Big Ajar Enterprise

Junior Fellow Placement in Ghana

Final Report

August 2011

By

David Lalanne

Table of contentReview of the scope of work..........................................................................................................2

Context of ADVANCE..................................................................................................................2

Living situation............................................................................................................................2

Placement objectives..................................................................................................................2

Results............................................................................................................................................2

Better understanding of nucleus farmers challenges and realities.............................................2

Implementation of a lead farmer pilot project in Busa and Tangazu..........................................2

Structure of the pilot..............................................................................................................2

General idea...........................................................................................................................2

Iterative process.....................................................................................................................2

Creation of an “Outgrowers agreement”....................................................................................2

Recommendations..........................................................................................................................2

Business related..........................................................................................................................2

Lead farmer related....................................................................................................................2

Annex A..........................................................................................................................................2

Annex B...........................................................................................................................................2

Annex 1C.........................................................................................................................................2

Annex 2C.........................................................................................................................................2

Review of the scope of work

As a Junior Fellow from Engineers Without Borders Canada, I spent the last three months working closely with Big Ajar Enterprise and the ADVANCE project.

Context of ADVANCEThe 4 year ADVANCE project is implemented by ACDI/VOCA in collaboration with local implementing partners. The goal of this project is to transform the agricultural sector of various agric-industries in Ghana through a Value Chains approach. The project has recently been re-structured from office based teams to commodity focused teams in the hopes that this will stimulate improved cross-team learning, collaboration, innovation and ultimately impact. One of these teams is the maize and soya team which is working with all value chain actors, but in particular many nucleus farmers, particularly in the northern 3 regions of Ghana. In a greater context, the whole project will be re-structured again by the end of September to concentrate almost all its resources in the three northern regions, trying to focus on the poorest part of Ghana.

The ADVANCE team has been working closely with nucleus farmers, who are commercial farmers that offer a range of services to their outgrowers (plowing, planting, input credit, threshing) and take payment in kind at harvest. ADVANCE seeks to help these nucleus farmers improve their business practices and in particular to build stronger relationships with both end markets (processors) and their outgrowers.

ADVANCE has been working with Big Ajar Enterprise on a lot of different issues related to his business. Only in the last year, he received help not only from the maize and soya team working in Wa, but also from the financial team, linking him to financial institutions and loans, and from the equipment team, who offered him to attend trainings in new inputs technologies (inoculants, hybrid seeds, etc.) The ADVANCE project is also seeing a lot of potential in Big Ajar Enterprise to become a role model in managing a nucleus farming business in Upper West region and even in the whole northern Ghana.

Living situationLike other volunteers from EWB, I was immersed in the rural livelihood of the farmers I was working with. In my particular situation, I was living with a family in Busa, a village 15 km from Wa, where Big Ajar Enterprise is established. Busa is also the village with the biggest number of outgrowers working with Big Ajar, which allowed me to have a constant contact with the field realities. This living situation also enabled me develop better trust relationships with the farmers and the different actors working on the field with them. This is the best way to get live insights on what is working and what is not and to make the needed adjustments as fast as possible.

Placement objectivesThe goal of my placement was to influence the ADVANCE project and Big Ajar Enterprise based on what I learned being immersed inside the business and with the farmers which is an opportunity that very few people have. Here are some of the major points with a little bit of explanation:

Directly support Big Ajar to strengthen his relationships with outgrowerso Live and work mostly in the field to build very trust relationships with farmers

and be able to better understand how they understand/perceive his business. Pilot and assess innovative interventions at the outgrowers level

o Investigate possible incentives for improved record keeping.o Work closely with private extension staff to drive adoption of technology in

outgrowers.o Look for opportunities to strengthen the thinking and analysis of Big Ajar’s

private extension staff in behavior change interventions. Help Big Ajar improve his business strategy by providing a field insight

o Discuss evolution of business strategy based on rapid changes in business environment and risks of farming business.

o Co-develop processes for identifying strong potential lead farmers in every community.

Support ADVANCE in its work with nucleus farmers and outgrowers schemes o Increase the effectiveness of ADVANCE’s technical assistance and interventions

to meet the specific needs of nucleus farming businesses like Big Ajar.o Understand the impacts of ADVANCE’s work with nucleus farmers, highlighting

areas of success and find possibilities of improvement. o Give specific feedback to key field staff on different teams regarding the

effectiveness of interventions (financial services, grants, inoculants, records keeping training).

