How We Work
GAFCo operates commercial hubs, which are concentrated farming micro-economies within a 20 kilometer radius with over 10,000 acres under cultivation. Commercial hubs pool the resources of hundreds farmers in multiple villages, improving efficiency while increasing the incomes of thousands of families. Each hub includes a GAFCo Academy and a fleet of mechanized equipment to transition smallholder farmers toward producing high quality crops at a greater scale. We help our farmers finance growth and mitigate risk, and employ a community-based empowerment program that builds social capital. With our own logistics and processing equipment, GAFCo expands the value chain from the hub all the way to the export dock, benefitting farmers and customers alike.
The commercial hub
GAFCo operates twelve commercial hubs across the northern zone, lake zone, and southern corridor of Tanzania. Hubs become the center of agricultural activity within the region, creating the economies of scale that stimulate vibrant business activity. Farmers are encouraged and enabled to expand their farms from less than three acres to in excess of twenty acres, leading to significant increases in their incomes, which helps attract new farmers to join the hub. Today, GAFCo hubs contract with more than 400 large and mid-size commercial farmers and over 3,000 small-scale farmers on more than 60,000 acres to produce:
- 130+ varieties of high-value seed beans, flower seeds, sun hemp seeds, and other seed varieties for Europe, Middle East, United States, and South Africa markets,
- high quality food pulses for canneries in Europe and Middle East markets,
- high oleic sunflower oilseeds for cold-press extraction to virgin crude oil supplied to European food processors,
- high linoleic safflower oilseeds for cold-press extraction to virgin crude oil supplied to health and cosmetic, industries in Europe, and
- sorghum and maize as rotational cash crops for local markets.
GAFCo translates firm client orders into fixed-price farmer production contracts that cover high quality seed, fertilizer, mechanized services, finance, crop insurance, and credit life insurance. Small-scale farmers are encouraged and enabled to gradually expand their farms up to 200-300 acres, leading to significant increase in their incomes. Hubs become the center of agricultural activity within the region, creating the economies of scale that stimulate vibrant business activity. We estimate that for every farmer who contracts with GAFCo, ten other families earn incomes through direct employment or crowd-in opportunities within the value chain.
GAFCo presses sunflower and safflower oilseeds at its own oil mill centrally located in the Babati region in the northern zone, and more than 5,000 tons of seed and pulses are graded, cleaned and packaged every year at GAFCo’s Arusha processing facility.
GAFCo's field extension officers and agronomists use mobile technology to GPS map farmer fields for traceability of all production; track growing activities and yield projections; and report incidents that may impact production and insurance claims. GAFCo’s cloud-based farm management system monitors hundreds of growing campaigns by variety, projected yields, farmer, and associated fields.
Stimulating vibrant business activity in local communities
Each hub centers around a GAFCo Academy, which is a profitable model farm that serves as a venue for training farmers in crop protocols that improve yields and quality, and minimize post-harvest losses. In addition, GAFCo agronomists and field extension officers frequently visit farmer fields to supervise and monitor production. GAFCo Academy conducts research on best practices and has developed climate-smart protocols based on conservation agriculture technology tailored to the local environment in Tanzania. In addition, field trials are conducted on new crop varieties with focus on high value crops.
GAFCo provides mechanized services to farmers, including land preparation, precision planting, spraying, and harvesting. This allows farmers to achieve higher crop quality and yields, while cultivating more land to earn greater incomes.
GAFCo’s goal is to enable farmers to become self-reliant and improve their profitability while stimulating small and medium sized businesses and creating employment opportunities. Towards this objective, GAFCo works in collaboration with commercial partners to facilitate finance and training for commercial farmers, producer groups, and local businesses to procure used tractors and implements (e.g., rippers, planters, sprayers) for production, and to engage in crop cleaning, storage, and transport services for post-harvest activities.
The commercial hub model incorporates three categories of farmers, and strives to transition farmers into higher income-earning categories as they grow in size and capability:
Commercial Farmers (20-200 acres)
Commercial farmers contract individually with GAFCo and receive a full suite of products and services to support their farming businesses. Commercial farmers with more than 200 acres are encouraged to lease their excess land to smallholder farmers. Today GAFCo has over 400 commercial farmers, most of whom started as smallholders.
