Capacity building for agriculture [interview]
Barbara Rademaker started at Oikocredit in January 2021 as the cooperative’s Global Agriculture Specialist. In this interview we find out about Barbara’s past experience, present work and future ambitions at Oikocredit.
Can you share a bit about your background and expertise?
For 15 years before joining Oikocredit, I lived in Latin America and worked in various roles in the impact investing sector. I worked as an investment manager, technical assistance adviser, local economic adviser and board member of various microfinance institutions (MFIs). These roles gave me the opportunity to work directly and indirectly with indigenous communities, smallholder farmers, cooperatives, and small and medium enterprises (SMEs).
I would say that my expertise is in knowledge development and designing and implementing technical assistance and capacity building programmes. This is why this specific role with Oikocredit is so fitting for me.
What inspired you to work at Oikocredit?
One thing that inspired me was the fact that Oikocredit is a cooperative. The profile of investors in a cooperative is very different from other social impact investors. In a cooperative they are much more engaged and critical about what you do and how you do it.
When you are in the field or behind your desk, you sometimes get caught up with your day-to-day work. I find it inspiring to have socially and environmentally engaged investors who are involved for the long term. It’s refreshing that they are not only supportive of our work, but they are also prepared to ask questions and be critical. This is very important as it reminds us of what we as Oikocredit stand for: investing responsibly to support low-income people in improving their quality of life.
The other thing that inspired me to work at Oikocredit was the opportunity to do what I am passionate about: capacity building. Oikocredit is committed to monitoring its impact for the long run, it’s not about short-term intervention. Instead we want to transfer our knowledge and make sure our partners grow in capacity. Offering long-term support is riskier, but it’s what our partners need. This is what makes Oikocredit stand out among other impact investors. I really enjoy what I do and I’m grateful for the opportunity.
What do you do as Oikocredit’s Agriculture Specialist?
I focus on two main things. First, I develop capacity building programmes and projects for smallholder farmer organisations, SMEs that work in agriculture, and financial institutions that want to improve access to finance for smallholder farmers. In order to do this, we identify common needs of organisations and develop capacity building programmes around those needs, while also taking into account the specific needs of each partner. Our Price Risk Management Programme, for example, offers collective trainings, peer-to-peer visits and individual mentoring services. The combination of both individual and collective support helps our partners in implementing what they’ve learned into their work.
A capacity building project for agriculture partners can also be set up on an individual basis if the outreach and impact is significant enough to the agricultural sector. One example of this is a project in Cambodia where we are supporting a microfinance institution in their efforts to expand their outreach to agricultural cooperatives. To help them achieve this, we are working with them to improve their loan origination and develop non-financial services for this sector.
Secondly, my role – together with my other colleagues at the Social Performance and Innovation department – focuses on promoting and sharing knowledge with our stakeholders. Our goal for next year is to have an Oikocredit Academy where our partners can access programmes and materials that we have developed in our capacity building programmes.
Why is agriculture an important sector to support?
The world's low-income people live disproportionately in rural areas, not the cities, and rely on small-scale farming for their livelihoods and survival. According to the International Fund for Agricultural Development (IFAD), about 3.4 billion people, including four-fifths of the very poorest, live in the rural areas of developing countries. Hundreds of millions of smallholder farmers help feed their country’s population but they lack access to finance and markets and are vulnerable to unfair competition, volatile pricing and climate change.
Governments often neglect the rural sector. By investing in small-scale agriculture and people-centred rural development, we can really improve livelihoods, create jobs, stimulate local economies and counter pressures on people to migrate to urban areas. IFAD reports that investing in agriculture in sub-Saharan Africa can be up to 11 times more effective in tackling extreme poverty than investment in other sectors.
What are some of the biggest challenges we face when it comes to this sector and how can capacity building help?
Finding ways to de-risk the agriculture portfolio is a key challenge, especially with all the impacts of climate change that the sector faces. One way to support the sector more sustainably and de-risk our investments is through capacity building programmes.
For instance, in West Africa we are supporting a partner that is developing and rolling out a form of weather index insurance. Weather index insurance is an innovative approach in developing countries that bases insurance pay-outs on locally measured indices, such as rainfall, rather than on farmers’ crop yields and has proved cost-effective. Similarly, our longstanding price risk management programme is a way of supporting coffee partners and de-risking our portfolio at the same time. More generally, we aim to help agricultural partners be agile and flexible in their responses to events.
How has climate change been affecting the agriculture sector?
Climate change has hugely impacted the sector. Not only are harvest cycles changing, but droughts, floods and other extreme weather events such as storms affect smallholders hugely. This is especially the case with commodities like coffee and cocoa. Increasingly frequent droughts can mean a lack of local hydroelectricity to run small-scale processing machines.
On the other hand, technological developments offer opportunities for the agriculture sector. The challenge is how to make newer technologies applicable to smallholder farmers’ reality. For example, it is now possible to use satellite imaging to evaluate the health of crops and the land. Translating this information into practical advice and measures that smallholders can take is often a challenge, but it can be done.
How has the agriculture sector been impacted by Covid-19? What are we doing to help?
Margins have come under pressure for our partners in the agriculture sector because costs of production have increased. Inputs such as bags and transport are more difficult to obtain. Movement restrictions have at times resulted in famers not being able to recruit seasonal help for harvesting, and the need for biosafety measures has meant higher costs for some partners. A shortage of shipping containers worldwide has created logistical issues, and temporary closures of coffee shops in consumer countries have reduced demand.
Fortunately, impacts on agriculture have not been as bad as we expected, because people still need to eat and drink, and during the pandemic most governments have designated agriculture a priority sector. There have been greater impacts in urban areas, where many Oikocredit microfinance partners have been hit harder.
We have responded in several ways: in 2020 Oikocredit set up a coronavirus solidarity fund, which we have used to help our partners provide extra support to their clients and members. Building on from the solidarity fund, we recently developed a programme called ‘Innovation in Response to Covid-19’, to support partners’ innovative solutions for more vulnerable clients and members in coping with the pandemic. This new initiative also aims at helping our partners to prepare for the post-pandemic reality. In addition, we have given payment holidays to partners in difficulty, and provided additional online resources and support.
- 30 November 2021 - IDH Farmfit Fund and Oikocredit co-investment in Aldea Global to support Nicaraguan coffee smallholders
- 17 November 2021 - Symbiotics and Oikocredit invest in ETG to support West Africa cocoa and cashew value chains
- 16 November 2021 - Q3 2021 quarterly report: Cautious optimism
- 16 November 2021 - Mirjam ‘t Lam appointed Oikocredit’s Managing Director
- 15 November 2021 - Oikocredit partners Crecer and Fonkoze shortlisted for European Microfinance Award 2021 for Inclusive Finance and Healthcare
- 05 November 2021 - Oikocredit holds general meeting in December
- 04 November 2021 - Capacity building for agriculture [interview]
- 03 November 2021 - Oikocredit expands its financial inclusion portfolio with the latest investment in Senegal
- 01 November 2021 - Oikocredit and Opportunity International announce impact investment of USD 100 million to advance education in low-income countries