Bringing wealth to Africa’s smallholder farmers digitally.

Anyone who lives in Africa,’ Shungu Kanyemba argues, ‘knows that eighty per cent of our population depends on economic activities from the hinterland. We all have a cousin who still works in the countryside, as a farmer, and every time you pass by you realise that life there does not change. They still always* make the bricks the same way! And THAT could be changed.

“This is the story of a small-scale cotton farmer in Africa,” Shungu recounts. “He spends four months from planting cotton to harvesting, bagging and sending it to the ginnery. He gets no more than 20 US cents from the cotton that is woven into a t-shirt that sells for about USD 15.It is not fair. He will eventually earn about USD 2,000 annually from his produce. However, there is someone who owns a brand in a European country, lives in a penthouse and earns more from it than him. We need to start asking ourselves how we can diversify farmers’ livelihoods, increase their productivity and increase the price they can bargain for. This is the highest purpose of my work and Kvuno.

Kvuno’s tagline is Wealth to the Farmer, and I remember when we came up with it everyone in the room agreed it was a war cry. A war cry because we exist so farmers become wealthy, and I think it sums up the passion we have for working with smallholder farmers.”Shungu is a co-founder of Kvuno, a social enterprise that ensures farming creates wealth for smallholder producers by providing them with services and products designed to ensure they are more prolific throughout the entire value chain. Kvuno’s products and services are always powered by the most effective technology available to society.

Zimbabwean, Shungu has been living in South Africa since 2009. His passion for innovation and conviction that digital is the game changer for Africa’s smallholder farmers pushed the one-time Applied Physics student to change course and study computers. A change that enables him, through his work, to bring change to smallholder farmers in southern Africa.Further earning an MBA from the University of Cape Town provided him with skills in starting creative ventures, innovation, entrepreneurship and leadership. “It became an epiphany for me that I always wanted to turn ideas into businesses. I wanted to plan, experiment and make a difference,” he explains.

While Shungu had hoped to work with a venture capital company after earning his MBA, he found himself employed by an NGO as an enterprise development project manager for small enterprises. “Working for a not-for-profit, though fatuous, helped me realise that I liked companies whose purpose was not to generate profit for shareholders, and which do not distribute any surplus profit as dividends to these shareholders but instead plough it back into the purpose for which the business was created.”However, it was only after accepting a position at Solidaridad as the Digital Innovation leader for Southern Africa and Small micro-enterprise entity development, that he finally got the opportunity to turn ideas into businesses for smallholder farmers.

“At first, I found that an IT job was not appealing until I realised the venture was much more; it involved creating technology for smallholder farmers to get access to platforms that large-scale farmers have, and I had leeway to create “companies” that would ensure this access.I realised that NGOs could play the role of capital venture companies and behave like venture capital funds for social enterprises. However, they could do this without making profits for shareholders. Our first challenge was to find a way to bring in the latest technology that commercial farmers have access to and use it to help smallholder farmers who have only about 2 acres of land and earn about USD 2000, or euros, on their crop per year. How could we use this technology to increase productivity, sustainable intensification and increase farmer productivity?” explains Shungu.

The other challenge was finding ways to use the same technology to give farmers better bargaining power within the power chain. “One challenge is about yields; the other is about bargaining power. There is a huge divide between smallholder farmers and commercial farmers, and the digital divide affects yield per hectare and many other things for smallholder farmers, which I find disturbing. Until we embrace digital opportunities, we will lag in this industry as people who support smallholder farmers,” says Shungu.

Enter Kvuno. That “leeway” that came with working in his IT position made it possible for Shungu to explore his passion for turning ideas into business. Today Kvuno provides digital services to smallholder farmers, so they adopt efficient practices. These include digital soil testing, a logistics hailing system which enables farmers to request mechanisation and tools, upload information, and record data. This can be used to lower the cost of finding and conducting transactions with them as well as digital organisations to become seed multipliers.

“Kvuno adds to the value chain by offering farmers the services they need at affordable prices. Our business model is based on cutting costs for the farmer with support from donor organisations. We charge these organisations to provide funds which we then use to provide services to the farmer. This is done through a company whose role is not to make a profit, in fact, a company that cannot make a profit,” explains Shungu.

Registered as a not-for-profit company in South Africa without any shareholders, any extra income generated by Kvuno can never be given to anyone as a dividend. Instead, it is ploughed back into the company to reach more farmers or given out as a grant to other organisations that perform the same services.Changing smallholder farmers’ livelihoods, Shungu argues, requires looking toward alternative business models. This requires a solution that offers digitally innovative solutions to both the farmer and the people that work with them.

“80% of their costs must be relevant to farmers. The man who comes on a motorbike to test the farmer’s soil must experience the same quality of life as him. We need value chains owned by people experiencing similar lifestyles. Business models should be vertically integrated at hyper-local levels and those are some of the things we are starting to look at as ways of helping the farmers, but it is a long way to go,” says Shungu.

So, what fuels Shungu’s passion to bring wealth to the smallholder African farmer?

“Two things; innovation, which comes naturally to me. Disrupting existing systems especially if there is a problem with them is one of my hobbies. Digital and business model innovation allow me to do this. We know that digital disrupts everything, so being in that industry makes me realise that we can disrupt systems responsibly. Business models are also quite fascinating to me; how do we challenge the assumption that all businesses should exist to make the shareholders wealthy? Can’t we have at least 30 percent of the businesses operating in an eco-system that serves the needs of the smallholder farmer?”

When you are an African living in Africa you understand that 80 percent of our population depends on economically creative and viable activity in the hinterland. We all have a relative that still lives in a rural area and is a farmer. But every time you are there you realise that life does not change. They still make bricks like they did years ago! And this must change.

The challenge is how to take an experiment done in five districts in southern Africa and make it something that reaches the whole continent. Digital is the differentiator. It allows us to do amazing things, like lower the cost of services for farmers. Digital provides us with the opportunity to aggregate the voice of the smallholder farmer and their products.We see a future where farmers are aggregated digitally and transactions with them are digitalised. Finding them and doing business with them is expected to be easier with these digital solutions. They are able to mobilise and process their produce and put brands on their products digitally.

That is why it is imperative to work with organisations with a purpose. This is to help smallholder farmers produce more because they can, and ensure they have a better voice in the value chain. That is how we can start changing. At Solidaridad, we call it change that matters and that is what motivates us. – Shungu Kanyemba.