Carl Jensen, co-founder and CEO of Good Nature Agro
Interview with Carl Jensen
CO-FOUNDER AND CEO, GOOD NATURE AGRO
Lives in: Zambia
How American-born Carl Jensen and his co-founders at Good Nature Agro constructed a enterprise with $10 million in income by collaborating with smallholder farmers in Zambia.
Agriculture in Africa is dominated by hundreds of thousands of small-scale farmers who domesticate modest parcels of land. Smallholder farming on the continent is commonly synonymous with low yields, restricted use of high quality seeds and fertilisers, minimal mechanisation, and normal hardship and poverty. But, one firm, Good Nature Agro (GNA), has tapped into the latent potential of Africa’s smallholder sector, establishing a enterprise with $10 million in income by collaborating with farmers in Zambia.
At its core, GNA contracts over 20,000 small-scale farmers to develop legume seeds and commodities – reminiscent of cowpea, soya bean, and groundnuts – after which purchases these merchandise from the farmers to promote at a revenue. Nevertheless, GNA’s built-in enterprise mannequin extends far past easy commerce. It supplies farmers with loans to purchase high-quality seeds and different agricultural inputs, provides steady farming help by way of personal extension brokers, and delivers monetary and digital literacy coaching. GNA can also be concerned in financing property for farmers, starting from agricultural tools to cellphones.
The smallholders are each the corporate’s suppliers and clients. “We knew that farmers wanted high quality inputs [and] they wanted financing so as to have the ability to entry these inputs. They wanted technical help all year long with a view to maximise what got here out. After which they wanted a assured market – they wanted sureties, like farmers wherever on this planet. And so we constructed a enterprise mannequin round fulfilling all of these wants,” explains GNA’s co-founder and CEO Carl Jensen.
Apart from getting cash for itself, GNA has considerably elevated the earnings of the farmers it really works with. Earlier than GNA’s involvement, they earned a mean internet earnings of $113 per hectare. GNA’s intention has all the time been to lift this to $600 per hectare, which, contemplating the common farm dimension of three.3 hectares, quantities to about $2,000 per farmer household. Final season, for the primary time, GNA surpassed an $600 common for the farmers in its community.
“We’ve had farmers who’ve succeeded to the purpose that they’ve give up farming, which I believe is a improbable factor – farmers which have gotten sufficient to buy a store in Chipata, like they’ve all the time needed to do,” says Jensen.
From America to Zambia
American-born Jensen, who grew up on a big wheat farm in Idaho, started working from a younger age. Like many farm children, his early duties included driving a tractor and truck and choosing rocks from the fields, tasks he undertook even earlier than his teenage years.
After finishing highschool, he pursued structure at college however in the end graduated with a level in agricultural economics. Unsure about his profession path, Jensen spent a 12 months in Cambodia volunteering with rice farmers, an expertise which sparked his curiosity in working with smallholders. Upon returning to the US, he labored on varied farms, extending his information past his household’s farming practices. In 2012, he enrolled in a grasp’s programme on the College of California, Davis, to review soil science and worldwide agricultural growth.
Throughout the summer season break of 2013, Jensen participated within the Worldwide Improvement Design Summit (IDDS) in Zambia. This six-week programme assembled people from various backgrounds to develop applied sciences and enterprises aiding these in poverty. The programme entailed in depth interplay with farmers in rural communities. It was right here that Jensen encountered lots of the farmers he would later collaborate with by way of GNA.
He additionally met his future Zambian co-founder, Sunday Silungwe, who was his roommate all through the programme. At the moment, Silungwe labored for the non-profit organisation Heifer Worldwide. The pair instantly hit it off, spending numerous hours discussing points associated to smallholder farming. One key perception from the programme was the interconnectedness of farmers’ challenges which shaped the premise of their enterprise concept.
After the summit, Jensen returned to the US to finish his graduate research, whereas Silungwe continued with Heifer and started laying the groundwork for his or her enterprise in Zambia. Kellan Hays, a fellow UC Davis pupil, joined because the third co-founder. Their proposed enterprise gained two marketing strategy competitions – one at MIT and one at UC Davis – securing a complete of $25,000, which, together with founder investments of $50,000, funded the launch of the enterprise in 2014.
As soon as Jensen accomplished his 12 months at UC Davis, he relocated to Zambia to begin the enterprise full-time with Silungwe. Hays, initially working part-time whereas employed elsewhere, joined the group full-time in 2018.
