Farming as a business: A shift of mindset

Originally published on January 15, 2018.



Marie Nyirangirinshuti is a maize farmer in Eastern Rwanda. With a husband and four children, Marie relies on income from her annual harvest to care for her family. Up until recently, her farming efforts fell short in meeting their needs. Though she owns 10 acres of land, her productivity was low and losses were high due to limited access to quality seeds and varying access to fertilizer. Of what she could grow, it was difficult to find buyers – forcing her to sell to different people at inconsistent prices.

Standing outside of IZMGM cooperative, Marie recalls the difficulties of the past. Today, her situation has changed. For Marie, the first step to an improved life was joining the cooperative. “All farmers should join cooperatives – it’s the best way a farmer can acquire knowledge in good agronomy and managerial practices,” she says. In addition to being a member of IZMGM cooperative, she is also the vice president of the Union of Maize Famers of Bugesera (IAIBU). “I was born in a family relying on farming. But in our family, we did not know that agriculture can be transformed into agribusiness. Since I joined IZMGM cooperative, I started seeing changes and opportunities in farming,” noted Marie.

In 2014, the IZMGM cooperative was introduced to the Cooperative Development Program under the U.S. Agency for International Development (USAID)-funded Seed Cooperative Alliance (SCA). The SCA program supports cooperatives increase competitiveness and expand benefits to members. Implemented by Land O’Lakes International Development in Rwanda and Tanzania, SCA facilitated creation and strengthening of alliances with private sector actors as well as provision of technical assistance and coaching to partner cooperatives.

IZMGM is one of 11 maize cooperatives that form the union IAIBU. This union was established in 2008 in the Bugesera District in the Eastern Province of Rwanda. Its formation met the need to better link farmers with the private sector and institutional support to overcome the obstacles of market access, quality inputs and lack of infrastructure. Under IAIBU, the cooperatives could enter the market with larger volumes than they could individually, to meet buyer demands, such as from the World Food Program and a local processor, Bugesera Agri Business Company (BABC).

According to IABU President Niyonzima Sostene, the strengths of the union, include having market pull, a business mentality, the membership benefits to farmers and the partnership with SCA. In 2013, farmers were claiming a lack of quality seeds, internal conflicts and inadequate communication skills. The SCA project helped them link to seed suppliers and provided training. “Land O’Lakes has trained us how to manage our resources better, as many of us had not had any training on management or effective communication before. I am now skilled on how to communicate more effectively within my cooperative by ensuring a participatory approach with our members,” said Sostene.

By participating in the SCA trainings and utilizing hybrid seeds, Marie’s yields alone have increased from 250 kg to 500 kg, and her total harvest sales have tripled from 12,000 RWF to 36,000 RWF. “Sound management starts at home – communities can be much stronger if many coop members are trained in leadership and financial management, not just the leaders. Today’s ordinary coop member is the tomorrow’s cooperative leader,” she says.

At the union level,  coops could now partner with more businesses, such as BABC, who are buying maize with a better profit margin than any other buyer. The partnership with BABC goes beyond buying the maize, to also working together to meet market demands by selling the processed maize flour in villages where the maize is produced. Working together has created a win-win for all involved: the farmer, the coop, the union and the processor.

Marie also noted that because of this business alliance, her local cooperative has become more bankable. One bank gave a loan to IZMGM to buy a truck, allowing them to deliver seeds and fertilizer to members at the right time in the season. Some members are also able to access advances from the bank. For Marie, this allowed her to hire laborers to help plant her acres.
A second private sector alliance, that began out of SCA, was with a hybrid seed supplier, SeedCo. This partnership enabled the coop to obtain higher quality seeds that result in higher yields. In partnership with SCA, IZMGM also trained farmer members on how to properly plant the seeds by using local demonstration plots.
With the financing and supplier alliances in place, IAIBU signed a contract that guaranteed coop members a steady and reliable market with BABC for their harvest.

Through coop membership, Marie now has more maize for her family and has saved enough income to buy a goat, health insurance for her family and more land, as well as increase her family’s dietary diversity. She is just one of the many farmers to benefit from the cooperative development funds provided under USAID. Ten farmer cooperatives in Rwanda were impacted by the SCA program.

As Marie heads in to her monthly cooperative meeting at IZMGM, she smiles and exclaims that she is proud of how far her farm, and her cooperative, have come. She sees her role as a farmer differently now. “Farming is a profession – treating it as a business is a key to success,” she says.
 

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