FOLO Farms: Impact Summary

The Context Food Safety: The Malaysian press and people often claim that Malaysia’s food production is laden with pesticides. In particular, the European Food Safety Authority (EFSA) flagged food imports from Malaysia as containing the highest incidence of dangerous pesticide residue levels globally. With 99% of all vegetables grown in Malaysia using pesticides and chemical fertilizer, food originating from the country continues to exceed acceptable safety levels. Excessive chemical fertilizer use also has a negative effect on the environment, contributing significantly towards land degradation and soil infertility. Despite a growing demand for organic products, very few farmers in Malaysia are willing to convert their farms from conventional methods to organic farming. Food Waste: Food waste is a pressing challenge in Malaysia, comprising 60% of the total waste in the country. The majority of this waste (as much as 9,000 tons per day) is dumped in open landfills. Besides straining resources (both land and economic), landfills also present a huge environmental concern. As the single largest source of methane, landfills contribute significantly towards increased greenhouse gas emissions. Source: http://www.efsa.europa.eu/ https://www.researchgate.net/profile/Hassan_Arafat/publication/265387304_Solid_waste_management_in_the_hospitality_industry_A_review/links/540f0a5f0cf2f2b29a3dc086.pdf http://cleanmalaysia.com/2016/04/01/malaysias-food-waste-needs-tackling/ http://www.businesscircle.com.my/organic-farming-in-malaysia-what-needs-to-be-done/ https://www.globalpolicy.org/global-taxes/49705-land-degradation-causes-10-billion-loss-to-south-asia Photo credit: http://www.agricultureph.com/2016/02/5-paradigm-shifts-that-should-have-been.html Sources: https://www.oxfordbusinessgroup.com/node/903301/reader https://www.adb.org/sites/default/files/publication/27529/poverty-philippines-causes-constraints-opportunities.pdf http://ageconsearch.umn.edu/bitstream/195705/2/ATT_SAEA_2015%20(1).pdf https://www.scribd.com/document/30810367/Philippines-Women-in-Agriculture-Environment-and-Rural-Production https://www.adb.org/sites/default/files/linked-documents/41220-013-phi-ssa.pdf

The FOLO Farms Solution Feed Our Loved Ones (FOLO) Farms is a family-run farm, based in Johor Bahru, that transforms urban food waste into rich organic compost to grow a diverse range of healthy vegetables and microgreens. FOLO Farms bypasses middlemen to supply nutrient-rich organic vegetables directly to communities in Malaysia and Singapore. FOLO Farms collects food waste from its partner restaurants and hotels, diverting it from being burned or dumped in landfills, and converts it into microbe- and nutrient-rich compost. The compost allows FOLO Farms to grow safe and nutritious vegetables using sustainable, organic methods. The organic compost also helps regenerate previously degraded soil, restoring soil fertility and improving the efficiency of land use. FOLO sells surplus compost to neighboring farms, providing an organic alternative to chemical fertilizers and pesticides. FOLO Farms currently operates a vegetable subscription model where customers join the farm as members to partake in the risk and reward of a joint harvest – strengthening their sense of community.

FOLO Farms: Business Model FOLO Farms transforms urban food waste to rich compost, growing healthy vegetables and cutting middlemen to directly supply to communities in Malaysia and Singapore. FOLO Farms customers are typically middle to high-income families with an average household size between 3 and 4 individuals. Revenue Generating Activities (Present) Revenue Generating Activities (Future Plans) Vegetable Subscription Model: FOLO Farms operates a vegetable subscription model where customers join the farm as members to partake in the risk and reward of a joint harvest. Each 24-week subscription is RM2,000 for the vegetables. For Singapore families, the price is S$1,200. Each household receives 8-10 different varieties of vegetables and a tub of microgreens with every weekly box. Organic Solid Compost and Liquid Fertilizer: FOLO Farms currently produces over 3000kg of solid compost from food waste a year, all of which is used on the farm. FOLO Farms also produces approximately 20,000 liters of liquid fertilizer, only 25% of which is used for the farm. FOLO currently sells its excess liquid fertilizer to other farms and landscapers at RM 30 (1 liter bottle) or RM 100 (5 liter bottle). External Projects: FOLO Farms designs and executes urban farm and garden projects on an ad-hoc basis (these include edible gardens and green ranger programs in schools). Organic Solid Compost: FOLO Farms anticipates to produce a surplus of solid compost by June 2017 (500-700kg per day). FOLO plans to retail its solid compost at RM 3-10/kg to other farm or garden projects. they anticipate a surplus of solid compost every week by June 2017 – around 500kg to 700kg every day. They plan to sell this for around RM3-10/kg (depending on packaging size) retail, or on external farm projects. External Projects: FOLO Farms plans to establish an Urban Farm Design and Development Team to design and build urban farms and gardens for schools, hospitals, developers and housing complexes. Nursery and Recycling Collection Facility: FOLO Farms looks to build an onsite organic nursery which will serve as a new education/awareness farm section, a revenue source and on-demand supply source for their urban farm projects. Urban Farmer Training Program: FOLO Farms will partner with consultants, farmers and trainers to develop a urban farmer training program and establish onsite training facilities.

