Building a Season of Plenty

A new digital layaway plan will help poor Tanzanian farmers finally get the seeds, fertilizers and other resources they need to modernize their farms. (Photo: Dalberg)

Planting season can be the leanest time for small-scale farmers.

Wilson, a farmer in rural Tanzania, knows the uncertainty all too well.

By the time he pays for his family's needs, he has little cash to start the new planting season. This means reusing seeds or buying poor quality ones, tilling the same plot of land without reviving it with fertilizer and other nutrients, and sticking to traditional agricultural practices.

Farmers like Wilson who want to modernize their farms have few options - less than six percent of loans from formal banks go to agriculture -- and only a fraction of that to smallholder farmers. Borrowing from informal lenders to buy the inputs he needs brings additional risk he can ill-afford.

He explained, "All of my income for the family comes from my farm. So trying these new programs that come up is hard because I don't know what to expect. If I lose on the farm, I lose overall."

He is hardly alone. Some 19 million people in Tanzania earn their living from their small farms and smallholder farmers produce nearly 70 percent of the country's food. Yet, only half of them grow enough to sell. The overall impact on farming is telling. Average productivity per hectare of most crops is a fraction of that in other parts of the world, and yields of key staple crops such as maize are stagnating or declining due to soil degradation and extreme climate.

Grameen Foundation recently joined with the Alliance for a Green Revolution in Africa (AGRA), and Positive International Limited (PIL) to launch a new digital layaway plan for farmers. It will give farmers the ability to gradually pre-pay PIL agro-dealers for the inputs they need, at discounted prices, using mobile technology. Each farmer will receive a customized inputs package based on their production goals and also customized extension services via SMS text to guide their use on the inputs.

The layaway program will finally give Tanzania’s farming families access to the high-quality, affordable inputs they need.

The team will test the toolkit with 15,000 farmers in northern Tanzania.  As farmers increase their yield, AGRA will link farmers to markets. Once the full product has launched, the team plans to work with PIL agro-dealer networks to introduce the toolkit in Malawi, Mozambique, Zambia and other parts of the continent.