The Netherlands Ministry of Foreign Affairs has pledged EUR 8 million to AgriGRADE, an innovative approach to graduate the cooperative agricultural sector in emerging economies. The AgriGRADE concept, developed by SCOPEinsight, Agriterra, IDH, Oikocredit, and IDH FarmFit Fund, is a systematic and data-driven way of working that integrates proven concepts and tried and tested tools and services of the different organizations. The ultimate goal of the approach is to make cooperatives and farmer organizations in emerging markets more attractive for farmers, off-takers and investors.
Rethinking Agricultural Development
The AgriGRADE approach challenges conventional, and fragmented, efforts in cooperative development by adopting a structured, market- and data-based approach. This approach involves using business intelligence from the farmer organizations to segment and select them based on their needs and characteristics allowing for a more precise and efficient distribution of resources and technical support.
It combines this with value chain data to design value chain models, that allow cooperatives to optimize and scale their added value for members and markets. The AgriGRADE partnership is based on clearly described, complementary roles based on demonstrated expertise and track record.
In the next three and a half years, the AgriGRADE Center of Excellence will further develop and improve the AgriGRADE concept and will pilot it in Kenya and Tanzania, to deliver a proof of concept of the data- and market-driven approach. Over time, the goal is to expand the partnership with more international and local partners and implement the approach in other countries at scale, ultimately driving investments in the cooperative agricultural sector within emerging economies.
The Netherlands Ministry of Foreign Affairs wholeheartedly encourages the AgriGRADE initiative, embracing its Dutch roots and data-driven approach: “It is encouraging to see that a consortium of Dutch organizations joins forces to design an innovative and data-driven concept by building on the expertise of each party and remove overlap to increase efficiencies.” Michiel van der Pompe, Management Team member of the Sustainable Economic Development Department, Ministry of Foreign Affairs.
Leveraging Data for Progress
AgriGRADE partners commit to working systematically, using data to make the collaboration interoperable, with clear roles and responsibilities, and where partners are accountable for measurable results. This approach includes:
- Information exchange among partners: The SCOPE tools – a set of specialized tools that measure the needs of the farmer organization from a business point of view – collect data and assess the cooperative landscape at scale, amassing a vast database and allowing segmenting and further analysis. The SCOPE data together with IDH Inclusive Business Analytics, which provides value chain intelligence (IDH insight Hub), support partners to make well-informed decisions in each of their fields of expertise. SCOPEinsight IT systems facilitate data sharing among partners and stakeholders, including financial institutions and private sector partners.
- Data-driven Technical Assistance (TA): Using business intelligence, Agriterra and other TA providers deploy their approaches to strengthen the business acumen of the farmer organizations, to improve their services to members and off-takers. The targeted support should lead to access to markets and finance-ready organizations.
- Enhancing Value Chains and optimizing inclusive business models Combining the insights from IDH’s Inclusive Business Model Analyses (IBA) with the SCOPE Assessment data, IDH can further strengthen value chain relations and the sourcing and service models to increase the added value of farmer organizations for the benefit of their members and market.
- Facilitating Access to Finance Oikocredit plays an important role in ensuring that the Technical Assistance provided to farmer organizations improves their access to finance. Oikocredit plays an important role in ensuring that the Technical Assistance provided creates bankable organizations, the first step to reducing risk. Also, Oikocredit and FarmFit Fund aim to address other barriers that hamper farmer organizations from accessing finance, such as the development of suitable financial instruments, and structuring deals.
Desired Change & Impact
- Unlock increased investments in the cooperative sector
- Bring business savviness into the development sector, by using data to drive decisions and investments by farmer organizations and other stakeholders
- Use a market-driven approach to support farmer organizations to position themselves to become more reliable business partners
- Empowering the farmer organizations, by Improving their competitiveness and investment readiness
Quotes AgriGRADE partners
“AgriGRADE’s approach resonates with our mission of empowering farmer organizations for sustainable growth. We believe in the power of ambition and entrepreneurship in rural development.” – Marco Schouten, CEO Agriterra
“We regard AgriGRADE as a great initiative to boost the value proposition of farmer organization performance through data-driven insights and market opportunities.” – Tony Bruggink, Program Director at IDH, The Sustainable Trade Initiative
“The agricultural sector is increasingly in need of transformative solutions, particularly in light of food security, climate change, and enhancing the resilience of farmers in developing countries. Oikocredit is delighted to collaborate with AgriGRADE to cultivate new opportunities for rural farmers, empowering them to develop resilience and make positive contributions to their communities and the environment. We anticipate that working with our peers in this initiative will further our impact in the low-income communities we serve.” – Mirjam ‘t Lam, Managing Director, Oikocredit
“Farmer organizations are key to well-functioning food value chains. However, they are often insufficiently mature to have sufficient access to finance. We expect that through AgriGRADE more farmer organizations will professionalize and access to affordable finance will no longer be a major constraint for them.” – Roel Messie, Chief Executive Officer at IDH Investment Management FarmFit Fund
“For almost fifteen years SCOPEinsight worked on the founding vision that professional farmer organization are the essential condition for rural prosperity. And that the way to achieve that at scale is to work in a systematic and data-driven way of working. The support for our receiving for AgriGRADE from the Dutch ministry will enable us to bring this vision to the next level.” – Lucas Simons, Chief Executive Officer, SCOPEinsight and lead AgriGRADE