The Nyabon Aggregator Model
The Nyabon Aggregator model is an ecosystem of stakeholders working together with the common goal of developing crop value chains.
The Nyabon Aggregator model is an ecosystem of stakeholders working together with the common goal of developing crop value chains. It does this by aligning the interests of four key stakeholders who can all benefit financially from the model’s success. Stakeholders in the model are:
Farmers/Farmer Organizations are the primary producers. They own the primary sources of production and seek to increase yields and incomes while reducing the toil on women and attract youth to farming, through improved inputs, machinery and equipment, and support services supplied directly or indirectly by Nyabon.
Off-takers provide a reliable market and contract to purchase crop harvests, and “add value” by processing and selling to domestic and export markets. This brings external funding into the ecosystem which is used to finance primary production and support farmers.
Working Capital Providers include banks and SACCO’s, debt financiers and investors. They provide financial resources and work closely with other key players which, together reduce risk. This brings liquidity to all players in the ecosystem and enables the system to operate smoothly and efficiently. This creates the capacity for scaling up and growing agriculture production to its full potential.
Nyabon coordinates the work of all ecosystem players. It develops strategies, negotiates, develops and implements mechanization solutions and financing. By creating a “closed loop” system, Nyabon aggregates smallholder farmers, increases production, sells to off-takers to monetize harvests, while simultaneously working with banks and other lenders to provide working capital to keep the system operating.
Through this model, Nyabon promotes efficient and affordable mechanization for farmers by demonstrating, selling and financing agricultural equipment, inputs and services both directly and through secondary providers. The model is designed to be sustainable by aligning the financial interests of all players in the ecosystem who all benefit and share in its success.
Nyabon is a sustainable social enterprise created to achieve lasting impacts while achieving success as a profitable business with shared benefits for all participants. Mechanization solutions for smallholders that promote production, harvesting, storage and transportation are critical to improve yields and crop quality while also reducing post-harvest losses. The ecosystem and interconnectedness of what Nyabon has created are the missing components to improve smallholder agriculture across sub-Saharan Africa.
Nyabon’s mechanization-based solution to develop productive and cost-effective ways to help smallholder farmers starts with accessing equipment. This is supported by close working relationships with Farmer Organizations, Co-ops, Agri SME’s and other organizations working directly with farmers. This collaboration provides for equitable sharing among a group of neighboring farms, paid for over time using lease-to-own financing or loans. Paybacks are guaranteed by crop revenues and further supported by crop insurance. To further ensure success, Nyabon provides training, support and maintenance to achieve optimal outcomes for all stakeholders.
Nyabon’s Aggregator Model is already playing a key role in developing and expanding priority crop value chains with well-established and growing markets. This process starts with a market analysis done with business partners working in different parts of the value chain to identify market demand. Then it expands to include banks and other lenders to provide affordable financing to farmers, SME’s and Nyabon for equipment. To accelerate increased production, funders who provide grants, reimbursable grants, low-cost loans, etc. also are key partners to cover costs of farmer training, demonstration plots, supportive services and help with special costs related to new or expanding crop value chains.
The Aggregator Model is a unique vehicle for addressing the obstacles faced by farmers and rural communities. This includes attracting youth to farming, increasing employment and training for rural youth in agriculture value chains and reducing the heavy work and toil on women by substituting manual labor with mechanization. Reducing these obstacles helps farm families engage in sustainable, climate smart agriculture, improve incomes and livelihoods, and help meet the SDG goals.
How Nyabon Aggregator Model Works
- Identifies key stakeholders critical to creating successful value chains
- Aligns the interests of all participants
- Learns through demonstrations, pilot projects, testing and adaptation. This includes optimal use of equipment and technology, creating new financing solutions, and improving performance through learning from successes and failures (feedback loops);
- Oversees and coordinates the process to ensure:
- The value chain remains strong and growing to meet market demand
- Farmers have all the necessary required resources and a guaranteed end-customer
- Working capital is available to keep the system operating throughout the cycle
- Mechanization solutions improve farmer productivity and crop supply
- Potential is maximized through scaling and expanding partner involvement
Benefits and Beneficiaries
The fundamental building block of the model is an alignment of common interests for all participants. Key benefits and beneficiaries are:
National Governments: Benefit from domestic production as an alternative to imports of food. This directly contributes to increased employment, a stronger GDP, better foreign exchange balances, improved domestic food security and nutrition, and positive climate impacts through the use of climate-smart agriculture.
Farmers/Farmers Ogranizations and Off-takers: Improved revenues, reliable, contracted quality supply
Working Capital Provider: New and expanded revenue streams; New customers
Women and Youth: Jobs; training; improved incomes, Improved working conditions