Inclusive Business Model Review: Endline report for Africa Improved Foods, Rwanda

Africa Improved Foods (AIF) was established in 2016 as a public-private partnership among DSM (DSM-Firmenich), IFC (International Finance Corporation), FMO (Financierings-Maatschappij voor Ontwikkelingslanden) and the Government of Rwanda.

AIF procures maize and soy (2022) from African farmers and manufactures food products in the relief and nutrition segments such as baby and mother food, breakfast cereals. It has the capacity to serve 1.5 million children everyday as of 2024 and envisions to impact 10 million lives everyday by 2028.

In 2021, IDH partnered with AIF to develop a plan for procuring 100% of its maize required from smallholder farmers via engaging with farmer cooperatives. The objective was to ensure long-term and sustainable maize supply to AIF by facilitating farmer access to premium maize markets.

There was a focus on capacity building for cooperatives and farmers via cooperative coaches to enhance the quality and quantity of maize supplied. As of 2024, AIF can procure 100% of its maize from 44 cooperatives.

This end-line analysis sought to establish the project's performance while reflecting on the contextual and internal factors that influenced performance and providing recommendations on the way forward for AIF.

The key outcomes were as follows:

1. The rejections by AIF were higher in the beginning of the project (50-80%) due to aflatoxin %. As a result, the maize was sold by farmers in the open market at a lower price (10-15% lower). These rejections reduced to less than 3% for 2024 due to cob procurement model and better post-harvest management practices.
2. AIF has reached 25,000 farmers via 44 cooperatives under the project with capacity building training conducted for 14,000 farmers, 21 demo plots being developed and a 57% increase in maize yields observed.
3. The absolute rise in farmer income (RWF) from 2021 is 89% which is attributed to an increase in yield due to the cooperative coach and demo farm approach. However, this is still below the living income benchmark of USD 2,904 per annum.
4. Cooperatives have gained farmer loyalty due to providing input on credit and looking at the social aspect of the lives of their member farmers. This has led to majority of cooperatives fulfilling their contracts with AIF and thus AIF also paying advances to certain cooperatives to secure good quality maize.
5. 11/15 farmer cooperatives evaluated saw an improvement in their operations and contract fulfilment through the project’s intervention. 7 of these have graduated to a ‘mature’ stage which includes access to formal finance and using digital accounting software.