Disrupting the East African maize value chain with a technology backed model for agriculture to increase incomes for 40,000 farmers.
Pitch us on your solution
Annual demand for premium maize in Rwanda is 70,000+ tons. Whilst smallholder farmers across the country produce 5 times this premium demand, only 10% is sourced locally and the gap filled by costly imports. This shortfall in local supply is a result of rapid declines in quality during post harvest handling (aflatoxin infection) and challenges around rural aggregation.
Since 2016, Kumwe has been disrupting the maize value chain in Rwanda with a new model for post-harvest processing and aggregation. Using ‘just-in-time’ transport management, industrial post harvest processing and top-tier technology and analytics, Kumwe’s model bridges the gap between agro-processors and local farmers. As a result, Kumwe is now the single largest maize aggregator in the country and has achieved unprecedented >99% quality acceptance from premium processors.
What is the problem you are solving?
Annual demand for premium maize from Rwanda's agro-processors is 70,000+ tons (approx US$ 21 million). Smallholder farmers across the country produce 5 times premium demand and can supply the market at lower prices than imports. However, less than 10% is sourced locally with the gap filled by imports.
This shortfall is due to rapid declines in quality in the post-harvest handling (aflatoxin infection) and challenges around rural aggregation.
The quality and aggregation gap between premium buyers and farmers must be addressed to help Rwandan agro-processors become more competitive and farmers to move from just above subsistence farming to real prosperity.
Who are you serving?
Smallholder maize farmers currently carry the full burden of the post harvest process, spending 6-10 weeks manually harvesting, shelling and preparing maize for sale. 20% of harvest is lost in the poor, informal process and aflatoxin molds quickly developed on wet maize. With limited market, high transport costs and large risks of quality rejection, farmers are forced to sell informally for low prices.
Kumwe is a logistics group using supply chain expertise, efficient logistics, lean operations, technology and innovation to ensure farmer production reaches premium, high-value markets. Having identified poor post-harvest practices as the cause of poor quality, low value maize, Kumwe introduced the Kumwe Cob Model: the purchase of unshelled maize for industrial post-harvest processing (shelling, cleaning, drying) and sale to premium buyers.
For farmers this means more of what they grow reaches a market for a premium price. Paired with reduced post-harvest costs, the result is 300% income increase. Most importantly, we pay farmers in full, immediately after pick-up through our traceable, electronic payments. Kumwe works with more than 40,000 farmers, of which 90% would recommend Kumwe to another farmer.
What is your solution?
Kumwe is solving the quality and aggregation challenges through the Kumwe Cob Model. Kumwe buys unshelled maize from farmers shortly after harvest, paying them a premium-grade price within 1-3 days. Within 24 hours, Kumwe buys, transports, shells, dries, and delivers grain to a designated buyer at a set premium. This processing is supported by year-long field extension and a farmer call center.
All these steps are linked via our in-house technology (app and dashboard), complemented by robust analytics needed to ensure the tight operation and economics are controlled from the field to the factory.
By taking on these post-harvest activities, Kumwe cuts 5 weeks from the typical farm-to-factory lead time, reduces post-harvest losses to ~3% (from 15-30%), and delivers maize to premium buyers with a quality acceptance rate of >99%. Moreover, farmers are assured of a premium market with less investment and earlier payment. The result for farmers is a four-fold income increase.
Kumwe is now targeting to meet 50% of domestic demand for maize by 2022 and expand into new value chains through the launch of a series of provincial service hubs for agriculture commodities.
Service Hubs have the advantage of local proximity, flexibility and purchasing power to achieve economies of scale. The hubs will bring high-value markets closer to farmers, empower them with real-time prices and provide complementary services for inputs and equipment rental. The hub is supported by Kumwe's in-house mobile application, able to map, mobilize and pay farmers digitally.
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Where is your solution team headquartered?Kigali, Rwanda
Our solution's stage of development:
Select one of the below:
New business model or process
Describe what makes your solution innovative.
BOLD. Kumwe is scaling up with the target of meeting 50% of annual national demand for premium maize through local sourcing by 2023. This is up from 1% in 2016, and will save Rwanda upward of US$ 10 million in import costs. Kumwe also intends to apply its model to new crops.
INNOVATIVE. Before Kumwe entered the market, the burden of the post harvest handling process was placed on smallholder farmers. Following harvest, farmers would spend 6-10 weeks manually harvesting, shelling and preparing maize with 20% losses through poor, informal process and significant quality loss as aflatoxin molds quickly developed on wet maize. Farmers had limited access to market, with transport costs and high and they risked quality rejection.
Combining innovative and unparalleled transport management, industrial post-harvest processing, operational rigor, and top-tier analytics, Kumwe has built the essential logistics and quality link that had previously prevented high-value buyers from sourcing maize locally through smallholder farmers. Kumwe Harvest is now the largest maize aggregator in the country, having solved the problem of aflatoxin and resolved significant logistics challenges.
TRANSFORMATIVE. Kumwe has upended the status quo and demonstrated to actors across the value chain that through innovation in technology and management, Rwanda can meet demand for high quality inputs internally. Just-in-time system preserves maize quality, reduces post-harvest losses to 1-2% and allows buying several weeks earlier. Paired with reduced post-harvest costs, the result is 300%+ income increase for thousands of farmers.
Describe the core technology that your solution utilizes.
Kumwe is scaling domestic aggregation of maize and expanding into new value chains through the launch of a series of provincial service hubs for key agriculture commodities.
These Service Hubs have the advantage of local proximity, flexibility and purchasing power to achieve economies of scale in the aggregation process. More importantly, the hubs will bring high-value markets closer to farmers, empower farmers with real time and transparent prices, volumes and quality, and provide complementary services for inputs and equipment rental.
