Introduction
EDF’s Contract Farming Export Agriculture Facility (ConFarm) was developed to improve the country’s commercial farming by focusing on increasing productivity in a bid to promote high value agricultural exports. ConFarm aims at assisting farmers with active farms to engage in contract farming with off-takers (manufacturers or direct exports of commodities) so that the country can achieve its full export potential from the agriculture sector.
Rationale
The facility was developed to address four main challenges that the sector faces which include limited access to financing and inputs for farmers; serious threat of climate change on yields; limited capacity to efficiently meet national and international demand; and serious under capitalization of agro-enterprises. The facility has the following benefits:
- Financing the establishment/ expansion of contract farming;
- Supporting commercial farms in export agriculture, especially those implementing out-grower schemes;
- Helping commercial farmers to find readily available markets for their products;
- Earning extra revenue through hiring out machinery.
- Product Features
The product is structured to intervene in the agricultural sector in the following ways;
- Procurement of farm machinery and implements to facilitate production, processing and transportation of farm produce.
- Provide working capital finance to contract farmers for the purchase of agriculture inputs.
- Support contract farmers in construction of production support infrastructure such as irrigation and warehousing infrastructure.
- Provide Guarantees to commercial banks and input suppliers involved in providing loans/credit to contract farmers.
- Provide Project Preparation and advisory services to take the projects to a bankable stage.
Partnerships
EDF liaises and partners with Contract Buyers, Farmer Organizations, Insurance Companies, Financial Institutions and Agro dealers that engage with farmers in the contract farming value chain.
Application Requirements
For loan product
- Land holding size of not less than 100 ha with tittle deeds.
- Owner’s contribution of at least 20% of the total project cost for Working capital and 30% for Capital Expenditure and Guarantee facility.
- The farm should have sound management structures.
- Confirmed export orders or contract for any targeted and approved commodities.
- Promoters must have a track record of at least 3 years in farming.
- Assets to be insured with comprehensive insurance cover.
Project Preparation Fund
- Project should demonstrate high level of economic impact;
- Promoters must have a track record in farming of at least 3 years
- Promoters to contribute a minimum of 20% of the total cost of the proposed preparatory activity; and
- Promoters should own a minimum of 200 ha of farm land;