Impact Overview FOLO Farms is a triple bottom line company; alongside generating a financial profit, FOLO Farms also creates social and environmental returns as outlined below: IMPROVED WELL-BEING STAKEHOLDER: Customers FOLO Farms provides customers with access to organic vegetables through its vegetable subscription model. With no chemicals added in the production process, customers report improved health and diet from consumption of these nutrient-rich vegetable products, as well as a strengthened sense of community. REDUCED GHG EMISSIONS AND IMPROVED LAND UTILIZATION & REGENERATION STAKEHOLDER: Environment FOLO Farms diverts food waste from being burned or dumped in landfills, converting it into nutrient-rich compost. This mitigates significant GHG emissions such as carbon dioxide and methane. The compost is then deployed as a sustainable bio-fertilizer, regenerating the soil and improving land use efficiency. IMPROVED KNOWLEDGE AND SKILLS STAKEHOLDER: Trainees FOLO Farms conducts training programs on organic farming practices and techniques. FOLO Farms plans to develop a more structured urban farming program and to target youth from marginalized communities so as to improve skills and knowledge on urban organic farming. Photo credits: <insert organization>

Shujog Sustainability Pyramid

FOLO Farm’s Theory of Change Activity Outputs Primary Outcomes Secondary Outcomes Sells organic vegetable shares to customers through a farm subscription model NUMBER OF CUSTOMERS AMOUNT OF ORGANIC VEGETABLES SOLD AMOUNT OF ORGANIC FERTILIZER SOLD AMOUNT OF FOOD WASTE COLLECTED NUMBER OF TRAINING PROGRAMS CONDUCTED IMPROVED WELL-BEING (through consumption of organic vegetables and community engagement) Indicators: - Value of improved well-being ENHANCED HEALTH AND QUALITY OF LIFE (improved basic wellbeing through healthy food consumption) DEVELOPED URBAN FARMING INDUSTRY IN MALAYSIA (increased interest among Malaysians to engage in urban farming) ENHANCED AWARENESS OF FOOD SAFETY (increased awareness among consumers of health risks associated with pesticide use) Sells surplus biofertilizer and liquid compost to local farmers and landscapers Customers REDUCED GHG EMISSIONS (through avoided GHG emissions from composting food waste) Indicators: - Value of reduced GHG emissions Builds urban farms on a project basis for schools, hospitals, buildings etc. IMPROVED LAND UTILIZATION & REGENERATION (through regenerative farming and the use of nutrient-rich compost) Indicators: - Value of improved land utilization & regeneration Diverts food waste from landfills and converts the waste into compost Environment Conducts training in organic farming techniques IMPROVED KNOWLEDGE AND SKILLS (through participation in FOLO Farms' organic farming training programs) Indicators: - Value of improved knowledge and skills Community Conducts awareness programs on organic food consumption and production

Impact Projections 2017-2018 CUSTOMERS ENVIRONMENT 4,380 tons of food waste will be diverted from being burned or dumped and transformed into compost. 16 acres of previously degraded land will be restored through regenerative organic farming, creating $20,240 in improved land value Photo credits – FOLO Farms 120,120 tons of organic vegetables will be sold to 462 customers, who will experience improved well-being valued at $61,274. 473 tons of carbon dioxide will be avoided, mitigating $4,450 worth of social and environmental damage. 394 tons of methane will be avoided, saving $145,986 worth of social and environmental damage.

Improved Land Utilization & Regeneration Improved Knowledge and Skills Social Return On Investment (SROI) US$2.26 of impact created for every US$1 raised Improved Well-being Present Value of Net Impact $61,274 Reduced GHG Emissions $118,889 Improved Land Utilization & Regeneration $20,240 Improved Knowledge and Skills $20,849 Total Present Value of Net Impact $221,253 Investment Capital to be Raised $68,000 Net Present Value (NPV) $153,287 SROI (using NPV) 2.26 Discount rate: 13.13% - Average of FOLO Farms’ Weighted Average Cost of Capital (WACC*) and Malaysia Risk-free Lending Rate All values are quoted in US$ *WACC calculated by Shujog

FOLO Farm Summary ORGANIZATION MISSION FOLO Farms aims to feed the world nutritionally power packed, super organic vegetables. IMPACT SUMMARY Social Return on Investment for US$68,000 capital raise is ‘2.26’ (US$2.26 of impact created for every US$1 raised). FOLO Farms achieves four overarching outcomes: Improved Well-being Stakeholder: Customers Reduced GHG Emissions Stakeholder: Environment Improved Land Utilization & Regeneration Stakeholder: Environment Improved Knowledge and Skills Stakeholder: Community Photo credit – <insert organization> Year of Incorporation: 2014 Country of Operation: Malaysia Impact Assessment Conducted by: Shujog Impact Assessment Date: December 2016

FOLO Customer Testimonials "I changed my lifestyle after being introduced to FOLO Farms produce. It tastes much better and I now eat out much less than I used to."  "We have been consuming the vegetables from FOLO farms for more than a year and we haven't visited the doctor since. I don't think this is entirely due to eating from FOLO but I think it is a big factor"  “FOLO Farms is a good example of what I would like to create when I start my own organic farm next year." "Other farms don’t allow people to show the production and harvesting process so you don't know where your food comes from"

Recommendations Shujog recommends FOLO Farms undertake the following actions to grow demand for organic farming and organic vegetables and magnify its impact: EXPLORE MICROFRANCHISE MODELS TO REPLICATE COMMUNITY FARMING Leverage micro-franchising to replicate FOLO Farms community farming model across Malaysia. This will enable FOLO Farms to further its mission of spreading organic farming knowledge and developing the urban farming community in Malaysia, while improving its financial sustainability. INCREASE ENGAGEMENT WITH NEIGHBORING FARMS AND COMMUNITIES Increase engagement with other organic farms to gain competitor perspectives, share learning and disseminate knowledge. FOLO Farms can leverage these partnerships to market and bolster its urban farmer training program going forward.

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