Presentation on theme: "OSPRO Wikifarming and Open Source Processing The Organic + Fairtrade Experience 2.0 Ashifi Gogo, Evans Lartey, Bright Simons Center for Humane Education,"— Presentation transcript:
1 OSPROWikifarming and Open Source Processing The Organic + Fairtrade Experience 2.0Ashifi Gogo, Evans Lartey, Bright Simons Center for Humane Education, Ghana.GSEC 2007
3 Source: Packaged Facts report – projections for 2005 The OpportunityEU Organic market: $10 billion, massive growth.UK imports 75% organic.Suppliers (farmers) in developing countries, like Ghana.Rigorous organic certification proceduretoo complicated (illiteracy).Source: Packaged Facts report – projections for 2005
4 Fairtrade + Organic food consultancy, consolidator and exporter. WOSPRO’s VisionFairtrade + Organic food consultancy, consolidator and exporter.Social impact:Farmers (Fairtrade).Environment (Organic).$1.1 mil profit in 5 years with $0.5 mil investment.1400 farmers: 3X net income increase.
5 Organic Farming Organic alone: 40%. Fairtrade alone: 45%. Organic: good environmental practices.Low pesticides: Cancer & allergy fears.Low fertilisers: Environmental good.Natural growth: Great taste.Community building: Social issues.Fairtrade: pay farmer fairly.High price premiums:Organic alone: 40%.Fairtrade alone: 45%.Combined: 55%.Sources: Wikipedia, Fairtrade Organization
6 How Do I Get Into The Market? You need a Certifier.Monitors organic standards.Issues certificate permitting organic sales.Soil Association certifies 75% of UK organic produce.Source: Soil Association
7 Politically stable: 25 years Fully democratic, past 15 years GhanaPolitically stable: 25 yearsFully democratic, past 15 yearsFree press & rule of law.2006 Inflation rate: 10.5%.Established UK trade links.Agriculture: 40% of GDP.Employs 60-70% workforce.Sources: Wikipedia.org, CIA World Fact Book Websites, Ghana Statistical Service
8 Typical Ghanaian Farmer Grows organically by default.Precedent for cooperative farming.Low scientific sophistication.No organic certification.Costs $1200/day for inspection.Average yield.Low to medium net income$500 a year.Handles product distribution.
9 WOSPRO’s SolutionsGuidance through UK organic certificationVirtual proximity organic educationVIRPROX: Cost saverLong term: certification costs fall from $1200/day to $120/dayWOSPRO purchases directly from farmer at fair priceOrganic AND FairtradeWOSPRO exports products to UKWOSPRO: Organic food consultant + consolidator + exporter = supply chain facilitator
10 Ghanaian Certified Organic Farmer Existing Food Exporter Revenue ModelGhanaian Certified Organic FarmerUK Distributor (more info in Q&A)Existing Food ExporterUS / Global DistributorWest African Certified Organic FarmerLong Term50kg peanuts: $12With WOSPRO: $36No organic, no Fairtrade: $54Fairtrade+organic sale: $78Source: Fairtrade organization, NAFED45%Hauling cost: $30Profit: $12Put in concrete numbers here for the purchase and sale.Year 1Year 2Year 3Year 4Year 5Sales Turnover (‘000 US$)4009001,2002,1004,000Profit (‘000 US$)-450-247.552.55251,100Bottoms up approach, conservative estimates. Available in Q&A.
11 Break Even Analysis EU Market Entry Market size: $105 mil. Break-even sales = $1,547,500.Market growth:15% per annum.Inflation, interest rates will not exceed 30% per year.Bottoms up approach, more info in Q&A.
12 Large SROI value of 3 Social Impact $1 invested = $3 Fairtrade farmer’s income increases from $500 to $1600 over 3 years.Environmental and health gains.Direct and indirect job creation.Stem rural urban youth drift.Eco & food tourism.
