Inclusive Business Analysis: Enhancing Raphael Group Limited’s Farmer Organization Servicing Model to Optimize Production and sourcing of rice and beans

Promoting Inclusive Grain Sourcing and FO Strengthening in Tanzania

AgriGRADE is a strategic partnership initiated by a consortium consisting of Agriterra, the IDH Farmfit Fund, IDH, Oikocredit and SCOPEinsight. This pilot initiative was launched in 2024 and is currently being implemented in Kenya and Tanzania. AgriGRADE seeks to strengthen farmer organizations (FOs) by delivering tailored business development services to meet specific needs and gaps. It is a standardized and data-driven approach that focusses on professionalizing FOs and connecting them to financing and markets. To do so, AgriGRADE has onboarded three SMEs in the pilot that aim to enhance their sourcing and service delivery model by means of working through farmer organizations, one of which is Raphael Group Limited (RGL).

Founded in 2010 and based in Mbeya, Southern Tanzania, Raphael Group Limited (RGL) is a leading agribusiness engaged in the processing and distribution of rice, beans, groundnuts, and sorghum. RGL sources grains from approximately 23,000 farmers through 200 farmer organizations (FOs) across Tanzania. The company serves primarily local and regional markets, including Kenya, Uganda, and Zambia, and is gradually expanding into international markets, having previously exported small volumes to Belgium and France via intermediaries. RGL provides embedded services to FOs, including training, input supply, and access to finance.

Project Goals and Impact

Under the AgriGRADE program, 31 FOs at varying maturity levels were selected to work more closely with RGL to address challenges in service delivery and financial sustainability. The initiative aims to enhance contract compliance, stabilize supply, and position FOs to better serve premium markets like the EU. RGL is working with partners to pilot new models of service delivery to FOs.

Key Takeaways:

• Prioritise Strategic Alignment: While most FOs face similar structural challenges, their diverse business models require differentiated technical assistance (TA). A formalised segmentation that considers both business model as well as maturity will inform RGL on how to enhance and expand services more sustainably.
• Explore Outsourcing Some Operational Functions: RGL could consider outsourcing select operational functions such as initial processing or service delivery functions to FOs to enhance their profitability while improving RGL’s operational efficiency.
  
• Operationalise FO Segmentation: A company-wide policy on FO segmentation and graduation will foster shared practices, allowing more precise tailoring of services to the diverse needs of RGL’s FO base.
  
• Pursue Strategic Partnerships: RGL should leverage partnerships in agri-finance and insurance to de-risk FO operations and improve their access to working capital.