294 Emiliano Mroue – Raising $7.5 million to scale from working with 20.000 to 100.000 farmers

A conversation with Emiliano Mroue, founder of WARC, about their recent funding round, being close to the farmers and why he left a corporate job in Germany to start a farmer focussed anti poverty company in Sierra Leone which turned into a company serving today over 20000 farmers, mostly in Ghana, in the transition to more regenerative practices. What is their secret to be close to the farmers always, not quite often but always?

Smallholder maize farmers at the edge of the Sahara, brutal circumstances in the Sahel mean most farmers are growing to eat and to survive and, with climate change and current farming practices burn and deep tilling, their survival is literally on the line. These soils can be depleted in a decade or less, not like in the global North where we might have 50 to 60 harvests left. So how do you go about behaviour change with farmers that are in poverty, you want to help them to change, but don’t want to risk their fragile livelihood? How do you find the recipes that work in the local context?

In March 2024, the Ghana-based agricultural service provider Warc Africa has successfully closed its Series B round, securing $7.5 million. The fresh capital raised aims to boost Warc Africa’s reach to serve over 100,000 farmers in Ghana, increase their incomes, and protect the soils. 

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Transcript

Speaker 1: 0:19

How do you go from having a corporate job in Germany to starting a farmer-focused anti-poverty company in Sierra Leone, which turns into a company which today serves over 20,000 farmers, mostly in Ghana, in West Africa, in the transition to more regenerative practices? What's their secret? To be close to the farmers Always Not quite often, but always Smaller maize farmers at the edge of the Sahara. The brutal circumstances of the Sahel means mostly farmers are growing to eat and to survive and with climate change and the current farming practices of burning and deep tillage, their survival is literally on the line. These soils can be depleted in a decade or less, and not like in the global north where we might have 50 or 60 harvests left. So what do you do? How do you go about a behavior change with farmers that are in poverty and you want to help them to change, but you don't want to risk their fragile livelihood? How do you find the recipes that work in these local contexts?

Speaker 1: 1:18

This is the Investing in Regenerative Agriculture and Food podcast Investing as if the planet mattered, where we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems, while making an appropriate and fair return.

Speaker 1: 1:37

Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, wear and consume, and it's time that we, as investors big and small and consumers, start paying much more attention to the dirt slash, soil underneath our feet. To make it easy for fans to support our work, we launched our membership community and so many of you have joined us as a member. Thank you. If our work created value for you and if you have the means and only if you have the means consider joining us. Find out more on gumroadcom slash investing in RegenAg that is, gumroadcom slash investing in RegenAg or find the link below Welcome to another episode today, with the founder of Wark transforming farmers into the world's climate heroes. Welcome, emiliano.

Speaker 2: 2:40

Thank you very much.

Speaker 1: 2:41

It's great to be here and it's funny because we had a call before but we never recorded. Um, we've done a soil build, this episode, which, of course, will link below, right in the middle of the pandemic, I think. Second lockdown the winter, the global winter, the winter in the global north or in the north northern hemisphere in 2020, and I think it was released somewhere early 2021. But it was done through a piece of software we used to use where we send a few questions. You answered and so we've never had this conversation style, which I'm really looking forward to, because I know a lot has happened since then and, in general, there's been a long journey and you just announced a very significant fundraise. So congrats with that.

Speaker 1: 3:23

And I already had it on my list to check in. I don't know why. Maybe there was somewhere in my unconscious I was thinking what's happening to VARC? What's happening to VARC? Anyway, it was a good reason to reach out and have you back on the show. So, first of all, welcome to the show and welcome back on the show, emiliano. And let's start for people I I will link it below, but still to give them a bit of your journey what led you to Sierra Leone, to Ghana, to West Africa, which you're not originally from, as your name suggests, and spending most of your awake time focusing on soil.

Speaker 2: 3:56

Absolutely, thank you. Thank you, ken, and well, it's great to hear you know, not only the world changed dramatically since we did the first conversation three years ago, but also my life, the company and hopefully the lives of tens of thousands of farmers as well in West Africa. But I guess we're going to talk about that in a minute. But when I'm originally from Argentina, I have a very thick accent, so please excuse me for that. But well, I've been, let's say, on the run or around the world for the last 20 years.

Speaker 2: 4:35

After spending a few years working in Germany in fast-moving consumer goods Absolutely nothing to do with agriculture, absolutely nothing to do with agriculture I was exposed, or actually I went on holidays because there was no other. There is no other better explanation than that I went on holiday to Sierra Leone. It's a different story why someone that works and lives in Germany chooses Sierra Leone as a holiday destination, but anyways, I did holiday destination, but anyways I did. And um and uh, you know, I, more than anything, I first got exposed, uh, you know, to the social implications of extreme poverty, uh, and extreme poverty meaning, uh, not even having enough to eat, uh, chronically, you know so, in Sierra Leone, uh, back in the day, half the population didn't have enough food to eat or would go many days hungry, and most of these people were actually farmers. I learned after that trip that 90% of those farmers were actually living below the subsistence line. So they farmed, they spent a whole year farming and putting all their efforts, their illusions, their dreams into that season. And they don't even have enough to eat so let alone to sell and generate an income or pay for medicine whatsoever.

Speaker 2: 5:59

And then, you know, drawn by the poverty implications of subsistence farming or below subsistence farming, I got to get exposed as well to the impact and implications that climate and in particular soil and soil erosion, is having to those farmers that are already in an extremely vulnerable position, you know. So imagine if they today produce very little with soils that are reasonably fertile. Imagine, you know, if those soils get completely eroded they will produce nothing. And they are absolutely. You know. They have absolutely no safety net. You know, have absolutely no safety net. You know, and you know.