13 Project Timeline Organic subcert. from UK company Storage facilities, farmer recruit, transportation logisticsExport & dist. outlet finalizedFunding: $150,000First batch of crops shippedMore farmersExpand distributionDiversify crop selectionFunding (IFC): $350,000Expand to EU, starting with NetherlandsGrow to primary West African CertifierLong term growth / exit strategy2007200820092010
14 Management Team Evans Lartey Graduate, L’Ecole De Management in Paris. Founder and CEO of PIU, investment consultancy in AccraTop agric graduate; food security expert, USAID Title II Project.Bright B. Simons2005 Marie Curie Fellow (EU Migration Centre, Berlin), Journalist.Human Development Analyst. Researcher into organic issues.Paa Kwesi ImbeahYale University graduate and Gordon Grand Fellow.Founder, Kasahorow project: translation effort for African languages.Localized farming education materials and efforts.Ashifi GogoElectrical Engineering Ph. D. candidate, Thayer School, Dartmouth.Computer consulting, online social networks. VIRPROX.Active search: CFO, CEO
15 Advisory BoardElsa Garmire: Professor, Dartmouth. Tech. transfer expertMember, National Academy of Science, Fellow, Optical Society of America, IEEE.Nancy Garrison: Organic food expertleading member, Slow Food Movement, arguably the world’s largest organic consumers’ associationJohn Jeavons Project: organic farming educationArpit Rai: High tech social entrepreneurshipExec. Dir., ASES SingaporeBusiness Development Executive, technology consulting giant Satyam.Gregg Fairbrothers: Director, Dartmouth Entrepreneurial NetworkStartup launching maestroClaude Fussler: Sustainable development expertFormer Director of the World Business Council for Sustainable DevelopmentNick Hewison: UK crops market expertMD, NDH Management Services & Consulting, commercial fruit grower in Devon, UK
21 Distribution: Timeline Fairtrade VenturesExpand to include:UtopiaNew Covent Garden TradeCumbria OrganicsSupermarkets & caterers for in-house brandWaitroseCo-opOrganic RestaurantBistro OrganicWOSPRO’s own label:AsdaTescoSainsburyCafeterias in universities, offices etc.Expand to USA:Whole EarthAmy’s Kitchen200720082009201020112012
22 Growth: TimelineYear 1 – [Months 1-6]: Pilot Project: 26 farmers, Crops: Peanuts, Peppers. VIRPROX trial run.[Months 6-12]: Launch: 50 farmers; Organic certification license obtained; first order through Fair Trade Ventures. VIRPROX goes live – Soil Association MOU on VIRPROX concluded.Year 2 – [Months 1-3]: 150 farmers. Fairtrade Certification obtained. New farming units admitted per sales dynamics. Ginger added. Districts in Eastern Region of Ghana come on-stream.Year 3 – WOSPRO labelling on products. First retail order secured. First batch of products reach Netherlands. Shea nuts and Cola nuts added. Districts towards Northern Ghana come on-stream.Year 4 – Derivative processing begins in Free Zones’ site – sub-contractor plant: shea butter, cola juice, pepper pastes, peanut butter and ginger extracts. Factory orders for processed produce begin. Explore prospects of USA entry.Year 5 – Enter US Market. Acquire license. Begin exploring bulk demand.
