Learning from personal experience just how hard it is for a small-scale farmer to secure funding to start and grow a business in SA, KwaZulu-Natal based Zamokuhle Thwala set up Agricool, an online market place that links smallholder farmers and buyers to markets. Thwala has just been awarded the joint first prize in this year’s SAB Foundation Annual Social Innovation Awards, for which he received R1.3 million in grant funding and business support. A total of R12.6 million was given away to 17 finalists. This is one of many prizes that Agricool has recently won, owing to the social impact of their business model. He told BizNews how the Covid-19 pandemic and lockdowns forced him to new thinking – opening new business avenues. Thwala also mentioned that he wanted to make farming cool to a new generation of farmers and that he thinks women make better farmers. – Linda van Tilburg
Zamokuhle Thwala on the inspiration behind Agricool:
I’ve been a smallholder farmer myself and I have struggled with access to market and finance. I‘ve tried to source finance from various institutions like banks and other funding – but I was not fortunate to do that. That’s how the idea came about. I decided to quit farming so I could try to solve this problem.
On what he was farming prior to creating Agricool:
At that time I was farming cabbage, spinach, peppers – it was dependent on the season – but mostly cabbage that I was selling to the local people. When I struggled with access to market, I started to sell to hawkers and informal traders who were selling vegetables. That’s how the idea came about, because I couldn’t sell to formal retailers. They had requirements with food safety.
It’s easier for the hawkers, they don’t ask questions. When you’ve got something that looks nice and that’s big in size – as long as they get their value for money, then they are more likely to buy and also resell to the customers. So at Agricool, we are helping smallholder farmers get access to market.
Our market is divided into two groups. We are supplying your informal markets, which is comprising of the hawkers – people selling on the street – and also your formal market, made up of formal retailers like Boxer, Usave, Farm Fresh and many others.
On the effects of Covid-19:
It had a catastrophic effect on us, because even the schools were closed. That is one of our markets as well. We supply people who have got tenders with school nutrition. When it closed, at that time, we were very small company. We only had one bakkie to do all these deliveries and we had invested a lot of money in high value crops like peppers and tomatoes.
When the lockdown was announced and informal traders were not allowed to trade, we didn’t really have our outlets – like the markets – where we could sell and our alternative would have been to sell to your municipal markets, where everyone can sell the product through agents. But the challenge – at that time – was that even the big-time commercial farmers couldn’t export. So their alternative was your alternative. We couldn’t compete on price, quantity and obviously on quality as well.
It was difficult. We lost over a million rand because of that and we’ve lost a lot of produce. We even had to give to some of the producers away for free because we couldn’t sell them. Even our logistic partners that we sometimes use to transport our produce were shut down as well – nothing was working at that time. It was really tough for us.
But I’m happy that it happened because it then pushed us to pivot into the formal markets. That’s how we got Boxer and Usave on board. At that time, it was only the formal market that was operational. Eventually when the informal marketplace was reopened we then said, let’s have both of these markets together and work with them.
On Agricool suppliers:
We are mainly the key for smallholder farmers. Farmers, who maybe have got a hectare of land. Mainly women and people in rural areas, because those are people who are deprived of access to finance. They would have little money to farm, but they also struggle when they’ve got the produce to sell.
We like working with emerging farmers – particularly black farmers – because they are deprived access to finance and markets. We provide them with access to markets. We’re looking for farmers who are mainly doing fresh produce, targeting women and farmers in rural areas, because that is where we can do more impact.
On women as farmers:
There’s more women coming in and joining agriculture. Looking at it from the perspective of sustainability, I think women make better farmers.
Our biggest goal is to help smallholder farmers improve their household income so they can improve the livelihood of their families. And when you give R100 to women, they’re more likely to spend with their family. But us men – some of us – we are not disciplined. You’ll find that our male farmers take money and do not use it sparingly.
They’re not even investing into the business – because we also do access to microfinance for smallholder farmers. Most of all, we get the good pay rates from women. We would encourage more women to join in, particularly youth, as we want more youth to join in with agriculture. You look at the average age of the farming community, it’s about 62 years. This really shows that we need more people to join agriculture so we can have a sustainable sector.
On future plans:
We’ve got many future plans. One of them is to get into export markets, where we empower these emerging farmers to be able to do export markets. We’re also be looking for more partnerships. They need to partner with us in helping emerging farmers. But now with the SAB Foundation grant of R1,3 million, we’re using all of this expertise and all the funds that you have into investing – in growth and a good team with the right skill set in taking this forward.