I’d like to use this blog post to lay out the goals for this project year, which were established by the 2Seeds Ground Team, as the Bungu Project transitions to a self-sustaining business. Now that I’ve been in Bungu for about two months, I’m better able to put these goals into perspective, in terms of both the work that has been done and the work that is still ahead of us.
Revenue and profit
Let’s start with sales. The goal is for monthly group revenue (the 12-member total) to consistently exceed TZS 500,000 and monthly profit TZS 250,000. The current exchange rate is about TZS 2,200 per USD, so that’s about $230 in revenue and $115 in profit. (That rate can fluctuate quite a bit, though, so from here I’ll discuss values in Tanzanian shillings.)
How feasible is this goal? To give some perspective, in the past two years, the group has met this revenue figure in four different moths and the profit figure in 11 different months. In all the other months, production or marketing troubles have kept revenue and profit low. The marketing component has now largely been figured out, but production shortcomings have continued to lead revenue and profit to flounder. Flooding, pests, cold, and overworked soil has have kept the group from reaching full production capacity.
Consequently, ensuring consistent production has become a major focus of this project year. To start, to reduce the risk of flood damage, we are in the process of building flood barriers and clearing deeper irrigation ditches at a number of at-risk farm plots. Second, we’ve also put a two-to-three month hiatus on planting (September to November, roughly) to lay down high-quality organic fertilizer to rehabilitate the soil. Last, we are developing a crop rotation strategy to control pests, help plan planting area according to weather, and keep the soil healthy. (Keep following the blog for updates on these initiatives!)
Once the entire group begins full-fledged planting again in November and December, they’ll be slated to harvest in early spring 2016 when we expect revenue and profit to hit these goals.
Like every 2Seeds projects, the Bungu Project has a group savings component. The purpose of building a group savings plan has been to allow the group to access capital to use on any unforeseen or big-ticket expenses. In places like Bungu – i.e. rural and poor – there is very little access to formal financial services. The closest bank is a two- or three-hour bus ride away in Korogwe, and many people don’t have enough cash to open an individual savings account. After building up a group savings, about a year ago the group officially opened its own group bank account at the Korogwe branch of CRDB bank.
The Project’s group savings goal is to keep the balance of this account above TZS 1.5 million, and to generate monthly deposits of TZS 50,000. The current balance is over TZS 1.8 million at the moment, meaning we’re ahead of the game in this field. As far as deposits, the group has decided to pause deposits during these few months that they are not planting. No planting leads to no harvesting, which leads to no sales. And no sales revenue makes it hard to deposit cash. As with the revenue and profit goals, the savings goal hinges on solid crop production. All roads lead back to production.
Impact and qualitative goals
The impact goal aims to put a solid figure on the impact of 2Seeds’s work in Bungu. The goal is for four of the 12 group members to take home TZS 75,000 per month from group activities. TZS 75,000 equates to about $1.25 per day, the figure widely cited as the international poverty line. All group members have some revenue-generating activity outside of 2Seeds (poor farmers are very risk-averse, choosing not to put all their eggs in one basket). Therefore, if they’re generating at least $1.25 per day just from 2Seeds, the thinking goes, they are certainly clearing the international poverty line across all income streams by a healthy margin.
But why four members and not all 12 members every month? Exposed to weather, pests and fluctuating markets, farming in the developing world is still risky business. Despite everyone’s best efforts, something will always go wrong for someone. The four-person goal is simply an effort at being realistic.
Other, non-quantitative goals include the personnel goal, to empower the group to take over fully running every aspect of the business after the Project Coordinator exit, and the goal to create a long-term strategy for expansion. As these goals are less tangible and less urgent, there is less of direct action plan. The reality that the group will shortly be without an on-the-ground Project Coordinator is very present in the group’s discussions, however, and with every new task to be completed there is an overall air of encouragement that one or more group members, rather than the PC, step up to the plate.
Focus on production
So much of the group’s operations are already functioning. The savings system is in place and healthy; the members have a great rapport; they work well together and quickly find solutions to get past any disagreements; they’re all experience farmers that know how to plant the vegetables produced. The weak link right now is consistent production, i.e. making sure that everything gets done to harvest marketable crops every month. Finding a way to ensure consistent crop production will be one of the major focal points of this project year. Once this piece is solidified, much of the rest of the challenges, including revenue, profit, savings contributions and group self-management, should fall in place.