Good Nature Agro is a provider of cowpea, soya beans and groundnut seeds.
Early days
Jensen and his co-founders began small, largely as a result of that they had restricted cash and have been nonetheless fine-tuning their marketing strategy. Initially, the enterprise had two most important parts.
The primary concerned contracting smallholders to develop crops, which GNA would then buy and promote at a revenue margin. To kickstart this, the corporate gathered a gaggle of 40 smallholder farmer households situated about 90 minutes from town of Chipata, close to the Malawi border, and enlisted them to develop maize and cowpea. GNA actively assisted these farmers in enhancing their manufacturing.
The second element centred on agricultural tools and instruments. This vary included particular baggage to forestall crop mould throughout storage, handbook groundnut and maize shellers, and a brand new sort of treadle pump.
However the preliminary phases have been fraught with challenges. The group discovered that maize was not an appropriate crop for the farmers they have been collaborating with. The depleted soils required substantial funding, particularly in fertiliser, to yield good maize crops. Nevertheless the cowpeas confirmed extra promise.
And whereas there was demand for GNA’s instruments, many farmers lacked the financial savings for even a $50 buy on property. Consequently, GNA discontinued the tools arm of the enterprise after a couple of 12 months.
“We positively misplaced cash,” says Jensen, talking concerning the early days of enterprise. “Barely paying your self and slicing prices wherever you’ll be able to. You’d be renting a beat up outdated minivan as an alternative of shopping for a automobile. Forty farmers – it’s not so much. And as we have been figuring various things out we had loads of college charges to pay alongside the best way.”
Changing into a seed firm
As GNA approached its first harvest, an NGO inquired if the corporate might produce high-quality legume seed. Legumes, together with beans, peas, and lentils, are valued for his or her edible seeds in pods. Going through a shortage of excellent legume seed, the NGO turned to GNA, which accepted the problem. Consequently, GNA shifted its focus, encouraging the smallholders it partnered with to domesticate seeds. Legume seeds are produced by permitting crops to totally mature and kind dry pods.
Jensen says producing seeds was match with the corporate’s operations. “Opposite to what many individuals suppose … engaged on small plots, and dealing with smallholder farmers, you’ll be able to truly get actually distinctive high quality produce … And so as soon as that chance got here alongside to do a seed sale … we realised that it was a reasonably good match with … the capacities we’ve developed in only a 12 months … Seed requires traceability, seed requires consideration to element, it requires with the ability to transfer by way of your whole subject and pull out something whereas it’s rising that’s of the flawed selection. Primarily, it requires dedication to a extremely high-quality, closing product. And that’s the place we felt we might carve out a distinct segment.”
Along with the unique NGO which sparked the thought to develop into a seed firm, GNA quickly began including different seed shoppers as properly.
Jensen notes that though a lot of the world seed corporations are current in Zambia, none have been centered on legume seeds. “We noticed that the market was sufficiently big … to begin rising fairly aggressively as a legume seed firm.”
The corporate subsequently expanded its community from 40 to 400 farmers, diversifying into soya bean and groundnut seeds alongside cowpea.
GNA bought its seeds to numerous shoppers, together with white-labeling for different seed corporations. American commodities buying and selling large Cargill, which had a soya bean oil processing enterprise in Lusaka, turned a giant buyer. Cargill provided GNA’s seeds to smallholders, who then bought the harvested crops again to it for oil processing.
GNA’s secret sauce: personal extension brokers
GNA’s personal extension brokers, or PEAs as the corporate calls them, have been essential to its success to this point. Every PEA works with a gaggle of 40 smallholder farmers, educating them about one of the best farming practices and offering coaching in monetary and digital literacy. These providers are provided freed from cost. PEAs have the potential to earn vital earnings, which is why their positions are coveted of their communities. PEAs obtain a set wage plus 2% of the income generated from the produce grown by the 40 farmers they oversee. They’re, due to this fact, incentivised to maximise the farmers’ output.
Changing into a PEA just isn’t straightforward. Candidates are meticulously chosen by dividing every group of 40 smallholder farmers into smaller items of 10. Every group nominates a possible PEA, making certain that candidates have already got the group’s belief. The 4 shortlisted candidates endure a radical interview course of to guage their farming expertise, management skills, capability to interact with different farmers, and a ardour for enhancing their communities. “Loads of smallholder farmers are farming as a result of it’s the solely factor obtainable … we needed individuals who beloved farming and needed to proceed farming and develop their operations,” Jensen explains. Finally, the corporate selects one candidate.
