Platfarm | A Solid Foundation for Farming
Platfarm: Logistic Support for Contract Farming Success INTRODUCTION 1.5 billion smallholder farmers comprise 85% of the world's farms. Yet they face many challenges. Most smallholders can't afford expensive inputs to grow higher value produce. Also, they are often out of reach of commercial markets. This erodes the profitability of their agricultural production as their only choice is to grow low-value staple crops. An emerging model for addressing these challenges is contract farming. In this approach, agricultural production is outsourced to smallholder farms, and the benefits are distributed out more evenly than in traditional approaches. Farmers receive a package of important benefits: 1) inputs and training 2) agronomic support 3) logistic support including delivery and pick-up of goods 4) a fair market price for their goods through a contract. THE CHALLENGE A major challenge with these programs, however, has to do with logistics. Because production is decentralized, there is a greater transportation and communication burden. Produce must be planted and harvested at the right time to meet the requirements of the market, and transportation must be coordinated well. OUR SOLUTION We have developed a product, Platfarm, to address this challenge and increase the efficiency and profitability of contract farming. Platfarm is a solution for managing contract farm supply chains that connects the program "hub" with the smallholder farmers. Information is shared between smallholders and program management through SMS messages. This information is used to optimize program efficiency. HOW IT WORKS Let's take an example: In western Zimbabwe, TMG operates a contract irrigation project involving over 1,000 smallholder farms growing tomatoes for processing into paste. Their current plant capacity is 150 tons / day, but they are having trouble optimizing the use of their trucks to pick up tomato harvests, and as they grow, will have difficulty ensuring a steady supply for the processing plant. They only use 10% of this capacity because of logistic difficulties. In addition, coordination with farmers requires frequent visits to their fields, which is a burden on the program. Enter Platfarm. Platfarm consists of a map and an interactive calendar. Managers use this to decide which farmers should plant tomatoes at a given time, as well as when to send the truck in order to fill it to capacity and eliminate spoilage. This is done through clustering farmers into groups using the mapping tool. BUSINESS MODEL Since our product will help generate revenue by increasing efficiencies, business model is based on a profit-sharing approach, since the efficiency gains will generate substantial revenue for the contract farming organization. http://platfarm.wordpress.com/
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Platfarm | A Solid Foundation for Farming
- 5. How Contract Farming Works Buyer TMG Contracts Coordination Seed Production Fertilizer Pesticide Farmers Sell Service Tractor Implement Transport Production Processing Market
- 6. Contract Farming – A Win-Win Solution Firms + Consistent quality and volume of supply + Reduced transaction costs + Don’t have to invest in land or fixed labor for own production SmallHolder Farmers + Consistent market with a known floor price. Lower risk + Embedded services (information, training, finance, transportation, Fertilizer/pesticide)
- 9. How it Works
- 10. Zimbabwean Pilot Site TMG – Western Zimbabwe 1,000+ Smallholder Farmers Cultivate 10% of Plant Capacity Tomato Processing Plant 150 Tons / day Seeking to expand to 6,000 Farmers With Platfarm, TMG’s revenue will grow by 1,000% !!
- 11. Contract Farming in Zimbabwe – A booming business • ASI Zimbrabwe contract farming study As of 2012: 50 328,000 628,000 Firms smallholders hectares