Speaker 2: 6:43

Then, if you go a lot deeper into that, you see how climate logically generates poverty, generates and impacts us collectively in many ways, but to farmers in particular, it's today. You know we are not talking about 2100, about our children, our grandchildren. We are talking about them today and that's how you know. 2100. About our children, our grandchildren. We are talking about them today and that's how you know. Year by year, I got more or we got as an organization as well, more and more into soil protection and finding ways to protect the soils and, logically, you know that resulted in us adopting and supporting farmers to adopt regenerative agriculture.

Speaker 1: 7:27

And so I mean especially farmers in the global south are hit, or everyone is hit by climate change, somehow even worse, and like, sadly, has done very little to it. Like it's not that they have burned massive amount of fossil fuels, have used massive amount of fossil fuel, created NPKs, et cetera, et cetera. It's not. They've been 0.001 part of the issue and take a good chunk of the effects at the moment, which is undeniably true. We can, it's have to, but just to state that like that's an even more unfair piece of the puzzle, apart from all the other discussions. Why are they in this poverty to begin with?

Speaker 1: 8:11

But so you come back from this holiday, I think you went back, it's something. You stayed, you went back to germany. I think many people, to a certain extent, have, may have an experience like that. They've been lucky enough to travel to places with very different cultures, very different um, poverty and inequality, and but it's very easy to slip back into. Slip back into um, okay, maybe I set up a small foundation or maybe I do something, maybe I donate here and there, but not putting your every wake hour for the next 10 years into it. So how did that happen?

Speaker 2: 8:46

you know, it's um, I think it was a combination of many factors. First of all, somehow in my life I was looking for that, you know, even though I was working in a big multinational. I was having a pretty good career, as you know, wearing suit and tie. It was 24, 25 years ago. I felt the most important guy in the world, you know. But I would go on holidays to afghanistan, you know, wearing suit and tie, it was 24, 25 years ago. I felt the most important guy in the world, you know. But I would go on holidays to Afghanistan, you know, and my friends could go skiing in Chamonix, you know. So it was obvious that I was looking for something else in my life and I I didn't really know what, um, what I did have very clear was that the path in which I was was not going to fulfill the objectives I had in my life, you know. So on that part I had very clear. So, you know, when I came back and I verbalized and I think that's the verbalization of, you know, sort of guys, I want to go to Sierra Leone to plant rice and support farmers and to my colleagues in the company, and everybody was like, what are you talking about. But that verbalization was. It might sound silly, but the verbalization of that goal for me was like a breakthrough to make it a lot more vivid.

Speaker 2: 10:00

And I guess I left a few seats alone in Sierra Leone with a few people that I've met there and continued talking, even if we've met for a few hours or a couple of days, while I was there on holidays, and we kept on talking and making a small pilot, you know, somehow a reality. And one day I went to my boss and I told him I quit, basically in German, and he asked me why? And I said because I want to go to Sierra Leone. And he was like what are you going to do there? And I was like I don't know, I'm going to try to support farmers.

Speaker 2: 10:40

And took a one-way flight and started up Back in the day. It was two of us, so I convinced my cousin to join and you know it was sort of an adventure, sort of starting something up and we had no clue where that was going to take us. You know, and I think or I believe we were very lucky because we've raised money just three months into sierra leone with this very first pilot that it was an eight hectare rice field. And you know, obviously, that raising of money helped us realize or build, or start at least a real company. And well then, that was back in 2012. And one thing led to the other, you know.

Speaker 1: 11:30

And you mentioned rice a few times. What made you choose that as an entry point?

Speaker 2: 11:37

Well, the first reason it was social. You know, because most smallholder farmers in Sierra Leone plant rice. You know they depend on rice, they consume rice more than anything else. It's the main caloric source in Sierra Leone in particular and you know the logic was fairly straightforward. You know, if we support farmers that are not producing enough rice to feed themselves, to produce more, to have a surplus to sell into the market, that could also help substitute importation of rice. That it was back in the day, and I think it still is, the main source of currency use, hard currency use, in Sierra Leone. So we thought it would have a social and macroeconomical impact in the country as a whole and afterwards, after getting and understanding the implications as well of rice farming. It's one of the ones that has the highest carbon footprint. It's one of the highest carbon footprint crop in the world and sometimes we, I guess we don't realize that. You know it's a tremendous impact, mainly because of the methane of the flooding and the methane and the rotting.

Speaker 1: 12:52

Right yeah, exactly. So the CO2 equivalent is the calculation is massive because of a lot of rotting Exactly, precisely and so when it's saturating the soils, that flooding of the paddies generates a massive amount of emissions.

Speaker 1: 13:09

And then where do you start? Because these sea farmers, you meet them that are it's bad to use the word underperforming, but they could produce more. How do you even come about to start that as a company compared to as some kind of NGO? And how do you envision, like, where do you start when you want to help an aid hector, in this case, or beyond rice paddies, to at least feed the rice farmers, instead of them having to spend all their year, like you said, all their dreams, everything into and then not even have enough to feed themselves and thus having to import and find some currency somewhere to do that, which means off farm jobs, which means a lot of other things. Um like, where do you start?

Speaker 2: 13:55

look uh for for for us and I I still believe in that, you know. So, um, we we believe that solutions should be as market-driven as possible. We recognize that in some cases and this is something that maybe we didn't recognize that much back in the day, but we do recognize that in some cases, in extreme cases, you know, there is a massive need for subsidies or for covering part of the risks, and this brings a completely different discussion on, you know, more innovative financing instruments and so on and so forth. But for us, it was mostly about that, you know, finding a way to make it sustainable.

Speaker 2: 14:36

Back in the day, I had no idea what a social entrepreneur or what an impact investor were.

Speaker 2: 14:41

This was mid-2011, when we were just thinking about the pilot but we did know that if we could embed impact and financial return, that would be a very powerful proposition as an organization.