Results

Better understanding of nucleus farmers challenges and realities

The first half of my placement with Big Ajar Enterprise was devoted to this only goal: get a better understanding of the business I was working with. By getting the this information to higher levels of influence within ADVANCE and EWB, I was able to provide all these people with key insights right from the field on how nucleus farmers and outgrowers schemes really work in reality. I also informed Big Ajar of the different things I was learning from the field, to help him improve his own business strategy and find easier ways to strengthen his relationship with his outgrowers. I achieved both these result in a few different ways:

ADVANCE and EWB

Provide both organisations with weekly reports on my learnings about the business. Present the results of my placement with Big Ajar to key staff from ADVANCE

(ACDI/VOCA1), IFDC2, ASI3 and EWB. Write a briefing paper about the results of my placement, which is going to be read by

all the key actors working with nucleus farmers and outgrowers schemes in northern Ghana.

Big Ajar Enterprise

Present the results of my work in a formal way to Big Ajar in 2 different occasions. Have informal conversations with Big Ajar about challenges of nucleus farming and

discussing ways to address them. Write a final report to Big Ajar Enterprise, stating the results of my placement in his

business and my recommendations for the future.

Implementation of a lead farmer pilot project in Busa and Tangazu

Structure of the pilot As mentioned earlier, one of the major objectives of the placement was to help Big Ajar Enterprise to improve its relationship with the outgrowers. Being immersed in the business itself for 2 months and using some already existent documentation about outgrowers scheme4, the concept of a lead farmer structure finally seemed to be the most adapted solution in Big Ajar’s specific context. This year, the pilot was only implemented in 4 farmer groups in 2 different

1 Implementing NGO of ADVANCE project2 International Fertilizer Development Center3 Agribusiness Systems International4 Facilitating the development of outgrowing operations: A Manual, USAID, August 2009, 153p.

communities. These 2 communities are the ones closer to the place where I was living, allowing an easier monitoring of the project.

Table 1 : Initial description of the 4 groups participation in the lead farmer pilot project

Busa group #1 Busa group #2 Busa group #3 Tangazu groupName of the lead farmer

Kassim Mahamuda

Hudi Hamza Thadius

Number of members

6 members (all women)

26 members (all men)

21 members (all men)

15 members (all men)

Number of acres farmed

6 acres 52 acres 21 acres 32 acres

Crops 3 acres of yellow maize3 acres of soya bean

Soya bean Soya bean Soya bean

Repartition of the land

Block farm Separated in 1 to 3 acres plots

Block farm Separated in 1 to 3 acres plots

Number of years as Big Ajar outgrowers

Second year Third year (were doing white maize before)

First year First year

General ideaThe purpose of the lead farmer structure is for Big Ajar to have people on the field that will be able to do some of the work that a full time field staff would do for a lot less money. A lead farmer is a farmer with a specific set of skills and attitudes (usually 1 in each group or community) that is hired by Big Ajar to perform a certain number of predetermined tasks and roles. For example, a lead farmer can be in charge of monitoring the other farmers in his group, taking farming records for the group, communicate to his fellow farmers important information or trainings that Big Ajar is giving him, etc. For this structure to work efficiently, the lead farmer also needs an incentive which, in many cases and examples, takes the form of a performance-based remuneration at the end of the season coupled with bonuses for really good performance.

Iterative processThere is actually no basic methodological templates to implement a lead farmer structure in a nucleus farming business like Big Ajar Enterprise. There is nothing to attest that it was done before in northern Ghana and for this reason, we decided to use a highly iterative process in order to improve the pilot as fast as possible. The idea was to get really quick feedback from the field on the projects and make the adjustments live as the problems were popping up. Here a general idea of the iterative process from the early stages of the project until today:

1. Choosing the lead farmer

Actions taken Observations In literature, we find different ways of

choosing a lead farmers : let group nominate its own lead farmer based on a series of criterias, let the group vote for the lead farmer between 2 or 3 candidates previously choosen by the business or the lead farmer can be picked by the business itself. We went for the last option because of the lack of time to the group in the decision process.