Consolidated Smallholder Farmers (10-20 acres)
Consolidated smallholder farmers contract with GAFCo through producer groups, which GAFCo forms and trains. GAFCo works with the government, community leaders, and farmers to consolidate land, so smallholder farmers farm on adjacent flat parcels that can be efficiently supervised by GAFCo and serviced by mechanized equipment.
Dispersed Smallholder Farmers (1-3 acres)
Dispersed smallholder farmers contract with GAFCo through producer groups and receive training from GAFCo with the goal of transitioning to becoming consolidated smallholder or commercial farmers within 1-2 years.
Growing financial capital while building social capital
FINANCING GROWTH & MITIGATING RISK
GAFCo works with banks and insurance partners to build the financial capacity of farmers as they grow their businesses.
Our partners provide GAFCo farmers seasonal loans for purchasing seeds, inputs, and mechanized services, as well as savings products that encourage financial stewardship. GAFCo farmers are linked to multi-national insurers for multi-peril crop and credit life insurance to foster resilience in the face of drought, flood, disease, and pests, as well as tragic life events, so farmers feel secure to invest in growing their farming businesses. To help families achieve financial stability, and to counter the incentive for side-selling, our partners offer loans during the growing season for education expenses and family crises.
As farmers grow their businesses, GAFCo links farmers and small businesses to growth capital so their incomes are limited only by their abilities.
Building Social Capital
Smallholder and small-scale farmers transitioning from subsistence/low incomes to commercial farming are held back by dependency mindset and a local environment that is unfavorable to business. GAFCo works with our partners to advocate for business-friendly policies with the government at the regional, district, ward, and local levels, while building capacity within the community to advocate for themselves.
GAFCo, in collaboration with our partners, trains farmers in household and business financial literacy and the importance of personal initiative and ethics in farming as a business. Producer groups and associations are formed, and learn to advocate with the government and negotiate with GAFCo and other commercial entities. Mechanisms for conflict resolution and continuous learning is established, leaving behind a sustainable model. Small-scale farmers transition from farming as part of a producer group to farming individually on larger parcels of land, increasing from 20 acres to 2-300 acres as they increase in capability.
Integrated operations from the farm to the export dock
EXPANDING THE VALUE CHAIN
GAFCo operates in all segments of the agricultural value-chain from developing markets and clients for high-valued crops; sourcing & distributing high quality inputs for crop production; managing finance, insurance and production contracts with farmers; training farmers in good agricultural practices; collecting and transporting ex-field crop for processing; processing and packaging crops for various end-markets; and managing storage, transport logistics, and sales to local and export markets.
GAFCo operates in twelve regions producing crops year-round with its peak harvest season between July and September. We process crops for delivery to end markets from two processing and packaging facilities, one in Arusha and one in Babati. The Arusha facility processes over 5,000 tons of seeds and high-quality food beans, with projected growth to 21,000 tons by 2022. GAFCo inspects, conducts quality checks (e.g., germination, 100g grading), cleans/sorts and packages over 130+ varieties of seeds and high quality food beans for export. In addition, over 750 tons of seeds are dressed, packaged, and distributed to farmers in commercial hubs for production. GAFCo is expanding its processing capacity through additional technology (e.g., fine cleaners, graders, gravity separators, polishers, color sorters, seed dressing, packaging) and processing software to serve global clients and outsourcing opportunities in Tanzania.
GAFCo produces high oleic sunflower oil for the food industry and high linoleic safflower oil for the vitamin, food and cosmetic industries, respectively. In peak season, GAFCo’s oil mill in Babati presses nearly 5,500 tons of oilseeds extracting 1,650 tons of cold-pressed, crude oil. Oil is exported in 22 tons flexi-tanks, where each tank fills a 20-foot shipping container. The byproduct oilseed cake is sold locally for animal feed as a critical nutritional ingredient. GAFCo is investing in hybrid seed release and multiplication to offer high quality, affordable seeds to farmers; production of healthy and essential oilseeds for raw, bulk oil and bottled markets; and advanced production and processing technology.