Speaker 2: 14:56

So where we started was recognizing or at least identifying that RISE was where we wanted to start for the reasons I just described, and then was thinking and iterating different business models on how this could work, and we tried tens of different things and tens of different models in the last 11 or 12 years 13 years now, sorry until we found something that is starting to work. So there were many things I didn't appreciate back in the day, like the need for subsidy in this case, particularly because, you know again, we are talking about one of the least developed countries in the world. Secondly is that you know that lack of general development and chronic hunger in society that has a very strong impact on human development in general and therefore on skills, on HR availability and so on. Given those facts, it would take a very long time to find something that worked. So for us, 2011 until maybe a year or two ago, it was more than anything about surviving as an organization.

Speaker 1: 16:10

I keep doing R&D yeah.

Speaker 2: 16:12

Basically, and you know, trying to figure out what works and what doesn't as fast and as cheap as possible.

Speaker 1: 16:19

A good reminder for many. I mean, luckily, many people aren't operating in such an extreme set of circumstances as you, but, having said that, many are operating in quite extreme circumstances, which could be even Brandenburg in Germany, which could be. We have had interviews in Pakistan and India and I call them the sort of the recipe finders, Like we don't know what works in those contexts. Yet we don't know what works with regenerative practice. We don't know what works in a regenerative framework, trying to get the inputs as low as possible, trying to make as many as much nutrient dense or nutrient quality food as possible. We don't know, because if there was a blueprint we would know, but it's not there and it depends on southern italy, is different than northern italy and it's even different than middle italy and the same in france and the same in chernobyl and the same.

Speaker 1: 17:04

So these and these paths, like this recipe finding or pathfinding, takes probably a decade in many, many places. But you need funding to do that and you need flexible funding and grant funding and all the other funding you can get your hands on until you find a recipe or until you find something that okay, in this context this seems to work because of markets, because of soils, because of local context, social context, inputs and the whole thing. And so, before we jump to it, like, did you remember when you felt like, okay, we start to find a recipe that actually seems to make sense, or seems to start to like we have something now? Do you remember, was it a moment, was it a period when it suddenly started to click?

Speaker 2: 17:47

You know it, period when, when it suddenly started to to click, you know it's, uh, it's. It's a bit blurry, because there were many times in which I thought, oh, this is gonna work, and you know, we start something mega excited, thinking, you know, we, we finally hit the nail and uh, and this is gonna be example do you have an?

Speaker 2: 17:59

example. Well, I mean, every time we time we would pivot, you know, sort of the business model we started in Sierra Leone in 2011 and in 2018. So, seven years into our history in Sierra Leone, we expanded into Ghana and, you know, when we came to Ghana, we found there is a country that is much more developed than Sierra Leone. It's a middle income country. To Ghana, we found there is a country that is much more developed than Sierra Leone. It's a middle income country. It didn't suffer a brutal civil war like Sierra Leone did.

Speaker 2: 18:28

10 years before I got into the country, and also there were many, you know, condiments to think that it was going to be a lot easier, you know, in Ghana easier between brackets, you know. And when we started started, things started moving a lot faster than than where, than when, uh, than what they were doing in sierra leone, you know. And we thought, okay, we, we found the solution to all our problems, but there were still many problems more to come, including covet, of course. Uh, but, uh, but you know that that sort of excitement uh happened, you know, three or four times along our history, but I think the moment in which things started to change for us was two years ago, when we did a considerable pivot as well in our business modeling, how we engage with smallholder farmers.

Speaker 2: 19:27

Smallholder farmers and you know this is all about, in our opinion is mostly about behavioral change, you know, and finding ways in supporting farmers to do a few things differently and, you know, adopt some practices differently, trade differently, aggregate differently, protect their crops differently and so on and so forth. And we started doing something significantly different two and a half years ago and that is the model that we still have today and that is the model that is working and we are now scaling. So when we started that, we were very convinced, my partners and I, and yeah, we saw the results really quickly, you know. So the first year we piloted was really good. Uh, second year was even better and this year it's um, you know, it's going really well.

Speaker 1: 20:14

So I guess that's what I was saying. Walk us through, walk us through. What's the model or the recipe that at the moment seems to be working? Of course, course, everything changes, unfortunately unfortunately in life. And what's the model you currently operate mostly on, and how do you impact so many lives?

Speaker 2: 20:32

absolutely um, for us, uh, there was something that we always believed in, uh, but I guess we executed quite differently in the past. That was it makes a massive difference being close to farmers always, and the always and I underline the always that's the fundamental element, you know. So five, six years ago, we built an extension uh model with lots of uh you know, we call them farmer connectors uh, in the farm and you know, on the ground, visiting farmers, you know, once a week or twice a week, whatever it is, which is a fairly high frequency for an extension model, but that's not always. That's quite often, right, is we put the time and the effort in trying to figure out how could we sustainably be close to the farmers always and concretely, what we are doing now is we are building a network of what we call trading hubs. A trading hub is basically a small piece of infrastructure like a small shop that we build it in every single village in which we operate, right, and that's a trading hub, is run by two women, uh and uh, and they are there every single day, right, and our focus is on supporting these women. They are work employees, so they are uh, they, they, they work with us in training the women, in nourishing and nurturing those women, so that then they can support the farmers in the village. Today we have around 100 of these training hubs and that basically means that we are there always and that always changes the way in which we relate with the farmers.

Speaker 2: 22:23

And let me just give you one very simple example.

Speaker 2: 22:28

You know, in the past, farmers who harvest their maize think that they are in a 500-people village in the middle of the Sahel.

Speaker 2: 22:36

It's very hot, you know, it's very dusty and it's very far away from everything, right? So basically that farmer that harvests two or three tons of maize, basically he or she takes that maize into their homes and they sit and wait, right, and one day there's a truck that shows up in the village and that's a, you know, a trader, and this trader offers them cash for some or all of their maize, you know, and people go out and sell typically half of their production of 30% or 70%, but you know, around half of their production to this truck that showed up that day into the village, because they have no idea when they're going to be able to sell maize again and they need money to buy a chicken, to pay for the students fees to buy medicine, whatever it is nobody knows what, when the truck will come, if the truck will come, if another truck would come, and let alone if they would pay a proper price, at what kind of price the next truck might offer, etc.