23 (Each farming family has about 5 workers) Growth: DetailsYearProjectsCrops Involved# of FarmersOutputA. Total tonnageB. US$ ‘0000 (pre-launch)Feasibility Studies.Pre-inspection consultations with SACL.VIRPROX prototype completed + simulations.MOU with SACL about VIRPROX.Staff recruitment & training.Identify farming districts.1Recruit farmersOrganic certification license.First orders from Fairtrade Ventures.Silos completed.PeanutsPeppers(Each farming family has about 5 workers)300A. 418B. 4002Fairtrade license obtained.More farmers recruited, new districts added.Negotiations with more third-party buyers.Factory and feedmill orders begin.First direct orders from retail chains begin.Above + GingerLime450A. 815B. 900
24 Growth: Details Continued YearProjectsCrops Involved# of FarmersOutputA. Combined tonnageB. US$ ‘0003More retail & factory orders.Re-negotiating third-party distribution; focus on direct orders.Dutch orders.Brand-packaging of produce begins;’’ free zones concessions’’.Lease on warehouse.GingerLimePeanutsPepperShea nut600A: 1315B: 12004Processing of product derivatives.Warehouse leased near Tema port.Shelf-space in supermarkets for processed and packaged produce.U.S. Fairtrade and Organic license obtained.same750A: 1900B: 21005U. S. market.Warehouse leases in Netherlands.Shelf-space in Netherlands, Switzerland and Germany.1400A: 3100B: 4,000Long-termWest African certification agentAdditional commercial applications of VIRPROX.Evaluate market & add new crops
25 Fairtrade: Sales & Growth Purchase farm produce at fair prices from farmers in developing nationsNorth American & Pacific Rim growth:2003 Total Sales US$ million, a 52% increase over 20022004 Total Est. Sales of $ million.Source: fairtradefederation.org, Wikipedia.org
27 Market: Organic + Fairtrade International Premiums ProduceCountry Of OriginFairtrade & OrganicminimumPrice per MT (US$)Premium per Metric Ton (US$)Premium %PeanutsChina110045041GingerIndia95016017Shea nutsUganda40013033Shea butterSenegal140042030PeppersEgypt85525029LimesBrazil170030018LemonPeru1906032Mango2145526Orange2048039Pineapple2409038Source: Fairtrade Standards For Fresh Fruit and Fresh Vegetables For Small Farmers’ Organizations. May 2006.
29 Market: U. S. Organic Sales 2005: $15 BillionSource: Southern Organic Resource Guide
30 VIRPROX: WOSPRO’s logistics and resources management system. VIRPROX: DetailsVIRPROX: WOSPRO’s logistics and resources management system.Unlike SAP 6.0. Optimised for audiovisual interfacingExisting systems: NIP’s OTS, but require IT trained farmers.VIRPROX is simple and functional.
31 Portal for communicating with certifier audiovisually. VIRPROX: Web PortalPortal for communicating with certifier audiovisually.Inventory orders, batch control via portal.WOSPRO field activities video-transcribed into system.Learning material for extension officer trainees.
32 VIRPROX: Practical Scenarios Training:Record SACL training sessions, upload to VIRPROX.New extension officers recruited: retrain with VIRPROX multimedia.No need for SACLNeed to educate semi-literate farmer: use VIRPROX multimedia, translated to local languages.No need for high literacy.WOSPRO faces new farming challengesCapture multimedia, upload to VIRPROX, notify SACLSACL solves problem remotely. Saves $$$.Better than , phone, air mail.Supply Chain:Keep track of product batches with codes in VIRPROXProblem arises: traceback with VIRPROXVIRPROX: Powerful tool for data keeping, auditing, disaster prevention, training and post-crisis learning.
33 Mock-up of a VIRPROX-powered portal plane. VIRPROX: SchematicMock-up of a VIRPROX-powered portal plane.
34 VIRPROX: Capital Disbursement Schedule of CostsAmount (US$)Software code development (VIRPROX)40,000Market research, pre-revenue overheads, hiring10,000Certification and incorporation of division2,000Wireless infrastructure8,000Data centre and network services5,000office space and outfitting15,000Patents and copyrightsLegal miscellaneous3,000OperationsHuman Resource Development30,000Total120,000Premises and AssumptionsInterest rates differ for IFC loan facility and venture finance.Venture finance package is an optimal mix of debt and equity.In year two, WOSPRO shall qualify for the fair-trade concessionary financing scheme under the Shared Interest program.
35 Fairtrade AND Organic products UK. WOSPRO ServicesFairtrade AND Organic products UK.Developing skills and knowledge for organic farming in Ghana.Scoping and feasibility studies, aid decision makers.Training extension officers from Kwadaso Agric University, Ghana.Training in organic certification.Market development and supply chain mapping.
