Making more than peanuts

Sunday Silungwe (left) and Carl Jensen (right), co-founders of Good Nature Agro.
Sunday Silungwe (left) and Carl Jensen (right), co-founders of Good Nature Agro.
Mining for Zambia

Original article on Mining for Zambia website

Good Nature Agro grew out of a chance meeting between Sunday Silungwe and Carl Jensen at Zambia’s International Development Design Summit. Silungwe’s background in developmental studies and Jensen’s passion for agricultural development sparked conversations about post-harvest loss, and the inherent problems with Non-Government Organisations (NGOs), which are all-too-often destined to die from lack of funding. They started Good Nature Agro in 2014 in the hope of building a business that, in a nutshell, would enable small-scale farmers to generate lasting income. That was key: unlike many not-for-profits, it had to be sustainable. Five years later, working with 5,000 farmers across six crops, Good Nature Agro is among the most impactful agro-processing companies in the country, providing training and support to established farmers whose incomes are now more stable, and other Zambians who have successfully made farming their livelihood.

A little over a year ago, Good Nature Agro began working with Impact Capital Africa (ICA). ICA is a platform that builds bridges between impact investors and businesses in emerging markets like Zambia with the potential to generate both commercial and environmental or social returns that will benefit the wider community. Now, an exciting new stage in the company’s development is coming to fruition. Partnerships secured via ICA are enabling Good Nature Agro to work with a new group of farmers in Southern Province, to explore export markets for a variety of legumes grown in the region. After years of focusing on the growing of crops for seed, the setting-up of a peanut processing plant will close the gap. The land earmarked for the building of the peanut processing plant is within Munali Nickel Mine’s site.

Mining For Zambia asked co-founder Carl Jensen to tell us more about the journey that lies ahead for Good Nature Agro in its partnership with Munali.

Good Nature Agro was already generating revenue when you became involved with ICA, which aims to connect small and medium-sized enterprises (SMEs) in Zambia with investors. What did your involvement with ICA lead to?

 If it wasn’t for ICA, we wouldn’t be working in the area — in Southern Province — which we recently entered. We’re approaching our first growing season here, and working with ICA has allowed us to make sure that we’re utilizing this upcoming season well: engaging farmers, getting to know the area, and really scoping out how investment will be used for the peanut processing plant. So we’re still in the early stages — but those early stages were unlocked by ICA.

In what ways specifically?

Through ICA support, we were able to strike a partnership with Munali Nickel mine and secure a grant through PEP Zambia (PEPZ), which has allowed us to start working in Southern Province with a limited number of farmers. It has allowed us to take risks and to innovative a bit more: to focus on R&D [Research & Development] and to test out different cropping systems. The PEPZ funding has really helped us to staff up and get the most out of the region. We’ll be working with 200 farmers here on 100 hectares. It’s challenging across that kind of spread to break even, especially in the first year. This funding and our partnership with Munali [and its major investor Consolidated Nickel Mining] is really accelerating the process for the export-driven model that we’re moving steadily towards.

You’ll be working with a new group of farmers in Southern Province to focus on growing crops before the peanut processing plant is ready, when you’ll start focusing on exports. What stage are you at now?

Before moving forward with the planning of the peanut processing plant itself, we need to consider what scale is practical, how we’re going to work with Munali mine in terms of utilities, and various other factors. That’s ongoing, and construction on the plant won’t start for about a year. For now, the real foundation of our work here is engaging the community around Munali, including the farmers that were relocated by the construction of the mine. About 65 percent of the farmers that we’ll be working with directly in Southern province fall within the RAP [Munali’s Resettlement Action Plan, for which $7.5 million was spent on building new homes for households impacted by the mine’s operations.] The other 35 percent of farmers are located in the nearby area.

The way that we like to operate is to enter an area and work very closely with a couple of hundred farmers, using our ‘high touch’ model. It’s not just a one-directional interaction, where we’re providing training, finance, and all of that. It’s really bi-directional in that first year, where we’re learning about how the farmers make their decisions; we’re learning about the physical and ecological context, what works, which crop varieties are best, what the major concerns are that farmers have throughout the season… So we’re currently in the process of exploring what informs the model we adopt, and the practices that we go forward — and scale — with. Because ultimately, we want to reach tens of thousands of farmers in each of these areas.

What new learnings will you be applying to your farming programs in Southern Province?

In Southern Province, we are entering with a wide open mind, and utilising systems that will allow us to work with farmers so that they can be profitable — so that we can be profitable, but also so that we take a more assertive stance on rebuilding the soil, which is quite degraded. We’re using practices that can work better with limited, less predictable rainfall, and higher temperatures than in Eastern Province. We’re using a system based on ‘alley cropping’, which means we’re spacing single rows of pigeon pea [a perennial legume] about two and a half meters from each other, repeating throughout the field. And in between each of these rows, we’ll have different legume crops and varieties that are best adapted to the climate. Each of the varieties that we’re introducing has a purpose within the soil, within the local ecosystem, and nutritional potential for the home. They also each have a market associated with them. The ground nuts will likely be intended for export to South Africa, the cowpea [also known as black-eyed peas] will probably be taken back to Chipata [where Good Nature Agro’s headquarters is] and then eventually be exported to South Asia.

Tell us more about the plan to export Zambian crops.

The main thing is working with farmers to shift varieties. Local varieties of groundnuts are not a good fit for the international market: they’re too high in oil, and they’re too pointed so they don’t process well. We want to move towards other healthier, tastier groundnuts. The good news is, these nuts also tend to have shorter growing seasons and tend to be easier to produce with small scale farmers. It’s a mystery to us why this hasn’t happened earlier! Everyone has been focused on the local market, and no one has really focused on the larger formal market for groundnuts, which is South Africa.

Processing the groundnuts in the processing plant that will be housed within Munali mine’s site is an essential part of this exciting plan. Do you have some kind of lease with Munali or are they simply giving you access to their land?

In terms of utilising the land that the processing plant will go on, it’s Munali’s land and this is very much a function of them being a very forward-thinking company. Yes, we are working with farmers affected by the mine, but the Mabiza and CNM team are also just self-aware enough about the fact that, as a nickel mine, there is going to be an end date and it’s within sight. What will happen to this region? What will happen to the farmers once Munali runs its course? They’re laying the groundwork for that now, which involves making the best use of the land that they have, and ensuring lasting productive use for local people and Zambian businesses alike.

Tell us a bit more about your involvement with ICA.

ICA provides technical assistance and master class support for (generally) slightly earlier stage SMEs than us, that want support in building their business plan, building a financial model, or pitching etc. We have a profile uploaded onto the ICA website and, as with other good impact investing networks, it’s about getting ‘face time’ with people, and investors.

Zambia is still considered a frontier market by most of these funds, which means that you’ll talk to quite a few impact investors, and they’ll say, ‘No, we only do East Africa,’ for example. Part of our involvement in ICA is being an ambassador for the country and the region. As these investors arrive, they can see that there are a lot of really interesting, smaller stage companies; there are also companies that are looking for $2 million of equity funding, have a proven track record, and have already broken even. So, to some extent, we view ourselves as representing the ecosystem and its potential.