Dimeari Von Kemedi, managing director of Alluvial, a company that supports smallholder farmers with inputs, finance, and access to market, in this interview with Caleb Ojewale, speaks about the company’s approach in helping to achieve food security, creating wealth for farmers, and generally enhancing processes along the value chain. Last year, Alluvial announced a partnership with the Mastercard Foundation, which saw it expand support to 65,000 farmers and another with IDH Trade to support an additional 25,000 farmers. Excerpts:
Can you tell us about Alluvial, and what exactly you do in the agriculture value chain?
The name comes from alluvial, the body of material deposited by overflowing rivers, which makes the soil nutritious for plants. We work very closely with farmers to address all of their identified needs, ranging from training, land preparation, access to finance and access to market.
What prompted the interest for you to go into agriculture?
We were responding to the state of food security in the country. We wanted to contribute our own quota to food production, and obviously, to be profitable in doing that, which is why we went into agriculture. We started as a commercial farm. We were given 2000 hectares in Cross River State by the government and the purpose was to cultivate rice as a commercial farm.
However, by the time we went to the village, we found that much of that land was already occupied. Some houses were already built and in many of the places, community members were already farming on the land.
So, we still had a little bit to work on but with time we discovered that the best way for us to be effective at what we were doing was not to dispossess the owners of the land—the community people—and take over the land in the name of commercial agriculture. Rather, to provide all the services that they needed and still be profitable in that process. That is how we transitioned from being a commercial farm to a service provider for smallholder farmers.
With this transition into a service provider, how would you describe the problem Alluvial has been trying to solve?
The problem we have been trying to solve for farmers is access to productivity tools, high quality seeds, agrochemicals, fertility materials like fertilizers. These are the items that we provide to farmers alongside training. Of course, all of these cost money and many farmers do not have access to finance, so we mediate access to finance as well. Critically, we also provide access to market for the farmers.
In doing this, it almost sounds like something charitable, as if you are just giving this to them. How exactly does this work as a business?
It is not charitable. Everything comes at a cost to the farmer. It is just that this cost is paid later. This is a profitable business for us and it is also profitable for the farmers.
We need to ensure that farmers have access to enough finance for at least five hectares so that they won’t have to choose between loan repayment and the survival of their family
Last year, we provided support to farmers in the dry season, which included providing tube wells to these farmers and they had very good yield because of the availability of water at the right time
There are more women in the farms than men, but when it comes to support from the financial sector, the men are far more (beneficiaries)
How would you describe the impact of your approach on the profitability of farmers and the communities in which they are based?
Our work increases the yield of the farmers as well as the quality of the produce, in some cases, as much as up to 50-100 percent. Through our work, farmers who were farming on less than one hectare are farming on more than one hectare. Going forward, we see ourselves working with farmers who have up to 5 or 10 hectares because quite frankly, one hectare is not enough for a family and the high rate of loan defaults that we witness toady across Nigeria is very much linked to the size of the farms.
If you, as a family, are confronted with many challenges— you have to pay school fees, you have health bills to take care of and you also have a loan to repay— which one are you going to deal with first? So, we need to do better. We need to ensure that farmers have access to enough finance for at least five hectares so that they will not have to choose between loan repayment and the survival of their families.
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Do you have anecdotes on what outcomes have been recorded in some of the communities you have engaged with these farmers?
A lot of the farmers that we work with, despite the tightness of the situation, repay their loans, because they understand that we are with them for the long term and that we can grow together. But a lot of work has had to be done in creating a common understanding between us and the farmers and, in fact, also involving the community leaders.
Many families have reported an increase in their standard of living. Many of these farmers are women and they have received support not just from us but from community leaders. If you look at the statistics, you will find out that there are as many women as men, if not more, involved in smallholder farming. When it comes to farmers who receive support, either from government or other institutions, you will find that women are far outnumbered. So, we are also taking a deliberate approach towards ensuring that there are many more women receiving our services than men.