36 Operations Peanuts, shea nuts, lime, ginger and pepper plant farmers. Exclusive agreement to supply WOSPROMicrofinance (local bank)Locally produced farming implementsCertification guidanceInitial: WOSPRO bears certification cost (SACL core processes). Medium to long term: Farmer bears VIRPROX subsidized cost. 20% annual earnings servicing debt. Paid in 5 years.Local carting company: fully refrigerated transportation and storage silos.Existing freight forwarders: export to UK warehouse.Medium to long term: WOSPRO packaging, labeling facility at Port of Tema, Ghana.“Ghana Free Zones Scheme”: Over 70% output for export reduced tax burden by over 85 %.Support under EU’s Everything But Arms Initiative.
37 Ongoing Feasibility Studies: Farming Districts in Ghana:Ejisu-JuabenBosomtwe Atwima KwanhumaKwabreEthnographic study of 14 farming families ongoing
38 Ongoing Feasibility Studies: Business Partnerships at local and International LevelIFC (International Finance Corporation) considering application under S&ME Fund schemeIFAD (International Fund for Agricultural Development) studying proposalDistrict Directorate of Agriculture in Ejisu-JuabenKwadaso Agricultural College:recruit extension officersprovide top-up organic course using VIRPROX platform.
39 Strengths, Weaknesses, Opportunities, Threats. WOSPRO: SWOTStrengths, Weaknesses, Opportunities, Threats.StrengthsWeaknessesLeadership Advisory BoardMatching fundsGhana stabilityHigh food milesNeeds good marketingOpportunitiesThreatsAccess to big marketing infrastructure(fairtrade & activism)Booming market – right positioningGhanaian agricultureNew marketBig foodEnvironmental changes
40 Strengths WOSPRO: SWOT Vice President: Evans is Director of Devt., IMANIInternational award-winning think tanklinks to major corporate bodies in Ghana.IFC funding possibilityIFAD support possibilityAdvisory boardGhana stability
42 Opportunities WOSPRO: SWOT Access to marketing resources through Fairtrade and environmental activism movements.Growing society support for organic and Fairtrade.Booming industry, being in the right niche at the right time could bring millions of dollars.Organic by default farming in Ghana
43 Agriculture is natural cycle dependent WOSPRO: SWOTThreatsAgriculture is natural cycle dependentNew industry – trends can be fickleProduce buying in EU/US: tilted in favour of big foodless bargaining power for suppliers
44 Cash crop growing system Competition: GhanaCash crop growing systemCocoa, coffee, pineapples.Large export income earnings.Great Government support (agric specialists).Specialized marketing/distribution companies.
45 Competition: Global India. Competing crops: ginger, pepper. Duplication of cooperative model.Existing EU/US perishables trade ties.Comparatively lower commercial farming.Low earning power in agriculture sector.India. Competing crops: ginger, pepper. Problems: low consolidation, technical inefficiencies, market links, entrepreneurship and networkingOnly 23% of major European importers source from India.Source: FIBL Research Institute of Organic Agriculture Report Organic Agriculture in IndiaInternational Competence Centre for Organic Agriculture ICCOAReport of the Need Assessment of Indian Organic Agriculture, January 06, 2004Summary: “The Indian Organic Market [is] suffering from the incertitude about the potential market, lack of successful pioneers and courageous imitators […].”
46 Competition: Global Sri Lanka. Competing crops: Lime, pepper A 24-year old civil war: Hindu Tamils and the majority Buddhist Sinhalese. Logistics/export nightmare.Uganda & East/Central AfricaGreater emphasis on Cash crop farming & commercialisation of agriculture.Only political semi-stable: Uganda, Congo and Zimbabwe.Higher freight costs to Europe.Shea nuts: grown in West Africa.
