Solar Irrigation to Grow Smallholder Profits in Kenya
SunCulture designs and sells solar-powered irrigation systems that make it cheaper and easier for smallholder farmers to grow high-value fresh fruits and vegetables. The company’s AgroSolar Irrigation Kit increases farmer profit by $14,000 per acre per year — based on fuel, fertilizer, and labor savings and crop yield increases. SunCulture’s Co-Founders Samir Ibrahim (CEO) and Charlie Nichols (CTO) met in New York and launched SunCulture out of the New York University Stern Venture Competition. The company launched in mid-2013 and has since installed 500+ systems across Kenya, Tanzania, Uganda, Somalia, Ethiopia and South Sudan. SunCulture was recently awarded $2m in funding from USAID’s Powering Agriculture program to support scaling up across the East African region. (Written by Charlie Nichols)
When Samir and I founded SunCulture, we didn’t know much about farming, but we shared a passion for using our skills to solve big problems. Samir had recently graduated from NYU Stern where he studied Finance and International Development and was working for PricewaterhouseCoopers in New York. His ambition was to return to his family’s native East Africa to work on large-scale infrastructure projects –something I didn’t know when I approached him about joining SunCulture.
I had been working out of the Metropolitan Exchange building– a repurposed bank turned creative space on Flatbush Ave in Brooklyn for green entrepreneurs, biotechnologists, urban farmers and a few TED fellows – on a number of clean energy ventures including developing large-scale commercial solar projects with IPP Solar and building small-scale concentrating solar generators with lenses from upcycled projection television screens. Unlike Samir, I don’t have a family connection to Africa, but I spent a summer living with a farming family in Senegal prior to starting university. This humbling experience — my first time outside an OECD country — provided key insights into the challenges faced by half a billion smallholder farmers globally, most of whom live in the developing world, and eventually led to the idea behind SunCulture.
The Rise of Smart Farming
We’re really excited about agriculture in Africa. By 2030, the World Bank projects Africa’s farmers will create a trillion dollar agribusiness market if they can access the capital, knowledge and technology necessary to increase yields — which trail world averages by as much as 50%. Sub-Saharan Africa is the region with the highest prevalence of undernourishment in the world — almost one in every four people is undernourished. However, Africa possesses 50% of the world’s unused arable land and can feed itself — and help feed the world too. In Kenya, where SunCulture operates, 75% of the labor force is engaged in agriculture and the sector contributes 30% of GDP.
Smart farming technologies like SunCulture’s solar powered irrigation systems — which increase yields by up to 300% with 80% less water than traditional farming methods and use clean and affordable solar energy — present an exciting opportunity to sustainably address the yield gap on millions of smallholder African farms to improve food security and enhance economic growth.
Of the 5.4 million hectares of Kenyan farmland, 83% are unsuitable for rainfed agriculture and require irrigation, but only 4% are currently irrigated — compared to 37% in Asia. Other irrigation options like using diesel pumps to move water onto crops cost upwards of $250 per month to operate — out of reach for the majority of low-income smallholders. There is strong and growing demand for irrigation solutions, but lack of access to capital, lack of awareness of appropriate solutions and high transport costs limit adoption.
Women make up a large share of Africa’s farmers, but in addition to challenges confronted by male farmers, they face particularly restricted access to land ownership and productive farm inputs like irrigation. Low productivity farming is incredibly labor intensive — involving manually ferrying water, tilling the soil, and frequent weeding. Women and girls traditionally provide the majority of African farm labor and are often excluded from gaining an education due to their commitments on the farm, further precipitating the gender gap.
Behavioral Change & New Payment Schemes
One of our key early learnings was that great technology is just one part of the solution and that companies serving rural African customers have to offer an array of services to facilitate adoption of new tech. SunCulture accomplishes this by being a one-stop-shop for smallholder farmers. In addition to industry-leading solar-powered irrigation systems, we offer end-user financing through bank partnerships and are currently developing Pay-As-You-Go (PAYG) solar irrigation services that cost as little as $2 per day. SunCulture-trained technicians and agronomists provide on-farm training, soil analysis and agronomy support by mobile phone. Next-day delivery and installation anywhere in Kenya is included in the price of the system, saving farmers the hassle and expense of travelling to the city to collect their irrigation system. We’ve found that providing these complementary services instead of focusing strictly on technology has enabled us to better meet the needs of our customers and build trust necessary to facilitate adoption of new and sometimes unfamiliar technology.
Smallholder farmers are some of the most financially vulnerable customers and many are only one bad growing season away from financial ruin. We work with our customers to continually develop new products and services to better manage the risk inherent in agribusiness. One of the programs we’re most excited about is leveraging PAYG technology to provide a rent-to-own irrigation model. Companies like M-KOPA, OGE, Mobisol and others have demonstrated the viability of PAYG solar and value of the resulting data, but productive use PAYG applications, specifically in the agriculture sector, like solar irrigation have yet to reach scale. At SunCulture, we occupy a unique position in the agricultural value chain by providing technology development geared specifically for smallholder farmers as well as product distribution and service delivery and that this position enables us to provide a packaged solution for smallholder farmers that will leverage PAYG technology in new and exciting ways.
An Evolving Model
In terms of technology development, SunCulture has evolved from primarily integrating products from third-party vendors to a combination of integration and in-house technology research and development. This transition has enabled us to design low-cost products that meet the specific needs of smallholder farmers. When we first entered the Kenyan market, the average cost of a solar water pump was roughly $10,000. We launched our SP-300 model in 2013 for less than a quarter of that price and have since refined and simplified the design to reduce the price down to $1,600. We also offer drip irrigation systems for less than $400 per acre including delivery and installation compared to a market price of $1,200. We’ve accomplished this by simplifying the design and using materials that can be transported by any available means (motorbike, bicycle, etc.) instead of requiring a pickup truck, which is expensive and depends on sometimes-unreliable roads. We’ve gotten really good at figuring out how to do away with unnecessary components while still maintaining a high quality customer experience. Over time, we expect to develop more and more products in house and to that end we are establishing a research and development center in Cambridge, UK later this year.
We feel that providing credit to farmers for purchasing productive use assets like our solar irrigation systems, while different in many ways from solar home systems, will achieve similar levels of adoption over a relatively short timescale and that the impact of this on smallholder farmer livelihoods, nutrition and the larger African agricultural sector will be monumental. We’re excited to play our part in this evolving trend and look forward to collaborating with others in the space.