To choose the lead farmer in each group, the business used a section from the Outgrowers Manual from USAID (see reference on previous page) where are stated some of the essential qualities needed to be lead farmer. This section of the manual is shown in the Annex A.

The method used to select the lead farmer can only work if you know the group well. Unless it is really hard to make a good choice based on the criterias if you don’t know every member.

In one of the group, the lead farmer choice created a tension between him and the chairman of the group, who was not part of the selection process and felt that the lead farmer was taking on some of his powers.

2. Creation and signature of the lead farmer agreement with Big Ajar

Actions taken Observations The lead farmer agreement (see Annex B)

is a contract between the lead farmer and the business owner, in this case Big Ajar Enterprise. The purpose of this is to officialise the structure by stating clearly for both parties the roles of the lead farmer expected by the business and the remuneration expected by the lead farmers.

The roles attributed to the lead farmers are based on the Outgrowers Manual from USAID (see Annex A).

The remuneration table was extensively discussed with the business and this is the final result we presented to the lead farmers.

Ask every lead farmer to sign the contract after the workshop (see #4)

One of the problems of the pilot project was that it was implemented too late in the season and the content of the agreement couldn’t be discussed with the lead farmers themselves.

We couldn’t do a financial analysis of the lead farmer structure to determine the optimal remuneration because of time and financial knowledge constraints.

Big Ajar couldn’t be present to sign the agreement at the same time than the lead farmers. This led to unanswered questions and frustrations.

3. Informal and individual meeting with each lead farmer

Actions taken Observations Informed individually each lead farmer

the concept of the pilot project and that Their comprehension of English is not

always the same and individual meetings

they were chosen by Big Ajar to be the lead farmer of their group

In average, 15-20 minutes 1 to 1 meeting with the lead farmer

are sometimes hard to handle because of the language barrier

Good introduction but still a lot of incomprehension after the meeting

4. Lead farmer workshop

Actions taken Observations Workshop to address the

incomprehension of the concept of lead farmer after individual meetings

3 hours workshop with a number of activities to provide a better explanation of the tasks of the lead farmers. Focused on major points like monitoring and records keeping

Gave a certificate of completion to every lead farmer after the workshop

Difficult to get the participation of lead farmers, and even more when you ask them to sit down for a long time.

Not all the information was well understood by everyone. Still need some reinforcement and to repeat the message

5. Monitoring

Actions taken Observations Check-up on records that they had to

keep to see if it was well done and if they were following the deadlines decided during the workshop.

Organise a few lead farmer meetings in the weeks after the workshop to try to see what challenges they were facing and what feedback they had about the pilot.

Visit some of the fields to see if the good agricultural practices were well applied by the farmers of different groups.

The records are usually well kept if you give a template they call fill even if some lead farmers do it better than others. The template must be simple and easy to use.

During the meetings, it’s hard to get the real opinion of the lead farmers.

The biggest challenge/problem is probably the monitoring of the members of the group. Most lead farmers seem to struggle with monitoring, how to do it. The lack of time and the fact that every farmer to the same things at the same time are the main reasons.

Everything is a lot easier for groups with a block farm.

Creation of an “Outgrowers agreement”

One of the results of my placement with Big Ajar Enterprise is also the creation of a “Outgrowers agreement”. Big Ajar wanted to officialise the business relation between him and his outgrowers by signing a contract with each of them. This contract (see Annex C) lists all the inputs and services given to the outgrower on credit by the nucleus farmer and also clearly explains the

amount asked by the business as repayment for the inputs. The agreement also explains the interdiction of side-selling and the exclusivity of Big Ajar on the surplus made by the outgrowers.

In the groups with a lead farmer, he is in charge of making sure that every member of his group sign the agreement and attach a picture to the form. This way, we also use this outgrowers agreement as a test to see how lead farmers can respond to new tasks given by the business. Unfortunately, I had to leave before I could see the result of this test.

Recommendations

Business related

1. Prioritize farmer groups offering to work on a block farm. With the group already working good, encourage them to regroup some of their acres

2. Use a more farmer oriented approach. Right now, Big Ajar spent a lot more time dealing with everything related to financial matters and inputs than with farmers themselves. That creates problem at the farmers’ level, most of the time resulting in poor yields, side-selling, bad behaviours, etc. Before and during the growing season, at least 1 or 2 days every week should be reserved to go on the field and deal directly with the farmers.

