Our innovation is how we build communities into our business models to create positive impact. It is a given that portfolio companies must manage ESG correctly.
Issues in the African agricultural sector:
60-70% of the population in Sub-Saharan Africa live on smallholder farms, averaging 1-2 ha in size. Most are managed by women, farming low value subsistence crops. Farming techniques tend to be sub-optimal and farmers often use farm-saved rather than improved seed. Farmers lack access to basic infrastructure such as storage or transport. The results are low yields and low incomes. These families represent the lowest income group and are caught in a poverty trap.
If value is created across Africa's agricultural chain, then sustainable infrastructure can be built to permanently raise the standards of living for farmers, mitigate negative environmental impacts, and create a multiplier effect across local economies to increase overall prosperity.
Creating a significant positive social impact within communities
Communities are integrated into our business models. We aim for both business and community to have higher incomes. Five modes drive our positive social impact:
a) Direct Impact
Employment: A large-scale commercial enterprise brings direct benefits to an area, such as jobs on site and within surrounding services.
Food production: Most of our produce is for consumption within country or region, strengthening local economies and increasing food security.
Technical assistance: We provide training to smallholder farmers in conservation farming and animal husbandry. Employee training and management development improves local expertise.
b) Improved Inputs
We provide access to higher quality inputs for farmers, from seed and fertiliser to animals and poultry with better commercial viability. Hybrid seed boosts yields per hectare by 60% on average. Our seed is deployed on over 330,000 ha of farmland, almost all belonging to smallholder farmers.
c) Providing a Market
We develop world class development hubs to create a market for a higher value crop for smallholder farmers, typically through a processing plant development - farmers can make higher incomes by growing this higher valued crop.
d) Improving Infrastructure
As much as a third of smallholder grains are lost through a lack of reliable storage. We increase storage and other infrastructure availability to help preserve harvests and to help farmers sell when the prices are higher.
e) Community joint ventures
A community joint venture structure allows us to help communities manage farms owned by the community and to implement long-term skills transfer.
Our key impacts structured by SDG:
SDG 1: No Poverty
~340,000 people benefit economically from our investments. On average they profit ~$330 more per annum. Therefore, third parties – employees, smallholder grains and livestock farmers, and communities in joint ventures within our portfolio companies – earn an incremental profit of $112m per annum because of our investments.
Our businesses transact with over 630 SMEs who are paid over $18.3m per annum for their goods and services. We estimate that these SMEs hire over 6,000 people. In total, based on an IFC jobs study multiplier, we create ~7,500 indirect jobs in the industries we rely on.
CSI donations to communities around our operations total ~$186,000, estimated to benefit ~36,000 people.
SDG 2: Zero Hunger
Our investments in the seed sector and out-grower programmes aim to increase smallholder farmers’ yields from ~1.7 to 3.5 t/ha. If this can be achieved, then it will remove hunger in the countries where we operate. Smallholder farmers can realise this simply through using the right seed and conservation farming techniques.
In Zambia, the smallholder cattle farmers we work with have seen their herds increase from 16 head to 19-20 over the last 5 years. This is a result of our extensive dipping and vaccination programme, which has reduced cattle mortality and improved calving rates. Over 28,000 cattle owned by nearly 1,600 farmers benefit from this programme.
SDG 5: Gender Equality
Our impact is particularly strong in empowering women because most smallholder farmers are women. As an example, our poultry project in Tanzania focuses on women, who make up 80% of smallholder poultry farmers. We estimate that ~56,000 poultry farmers are earning over $450 more per annum because of this project.
The majority of grains farmers in Central and Southern Africa are also women. This year, nearly 22,000 t of grains are being purchased from smallholder farmers. Our seed is used by ~240,000 smallholder farmers and high yields are estimated to increase incomes by ~$255 p.a. per farmer.
Women are crucial to our operations, constituting 40% of our workforce. Women are particularly good at careful and technical work, such as managing our feed mill, handling fruit and poultry, and de-tasselling maize.
At our ranch in Southern Zambia, a sunflower out-grower scheme focused on women provides sunflower cake for feed for our feedlot.
SDG 8: Decent Work and Economic Growth
Silverlands has over 6,900 employees, up 47% from purchase (~4,700). Employee numbers have increased 4-fold in the Tanzanian and Zambian operations, associated with our large developments. Our businesses are key employers in their rural locations, increasing salaries by 3-fold since purchase (excl. CBL) – currently at $28m p.a.
Each operation has capacity and systems in place to ensure we follow world-class employment practices and ensure safe work environments for all employees. We adhere to the IFC Performance Standards with annual reviews of performance.
SDG 15: Life on Land
To protect soils and water resources: water use is minimised by using the most efficient irrigation methods, soil moisture probes, weather stations and mechanisation; runoff is managed with contouring; pesticide use is minimised by following Integrated Pest Management programmes; and fertiliser applications are tailored to the needs of soils and crops rather than broad spectrum application.
Minimum tillage and cover crops improve soils, which increases crop productivity and soil carbon. We implement these practices and train smallholder farmers about them.
On our farms that are blessed with large areas of natural woodland and grassland the biodiversity is protected and managed within conservation areas where possible. The removal of alien vegetation is ongoing.