Speaker 2: 23:40

Like complete in transparency, 100, 100 so and vulnerability absolutely vulnerable to to that and exposed to to, to that situation, and the farmer you know, at against that or being exposed to that crossroad. They can decide to sell something, everything, a little bit, or nothing you know, but but they all end up selling quite a bit of the production to that truck that shows up. You know, and of course you implied it correctly they rarely get the right price for the production. So now, by being there seven days a week, every single day of the year, then somebody needs to pay for, buy I don't know a book for her child's school. So they go and sell us five kilos of maize. Literally, they come with a small bag of maize. They sell us five kilos of maize.

Speaker 2: 24:33

We weigh that maize. That is something that is not done in the Sahel. Typically, people buy per bag, and a bag might be 100, 120, or 110 kilos. It's never below 100. It's typically above. So they lose that difference. So we weigh that small amount that they bring us and we pay for that little amount that they bring us. All digital with mobile money and so on, but that's another part of the story. So then the farmer monetizes what she really needs, you know, and it might be that they come and knows the price and knows the amount that she's getting paid for.

Speaker 2: 25:09

So she might come three times a week or five times a week sometimes. You know so because she knows that there will be somebody there to purchase whatever they have. And well, that realizes a much higher price for for the farmer and and so on. And I put that example because probably is the the most visual one to illustrate how being there always makes a change in the behavior of a farmer that was selling all their maize all together and now they are splitting it and selling it in small quantities. That being always there builds a much stronger bond of trust, because they know that the transactions are transparent, that we are there, that they know where to find us and so on. And that trust enables us to disseminate or to support or to encourage farmers to try different things, different practices. And here is when, of course, the region part comes in.

Speaker 1: 26:15

And so, before we get there, what happens then to the maize? Who do you sell it to? Because you cannot send a truck, of course, every time. Five kilos is waiting there for you. Like, how do you then store? How do you make sure it doesn't go to waste? What happens then? Let's say, with the maize that you buy?

Speaker 2: 26:31

So we store in those trading hubs and typically they are fairly small, they have 20, 30 tons of capacity and then, well, we have developed some internal digital systems to manage that level of capillarity, because here the scalability of the model depends on that capillarity, or that being really close and proximity to a farmer. So we're going to have, hopefully, thousands of these shops and then we basically how many do you have now? 100. Yeah, so we. We then, you know, pick up that mazeize. Typically a truck picks up the maize in two or three hubs and then we deliver it. To Now we are delivering it mostly to precisely a Dutch company that is a feed producer in Accra, and they produce feed for fish and chicken. Basically.

Speaker 1: 27:37

And why would they work with you instead of with the traders of the traders of the traders, like the Dutch feed company in Accra, which is the capital of Ghana, just for people? Just to keep people like we're in West Africa, ghana, and all the way in the South there's Accra. But why would they work with you? Compared to the usual between air brackets trader of traders that probably still passes the village or maybe they stopped, but at least passes many other villages and have maize to sell.

Speaker 2: 28:02

No, absolutely. Here we are changing a little bit the status quo in that supply chain in general. You know, I think that, which must make everybody super happy.

Speaker 2: 28:11

Absolutely. It makes some people happy though, so which is good. It makes tens of thousands of farmers happy and some of the buyers happy, but obviously some middlemen are not very happy. Now look, in our opinion the supply of raw materials in Sub-Saharan Africa can be very problematic, and I know I'm overgeneralizing because there are many countries and the realities are very different among those countries.

Speaker 2: 28:41

But this is something that, or there is a pattern in the unreliability of, particularly of the primary production right of crops into agribusinesses or agri-processors, and here the main advantage that agri processors like this Dutch company have is the stability of the supply, because one of these middlemen and, and that supply becomes unreliable and without MACE they cannot produce their feed and obviously without the feed they make no revenue. So that ends up being extremely expensive for them not to to have that supply sort of secured. And actually we have made a really helpful partnership with this Dutch company in particular. It's been a partnership that has been running for the last four or five years now, and it has been growing for the last four or five years because obviously it's positive for both sides. We are supporting them, securing their supply, and obviously they are off-taking our aggregated production, so it's a good deal for all.

Speaker 1: 30:07

And then let's start unpacking the regen piece. Once you've built this trust like you buy whatever people and whatever farmers have to sell to you for a good price then you've built this trust like you buy whatever people and whatever farmers have to sell to you for a good price. Um, then you build this trust. Then what? What do you not? What do you do with that? But how do you leverage that trust to start building changes, um in like long-lasting changes in in soil, in agriculture, to make sure that there will be maize in the next 10, 20 years and not just next year?

Speaker 2: 30:41

yeah, first can, if, if, it's all right, maybe, uh, I can give you our perspective of the problem.

Speaker 1: 30:49

No, and uh, please do, yeah, take, take us on the trip yeah, particularly from the farmer's point of view, you know.

Speaker 2: 30:56

So think about a farmer that is typically working all their land manually, right? Literally with their two hands and their hands of his or her family, right? So when the season starts, they typically go to the farm and what they see is just very high grass, right, two meter, three meter elephant grass.

Speaker 1: 31:19

for those that know what the elephant grass is, that is a really annoying I have a cup with a company that didn't make it, but it was growing elephant grass in the Netherlands actually for five years the speed of it is. I mean for sure it goes faster in Ghana, but it's a crazy fast growing grass.

