One Acre Fund gets $10 million from Proparco to increase food security in Africa

One Acre Fund received $10 million in funding from Proparco on May 15, 2024, to enhance food security in Africa. A non-profit organisation, One Acre Fund assists smallholder farmers in rural sub-Saharan Africa in developing resilient communities by offering agricultural resources, financing, and training for increased food production and prosperity.

Established in 2006, One Acre Fund presently aids over one million farmers across nine African countries.

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Proparco, a subsidiary of the Agence Française de Développement Group, facilitated the financing for One Acre Fund. For more than 45 years, it has collaborated with the private sector, offering funding and assistance to enterprises and financial institutions across Africa, Asia, and Latin America.

Its action focuses on key development sectors, namely; infrastructure, mainly for renewable energies, agribusiness, financial institutions, health, and education.

Proparco finances companies that contribute to job creation, generate decent incomes, provide essential goods and services, and combat climate change.

Proparco’s recent financing deal with One Acre Fund, graced by Antoine Anfre, the French ambassador to Rwanda, occurred on Wednesday, May 15, during the sidelines of the 2024 African CEO Forum in Kigali.

Françoise Lombard, the CEO of Proparco, said the partnership seeks to support sustainable food systems and smallholder farmers in nine African countries as part of the French-led international initiative FARM — Food and Agriculture Resilience Mission.

“It will help reduce poverty, especially in rural areas among smallholder farmers. It will improve the quality of life and health of farmers and families by pre-financing agricultural inputs, and equipment and providing training to farmers’ groups. Supporting resilient economies, especially in Africa, protection of the planet, and reducing inequalities are the three pillars of our strategy for the next few years,” she said.

She said in 2023, they reached a record-high level of activity by committing nearly 2.7 billion euros with more than 40 per cent going to climate resilience projects.

“A quarter of our activity is contributing to reducing gender inequality,” she said.

The $10 million funding from AFD Group’s private sector arm, Proparco, will boost One Acre Fund’s work, which offers farmers access to quality agricultural inputs in its countries of operation in sub-Saharan Africa.

With its unique positioning in Africa, One Acre Fund works to improve the quality of life and the health of smallholder farmers and their families by providing them with support throughout the agricultural cycle.

One Acre Fund’s CEO, Eric Pohlman, said the line of credit is expected to improve the food security and agricultural yields of African rural communities.

“We have deeply appreciated this partnership in our commitment to achieve food security. Proparco’s financing is going to enable us to deliver on harvest, improving seeds because farmers have the most important jobs in our communities. Farmers grow the food that all of us eat. They also supply the surplus that drives our economy. Farmers are at the centre of our food, our economy, and our environment. We say thank you to Proparco for the partnership.”

Throughout Africa, One Acre Fund works with over four million smallholder farmers across nine countries which include Burundi, Kenya, Ethiopia, Malawi, Nigeria, Tanzania, Rwanda, Uganda, and Zambia, including two million farmers in Rwanda, one million in Kenya and almost half a million in Malawi.

Pohlman said One Acre Fund’s main activity consists of pre-financing agricultural inputs and providing systematic training to groups of farmers.

The aim is to enable the farmers to produce more food, increase their income, and develop their resilience in the face of climate change and economic shocks, through agroforestry and other services tailored to the specific needs of these smallholders, whose average farm size is half a hectare.

“When farmers become more productive, they harvest and create new jobs in their communities. The solutions to food insecurity will be highly scaled. They only require resources. This is the reason for the new partnership. It adds more resources to our efforts towards our goal of serving 10 million households by 2030,” he added.

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Financing the One Acre Fund initiative is fully in line with the Food and Agriculture Resilience Mission (FARM), launched in 2022 by French President Emmanuel Macron, alongside the European Union, the G7 and the African Union.

While Proparco already disburses between €100 million and €150 million each year to consolidate agricultural value chains in Africa, financing needs remain insufficiently covered, especially for the smallholder farmers and stockbreeders, who are difficult to reach and more risky from a financial perspective.

The additional resources mobilised by France and made available to Proparco as part of this initiative are specifically earmarked for direct financing of agri-food businesses that experience difficulties accessing credit, as well as for agricultural MSMEs, by financing banking partners and microfinance institutions, to support smaller projects more effectively.

This action strengthens the coverage of the financing needs of the entire agricultural value chain in Africa from agricultural MSMEs to agri-businesses — therefore, enhances the production, sustainability, and resilience of food systems in rural areas in more fragile and riskier environments.

France’s support for the One Acre Fund is also part of the Choose Africa initiative designed to support African entrepreneurs and the broader French cooperation strategy in the African agricultural sector, particularly in Kenya and Rwanda.

Soure: The New Times