when they get sick, or when their children get sick, cannot afford to take themselves to the hospital.
Q: What inspired you to make a change in your career?
A: Initially, I was doing good and working, and I was happy. I was getting paid to do good. But then my co-founder was working for an agribusiness non-profit. They worked with small-holder farmers, trying to improve their food production systems. [The co-founder and I] had been friends, we had been neighbors’, we had grown up together.
We would meet at social events, and of course catch up with what is happening in our lives. But then he would have a lot of information about the good work they’re doing with the farmers. And he said, “It is not practical that I am working with them on this end, trying to help them get out of poverty using their model of production, while they are the same people who come to you asking for food.” So that was a very confusing dilemma. We didn’t have an answer, and of course, when something is confusing, you leave it. So we kept pushing it away.
So then, at some point, in 2010, the program I was working with was coming to an end but I was also getting disillusioned with the aid model. In my curiosity to try and understand how international aid and development works, and why some countries were rich while others were poor, I read numerous books on including the very controversial The Confessions of an Economic Hitman, written by an American [John Perkins]. Of course, it’s a memoir, so it could be a lie, it could be true. But what I read was very disheartening. The impression I got from these books was that the global economic system is designed in such a way that keeps some countries poor on purpose, and some countries rich. That is how the current economic system is designed. And it is [designed] at a very high level; the common people don’t even get to understand that.
The conclusion is, “If you’re selling food to a customer, if he has his own food, where do you sell your food?” If your customer figures out how to feed himself, you’re out of business. If you have a way of keeping him hungry, the better for you, because you have a market.
With these conclusions, I realized how naïve I was to think that we could use aid to build an economic system. But kind of, I felt that there must be something that ordinary people, who are not in that arena, can do to disrupt that kind of arrangement, if it exists.
So driven by this dilemma, [My friend and I] started a discussion on what we could do to contribute. And we agreed that the easiest road to get Kenya and Africa out of poverty is through agriculture. He had worked in that sector and had a lot of data, but we had to figure out a model to open it up. The thinking was that 80 percent of the population [in Africa] is dependent on agriculture. In Kenya, it’s 65 percent. So if you figure out an agricultural model that works, you’re addressing the needs of so many people because they’re tied to this sector. So how do we create a model around that?
One pathway is to lobby the government and come up with policies. [Some university students on this trip] asked me, “Why don’t you lobby the government to make things better?” And I said, “Yeah, that’s a very good idea, but of course, it doesn’t work that way.” So we thought there must be a way of cracking it. That’s how this whole thing started. That’s what we are trying to do.
Q: Tell us more about why you decided to focus on agriculture…
A: I look at agriculture from an economic point of view. My strongest argument [for why agriculture is important] is that farming should pay. If you are producing food, you should be able to make a living out of it. Because I think it is one of the most important sectors of the economy. But then you find that in our system, farmers don’t make money at all. That’s it.
“If it is not economically viable for anyone to become a farmer, what will that mean for the community’s food system, or the international food system?”
It’s not profitable, it’s not economically viable, so the question I’m always trying to answer is, “If it is not economically viable for anyone to become a farmer, what will that mean for the community’s food system, or the international food system?” So my reasoning is we have a food system that treats farmers as if they don’t need to farm, but every other sector of the economy is measured by how much money you earn. But for a farmer, it doesn’t matter, at least in the eyes of the world. You cannot attract people to that sector if there is no economic value to getting into that sector. I come from the school of thought that food production is a business and it should be profitable otherwise it won’t be sustainable. Any business that does not turn in a profit will at some point collapse and so is the case with our farmers.
Q: How are you hoping to address these challenges through your social enterprise?
What happens in the Kenyan market, and I guess in any other market – if you are a small producer, you cannot really get into supply agreements and contracts with restaurants and big consumers unless you promise two things; Quantity and Consistency. So, because of that requirement, many large buyers do not want to discuss this with small holder farmers, because they know they will not get a consistent supply in the quantities they require.
As a result, middle men or what we call brokers come in. They source the produce from numerous small holder farmers on a daily basis and supply the consolidated produce to the buyers. Many times, these brokers exploit the small holder farmers and pay very little for the produce. As a result, farmers remain the victims in this food production and distribution system. They are always at the mercy of the brokers.