Speaker 2: 31:39

It's super crazy fast-growing. It can get to two or three or four meters high in a month, right when the rains start, and that is right when the farmer needs to start preparing the land to start planting. So this family arrives to their, let's say, two acres of land. Two acres, I think this is what two football fields and I'm Argentinian, so we will not talk about football, I don't want to make any Dutch people angry here but it's, let's say, the size of two football fields. And it's full of grass, right, and they have, at that point they have a choice, you know they can. All their family spends 30 or 40 days with a cutlery in their hands, going by from sun to sun, you know, cutting that grass or they can burn it down in 30 minutes. So it's very obvious what happens, right and understandably, actually, you know. So they start by burning their fields, you know.

Speaker 2: 32:38

And then the most prevalent practice is plowing that land, because that land is typically very dry and very hard. So they do a really deep plow and they do that right before the rains start. So then it starts raining, and when it rains, it pours, rains, rain, it really rains, no, it's not justa drizzle here and there. So imagine all that amount of of water falling maybe 50 millimeters, 75 millimeters in one day, falling in one day into naked uh, fields. You know that has just been plowed and you can see the streams of you know mud going into the bottom of those fields. It's a disaster. And you know, on top of that is extremely hot so that accelerates the oxidation. So soils in the Sahel I mean, there are some studies that show could be degraded in less than 10 years. You know, in template zones in Northern Europe or even in Argentina, that can take 50, 60, 70 years of over-tilling and over-production. But there, you know, it's Much more forgiving, absolutely, it happens really fast and it has not been that big of a problem in the past because farmers would farm here in one place and then they would move. You know 500 meters, population pressure, with increasing deforestation.

Speaker 2: 34:18

Ghana loses 2% of their tree cover every single year to agriculture in particular. You know farmers are farming the same piece of land year after year after year. You know. So the Sahel keeps coming from the north to the south. The Sahara, basically you know Sahara, basically you know. So we are talking about northern Ghana, that's right in the middle of the Sahara, where, you know, the Sahara desert borders the forest below and that's going south at an increasingly speed, you know, faster rate, sorry. So that's sort of a problematic that we see. And farmers, in addition to that, they farm what they know, and what they know is maize, and many farmers do know soya, for example, and they farmed soya in the past, but you know the market is not attractive or there is uncertainty on how that's going to work and so on, so they stick to maize.

Speaker 1: 35:16

So to the burning. Every year on the same place, the same crop maize, exactly.

Speaker 2: 35:22

Burning over, tilling with rains, washing the top soils with the same crop year after year. So that's a recipe for disaster, and disaster from an environmental point of view and an immediate disaster for farmers themselves. Obviously no, because they they. I mean, if they don't have soil, they will go hungry, and you know there is no way around that and they will move if they can if they can, and so there's.

Speaker 1: 35:58

It always baffles me how little the sahel, that region, or that, that belt, let's say um on the north and the south, actually on, so like how little attention agriculture gets there. Like around the mediterranean, like around, like where the deserts are, are moving and they're moving many places like it's. It's brutal and so, having paint that painted this picture, what are other options? What do, what are interventions, or what are like, how could maize, or soil, how could these farmers, what could they also grow, uh, compared to and what would be practices they could do? Of course, build with the trust you've built um to to abandon, of course these are. This is going to be a massive shift. So I understand the trust you've built um to to abandon, of course these are. This is going to be a massive shift. So I understand the trust building piece first, um very, very vividly absolutely first.

Speaker 2: 36:47

Um, I think, uh, we, we need to recognize that farmers recognize the problematic as well. You know, and they do, and particularly when you talk to older farmers, they would you know now we need to use three times more fertilizer than 30 years ago. Because you know, and they do, and particularly when you talk to older farmers, they would you know now we need to use three times more fertilizer than 30 years ago because, you know, we cutted the trees and now it rains less. You know, things that make make a lot of sense actually. So they do recognize that, that there is an issue, and that is related to to the way that farming is. But, you know, the immediate term necessity is to farm to produce food and survive, right, so, um, through that, uh, trading, have a platform and actually we are going to launch a climate hub hub next to it to a trading hub, so it's going to be like sort of a tandem between trade and climate, uh, climate, in each and every single of these villages. What we attempt to do is to encourage farmers, to incentivize farmers and to find different ways on how to accelerate the adoption of some of the key elements in what we believe it's more urgent from a regenerative agricultural point of view, and the number one thing we believe is tilling or stop tilling or no tilling, right. So the amount of soil erosion that there is with what we have just spoken about, it's amazing, it's crazy, you know. So the first thing that we feel we need to do, or we think we need to do, is persuade as many farmers to switch to a no-till model. You know, here we are doing different things and we have tested many different things, from large scale no-till planting machines and Argentina is particularly big in that, you know we have these you know nine meter planting machines that are pulled by a 250 horsepower tractors and stuff like that. We have tried that to all the way to a manual, uh, you know no-till planter and, uh, and and and seeing, you know what's what works, uh, best for farmers. And now we are encouraging pretty much all the farmers with whom we work. We are facilitating and putting at their disposal this, you know, hand-pushed no-till planters so that they could at least put, you know, one-fourth, one-fifth of their land under no-till of their land, and they're no-till and hopefully, you know.

Speaker 2: 39:20

Then, moving into more and more of that, you know, and the reality here is that we are trying to persuade farmers through an economic incentive. You know that for them is a lot cheaper to use a push planter than to plow the land. Even if it's manual or if they hire a tractor, it ends up being a lot more expensive. So what we need to show, and actually what they need to believe by doing it themselves, is that no-till has little or no impact from a nil perspective, from a crop quality, and it's a lot cheaper, you know, and obviously indirectly, it has the, the regional or, let's say, the soil protection component. That's that, of course. We we explain um constantly to to farmers. You know, and this is just one example. On top of that, you know, we try to persuade farmers not to not to burn. That's a very complicated thing.

Speaker 1: 40:20

Yeah, because how do you get rid of the elephant grass? Yeah.