How many farmers have you worked with and over what period of time?
We have been working with smallholder farmers for a very long period of time, but the numbers have drastically increased after we signed a partnership with the Mastercard Foundation to support 65,000 farmers over a 2-year period. Afterwards, we also entered into another partnership with IDH Trade to support another 25,000 farmers. The numbers are increasing and I believe there are about 100,000 farmers now across Nigeria.
I’m a bit curious about the partnership with Mastercard Foundation. Can you give us an insight into how this came about, how you convinced them to go from payment processing to agriculture?
We did not have to convince them at all. The Mastercard corporation set up the largest private foundation in the world, which is the Mastercard Foundation and the purpose of this foundation is to help create jobs, and increase financial viability in the areas they work with, particularly in Africa. They have an emphasis on youth and women.
They saw the work we’ve been doing and they liked it. For us also, this was a great opportunity to partner with them to help them achieve their objectives which, of course, in the process, helps us to achieve our own objectives.
This partnership, since it started, how do you think it has changed the scope of your operations and how you impact farmers, in terms of the benefits they receive following the partnership with Mastercard?
We have been able to reach more farmers than we would have without this partnership. For the farmers, many of them, particularly during this period of Covid, with all the supply chain challenges and the escalating costs of inputs, have been able to access this support, which has greatly enhanced the standard of living of their families and helped them to address the shocks of the situation that we have globally today.
Can you give some examples, in terms of finance or input or what has actually trickled down to the individual farmers benefiting?
No, it is not trickling down. It is direct support with mechanization, input and access to market for these farmers.
What value chains, commodities are covered?
The value chains include rice, maize and soyabean. Last year, we provided support to farmers in the dry season, which included providing tube wells to these farmers and they had very good yield because of the availability of water at the right time. They didn’t have to contend with the fear of drought. On top of that, they had full insurance cover. We were able to also ensure that they had access to market and monetize their work.
On the yield, did they share with you what they were getting before and what they got after the intervention?
Particularly in the rainy season, some of them, before, were getting less than three tons per hectare and through our intervention, they were getting about seven tons per hectare. That represents a quite dramatic increase in yield. This was also at a time when the prices of these commodities were rising, so it was a good time for them. Moreover, Mastercard provided a subsidy of 75 percent on the chemicals and fertilizers and a discount of 50 percent on mechanization.
I’m interested in the insurance bit. Were there instances where the farmers had to call upon that insurance to save them?
In this case, they did not have to pay for the insurance. This was covered fully by the Mastercard Foundation.
But did they run into any situation that would have required the insurance, say, flooding or other incidents?
Fortunately, they did not. They were still happy to know that if anything went wrong, they had a cover. One thing to note is that nobody actually goes into farming to be covered by insurance because insurance doesn’t cover your profits. It only allows you to recover the cost of production, and that is not enough at all.
You also mentioned a bit about off taking what they produced. What would you describe as the difference between what you offer and if they had to seek market on their own?
There is no difference. We buy at market price. I would not even say that market is such a big challenge for farmers these days. As you know, there is a very high cost of food now, across the country. There are many offtakers in the villages. In some cases, they are paying farmers way ahead of their harvest time. Of course, this means the farmers will not get the best deal for their work because somebody would have paid them at a discounted rate because they needed money right away. We buy from them at harvest time. We buy at market price, so we do not ask farmers to sell at lower than the expected market price just because we are supporting them. The support is completely separate from the cost of the commodities we buy from them.
I would like to talk about your expansion in Nigeria. Which states do you operate in currently and what are your plans to expand and give access to more farmers?
We are currently operating in Benue, Plateau, Nasarawa, Bauchi, Kaduna, Kano, Adamawa, Taraba and Cross River. I don’t think we have a plan to expand across the country. As a matter of fact, we might even concentrate on fewer states but do more in those states.
If you are not looking to scale this to other states within Nigeria, would it be out of place to ask if you probably have the intention of scaling this outside Nigeria to other countries?