Jensen believes the non-public relationships the corporate has with smallholder farmers has been a key distinction maker.
Increasing into meals crops and past
After a number of years centered completely on seed, the GNA group realised there was a restrict to the variety of shoppers it might attain on this market. In 2018, to safe future progress, the corporate started contracting with new smallholder farmers to produce it with legume commodities for consumption. GNA then sells the commodities to quite a lot of consumers. These farmers obtain the identical help as GNA supplies to these producing seed.
Securing consumers for these meals crops initially posed a problem, as the corporate wanted to ascertain itself as a dependable provider. Jensen explains that many consumers have been cautious resulting from “belief exhaustion” from previous experiences with suppliers who delivered poor-quality produce. He reveals that meals crops now account for 30% of the corporate’s farming revenues, with the remaining coming from seed gross sales.
The corporate has three commodity processing amenities in Zambia.
GNA has additionally began primary processing of the commodities it sells, working three factories throughout Zambia. “We don’t do fast-moving client items – we don’t flip peanuts into peanut butter. We take the merchandise that come from farm gate, and we course of it to the place we are able to ship it to a peanut butter firm … They usually simply go forward and roast it immediately … We course of for worldwide buying and selling spec,” Jensen notes.
A brand new line of enterprise for GNA is the financing of property, from agricultural tools to cellphones, capitalising on its shut relationships with farmers. This facet of the enterprise remains to be comparatively small, accounting for $400,000 of its $10 million turnover.
“We wish to work with these farmers and supply no matter is important to develop their operations … to make them extra worthwhile at any scale. And in the end to get farmers properly out of … the cycle of poverty and into the center class the place they’ve financial savings, the place they will put money into long-term objectives. And the place a single 12 months shock just isn’t going to throw all of them the best way off observe,” Jensen provides.
Navigating progress
Through the years, GNA has attracted appreciable worldwide funding to gasoline its progress. In November 2023, the corporate introduced a $8.5 million Sequence B fairness spherical, with contributions from Goodwell Investments, Oikocredit Worldwide, and World Partnerships.
Reflecting on the corporate’s trajectory, Jensen admits he would have tempered the expansion ambitions if he have been to begin over. Notably in its early years, GNA aimed to broaden too quickly. “We had massive ambitions, we needed to succeed in as many farmers as attainable, we had large numbers on our monetary projections and pitch decks. However the longer we’ve been working, the extra we’re type of leaning into the significance of participating actually deeply with farmers, even when it means you’re working with much less of them…”
“Particularly in these years once we didn’t have constant clients and we didn’t have constant financiers, we might have made our lives so much simpler if we had put slightly extra realism in our monetary planning and made certain that the client base was sturdy and the investor base was sturdy … we should always have executed extra to not put ourselves in these positions of needing cash and needing it now,” he provides.
Weathering Zambia’s macroeconomic headwinds
Jensen identifies macro-economic points, notably these associated to foreign money, as the primary challenges the corporate has confronted. He says he has been stunned by how a lot the corporate’s path has been impacted by forex-related issues. Over the previous decade, the Zambian kwacha has misplaced over 300% of its worth towards the US greenback. Moreover, a shortage of US {dollars} in neighbouring international locations has additionally impacted GNA. A living proof is Malawi, the place GNA was creating a robust buyer base till a US greenback scarcity within the nation led to a major lower in imports.
Zambia’s heavy debt burden has been a urgent difficulty over the previous few years. In November 2020, the nation was the primary in Africa to default on its debt repayments amidst the Covid-19 pandemic, because the nation’s exterior debt climbed from $4.8 billion in 2014 to $11.2 billion in 2019. Three years later, Zambia remains to be negotiating with its collectors.
Jensen says it has been a “tough journey” however says he has confidence within the nation’s present trajectory. “We’re nonetheless driving a depreciating kwacha however largely it’s as a result of among the robust factors are being addressed. The type of uncontrolled borrowing that happened years prior has left the nation in a extremely tough spot … The federal government is working arduous to restructure all of these and progress has been good. They’ve been slicing again on a number of programmes that have been simply type of bleeding cash … So though it’s slightly painful proper now – with fairly a little bit of inflation, continued depreciation, larger prices the place subsidies have been eliminated on issues like gasoline – I believe it’s all for the great.”
Good Nature Agro CEO Carl Jensen’s contact data
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