Speaker 2: 40:23

Absolutely. And then, you know, we are trying to persuade more farmers to plant soya or groundnut or beans, you know. So, things that are the obvious, let's say rotations to maize. And finally, this is more an aspiration than something that we are doing now, but we are trialing a small scale still, cover crops, and we hope that at some point we will be able to find cover crops and farm cover crop at scale. You know, cover crops, and some of them are becoming even economically very attractive as they are being used for the SAF industry, for the sustainable aviation fuel industry, and they are starting to have a very high value, you know. So that's sort of one of our dreams as well, if we can rotate. You know ma sort of one of our dreams as well, if we can rotate.

Speaker 1: 41:20

You know, maize with, with some of those crops as well and like the other crops you mentioned, are you buying them as well, like the ground nuts, the soy? I mean the soy for fish feed and chicken feed. I think is is easy ground nuts, I don't know. Are you basically be that one-stop shop always on in the village Like whatever you, not whatever you bring, but if it's quality and we can find a home for it?

Speaker 2: 41:46

Absolutely Everything. So everything that we suggest or encourage farmers to do, it's also something that we would ensure them that we will buy at the right price. So then you know, we are trying to eliminate precisely the market risk, not the uncertainty, because you know, there is always market uncertainty in agriculture, but at least the buyer's risk is out for the farmers.

Speaker 1: 42:14

And in a no-till system, what do you do? Are weeds an issue? And if yes, what do you do? Is it are weeds an issue? And if yes, what do you do about that?

Speaker 2: 42:21

because that's always the the, the trigger, the tricky one yes, weeds, uh, weeds are an issue that's a tricky one for sure. I mean, we are somewhere in the middle here, you know. So we encourage farmers to weed as much as they can. That's extremely labor intensive. We are encouraging farmers to move away from some particularly hormonal herbicides like. The use of paraquat is very common in Ghana. Paraquat is a very old, very noxious herbicide. But people do use some other herbicides, depending on the crop, but many use glyphosate is obviously the most available and the cheapest one, and we are not asking farmers to use zero, because we know that in that context or at least we think that in that context it's very tricky. But we are encouraging farmers to transition into a more reduced herbicide context. We do not sell herbicides now in very specific cases, but in very small quantities as well. So we are, let's say, dreaming that those you know AI, optic driven, you know mechanical hand withers, you know become cheaper and more affordable so that we could disseminate absolutely yeah, and then the other.

Speaker 1: 44:05

I mean, do you like, of course, the combination of I think everybody's always like on no-till and then forgetting that it's part of them not forgetting but easily overstepping. That's part of a much bigger system and doing no-till organic is very difficult, as you said. No-till without certain herbicides is very difficult, especially in challenging soils, especially if it's not part of a much bigger rotation with cover crops and all of that. But you have to start somewhere because otherwise, like if the biggest issue is erosion, that you have to tackle first, otherwise you don't have any soil left.

Speaker 2: 44:44

No, and I was going to say especially in the tropics, where weeds grow a lot faster than anywhere else.

Speaker 1: 44:52

So you would say actually that's the best place to start any anti-weeding device is the tropics 100%, if you can manage.

Speaker 2: 44:59

you know sierra leone organa, then you're good to go anywhere else?

Speaker 1: 45:03

because what are other options to get rid of the, the elephant grass, for instance, except burning, like chopping it up, like what's the? Except menu, of course, which I understand is not an option.

Speaker 2: 45:12

No, there is, there's no I mean there is a little bit of grazing, but and, um, people do a bit of that, but it's uh, it's not enough and uh, you have too much biomass, emmanuel that's the problem. Yes, hundred percent. I mean which recently?

Speaker 1: 45:33

scratching the surface of what you could produce with the right tools, circumstances, knowledge, et cetera, because the biomass is more than you can graze. And are you, like you're saying, we're testing a bit, we're dreaming on the cover crop side? Are you going further than that as well, on replacing the fertilizer, the NPKs, or the highly costly and often fossil fuel made of course, with the alternative input side, the compost? I know in India there's a massive thing on alternative inputs. Is that the same in Ghana, or how is that developed and is that also a strategy through your hubs?

Speaker 2: 46:17

It's very tough. That is the short answer. And the reason is because in the Sahel, you know, in the heart of the maize production area, we are 400 kilometers away from you know, the closest poultry farms, you know, and there is very little poultry production up in the north. There is very little grazing or cattle. You know the closest poultry farms, you know, and there is very little poultry production. Up in the north there is very little grazing or cattle, you know, in general, so there is very little production of manure. You know we would have to drive manure for 400 or 500 kilometers and then it becomes, you know, it would become negative from an environmental point of view.

Speaker 2: 47:00

So we we actually did some trials. We have a, we have a chicken manure pelletizer. So we have been, you know, doing these chicken pellets, stuff like that. But this is in the center of the country, you know, and we can distribute it to farmers around there. But but that's not going to solve the heart of the problem. That is up in the north, where the Sahel is coming. So farmers have to rely today on fossil fuel fertilizers because these are soils that on top are not very fertile, so they are soils that in themselves are very sandy and they are particularly very low in nitrogen. So well, here we think that probably cover crops and and rotations with nitrogen fixating crops is going to have a much stronger impact than anything else on on fertility, you know. So that's sort of the thing that we are trying to push, but that has to be complemented with fossil fuel fertilizers, whether we like it or not.

Speaker 2: 48:07

And here always just to you know, to refresh that people are farming to survive. You know this is not a business and we also, coming as outsiders, need to be very mindful of that. You know they have an immediate need, that is food. If they don't farm, they don't eat. You know we are not talking about making more or less money. We are not talking about, you know, having a job whatsoever. We are talking about survival. So we are also very careful with what sort of technical advices we bring to farmers, you know, because we cannot, you know, put at risk their livelihoods either.

