One Acre Fund

One Acre Fund is a nonprofit organization that supplies smallholder farmers in East Africa with asset-based financing and agriculture training services to reduce hunger and poverty. Headquartered in Bungoma, Kenya, the organization works with farmers in rural villages throughout Kenya, Rwanda, Burundi, Tanzania, Uganda, and Malawi.^[1]

Using a market-based approach, One Acre Fund facilitates activities and transactions at various levels of the farming value chain, including seed sourcing and market support.^[2] In 2015, farmers who worked with One Acre Fund realized a 300% return on their investment and significantly increased farm income on every planted acre.^[3]

How it works

One Acre Fund offers smallholder farmers an asset-based loan that includes: 1) distribution of seeds and fertilizer; 2) financing for farm inputs; 3) training on agriculture techniques; and 4) market facilitation to maximize profits. Each service bundle is around US$80 in value and includes crop insurance to mitigate the risks of drought and disease.^[4][5]

To receive the One Acre Fund loan and training, farmers must join a village group that is supported by a local One Acre Fund field officer. Field officers meet regularly with the farmer groups to coordinate delivery of farm inputs, administer trainings and to collect repayments. One Acre Fund offers a flexible repayment system: farmers may pay back their loans in any increment at any time during the growing season. Beyond their core program model, One Acre Fund also offers smallholder farmers opportunities to purchase additional products and services on credit. These include solar lights and reusable sanitary pads.^[6]

History

One Acre Fund Logo

The organization was founded by Andrew Youn in 2006. While earning his MBA at the Kellogg School of Management, Andrew visited western Kenya in August 2005 and interviewed smallholder farmers about their quality of life. Many of those farmers were enduring an annual "hunger season" and unable to feed their families from their one acre of land. Upon returning to Kellogg in the fall, Andrew designed a business plan to employ a market-based approach to introducing productive farming techniques to smallholder farmers in East Africa. One Acre Fund launched in Bungoma, Kenya in February 2006, initially serving 38 farm families.

In April 2006, One Acre Fund was awarded the Social Entrepreneurship Track of the Yale 50K Business Plan Competition and the Social E-Challenge of the Business Association of Stanford Entrepreneurial Students (BASES). In May 2006, Andrew received an Echoing Green Fellowship,^[7] which provided a two-year stipend to pursue One Acre Fund full-time.

Since its founding, One Acre Fund has launched operations in Rwanda (2007), Burundi (2012), Tanzania (2013), Uganda (2016), and Malawi (2016).

Sustainability

One Acre Fund states that it practices sustainable intensification and land management.^[8] The organization trains smallholder farmers on how to create and use compost^[9] and how to minimize the amount of fertilizer used with a micro-dosing technique.^[10] The organization encourages farmers to plant Grevillea trees and aims to work with farmers to plant 10 million trees in Kenya by 2015.^[11]

The organization has also been recognized for its model of financial sustainability.^[12] In 2015, 78.5% of its field operating costs were covered by farmer repayments.^[13] "Field operating costs" excludes R&D, pilot projects, government relations, monitoring, as well as fund raising and other charity-specific costs.

Funding and Recognition

The One Acre Fund model has won grants from the Echoing Green and Skoll Foundations, and received the Financial Times/IFC award for “basic needs financing” in 2010 and 2011.^[14]

In 2007, One Acre Fund received a $300,000 grant from the Draper Richards Foundation^[15] and a $100,000 grant from Mulago Social Investments. Between 2009 and 2010, One Acre Fund received $6.5 million from the Pershing Square Foundation towards its Permanent Fund, which provides the basic capital to make loans to farmers, and in 2010, One Acre Fund was recognized by the Skoll Foundation with a $750,000 grant.^[16] Since then, it has received grants from numerous foundations, including The MasterCard Foundation, Bill & Melinda Gates Foundation, and the Swedish Postcode Lottery.

In 2012, journalist Roger Thurow wrote a book about a year in the lives of four One Acre Fund farmers in Kenya entitled The Last Hunger Season: A Year in an African Farm Community on the Brink of Change.^[17] In 2015, The Guardian published an article titled Kenya's Small-Scale Farmers Borrow Seeds To Grow Potential ^[18] that takes a closer look at their field operations. Later that year, David Bornstein of The New York Times wrote an article titled Energizing the Green Revolution in Africa ^[19] that profiles the organization and its work with smallholder farmers in East Africa.

Statistics

In 2014, 99% of farmers working with One Acre Fund repaid their loans in full.^[20] As of May 2016, One Acre Fund actively served 400,000 farmer families in Kenya, Rwanda, Burundi, Tanzania, Uganda and Malawi^[21] with repayment rates of the micro-loans as high as 97%.^[22]

Response to Maize Disease

After the spread of maize lethal necrosis (a maize disease) across western Kenya in 2013, One Acre Fund recommended farmers abandon maize for millet and sorghum. Initially this recommendation was met with some amount of criticism from farmers in the program who expressed their initial shock and displeasure as ugali, a maize-based food, is a staple in the Kenyan diet.

However, those farmers that stayed with the program found success as highlighted in an interview later that same year with the website Humanosphere. "Unlike maize, the price for millet is relatively consistent throughout the year," said the farmers. "...To optimize profit, maize has to be stored for months until peak prices are reached. When a financial emergency emerges, farmers lose out when they have to sell too early. With millet the problem is erased."^[23]

See also

• Social entrepreneurship
• microfinance

References