The DFCD helps prepare Kenyan agribusiness to scale-up
Deze content is in het Engels. Wil je meer informatie? Neem dan contact op!
The Dutch Fund for Climate and Development (DFCD) has approved grant support for Cinch Markets, a Kenyan agricultural land management company that unlocks the potential of smallholder farmers’ land.
In Sub-Saharan Africa, over 50% of the workforce engage in farming, with over 33 million people farming on less than a hectare of land. This is enough to provide them with their own food crops, but not sizable enough to benefit of the economies of scale needed to generate a healthy return from growing cash crops. They do not have the money to invest in their farm to improve its productivity.
Cinch, launched in 2019, has developed an innovative model to overcome the lack of scale holding back farmers’ incomes. Groups of interested smallholders can lease their land to Cinch. The company consolidates the management and farming of their land to grow more valuable cash crops, while improving the farmer income and environmental conditions on the farm.
The landowner gets a guaranteed income from an annual cash lease payment, a quarterly dividend from the proceeds of the produce, and a monthly salary if the farmer chooses to work on the land as an employee.
The project has been put forward by the World Wide Fund for Nature Netherlands (WWF-NL) which, together with SNV Netherlands Development Organisation, manages the DFCD’s Origination Facility to develop new projects. Following this approval WWF intends to sign a €300.000 grant funding agreement with Cinch Markets.
Cinch’s farming model improves landowners’ incomes significantly, creates employment opportunities and trains local youth in sustainable agronomic practices. It unlocks profit by switching from long cycle and low-margin crops (ex: grains, animal feed) to short cycle and high-margin crops (ex: french beans, garlic, herbs, etc.). By aggregating smallholder land assets, the company creates economies of scale and can invest in infrastructure and professional farm management.
Cinch has already demonstrated its ability to work with both cash crops, like chia, flax and horticulture, as well as trees like the tea tree. The company is now looking to integrate agroforestry into its farming model to increase the long-term resilience of the farming land, diversify its income streams and increase revenues. Cinch will intercrop a cash-generating crop, such as potatoes or pyrethrum, between rows of a tree crop, like jackfruit, pomegranate or moringa.
The cash crop can pay for the long-term investments in irrigation with short-term cash flow. Over time more land initially used for growing cash crops can transition to growing tree crops, which generates reliable revenue over years and improves the value of the land.
The company sees this model and the support of the DFCD as an opportunity to bring demonstrated parts of its business together to create a new business designed to restore degraded land, turning unproductive or unused farming plots into valuable climate-resilient arable land. It can replicate this approach even across Kenya’s northern dryland regions, so long as there is a reliable water table.
As a starting point, Cinch will likely choose a location for the first 50-acre farm north of Mount Kenya. It has been seeking the support of the WWF team of the DFCD to prepare its model for scaleup, while building the evidence its farming model generates a sustainable long-term profit. When the project is investment-ready the company is seeking an overall investment of around €13 million to scale up this business to an additional 1,000 acres in three years. Besides the DFCD, there are also some other investors who expressed their interest in contributing to this scale-up financing.
The company is using the DFCD grant to hire technical assistance to further develop the farming model, an environmental and social impact assessment, and expand its community engagement to attract and educate farmers.
It needs technical support to install the most cost and water efficient irrigation on the farms, understand which tree species are best suited for the areas they intend to reforest and what are the best cash crops.
The company is aiming to achieve the following impact yardsticks for the scaled-up project by 2028:
“We are excited to be supporting and working with Cinch to assist them in pioneering their integrated food and tree crop smallholder farming model in Kenya. Cinch presents an innovative model for improving smallholder yields, income, capacity and environmental outcomes, directly supporting some of the most vulnerable populations to climate change."
“We're thrilled to have the expertise of WWF and their partners alongside us as Cinch takes our tenets of Mosaic Agriculture to the areas that need it most. With WWF, we hope to show that land can be a productive asset in the service of the most vulnerable people, and our planet.”
For more information, Keiron Brand, Regional Lead WWF DFCD Africa at kbrand@wwf.nl.
In case you have any grievances in relation to this project of the DFCD’s Origination Facility, please contact us through our service desk at servicedesk@wwf.nl.
Cinch is a Kenyan agriculture company that addresses the key barriers to improve the productivity of land owned by smallholder farmers. It aggregates their land through leases, and then transforms the farming model into a sustainable, highly productive farming business. Cinch manages 700 acres across Kenya and Rwanda, and will expand to 1,000+ acres by the end of 2022. Cinch works directly with exporters and distributors exclusively on contract to sell produce.
The DFCD enables private sector investment in projects aimed at climate adaptation and mitigation in developing countries. The Dutch Ministry of Foreign Affairs has made available € 160 million to increase the resilience of communities and ecosystems most vulnerable to climate change. The DFCD is managed by a pioneering consortium of Climate Fund Managers (CFM), Worldwide Fund for Nature Netherlands (WWF-NL) and SNV, led by the Dutch Entrepreneurial Development Bank, FMO.