Speaker 1: 48:55

So it's sort of that balancing game In an ideal world, of course, of course, and because it's sort of that balancing game, of course, of course, and because it's easy, between brackets, to take risks from an office in Accra or Tamale or somewhere and you don't have to survive, you eat anyway, or regardless, five to 10 years out. What would you imagine? Is it maybe partly agroforestry? Is it more grazing? Is it special compost, like what? What would be something that, of course, given the circumstances and the conditions of being far away from from almost everything, um, might not be feasible. But if you could dream, what would you? What? What would make your life so much easier, apart from the hand weeding with AI and robotics? That would be definitely a big one. But what other things would make your life not your life, actually, but the farmer's life more easier?

Speaker 2: 49:51

I think what would be fundamental is to appreciate and monetize the adoption of practices themselves, and I think in this sector we have been stuck trying to measure CO2 capture and stuff like that. That is extremely complex to do at scale and therefore we have done nothing right. So what we do think is that there are some practices that are objectively positive, like the ones that we have just described crop rotation and, no-till, reducing soil erosion. I think that there is a good level of consensus that the two of them are good practices and I think if we could find a way to to support farmers, monetize the adoption of those practices and logically, this would bring a stronger economic incentive to bring them to scale and have an anchor-related stream of income for smallholder farmers. We have been all for years talking about carbon credits and sequestering, but it might require a slightly different approach. So that's one of the things. But then, logically, I think, on the practices themselves, well, you mentioned a few of them that could certainly support.

Speaker 2: 51:12

You know, I think there is a it's tough to think in grazing at scale also because it's very hot, particularly in the dry period, very hot and very dry. So you know that might put a different type of pressure into into this fragile ecosystem, you know. But, logically, if we could have, you know, a large amount of cattle grazing around at the right period of time, that's that of time that could have a very strong impact. But I think, going back to the cover crops, finding the right cover crops for that area, can also have a very important impact, particularly because the longest we can keep the, the, the fields cover at times when, when it's extremely hot you know we are talking 45, 50 degrees celsius at some times of the year that can also help, you know, protect the, the, the activity in the soil in itself, you know. So that's something that could be very helpful and you just closed the fundraising round.

Speaker 1: 52:27

Congrats with that, thank you. I'll put the Impact Alpha interview at FLEE in the links below as well. So you've been talking to a lot of investors over the last years. I can't imagine it being easy, especially in the current, let's say, economic state. Imagine that being easy, especially in the current, let's say, economic state. Not that there's no money, but somehow investors have been a lot less not forgiving, but willing to invest in general, except if it's AI. Then I think everything is easy. But what would you, what have you been telling? What would you tell investors if we would do this? I like to ask this question if we do this in a, in a theater or somewhere, and might be in amsterdam, or we actually in acra or in in new york, and the room is full of investors, what would you like them to to remember or to know or to understand after our conversation? Of course there were a lot of exciting things, but if there's one, one thing you want them to remember, what would that be?

Speaker 2: 53:22

Patience, I think you know, if the vision is clear and the vision is compelling and actually an absolute necessity that is, you know, to protect our ecosystems and support vulnerable lives I think that is patience more than anything.

Speaker 2: 53:48

And patience then results or needs a different approach to thinking in how to invest as well. And I think sometimes we try to apply the same logic that we apply to other industries or to other geographies to something that is very complex, that is risky because it is and that is extremely vulnerable. You know, and it can be a good business. It can be very gratifying as an investment, but very likely it's going to take a very long time. So I think that has to be factored in when looking at this and when analyzing this type of companies, projects, startups, whatever it is. They are looking at, obviously, when the markets are down or have been down, particularly in the risk or in the high-risk investment in the VC sector, driven by macro by very bad decisions in 2021, and by macro slightly higher interest rates. But that should not be what drives investment into these sectors. You know. It requires a different type of decision framework, in my opinion.

Speaker 1: 55:10

And what do you see as the biggest myth or things you have to explain over and over again to I'm imagining, mostly outside investors not based in West Africa? What's the education piece you keep repeating?

Speaker 2: 55:28

No, I think. On our case in particular, there are many so particularly investors that don't know the geography. They think there is a much higher political risk than what we think there is, or that there is a lot less infrastructure than what there actually is and that that has a disproportionate impact on on our ability as a company to to thrive from a financial point of view. I'm saying it. Oh, and then on the region, I think many assume region means organic, like the old-fashioned way of thinking, organic, and we try to explain well what we have been just talking about for the last 20 minutes. Right, it's not only organic. There are other practices and there has to be a prioritization of those practices. In this context, in these conditions and with this level of vulnerability, you cannot do everything at once, in our opinion. So it has to be prioritized and, based on that, then do a roadmap to try to adopt as many as you possibly can.

Speaker 1: 56:40

And how do people respond? I mean, it depends, of course, a number of them, of course, a number of them invested, a number of them didn't probably more didn't than did yeah, um, so that that is uh, um, yeah, and are you still active in sierra leone or in rice at all, or that has um, because we've been talking mostly ghana and maize now and and we started with with, with rice, which are two very different crops with their very different water use. Let's say, I mean, I think some of the mice farmers wish they had so much water, but they don't. Are you still active in Sierra Leone as well?

Speaker 2: 57:11

Yeah, we are active in Sierra Leone. But three years ago, you know, recognizing that extraordinary risk, that vulnerability that there is in Sierra Leone, we spun it off as a non-for-profit. So we created a non-for-profit that is called Farming Out of Poverty FUP for short. And FUP is working now with 1,000-plus farmers, not only on rice but also in vegetables and beans. And well, we have looked to raise grants, basically now the Whole Planet Foundation and Beetle Foundation, third Creek and Dovetail Foundation, some of those donated into FOOP, you know, believing that there is a very strong case to support, you know, those farmers that are not trying to escape poverty but that they're trying to escape hunger as a first step. So now we have FUPCA has around 50, 60 employees, it's being run by an Argentinian as well, tayo Gardei, and yeah, it's looking to support us as many vulnerable farmers in Sierra Leone as they can.