3. Improve the business record keeping, both on the financial side than on the farming side.

4. Start planning the growing season earlier. Arrange deals with input dealers before the start of the season, plan in the most details possible all what can be needed during the growing season (need of private tractor operators, buying of the seeds, weekly meetings with the lead farmers, etc.)

5. If it’s financially possible, hire a full time field staff working only for Big Ajar. The AeA (Abass) is way too busy to do a good work with Big Ajar outgrowers and if the number of farmers continues to increase, the business will need somebody to help to deal with all the outgrowers.

Lead farmer related

1. Choosing the lead farmer For groups known by the business, the lead farmer should be picked by it. If the

business is working in a new community, explain the selection criterias to the

group and let them choose their lead farmer. Also explain that the business still has the last word if the lead farmer is not doing a good work.

Emphasise the importance of being literate.

2. Lead farmer agreement The content of the agreement should be discussed with the lead farmers before

it is finally approved and signed, before the beginning of the growing season. The agreement should be signed in the presence of both the business and the

lead farmer and signed before the beginning of the growing season. The agreement should content more clear and quantified deliverables than

broader explanation of the roles. The remuneration will need to be revised with ADVANCE’s financial team and

with the lead farmers for next year. A meeting between the 3 actors (Big Ajar, ADVANCE and the lead farmers) to talk about that would be interesting.

3. Individual meetings and workshop The business should meet the lead farmers in person to explain the concept and

see if they are ready to take on the role. The workshop is good but it could be facilitated by ADVANCE’s FBFS or AeAs.

Should focus on things like efficient monitoring and record keeping techniques. The workshop should be split in 3 shorter parts and be done with a lot of group

discussions. Should be weekly meetings organised between the business and the lead

farmers, on a fixed date every week. These meetings should all be planned before the beginning of the season and even be mentioned in the lead farmer agreement.

4. Monitoring Hire a full time field staff that would be able to monitor the lead farmers’ work

and to manage any problem.

5. Repayment Make sure to monitor closely the repayment period with the help of the lead

farmers

6. General recommendations concerning the lead farmer structure Next year, the pilot project should be scaled to all the outgrowers groups

working with Big Ajar. Propose a cost-share lead farmer remuneration to ADVANCE

Annex A

SELECTING AND ENGAGING LEAD FARMERS

How will you select lead farmers in your outgrowing operations?

In an indirect or intermediary model of outgrowing, companies often need to choose lead farmers who can serve as liaisons with outgrowers. These lead farmers typically have a contract or agreement with the company to perform certain roles and functions.

1) What are your criteria for lead farmer selection? Create a list.

The company needs to focus on criteria that will help it to choose lead farmers who can best respond to their particular needs. Potential criteria include:

• A good reputation, the respect and trust of the community, and the ability to influence people and convince them to listen

• Honest, hard-working and sincere• Enjoy working with farmers• A commitment to the community (money alone does not work)• Loyalty to the company and honesty with regard to financial information, dealings with

outgrowers, etc.• Sufficient means to travel and communicate with outgrowers prior to receiving fees

/commission• Time to devote to the outgrowers (even if involved in other business activities, work with

NGOs, etc.)• Willing to carry out required lead farmer tasks (visiting farmers, meetings, etc.)• Familiarity with the targeted crop(s)• Space for a procurement site (advantageous, but not mandatory)• A willingness to listen to outgrowers and ask for their input / opinions• Have basic education and literacy skills• Be progressive and willing to adopt and adapt new technologies.

2) What will be the lead farmer role in your outgrowing operation?

Lead farmer roles and functions may include:• Assist with input distribution• Monitor farmers and keep records• Provide farmers with technical advice• Disseminate company information to farmers• Assist with organizing training activities and demonstration plots• Identify outgrowers• Help company to prepare and implement procurement operations (it is recommended that

company procure directly from individual outgrowers, not lead farmers)• Set up collection point(s)• Initial quality assessment of outgrower production• Support procurement schedule development (crop timing, pick-up times, etc.)• Organize procurement transportation• Receive payment and distribute to farmers.

