Zambia: US$10 million company proves small farms can be big business

LUSAKA — Agriculture in Africa is dominated by millions of small-scale farmers who cultivate modest parcels of land.

Smallholder farming on the continent is often synonymous with low yields, limited use of quality seeds and fertilisers, minimal mechanisation, and general hardship and poverty.

Yet, one company, Good Nature Agro (GNA), has tapped into the latent potential of Africa’s smallholder sector, establishing a business with US$10 million in revenue by collaborating with farmers in Zambia.

At its core, GNA contracts over 20,000 small-scale farmers to grow legume seeds and commodities — such as cowpea, soya bean, and groundnuts — and then purchases these products from the farmers to sell at a pro t.

However, GNA’s integrated business model extends far beyond simple trade.

It provides farmers with loans to buy high-quality seeds and other agricultural inputs, o ers continuous farming support through private extension agents, and delivers nancial and digital literacy training.

GNA is also involved in nancing assets for farmers, ranging from agricultural equipment to mobile phones.

The smallholders are both the company’s suppliers and customers.

“We knew that farmers needed quality inputs [and] they needed nancing in order to be able to access those inputs.

“They needed technical support throughout the year in order to maximise what came out.

“And then they needed a guaranteed market – they needed sureties, like farmers anywhere in the world.

“And so we built a business model around ful lling all of those needs,” explains GNA’s co-founder and CEO Carl

Jensen.

Besides making money for itself, GNA has signi cantly increased the earnings of the farmers it works with.

Before GNA’s involvement, they earned an average net income of US$113 per hectare.

GNA’s aim has always been to raise this to $600 per hectare, which considering the average farm size of 3.3 hectares, amounts to about US$2,000 per farmer family. Last season, for the rst time, GNA surpassed an US$600 average for the farmers in its network.

“We’ve had farmers who have succeeded to the point that they’ve quit farming, which I think is a fantastic thing – farmers that have gotten enough to purchase a shop in Chipata, like they’ve always wanted to do,” says Jensen.

American-born Jensen, who grew up on a large wheat farm in Idaho, began working from a young age.

Like many farm kids, his early tasks included driving a tractor and truck and picking rocks from the elds, responsibilities he undertook even before his teenage years.

After completing high school, he pursued architecture at university but ultimately graduated with a degree in agricultural economics.

Uncertain about his career path, Jensen spent a year in Cambodia volunteering with rice farmers, an experience which sparked his interest in working with smallholders.

Upon returning to the US, he worked on various farms, extending his knowledge beyond his family’s farming practices.

In 2012, he enrolled in a master’s programme at the University of California, Davis, to study soil science and international agricultural development.

During the summer break of 2013,

Jensen participated in the International Development Design Summit (IDDS) in Zambia.

This six-week programme assembled individuals from diverse backgrounds to develop technologies and enterprises aiding those in poverty.

The programme entailed extensive interaction with farmers in rural communities. It was here that Jensen encountered many of the farmers he would later collaborate with through GNA.

He also met his future Zambian cofounder, Sunday Silungwe, who was his roommate throughout the programme.

At that time, Silungwe worked for the non-pro t organisation Heifer International.

The pair immediately hit it o , spending countless hours discussing issues related to smallholder farming. One key insight from the programme was the interconnectedness of farmers’ challenges which formed the basis of their business idea.

After the summit, Jensen returned to the US to complete his graduate studies, while Silungwe continued with Heifer and began laying the groundwork for their business in Zambia.

Kellan Hays, a fellow UC Davis student, joined as the third co-founder. Their proposed venture won two business plan competitions – one at MIT and one at UC Davis – securing a total of US$25,000, which, along with founder investments of US$50,000, funded the launch of the business in 2014.

Once Jensen completed his year at UC Davis, he relocated to Zambia to start the business full-time with Silungwe.

Hays, initially working part-time while employed elsewhere, joined the team full-time in 2018.

Jensen and his co-founders started small, largely because they had limited money and were still ne-tuning their business plan.

Initially, the business had two main components.

The rst involved contracting smallholders to grow crops, which GNA would then purchase and sell at a profit margin.

To kickstart this, the company gathered a group of 40 smallholder farmer families located about 90 minutes from the city of Chipata, near the Malawi border, and enlisted them to grow maize and cowpea.

GNA actively assisted these farmers in improving their production.

The second component centred on agricultural equipment and tools.

This range included special bags to prevent crop mould during storage, manual groundnut and maize shellers, and a new type of treadle pump.

But the initial stages were fraught with challenges.

The team found that maize was not a suitable crop for the farmers they were collaborating with.

The depleted soils required substantial investment, especially in fertiliser, to yield good maize crops. However the cowpeas showed more promise.

And while there was demand for GNA’s tools, many farmers lacked the savings for even a US$50 purchase on assets.

Consequently, GNA discontinued the equipment arm of the business after about a year.

“We de nitely lost money,” says Jensen, speaking about the early days of business. “Barely paying yourself and cutting costs wherever you can. You’d be renting a beat up old minivan instead of buying a car.

Forty farmers – it’s not a lot. And as we were guring di erent things out we had a lot of school fees to pay along the way.”

As GNA approached its rst harvest, an NGO inquired if the company could produce high-quality legume seed. Legumes, including beans, peas, and lentils, are valued for their edible seeds in pods.

Facing a scarcity of good legume seed, the NGO turned to GNA, which accepted the challenge.

Consequently, GNA shifted its focus, encouraging the smallholders it partnered with to cultivate seeds. Legume seeds are produced by allowing plants to fully mature and form dry pods.

Jensen says producing seeds was a good t with the company’s operations.

“Contrary to what many people think … working on small plots, and working with smallholder farmers, you can actually get really exceptional quality produce …

And so once that opportunity came along to do a seed sale … we realised that it was a pretty good t with … the capacities we’ve developed in just a year … Seed requires traceability, seed requires attention to detail, it requires being able to move through your entire eld and pull out anything while it’s growing that’s of the wrong variety.

Essentially, it requires commitment to a really high-quality, nal product. And that’s where we felt we could carve out a niche.”

In addition to the original NGO which sparked the idea to become a seed company, GNA soon started adding other seed clients as well.

Jensen notes that although most of the global seed companies are present in Zambia, none were focused on legume seeds..