Speaker 1: 58:27

And are you thinking beyond Ghana? I mean, ghana is a very big country, but like? Is that at all planned? Like next door neighbor Cote d'Ivoire, which is Ivory Coast, which is not small, new York, togo, cameroon, like, or even north to Burkina Faso, are you thinking about that? Or is it like, okay, let's, because Ghana, I think it's 60 million, no more. It's a significant population and most of them are farmers. What are you thinking there?

Speaker 2: 58:57

For now, we are focusing on Ghana. So our target is, with this investment that we have just raised, to impact and work with 100,000 farmers, and that's going to take us around three years to get. We are at around 20,000 farmers now. So, you know, probably in a year and a half, if we are on track, we'll start thinking on what is the next step. But this could go in many directions as well, but for now, the focus is 100% on Ghana and the team there that is led by Chris Christopher Zhou is focused in trying to get these 100,000 farmers to adopt some of these practices that we have spoken.

Speaker 1: 59:45

And to flip the question a bit, or the conversation, what if you wouldn't be on the investee side but the investor side and you had crazy amount of money let's say a billion dollars to to invest, to put to work, which could be very long-term? Coming back to the patient piece, patient's piece you mentioned what would you do, what would you prioritize? I'm not looking for dollar amounts, I'm looking for what would be the main buckets let's say you focus on if you had to put a billion dollars to work.

Speaker 2: 1:00:13

For me, one of the key elements is to put value in the adoption of these practices, and I know that there are some companies I know one very well in Argentina called Tedra. There are some of these companies that are looking for ways to tokenize and put value into the adoption of some of these practices the ones at least where there is consensus that are positive practices. And this can mean a lot, right, because I mean, finally, farmers need to have a, you know, they need to have the right incentives to do things, and many do have, you know, the climate incentive or the soil protection incentive in itself, but I think if that coupled with a strong economic incentive, that can be very powerful. So for me, that's one of the key elements that hopefully the markets will accompany for some of these companies to take to scale. Then there are other elements.

Speaker 2: 1:01:23

I think that cattle has a very positive impact on the soils, or at least those of us that believe in region act do believe in that. But of course it has a negative impact on the methane emissions and while there are tons of companies as well looking at the, you know, sort of the reduction or the mitigation of these CH4 methane emissions from cows. I think that can have a big impact as well for the rest of the system, into adopting, you know, an animal system into their agricultural system to move deeper into the region ag as well. You know, into adopting an animal system into their agricultural system to move deeper into the region ag as well, and I think those two things alone can take quite a bit of money. And of course, there are a million other things from you mentioned agroforestry that can have a very strong impact as well.

Speaker 1: 1:02:21

And I sort of asked the magic wand question before you sort of answered it. Actually, if you could change one thing, um, we came to uh, the payments for, uh, for practices, but I just wanted to re-ask it in case you you thought of another answer as well, like if you could change one thing. In this case, really, anything could go. So you're no longer in charge of your investment fund, but you have the magic power to change one thing, which could be stop earning, or an amazing handheld cutter, or could be global consensus on something better flavor, better offtake. Agreements like whatever you you can imagine, but if you could change one thing overnight, what would that be? Agreements like whatever you can imagine, but if you could change one thing overnight what would that be?

Speaker 2: 1:03:06

That's a tough question, con no.

Speaker 2: 1:03:09

I know that's why I ask it. No, look, I think I'm going to stick to the weeding part as well, because I think that's also or at least I personally believe that no-till is probably one of the most urgent ones. It's not only in the Sahel but across the world, and probably the most pervasive reason why not to adopt is precisely weed management. So I think if we can solve that in a cheap, economical, sustainable way and definitively move away from the use of chemical herbicides move away from the use of chemical herbicides that can have a very strong impact in the systems in itself. And I think obviously then you can say or dream that if the market could value region, then consumers would pay more and then eventually farmers would get more, and that can be an incentive in itself. But I like to think more. You know sort of direct elements that we as farmers can adopt.

Speaker 1: 1:04:38

No, no, fair enough. And the dream of consumers fixing this, I I don't know. I mean that requires a lot of brand building, a lot of different value change chains or webs, a lot of a lot of work on that side, which people are doing, luckily, and we need to get the consumer on board. But, as you said, like your consumer is at the end is a fish farm operator somewhere in, let's say, western Africa, and unless there's a very clear quality benefit, I'm doubting that he or she is going to pay more for a regen ingredient. And so many farmers supply into those supply chains and are not necessarily touching an end consumer even remotely, of course, through the fish. But then the tilapia has to be. I mean, there's a lot of steps there to fix. So I definitely it has to make sense on the farm level and we have to pay more for food if you can, and we have to unlock all of those things.

Speaker 1: 1:05:44

This is not an argument to get off the hook for for consumers definitely. But I want to be conscious of your time as well and thank you so much for um the work you do, sticking with it. It was a very impactful holiday, uh, in in sierra leone and, of course, congrats with the round um. And to scale from 20 000 to 100 000 farmers over the next couple of years. You make it sound like it's very easy, but we will be checking in at some point I'm looking forward to that it won't hopefully be four years or three and a half, but maybe a bit less and see where you're at. So thank you so much for the work you do and coming here and take some of your precious time to share that, share your journey with us thank you very much, kern.

Speaker 2: 1:06:21

Likewise, thank you for amplifying the voices as well of regenerative players in the world.

Speaker 1: 1:06:34

Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website investinginregenerativeagriculturecom. Forward slash posts. If you liked this episode, why not share it with a friend or give us a rating on Apple Podcasts? That really helps. Thanks again and see you next time.