Dorothy, Complexity and Change

If you’re not familiar with EWB, then you may not be familiar with Dorothy. But please, allow me to introduce you.

Dorothy is a farmer. She farms everything from maize to pineapple. Dorothy is my boss.

Ok, so technically I report to my EWB Team Lead and my counterpart Project Director, but Dorothy is EWB-speak for the African smallholder farmer. And I’m in Ghana with the purpose of creating sustainable change that will be beneficial for Dorothy.

Where things get a little complex is that EWB doesn’t always work directly with Dorothy. I work with a development project, that works with agribusinesses, that work with farmers. To benefit Dorothy, I try to create change in the project that will create change in the business that will create change for Dorothy.

Why don’t I work directly with Dorothy? Because the project is a scaling mechanism. Whatever change I can make can be scaled through the project’s $8M budget and their staff’s reach across all of Northern Ghana. So I need to try to understand what changes Dorothy wants to see, and how I can create those while working a few degrees removed.

My job specifically is to look at Nucleus Farming businesses. A Nucleus Farmer is a commercial farmer who works with “outgrowers” – smallholder farmers to whom he supplies inputs, equipment, training, etc. The Nucleus Farmer will supply these things to the outgrowers on credit throughout the farming season, then at harvest the outgrowers will repay in-kind. The Nucleus Farmer therefore connects his outgrowers to input and output markets, and as such, holds a lot of development potential. Projects like the one I’m working with, that focus on private-sector agriculture development, are jumping on the opportunity to work with Nucleus Farmers as a channel for reaching smallholders.

Everything sounds great, right? Projects have a strong mechanism to reach farmers, these businesses preexist the projects and will continue to exist after the projects end, and the farmers are getting access to greater marketing opportunities. But there’s danger in assuming that any positive change at the business level will result in a positive change at the farmer level. In this complex system, things aren’t so straightforward.

To me, it seems that whether outgrowing is good or bad for farmers is not a simple or clear-cut issue. From the Nucleus Farming business I’ve been working with, here’s what I’ve observed thus far.

A few points on the benefits side:

• Farmers are overcoming the barriers to entry to farming: the high costs of land preparation and inputs are deferred until harvest when farmers have the ability to pay. Farmers who might not have farmed at all are doing one or two acres, and farmers who might have farmed one or two acres are doing five or more.
• Farmers are receiving more useful training: farmers are receiving training on good agricultural practices that is related specifically to the inputs they’re using and the variety of soybean they’re growing.
• Farmers are getting an assured market: Whereas otherwise a farmer may have to transport his grains to the nearest market and sell to whomever will buy, in this arrangement the Nucleus Farmer agrees to buy the outgrowers’ surplus and will arrange the transportation to the farmers’ communities.

But there are definitely some red flags I’ve observed on the costs side. All interest rates in Ghana are high, but for outgrowers repaying Nucleus Farmers in-kind, interest rates can be even higher. The interest varies from business to business, as does the amount of power the power have to negotiate with the Nucleus Farmer. So while farmers are getting a new source of income, their profit margins on their outgrower fields can be significantly smaller than the margins they could be getting by farming independently.

So my question is, what’s the cost-benefit balance? Is it enough for farmers to farm for smaller margins if the alternative could be no farming at all?

Well, I have to say that a simple answer, “yes, it’s enough”, is not enough for me. (Nor is it enough for the project, hence why my job exists.)

So the question becomes what kind of change would make a clear tip on the scale. And the challenge becomes how to create a change that’s a win for the farmers, a win for the business, and a win for the project.

Because if I want to leverage the project’s scale and the business’ sustainability, I can’t look only at Dorothy but need to zoom out to all levels of the system. But, at the end of the day, Dorothy is my boss and the centre of any change I’m looking at.

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