Even if the company uses an indirect outgrower model (with lead farmers), it is important that they maintain a level of direct relationships with individual outgrowers. This can include training / coaching sessions for all outgrowers, meetings with lead farmers and their group members, distribution of inputs to and tracking of credit with individual outgrowers, direct procurement from individual outgrowers, etc. Without these direct relationships outgrowing operations tend to have greater problems with quality, adherence to crop production advice, side-selling, etc.

3) Describe your strategy / approach for selecting lead farmers.

• Ask community leaders / businesspeople to propose lead farmer candidates• Ask farmers to suggest a lead farmer• Develop shortlist of lead farmers to present to farmers in target area for their input• Ask for referrals from the local area government agricultural services• Encourage farmers to approach the company and offer themselves as lead farmers• Receive recommendations from existing lead farmers (referral system)• Identify and promote high performing farmers who already produce for the company to

lead farmer status.u Lead Farmers4

4) Describe how you plan to remunerate lead farmers?

• Lead farmer compensation typically involves a fee or commission based on the volume of production that group members produce and sell to the company. While there are other ways to compensate them (e.g., fixed payments), this is the most common. Though their compensation may be minimal (given all they do), some lead farmers consider what they do a contribution to their community and to the farmers with whom they work.

• Another form of compensation is participation in training events and exposure visits organized by the company. Guide #3 – Selecting and Engaging Lead Farmers

• Being the lead farmer for an established company may confer special status in the community and could be an incentive to take on the role. However they compensate their lead farmers, it is important that companies offer appropriate incentives for the work they expect of them.

5) How would you deal with a lead farmer who does not perform as expected?

Sometimes a lead farmer does not work out and needs to be replaced. This can be a sensitive process, especially if he/she is well-known in the community and the company expects to need his/her support in future. Depending on the situation, here are a few suggestions on ways to replace a lead farmer:

• Ask the underperforming lead farmer to suggest two or three possible replacements• Ask field agents to recommend lead farmer candidates for the next season• Survey outgrowers in the group to find and appoint a replacement lead farmer• Release the underperforming lead farmer and use the criteria in 1) above to find another.

Annex B

BIG AJAR ENTERPRISEDealer in bicycle, bicycle parts and farming services provider

LEAD FARMER AGREEMENT

AGREEMENT made on the _______________________________________________(date), between _______________________________(name), lead farmer of ________________ group in the community of __________________ and _____________________________________ (name), managing director and owner of Big Ajar Enterprise.

1. Role description: Subject to the terms and conditions of this AGREEMENT, the lead farmer accepts to fulfil these roles for Big Ajar Enterprise:a. Receive trainings and other important information from the company (referred to as Big Ajar

Enterprise) and share it with all the members of his group.b. Monitor and support every member of his group in the application of the best farming practices.

If necessary, it is the responsibility of the lead farmer to call the right resource person in order to give good support to the members of his group.

c. Assist the company for the seeds and fertilizer distribution. Make sure that every member of the group receives and applies the right quantity.

d. Keep specific farming records (specified by the company).e. Part of the selection team to choose the best farmer in your group at the end of the season to

participate in the «Best Farmer of the Year» competition.f. Facilitate the process of signing the contract between the company and the outgrowers.

2. Payment and terms: The company will remunerate the lead farmer based on the performance of his group, either in kind or in cash. The remuneration will follow this chart:

Repayment rate of the group Remuneration- 1 acre ploughed free

100% 2 bags / 50 bags paidBetween 80% and 99% 1,5 bags / 50 bags paid

Under 80% 1 bag / 50 bags paid

A performance bonus of 1 bag (either in kind or in cash) will be awarded to the lead farmer if the average yields of his group reach 7 to 8 bags per acre of soya.

IMPORTANT: keeping the farming records is an obligation for the lead farmer to receive his remuneration. If these records are missing or not done well, the lead farmer will not be eligible to his remuneration. This will be evaluated according to the company’s judgement.

This agreement shall be binding upon the parties, their successors, assigns and personal representatives. Time is of the essence on all undertakings. This agreement shall be enforced under the laws of Ghana. This is the entire agreement.