47 Competition: Long Term Organic BrandAdvantageLimitation/RiskMitigationWOSPROFairtrade logo. Organic logo.VIRPROX enhances product integrity for supermarket and other buyers.Low production costs.Distributed produce supply base implies low risk of disruptions.High ‘food miles’Limited marketing resources to explain all value propositions.No shelf space advantage.Web portal compensates for lack of marketing clout.Access to media agenda of development and social justice advocacy groups.Web-portal provides means for organic-related needs to be clarified and met for added value to customer.Local/Independent‘Comprehensively’ organic – no food miles issues.Strong ‘local sentiment’ which influences patronage; customer can support farmer directly.Freshness guaranteed.Poor ‘reach’ (typically sell through ‘open markets’ which have limited scope.)Low economies of scale/high production costs may lead to higher than industry-average prices.No ‘Fairtrade’ opportunity.Low range – limited to local crop varieties.Local producers’ cooperatives can resolve some ‘economies’ issues.Strong patron bonding may lead to some customers overlooking price.Big Food(E.g. Kelloggs’ Kashi and Weetabix ‘Organic’ ranges)Massive marketing clout.Easy access to supermarket shelvesHigh Brand recognition.‘Footfall drive’ – loyalty to brand’s non-organic lines can generate interest for ‘organic’ versions.Most brand images incompatible with ‘organic’ ideal e.g. fall in Kashi’s sales upon acquisition by Kelloggs.Fairtrade/organic seals harder to acquire due to Certifier resistance.Enough muscle to influence customer perception through media lobbying.Can acquire ready-made organic brands for attempted integration into brand ethos.ExclusiveOrganic Brands(e.g. Jordans, Dove, Whole Earth, Whole Foods, Prince Charles’ Duchy Organics)Considerable marketing clout.Favorable access to shelf space.High Customer trust.Fairtrade/organic certification advantages clear and growing.No ‘proximity’ advantage.No significant cost advantages.May pose biggest competition to WOSPRO.Some like are involved in well-publicized conservation efforts.Customer bonding may thus proceed vicariouslySupermarketIn-House Brands(private labels)Formidable shelf prominence.Marketing instrument (in-store promotion) highly effective.Superior grasp of customer shopping behavioral trends.Brand compatibility with organic ideal is weak.No cost advantages.Low Fairtrade/organic certification advantages.Anti-supermarket sentiment may rub off.Sourcing locally, though expensive, may enhance proximity.Can easily source from third parties for repackaging as brand recognition is assured.New Entrants(Ghanaian producers competing with WOSPRO)Lower production costs.No short of potential members for producer cooperatives.Organic and Fairtrade certification advantages.Patent cover prevents adoption of ‘web-oversight’ marketing technique.Certification presents significant managerial and technical challenges.Sound knowledge of European (western) consumer trends required.Alternative technologies that may be in the pipeline elsewhere may enhance proximity.WOSPRO’s Contractual holds on managers, freight handlers, producers etc. can never be impregnable.
48 Ghana: Country Profile Capital (and largest city): AccraOfficial language: EnglishGovernment: Constitutional republicPresident of Ghana: John Agyekum Kufuor Independence from the UKDeclared : 6 March 1957 Republic: 1 July 1960Constitution: 28 April 1992 Area: 238,534 km² or 92,098 sq mi (about the size of Oregon).Water 3.5% of the areaPopulation: 22 million (2005 estimate)Density: 93/km² or 215/sq miGDP (PPP) 2005 estimate: Total $55.2 billion , Per capita: US$2,643 HDI (2004): 0.532 (medium)Source:
49 Ghana: Country Profile: Economic Standard & Poor country rating (2006) : B+ (Best in West Africa)United Nations International Development Organization ranks Ghana ‘’Best for Investors’’ in Africa 2007.World Bank: Doing Business Report 2007 – Ghana: Top Reformer in Africa.Ghana: highest grant award from US Millennium Challenge Accountgood governance, rule of law and democratic accountability.Cedi: full entry into international exchange rate mechanisms (2006)High scores: NEPAD African Peers’ Review Mechanism.Freedom House Investment Climate: Excellent
50 Ghana: Country Profile: Social Amnesty International Human Rights: GoodUS State Department Political Climate: Very GoodSocio-Political Information/Institutional EnvironmentNo national-level ethnic unrest in 50 years of independenceNo political prisonersNew Commercial fast-track courts to remove bureaucracy from the commercial judicial system.
