Background

Grant making by The Kilimo Trust is done within an overall strategy, whereby the evolving portfolio of projects contributes to the Trust’s mission of improving smallholder welfare and incomes in East Africa.

The strategy is built around the perception that after more than three decades of research by national and international institutes in Africa, there is now an increasing flow of improved technologies adapted to smallholder conditions.  Moreover, two decades after structural adjustment and market liberalization, there is emergent private sector capacity in input supply and output marketing, although the profitability in serving the smallholder sector remains something of a constraint on widespread investment in smallholder areas.  As well, there has been significant development of micro-finance and village banking, although much less in rural as compared to urban areas.  In many ways, the agricultural sectors in East Africa have developed many of the pre-conditions for smallholder agricultural growth, and yet there is still little evidence that these have sparked widespread adoption of new technologies or significant change in farmer welfare.  The Kilimo Trust will focus on funding projects that test how to integrate new technologies, market innovations for smallholders, and access to rural finance in ways that will lead to impacts on smallholder incomes.

Project Development and Funding Criteria

The core strategy will focus on projects that achieve this integration within a commodity or sub-sector approach, often linked directly to specific technologies.   In general, this will require partnerships across different organizations with expertise in these different areas.  Projects might start with a focus on a specific market and its development and integrate back to principal production zones or it might focus on a particular technology or set of technologies, where dissemination is linked to smallholder marketing strategies.  It is expected that both technology extension and market innovation will be built around farmer group formation and potential development of higher-order farmer associations.  These are seen as critical to reducing transaction costs in the provision of technical innovation, development of smallholder input markets and realization of remunerative prices in output markets.   The intent is on developing organizational, institutional and technological innovations that will lead to sustainable improvement in agricultural productivity, enhanced food security, increases in off-farm sales, and therefore improved farmer welfare and incomes.

Thematic areas

As a project portfolio is developed and deepens around this core strategy, a more complete strategy will be developed by assessing innovations in cross-cutting, thematic areas.  These projects will assess innovations and best practice in key areas that underlie the strategy.  Understanding the change and growth process, as well as alternative methodological and organizational arrangements, will help to both sharpen future project selection but also contribute to continued innovation in key thematic areas.  These areas will include:

•  farmer associations,
•  smallholder input and output market development 
•  agricultural value chains, 
•  technology dissemination, and
• rural financial services. 
   

All these present issues of organization, institutional arrangements, capacity, efficiency, and equity.   There is a presumption that given the constraints on the development of African smallholder development, at this stage these markets and service delivery systems will not be self organizing.  Rather for effective linkage to the smallholder farming economy, innovation is required in how these systems are organized and how limited margins are partitioned among economic agents.