Aug 5, 2019
Thank you for providing the detailed comments as a means to help us improve our proposal. We have carefully considered these comments and have incorporated the necessary changes into the revised version of our application. In the meanwhile, please find below a point-by-point response to the comments.
It would be interesting to see a photo of the prototype and to have more elaboration on how it works.
Response: Unfortunately it seems that we are only able to upload one photo onto the application website. We therefore have replaced the original photo with that of our system. However, we have many additional photos about the field production and operation that we are unable to show. For more photos, please visit safiorganics.co.ke. We have also elaborated a bit more on how the technology works, in particular emphasizing the “novelty” aspect of the work, in the revised application, but given the limited space provided in the application form, we are unable to provide full-fledged technical critique of our work. Instead, we have instead added references to several peer-reviewed articles as well as co-founder Kevin Kung’s MIT PhD thesis, if the reader is interested in better understanding the technical details.
It is not clear if it is an add on to tractor or if it is a standalone structure.
Response: This is a standalone structure that can be disassembled within an hour to be carried at the back of a tractor from farm to farm. But a tractor is not necessary for it to be transported.
The proposal has a high potential for impact using a proven model.
Response: Thank you.
The proposal would be strengthened by a clearer understanding of regulatory approvals needed for the mini-plants and how the business model was able to cope with impacts of droughts and floods.
Response: The following comments have been added to the proposal in response to the questions above.
In terms of regulatory approvals, when the fertilizer trials and pilots are done at a small scale, from our past experience, such activities have been exempt from approvals. However, as we start commercially selling the product, especially by working with existing agricultural input distributors, it is necessary to obtain official fertilizer certification from the government. After two years of effort, we are glad to report hat our product has been officially certified to sell as a commercial fertilizer as of early 2018. As we expand this work to other countries, it will also be necessary to seek the regulatory approval of these other countries. This will take time and effort, but we plan to do so with the local implementation partners who are well-versed in the locally relevant agricultural regulations. On the other hand, as our MiniPlant has been demonstrated (both at MIT and in the field) to produce no harmful emissions, and as our MiniPlant often operates at a scale smaller than what would be normally considered an "industry", we have found that our MiniPlant activities have been exempt from any of the other regulatory approvals related to emissions or commercial activities, beyond duly incorporating and registering the company with the local authorities.
In terms of weather-related eventualities such as floods and droughts, they do and will have an impact on our work, because if farmers decide that it is not the appropriate time to plant, then our fertilizer blend will not be purchased. Initially, when we began our work with rice farmers, we only had orders when the rice farmers were planting (twice a year), and when there was a drought throughout Kenya in 2017, it indeed hit our business hard. Since then, we have expanded the suitability of our solution to other farmer segments, ranging from horticulture to tea. As the different farmers have different planting seasons and weather dependencies, the versatility of our solution has in effect diffused the weather-related risk by making our product have consistent demand year-round, in many types of weather conditions. Indeed, we have found it a convincing argument to make to the farmers that, in the event of a drought, it is in their interest to lean on our product, which helps retain moisture in the soil more effectively and thereby reduce the need for external irrigation/rain while achieving the same level of growth and yield.
Also, has there been any backlash from fertiliser companies or political obstacles?
Response: The following comments have been added to the application in response to the question above.
In the long term, as we scale up, we also plan to work with traditional fertilizer companies. While people may consider these companies our direct competitors, from our past experience interacting with representatives from these companies, we take a different view. Indeed, Incumbent, large-scale fertilizer producers (e.g. OCP, Urakali) are actually very interested in accessing smallholder farmers in emerging markets, but have historically had trouble getting their products to them due to the aforementioned logistical challenges. Recently we have spoken to one of these companies which is launching a pilot program focused on delivering packages of seeds/fertilizers to rural Kenyan smallholder farmers affordably. We believe that our work and local connections can help them achieve their mission more effectively, as some of our nutrient recipes do make use of their product (just in much smaller quantities and with greater balance). As we expand, these incumbents can provide us with an entry point to new countries/markets and helping us scale. Therefore, we see these incumbents as potential strategic partners that can enhance our impact.
More effort could be made with making a more compelling case – besides the anecdotal case of Mr. Kibuchi, what data supports your claims? What are the observed benefits to farmers in Mwea? How much increase in yield?
Response: The following has been added to the application in response to the questions above.
Through the past few years, we have already impacted around 3,000 farmers similar to Mr. Kibuchi. Beyond anecdotal evidence, we have also begun collecting data with a small group (50) of farmers, ranging from soil pH changes to harvest yield data. While the data are still preliminary, we have observed a pH change of on average 0.7 points one harvest season immediately after using our product. While the extent of improvement is a function of how degraded the original soil condition is, on average, this group has reported an increased yield of around 25% and increased income of around 40%. In order to causally link the fertilizer’s mechanism to the impact, we have also begun a series of crop growth trials with research collaborators at MIT.
Response: Initially, we sold our fertilizer blend to farmers at a cost 30% lower than the market price. However, we quickly learned that these farmers, while poor, are very quality-conscious, and often connote a low price with poor quality. We have since then corrected our pricing strategy. Instead, our current value proposition to the farmers is as follows: At the same price that they pay for the fertilizer inputs, by switching to our product, they will see their yields increase by up to 30%.