51 Ghana: Country Profile: Investment Tax breaks for foreign investors.New Partnership for African Development (NEPAD).African monitoring of good governance, accountabilityGhana Investment Promotion Act (1994)tax concessions for up to 10 years are available.Low inflation rate (graph on next slide)
52 Ghana: Country Profile: Inflation Source: Bank of Ghana
53 Ghana: HDIHuman Development Index (HDI): life expectancy, literacy, educationGhanaChina, India██ high██ medium██ low██ n/aCredit: Wikipedia.org. HDI data for 2004
54 Ghana: Agriculture Details 5 acres, 2 or 3 full-time workers, part-time assistant during planting and harvestingFamily business. Strong communal element.Traditional land ownership held in communal trustChild labor. WOSPRO will ensure no child abuse takes place.Average turnover: US$3000No storage facilitiesExploited by middlemenWOSPRO model fits traditions.Farmers still own their land/farms.shared resources: storage, husbandry, training.No privacy issues54
55 Ghana: Natural Agriculture Advantage Already low inputs, easier switching to organicAbout 3 months to switch in Ghana, 3 years for developed countriesAlready low earnings,premiums an even bigger boostAll we need to do: increase capacity
56 Ghana: Agriculture Low Yield Ghana agric: not much change since independenceSource: earthtrends.wri.org. WRI : World Resources Institute
57 Ghana: Agriculture Organic By Default All these graphs support our argument that production is organic by default,low yield and that agric is in bad shape (almost no change since independence)Organic shouldn’t be difficult or expensive and our interventions are critical.Source: earthtrends.wri.org. WRI : World Resources Institute
59 REDF blended value format End of year five, ROI = 2. SROI: CalculationREDF blended value formatEnd of year five, ROI = 2.accumulative investment of $2.5 mil and net financial performance of $5 milSocial Purpose Value = 0.5Return = $2 mil, investment of $4 milHealth and environmental gainsAdditional $2 mil in measurable communal valueCalculated with Soil Association guidelinesTotal weighted SROI = 3.0
61 SROI: Social Benefit Directly to Farmer OperationPresentBottlenecksLoss of Ideal Output(yield & income)WOSPROInterventionSavingsClearingReliance on hoes and cutlasses – limits capacity6%1. Tricycle - tillers2. wheeled, hand-held ploughs3%SoilEnrichmentLack or resources to invest in expensive fertilisers.8%Advanced training in manuringComposting techniques5%Water useReliance on rain water.15%Rain Water StorageSustainable ground water useIrrigation techniques10%harvestingFrequent bruising of crops leading to reduction in appeal/shelf lifeGlovesscything implements.ControlInsufficient knowledge and resources to invest in proper management.Integrated ManagementOrganic pesticides12%StorageNo local storage facilities.High perishabilitySilosSaw dust, air controlMarket Access/TransportAverage of 2 middle-men before urban market is reached. No negotiation power so underpaid.30%One intermediary to export marketArrange transport21%Analysis:Ghanaian rural farmers are operating at an efficiency of 8% of achievable rates. In the short term, a conventional intervention could raise this up to 96%, but at the cost of sustainability. ‘s organic intervention can manage an uplift to 64% in first two years of operation.The implication is that in the short term alone output in combined yield and income terms rise 8 times. Diminishing returns flattens this growth in efficiency over the long-term, hence the need for new farmers to be brought on board even as existing farmers expand their land stock.
66 Required Capital Outlay Planned DisbursementAmount US$)Lease on/outfitting of company administrative, technical and operational buildings in . Construction of contingency storage silos. Lease/rent on office space in , (1 year)170,000Working Capital (produce bulk buying etc)250,000Cargo trucks for farm-to-farm harvest consolidation.80,000Farm equipment (hygiene, health and safety – oriented) to be leased out to farmers on flexible terms (portable irrigation systems, boots, disposable gloves, modern harvesting equipment)70,000Operational funds for start-up expenses (pre-revenue overheads), hiring, market research, legal miscellaneous, labor wages etc.160,000Total730,000
67 Cost of Sales & Revenue INCOME ($’000) Year 1 Year 2 Year 3 Year 4 of Raw Crops40070080012001800of Packaged Crops1803606001000of Processed Crops2040300Sub-totalCOSTS ($’000)Cost of SalesStorage8305080Bulk Transport12254884Customs & Duties263275Marketing283645Materials & OperationsCrop Purchases120250350500Farming Inputs7090VIRPROX10Certification(start-up)1535Packaging22.55560Processing34Freight55.5100160
70 Third Party CostsInsurance234610Bank Charges0.50.751LegalAdvisory1.55Sub-totalLoans & Debt ServicingInterest3530Servicing*15167.594.8653.5Total RevenuesTotal CostsStart-up CostsTaxesNet Income
71 Certification: SACL Core Processes Soil Association (SA): Certification conducted via Soil Association Certification Limited (SACL).SACL:inspector for compliance with SA regulationconsultancy for producers to meet standards.CORE PROCESSESPre-inspection consultationInitial technical visit to site(s): Soil testing, customized best practicesLicense grantingAnnual visitsSource: Soil Association Guidance Booklet, 2006.
