Leasing Leveraging Livelihoods: L3

Sustainable Intensification is one of the key drivers of agricultural transformation involving Smallholder Farmers in emerging economies. Mechanization would be a crucial component in farming that helps improving productivity and profitability in agriculture. It has been estimated by FAO that adoption of appropriate mechanization solutions would enhance the productivity by 20%. Mechanization would also help significantly reducing Post Harvest Loss resulting to increased profitability. It also attracts youth into agriculture.

The major challenges of Smallholder farmers to adopt appropriate mechanization solutions are

Knowledge:
knowhow & do how

To optimize production and profitability from farming, smallholder farmers require scientific knowledge of package of practices, farm management systems, postharvest techniques, value addition and above all be part of credible value chain. Smallholders need to build their capacities and strengthen supporting institutions.

Technology

Use of appropriate farm machineries depends on various factors viz., soil type, climatic conditions, agroecology, crop to be grown, perishability of produce, access to market etc. Comprehensive strategies need to be developed to optimize the gains out of mechanization.

Finance

Smallholders often are resource poor and risk prone. Their access to formal financial institutions is limited. They won’t be able to raise necessary capital due to lack of required collateral.

The complex combination of these three challenges pose humongous obstacles to the growth of mechanization among Smallholder Farmers in emerging economies in Africa, Asia and Latin America

L3 is an integrated approach to commercially promote sustainable and profitable ‘mechanization solution’ to Smallholder Farmers by blending three definite solutions viz.,

Knowledge Augmentation

Knowledge and capacity
development support

  • commercial agriculture
  • risk mitigation through Decision Support system & IoT
  • value addition
  • agribusiness support
  • Go -To -Market

Mechanization Technology

Diagnostic studies to determine appropriate specifications of machineries, Negotiation with Manufactures through RFQ, Facilitating Procurement, Training on repair-maintenance, ICT based advisory on machine health, Developing SOP in local language

Lease Finance

Innovative Lease financing options, No collaterals, Minimal down payment, flexible repayment schedule, robust built-in risk mitigation

How does L3 work?

SELECTION

  • Selection of mpower-u farmers/customer
  • Registration of Farmer customer into MIS
  • Farming system analysis
  • Business Plan support to selected custmers
  • GoToMarket Strategies development

Standardization

  • Techncial Diagnostics to determine mechanization needs
  • RFQ to potential Manufacturers & Vendors
  • SOP development
  • Due diligence om lease financing

Operations

  • Procurementof machneries
  • Operationalization of Lease
  • Training on Operations
  • Monitoring & Evaluation

L3 minimizes the risk of defaults by

  • Proper selection of mpower-u Farmers (high entrepreneurial capability and strong creditworthiness) who would earn revenues using machineries
  • Appropriate machineries with optimal output and minimal wear and tears
  • Incentivization towards maintaining good health of machineries
  • Buy-back options upon extreme defaults

CASE STUDY

L3 partnered with Alliance for Green Revolution in Africa (AGRA) and Rockefeller Foundation to bring sustainable mechanization solutions to reduce Post Harvest Loss in Maize value chain in Southern Highlands in Tanzania.

Southern Highlands is one of most impoverished regions of Tanzania where food and nutritional securities of the communities need to improved.

L3 identified three major stakeholders such as individual Farmers, Farmers’ Organizations (SACCO & AMCO) and local Millers.