Lead farmer

Signature________________________

Big Ajar Enterprise

Signature________________________

Witness

Signature_________________________

Name____________________________

Annex 1C

BIG AJAR ENTERPRISEOUTGROWERS LOAN AGREEMENT FORM (soya)

P.O. Box 486, Wa, UWRTelephone: 0756-22679 or 0244-607068Opp. Old State Fishing Co-Operation, Wa, UWRBranches: Tumu, UWR / Tamale, NR

AGREEMENT made on the _______________________________________________(date), between

_______________________________(name), outgrower of ________________ group in the community

of __________________________________at the H/No_________________________________ and

Abdul-Rahaman Tawfic, managing director and owner of Big Ajar Enterprise.

1. The outgrower certifies that he has taken the following inputs for each acre of soya beans farmed with Big Ajar Enterprise, for a total of ___________ (No acres of soya) acres:

Input or service received by the outgrowerTractor ploughingCertified soya bean seeds (Anidaso or Jenguma)1 bag of inoculants OR 1 bag of fertilizer (NPK)

2. The repayment will be of 2,5 bags of soya bean per acre with inoculants and 3 bags of soya bean per acre with fertilizer. The recovery will be done by Big Ajar Enterprise between November 1st 2011 and December 31st 2011.

* The bags are assumed to be standard maxibags (120kg).

3. With this agreement, the outgrower also certifies that Big Ajar Enterprise has buying exclusivity on the entire production surplus (after repayment of the inputs) from the acres farmed with Big Ajar Enterprise at a fixed and guaranteed price equivalent to the prevailing market price at the time of buying. This exclusivity on the production surplus held until February 1 st 2012. It means that any side-selling (selling to another buyer between now and February 1st 2012) of this surplus is prohibited and will be considered as a violation of this agreement.

4. This year, Big Ajar Enterprise will also provide his outgrowers with storage services. Instead of selling the surplus at the end of the harvest, the outgrower also has the right to give his surplus to Big Ajar Enterprise so he can store it safely during the dry season. Then, by May or June, the outgrower will have 3 choices: pick his surplus from Big Ajar’s warehouse and sell it, sell it to Big Ajar at the prevailing market price or ask Big Ajar to sell the surplus for him. The lead farmer of the outgrower’s group will be in charge of recording the stock of each outgrower.

Passeport size picture of the

outgrower

5. Big Ajar Enterprise will also give rewards to the best farmer of each group, recognizing the excellence in farming and the great example set by this farmer for his pairs. The reward will be decided by Big Ajar Enterprise.

This agreement shall be binding upon the parties, their successors, assigns and personal representatives. Time is of the essence on all undertakings. This agreement shall be enforced under the laws of Ghana.

This is the entire agreement.

Lead farmer

Signature________________________

Big Ajar Enterprise

Signature________________________

Outgrower

Signature________________________

Annex 2C

BIG AJAR ENTERPRISEOUTGROWERS LOAN AGREEMENT FORM (maize)

P.O. Box 486, Wa, UWRTelephone: 0756-22679 or 0244-607068Opp. Old State Fishing Co-Operation, Wa, UWRBranches: Tumu, UWR / Tamale, NR

AGREEMENT made on the _______________________________________________(date), between

_______________________________(name), outgrower of ________________ group in the community

of __________________________________at the H/No_________________________________ and

Abdul-Rahaman Tawfic, managing director and owner of Big Ajar Enterprise.

1. The outgrower certifies that he has taken the following inputs for each acre of maize farmed with Big Ajar Enterprise, for a total of _____________ (No acres of maize) acres:

Input or service received by the outgrower Cost/acreTractor ploughing 40 GHcCertified maize seeds (yellow or white) 20 GHc2 bags of NPK (fertilizer) 60 GHc1 bag of sulphite of ammonia (fertilizer) 25 GHcSeed treatment 5 GHcInterests and other costs (transport, maintenance, etc.) 37,5 GHc

Total cost 187,5 GHc

2. The repayment will be based on the prevailing market price of maize (yellow or white) between November 1st 2011 and November 31st 2011. The total cost will then be divided by the prevailing market price, giving the number of bags per acre due to Big Ajar Enterprise. The recovery will be done by Big Ajar Enterprise between November 1st 2011 and November 31st 2011.

The rest of the agreement is the same than for the soya agreement.

Passeport size picture of the

outgrower