72 Certification: SACL Peripheral Processes Organic farming advocacy in developing nations.Scoping and feasibility studies for decision making (local to national).Training of certification bodies.Market development of organic products.Source: Soil Association Guidance Booklet, 2006.
73 Certification: SACL (Certifier) Consultancy Services WOSPRO through VIRPROX: Perform SACL peripheral processes.Developing skills and knowledge for organic farming in Ghana.Scoping and feasibility studies.Training extension officers from Kwadaso Agric University, Ghana.Market development and supply chain mapping.Still need SACL inspection & certification services.
74 IFC funding deliberations: Ongoing Fairtrade certification: Pending MilestonesFarmers recruited: 14IFC funding deliberations: OngoingFairtrade certification: PendingOrganic certification: PendingPatents and copyrights: ExplorationVIRPROX specifications: OngoingTechnical and managerial consultations: OngoingIncorporation in three countries: Ghana, UK, USA.Private LLCPartners owning all shares outstanding after equity arrangements with strategic investors, venture financiers and development fund managers have been concluded.
75 Sale to larger company: SA, SACL. Exit StrategiesInvestor BuyoutSale to larger company: SA, SACL.
77 Fairtrade: Sales & Growth Purchase farm produce at fair prices from farmers in developing nationsNorth American & Pacific Rim growth:2003 Total Sales US$ million, a 52% increase over 20022004 Total Est. Sales of $ million.Retail Value Global Fairtrade SalesYearSales (€)Growth (%)200527200433200346200217200111200077Source: fairtradefederation.org, Wikipedia.org
78 Typical Ghanaian Farmer Grows organically by default.Precedent for cooperative farming.Low scientific sophistication.No organic certification.Costs $1200/day for inspection.Average yield.Low to medium net income$500 a year.Handles product distribution.WOSPRO provides solutions
79 VIRPROX: Certification Savings $100,000 per year for 120 farmersEach farmer has 5 workers.About $270 per dayVIRPROX: $45,000 per yearVIRPROX cost: $35,000SACL inspection: $10,000About $120 per day
80 WOSPRO InnovationSACL’s going rate for all its certification activities, including peripheral processes, is $1200 per day (plus VAT normally charged at British rates, usually 17.5%).Soil Association actively partners intermediary organisations such as Wospro to develop solutions to bring down costs. Wospro believes that it can build an innovative system that will bring to an absolute minimum the amount of peripheral certification processes outsourced to SACL. The following list is of steps that will be taken to achieve that result.I. Organising farmers within a particular community into a cooperative so as to dilute the costs per farmer.II. A close look at items III and IV on the menu in fig. 1.1 reveals that a web-based electronic system, with complete multimedia functionality, can allow Wospro staff play an effective role as a conduit of training and skills from SACL to farmers at a much more reduced cost than would have been the case were specialists to be dispatched from the UK to Ghana.VIRPROX:Similarly, strategies around supply-chains, process-tracks, new field knowledge, and consumer behaviour trends can be shaped in realtime, cost-effectively and synchronously. A system such as is being described allows complex systems to be standardised and is particularly suited to a cooperative model where new members will be regularly added through identical protocols. In this sense, we will have built a responsive mechanism for bringing new farmers ‘’organically onstream’’ in larger numbers, at greater speeds, and at low costs than can ever be achieved using prevalent methods.