So, our initial idea was that we would get into contract farming. We thought we would establish shareholding model farms of about 100 acres, and with this, we could enter into profitable contracts where we could be able supply enough produce and consistently. These model farms would be centrally managed and the numerous shareholders/farmers would earn a percentage of the revenues while the local community would lease the land, provide labour and get paid a decent wage.
One of the other challenges in Kenya is that we have three kinds of land: public land, private land, and community land. The private land is what currently gets farmed, but this keeps getting subdivided into smaller and smaller sections as the farms are passed down from generation to generation with the current average being 2.5 acres. So it’s almost impossible to farm at a sufficient scale to be economically viable. But the community lands are owned by different communities/tribes, and typically lie fallow. These lands belong to the whole community, so if you want to use it to farm, you have to lease it from the community and since sometimes it may not be easy to pay the lease in cash since the land is owned communally, the user could be asked to convert the lease amount into a tangible project that benefits the whole community, like a school or hospital or a water project. This is a high cost for an individual, but if we can create a commercial-scale farm, we can create the type of profit that would allow us to re-invest in these communities and expand these type of farms.
Q: How did you and your friend first get started in setting up your enterprise?
We asked, “Do we have the land?” And the answer was yes, the land is in plenty and affordable. Do we have the technology? No, but we can improve that. If you have the money, you can buy any technology you need. Do we have the expertise? Yes and no. But, we can pay people to develop that system. Do you have the money? No, we don’t have the money, but we can raise the money. So that system of how to raise the capital was the key question.
A technical guy who is into co-ops told us that we can use a shared economy kind of system. We wanted a website, which we thought we could incorporate in this shared economy model. So the capital you’re looking for, instead of coming from one source, could come from multiple sources, so we’re diversifying what we are working on.
We started toying around with that idea gradually, and started putting together some writing about the concept, developing the business plan. Then there was a competition. We submitted the application, the concept, and the ideal picture we were painting in our heads. And we got $10,000 from The Tony Elumelu Foundation which is a Pan-African entrepreneurship programme by Tony Elumelu, a Nigerian entrepreneur, investor and philanthropist. So, after we got that, we said, “Oh ok, at least someone serious takes our concept seriously, so, we must be on to something huge. We do not know what we are on to, but there is something worth working on till we figure out the ideal model.”
Q: Since you’ve been in Canada, what kinds of reactions have you had when you tell people about your business?
A: I have not had a lot of conversations outside of Africa. During my stay in Canada, it has been four weeks now, the biggest recurring question is, “How do you manage the accounts [of people investing in the farm]? All these people give you this money, and they will need to get this money out. And they could be small tiny amounts.” So the financial model has been the biggest question, whether we have the capacity and energy to manage that. We will need to refine how we come up with a financial model that is sensible and manageable and, of course, profitable, so that we’re not losing our money in transactional costs.
If you had 1 million dollars, what would you invest in: a farm or a Tim Hortons [coffee shop]?”
Another thing that has been a recurring question is, “if there is that potential [in African agriculture] that you are talking about, why aren’t people doing it [already]? You’re portraying the opportunity very well, so why are people not already coming in as investors?” Of course, that goes to a more complex part of the discussion, because that comes to issues of risk perception. For example, how do investors view risk? When they look at the global markets, where do they want to put their money?
I went to Olds College [an agricultural college 100 km north of Calgary], and one of the discussions we had was, “If you had 1 million dollars, what would you invest in: a farm or a Tim Hortons [coffee shop]?” It’s cheaper to franchise a Tim Hortons than to establish a farm! It has more revenue than a farm. So from an economic point of view, it doesn’t make sense [to the students] to go to a farm.
If we do not figure out a profitable food production model, no young person will go to that space. So what does that mean? Food prices will keep going up, and at some point, we may not have a sustainable food supply chain. So we’re trying to see if we can figure out an efficient, economical way of producing food, so that industry can attract more people.
Pine Tree Republic and EWB Calgary want to thank Samuel for sharing his time and passion with us during his visit to Calgary. Make sure to keep up-to-date on Samuel’s venture through the Crowd Farm Africa website, and on the latest developments with EWB Calgary.