Definitely. That is already ongoing across east and west African countries.
Can you talk about what these plans are and what they look like?
It is the same basic model. As always, working with people within these various geographies. We plan, collectively across the continent, to reach two million farmers within the next five years.
Where is the funding for this coming from to reach these many farmers?
There is a lot of interest in what we are doing from global funds, but more importantly, from local financial institutions in the different countries we are working in, including Nigeria.
With all the experience you have garnered over time working with the smallholder farmers, if you are to identify the top three major challenges limiting productivity in Nigeria, what would these be and how do you think they can be practically addressed?
I would say access to water is number one. India, for example, has about 52 percent of its farmlands under irrigation. Sub-Saharan Africa has 2 percent. We all know that we have challenges with drought in some cases. In some cases, floods. Dry season farming will greatly enhance productivity, both in terms of yield and in terms of the number of cycles that farmers can engage in for farming.
Then, access to high-yielding varieties and critically as well, access to training/modern agronomic knowledge. I would like to use this opportunity to address the issue of GMOs. The top food producing countries in the world are using genetically modified seeds for their production while those same countries are financing people in Sub-Saharan Africa to campaign against genetically modified food.
It does a lot of disservice to our capacity to produce more for our growing population. This is something that we must address as a country. We must have access to the best quality seeds to help us with drought resistance and much higher yield than we currently have. Consider a situation where you have the same amount of effort applied, the same amount of fertilizer, agrochemicals, and you recover two tons per hectare. The farmer in the other country is getting 10 tons per hectare for the same effort, over the same period of time.
Sometimes, you travel to the US and you eat foods from these same seeds but you don’t produce that in this country. That’s something that we need to address.
Then, I also mentioned access to training. That is very critical because we repeat the same agronomic practices that we have known over the past 10 or 15 years. For example, many farmers believe that they need to put 3 to 4 seeds of maize on the ground for them to get the required germination whereas what they need is just a single seed because of the very high germination rate of the improved seeds being used today. There is a lot that needs to be improved. We are already in the right direction. We just need to do more.
Food security in Nigeria remains a challenge. The last official data we had was in 2016, the Agricultural Promotion Policy document, which shows a deficit across pretty much every category of crop that we have in Nigeria. What are your thoughts on making food available and affordable to everyone? How can your efforts be replicated by more players to solve food security as a crisis in Nigeria?
I think we can again step back to the last question that you asked. We need to put more land under irrigation. We need to open up more land for production and then we need to use high-yielding seeds and the best agronomic practices. If we do this, within a short period of time, we can increase our production by ten folds. The base is so low, compared to the rest of the world, that any little effort in the directions that I have mentioned will result in very dramatic improvements in our food security situation.
There has been some attention in terms of women empowerment in some of your activities. Is this a deliberate effort?
It is very deliberate. If you look at where we are today, there are more women in the farms than men, but when it comes to support from the financial sector, the men are far more (beneficiaries). We need to, at the very least, support people in equal proportion.
For us to be doing that, we need to provide at least 80 percent of our support as Alluvial to women. That’s how we can actually reach the target of bringing up more women. As you know, we recently trained 50 women to be tractor operators. They would go on to establish mechanization service businesses with our support. I believe that will make a lot of difference because more of the people in farming are women. So, with women service providers, I believe that more women will be able to access the services that we provide.
On the policy side, how do you think issues such as land ownership for women, where there are some limitations can be addressed, and getting other policy backing so that they are even more productive?
I have not encountered land ownership as an issue for youth or for women. The support that farmers receive just has to be deliberately applied to women. Whether you are a man or woman, if you have access to finance and programs that support you, you can always take that to community leaders, family leaders or whoever is in charge of allocating land.
In our experience, in many of the communities, land is owned by families or by communities. There is also a lot of land owned by the government that is available for use. The target is to support first. The policy side is not a big problem. You can always talk to whoever is in control of the land.