The hubs are made possible, and profitable, through the use of Kumwe’s in-house mobile and desktop application. Able to map, mobilise, track maize and pay farmers digitally, Kumwe’s application can maximize the efficiency of the supply chain, enable farmers to sell more of their harvest and for a premium price, and ultimately increase incomes by more than 300%+.
Currently used internally, we plan on building a farmer facing side of the application that allows us to work with more than 40,000 farmers at minimal extra cost, reserving more value for farmers. Whilst mobile phone penetration is now 78% in Rwanda, the market share for smartphones is only 44%. Noting this, we intend for this application to run through a USSD service - a toll-free hotline with built in SMS features - allowing farmers to access market information via Kumwe, submit information on their produce to sell, and follow up on payment information after sale.
Please select the technologies currently used in your solution:
Why do you expect your solution to address the problem?
We aim to empower farmers to move from subsistence to prosperity through the provision of the most efficient logistics, handling and technology. An essential part of this is Kumwe’s ability to take on and manage the quality risk that once was the responsibility of cash-strapped farmers.
Kumwe purchase maize unshelled from farmers immediately after harvest, taking on responsibility to preserve quality until delivery to the final buyer. A difficult task due to the presence of aflatoxin in Rwandan maize and high levels of moisture, Kumwe have developed the ability to eliminate this risk through efficient, just in time logistics and technology. Using our in-house app, Kumwe tracks every kilogram of maize from farm-gate purchase, through processing, and all the way to factory-gate delivery. As a result, we have achieved an unprecedented 0% rejection rate from buyers.
Kumwe uses top-tier analytics to measure our progress and success real-time. Metrics measured include farmers served, farmland reached, post-harvest losses averted and its value, and import offset. We also track local and regional market prices to inform farmers and agri-processors of the money gained and saved respectively. This data is gathered through our in-house application, but is analysed through a software called Tableau.
Kumwe is targeting to meet 50% of domestic demand for Maize by 2022 and serve 40,000 farmers cumulatively as a result. In addition, we will use our series of provincial service hubs to expand into new value chains that include horticulture, with crops such as french beans.
Select the key characteristics of the population your solution serves.
In which countries do you currently operate?
In which countries will you be operating within the next year?
How many people are you currently serving with your solution? How many will you be serving in one year? How about in five years?
Kumwe currently works directly with 20,000 farmers, 50% of whom are women, and all of whom receive a four fold increase in income as a result.
Through our service hubs, Kumwe will serve 40,000 farmers cumulatively as a result. Rolling out our hubs for the early harvest season next year, we expect to be working with 27,000 farmers by the end of 2020.
What are your goals within the next year and within the next five years?
Kumwe's mission is to link local production with premium, high value markets, empowering farmers to move from subsistence to prosperity as a result.
Beyond the core growth of domestic maize sourcing, Kumwe believes there are further opportunities in:
Input provision, to increase yields for the farmers we work with.
Handling of additional crops, particularly horticulture through introduction of cold chain transport;
Complementary services, such as mechanized rentals and input distribution; and
Regional expansion, with potential opportunities in Southern Uganda, Western Tanzania, and Burundi.
What are the barriers that currently exist for you to accomplish your goals for the next year and for the next five years?
We aim to empower farmers to move from subsistence to prosperity through the provision of the most efficient logistics, handling and technology. An essential part of this is Kumwe's ability to take on and manage the quality risk that once was the responsibility of cash-strapped farmers.
How are you planning to overcome these barriers?
Kumwe have developed the ability to eliminate this risk through efficient, just in time logistics and technology. Using our in-house app, Kumwe tracks every kilogram of maize from farm-gate purchase, through processing, and all the way to factory-gate delivery. As a result, we have achieved an unprecedented 0% rejection rate from buyers.
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How many people work on your solution team?
Kumwe was founded out of MIT's Center for Transport and Logistics by Cyril Khamsi, a Delta-V accelerator winner. Having originally worked in Rwanda supporting the set up of a large food factory, Cyril noted the challenges of farmers to sell inputs to the factory due to poor quality of their product and inability to transport the goods to the factory in Kigali. On completion of his masters, he is now based full-time in Rwanda as CEO of Kumwe. He is supported by a team of 30 East African employees based in Kigali.
For how many years have you been working on your solution?
Why are you and your team best-placed to deliver this solution?
Kumwe is uniquely positioned to lead this ambitious growth plan due to our team's unique combination of world-class expertise in logistics, access to top tier technology and analytics, and intimate knowledge of operating in East Africa. This unique combination has been the source of Kumwe's success and has put the company in the best position to drive a paradigm change in East Africa's maize value chain.
With what organizations are you currently partnering, if any? How are you working with them?
Within the maize value chain, Kumwe is sourcing and managing quality to meet the needs of premium agro-processors, specifically Africa Improved Foods (AIF) and Minimex.
To support execution, Kumwe is working with local and international partners including USAID (Hinga Weze), DFID (IMSAR), the Clinton Health Access Initiative, World Vision Rwanda, SNV (Hort Invest) and the Government of Rwanda. Partnerships with these organisations have supported Kumwe's efforts to improve smallholder farmers’ access to formal markets in Rwanda. The various projects have provided access to additional maize producers and increase volumes as a result. In some cases, the projects have provided grant funding to increase Kumwe’s scale and ability to directly source and handle greater volumes.
What is your business model?
Kumwe is a for-profit organization. We make a margin on our shelling, drying, and transport services either charged as a fee, or more commonly as a spread on our buying and selling price of the maize.
What is your path to financial sustainability?
This is a volume business: the margins are thin, and dependant on scale. We have been scaling rapidly and as of last year, our revenues currently exceed $1.4M and will grow to $6.0M by 2023.
- Cyril Khamsi CEO, Kumwe Solutions