Creating Strong Links

STRUCTURED PRODUCTION PROGRAMS

The Primary Production Chain consists of Input suppliers, Producers and Off-takers. The chains that deliver the best value to these participants are those that are organized to allow the parties to give the best of what they have. This is done when all parties take part as equals – no matter who is the biggest – richest – strongest. We organize these three players to work side by side in a closed program called Virtual Farmer. In this we stand next to the Off-Taker, the farmer and his supplier and help each one of them.

The Input Supplier

These people start the chain by ensuring there is seed or seedlings, fertiliser to make it grow be it organic or not, and the ones that help to protect the crops against the perils of pests, disease and weather.

The Farmers

These are special people whether they farm by hand, cow or machine they wake up to feel the air on their skin and the soil under their feet. They love the soil and strive to feed the nations they live in and beyond.

The Off-Takers

At the heart of the chain the off-takers place the production in the market. They link the primary production chain with the rest of the world. These are the people that process the harvested food ensuring it reaches us.

PROGRAM DESIGN

Every cycle follows the same process.

a. The Off-taker sets the demand for the crop for the location.
b. Market analysis is done by them and pre-plant values determined.
c. The program opens for farmers to sign up and register their lands.
d. Forward Contracts are signed.
e. The Risk Mitigation program is opened.
f. The Funding is activated.
g. The Crop is produced and monitored spatially.
h. The Crop gets harvested and delivered directly to the off-taker.

In this cycle the risks are contained and managed. The producer is sure of his market. The Off-taker is secured of his crop and the Suppliers don’t take credit risks.

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WHAT AND WHERE?

The program is an in principle approach to production. It can be for cassava, maize, soya, sesame, rice or cane. At SAS we follow the same process until we find a way.

We study the history, the soils, the weather, the culture of the farmers, the government policies, and world markets. With this knowledge we can work out which key risks need to be managed.

The seasonal contracts address these risks. Once this is done we can follow the crops and the programs spatially and make sure we stay within the program rules. At present we offer the program in Southern and Eastern Africa with the intention to be a global offering in 3 years time.

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MANAGED RISKS

Farming comes with risks – both in market and production. By growing into demand the market risk is minimized. The production risk is managed form a specialized Insurance program called a Stability Fund.All production programs are charged a risk premium to join this Insurance Program. In particular we follow soil moisture and crop health using NDVI and RADAR. We share this crops status visually with all so everyone can see if the crop is produced and will be delivered. When extremes occur there is payment support into the fund. This helps the farmers to meet their obligations.
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