NjordFrey: Smallholder Aquaponic Farming

When Rwandan Smallholder farmers try to access higher yield/profitable solutions they face:

1) High-upfront capital costs.

2) Low/no access to finance (banks require 150% collateral, with 18% interest).

3) Falling into a dependency trap with competitors (no agency/ownership).

Our aquaponic technology takes the average 0.5-1 hectare available & increases yield x100's of times, allowing capital costs to be paid back through sales via our credit model, while increasing income 10 fold (40 farmers/farm min) & eradicating malnutrition through introduction of fish protein and vegetables. Once costs are paid back, the farmers retain majority ownership providing agency.

We will deliver 2,000 farms within 10 years, which will benefit +80,000 farmers, +240,000 family members, increase farmers income 10 fold (avg $125/yr) & calorific intake to above 2,500kCal per day for farmers/their families.

These benefits can be scaled anywhere with sufficient sunlight, doesn't require farmland/fertilizers as its soil-less based & not rainfall dependent.

Globally, there are +500 million smallholder farms; more than 2 billion people depend on them for their livelihoods. These small farms produce about 80% of the food consumed in Asia and sub-Saharan Africa (Smallholders can feed the world, IFAD.org).

Within sub-Saharan Africa, ~60% of Rwandan's (~7.3m of 12.3m population) are below the poverty line ($1.25 PPP, WEF 2016) and ~70% (majority female) of the population are employed in agriculture (FAO), of which ~2m are smallholder farmers earning an average $125/year (One Acre Fund) i.e. below the poverty line. This is the target group of beneficiaries that we are supporting with our solution.

When smallholder farmers in developing countries, like Rwanda, try to access higher yield/profitable solutions that can elevate them out of income and food poverty they face:

1) High upfront capital costs for advanced higher yield/profitable solutions.

2) Low/no access to finance (banks require 150% collateral, and impose default 18% interest rates).

3) Falling into a dependency trap with competitors (no agency/ownership).

Until these farmers gain access to higher yield solutions, they will be limited by the basic traditional farming solutions available to them, forcing them to remain under the poverty line.

NjordFrey are offering smallholder farmers access to:

• A sustainably designed aquaponic starter-kit (based on globally proven CHOP design system) as part of a 2-4 year credit pay-back model, with the capital cost of the equipment being paid back through the sales of the fish/veg produced (thus removing high upfront costs).

• Supply chain for farm/seasonal inputs (seeds/fingerlings/fishfeed).

• Training to allow them to become independent plus facilitate routes to market.

Our technology takes the average 0.5-1 hectare space of land available and increases yield x100's of times (compared to basic farming), while increasing income 10 fold (min of 40 farmers per farm, bringing them above the poverty line) & eradicating malnutrition for farmers/their families through access to a nutritious fish protein/plant based diet.

Once the aquaponic kit costs are paid back, the farmers gains majority ownership of the farm providing agency and a means to reinvest. We offer further innovation through our 'Non-Invasive Digital Health Monitoring System' which is our IP product (using AI/machine learning) that we are developing to collect real time data through sensors, that further improves efficiencies on the farm.

As our solution is not soil, fertilizer or rainfall dependent, it is accessible and globally scalable.

The main beneficiaries of our solution are smallholder farmers and farming cooperatives. 

In Rwanda, these target users typically have lower formal education levels, are concentrated amongst the rural youth labour market (>50% are 16-24, PTSA 4), majority females (79% of working population are in agriculture, GMO.GOV) in the sector and earn on average $125 per annum (One Acre Fund report).

There are also secondary beneficiaries in the form of low/non-skilled workers that are employed to construct farms, transport produce, sell at markets and are involved in any post manufacturing/processing of the increased variety of produce.

As part of the EIT Seedbed Accelerator Programme we took part in June-Nov 2019, we completed the customer discovery journey process to conduct 58 detailed interviewed with stakeholders. This included interviews with farmers/farming cooperatives, where we confirmed/gained further insight into the challenges faced, pain points and feedback on our proposed solution, which was subsequently incorporated. 

As part of our 18 month Digital Health Monitoring Project (started Nov 19), we have continued this engagement work and outlined objectives to include farmer and market buyer focus groups (Gender and Social Inclusion considered) throughout the project, to ensure they are at the center of our solution.

Challenge Statement: Support small-scale producers [NjordFrey directly support smallholders only] with access to inputs [NjordFrey provide comprehensive kits and full access to seeds/fishlings], capital [NjordFrey provide access to our credit model], and knowledge to improve yields while sustaining productivity of land and seas [NjordFrey provide F2F training and feedback from our monitoring system, within average farm footprint, soil-less/no fertilizers and not rain-fed, yet farmers now have access to a protein/plant based diet that didn't exist before].

In addition to increasing the tilapia fish production (Rwanda net importer), we are pushing innovation further with our monitoring system to further secure/improve production.

In Rwanda, we have concluded there are currently no direct competitors to our aquaponics solution aimed at smallholder farmers, however we have identified partial competitors:

1) Commercial Aquaponics - Kikaboni Farm & VMD Agro offer aquaponics to commercial customers who can afford high costs & longer investment returns. This is a smallholder cost barrier.

2) Capacity building organisations - One Acre Fund & Gardens for Health, only provide basic training for developing farmers with low incentives for agency. This is a smallholder technology barrier. 

3) Large agriculture - Monstanto & Nestle operate in the region, providing large crop production but only employ farmers, not equity share and don’t allow farmers to grow and reinvest their wealth. This is a smallholder equity/ownership barrier.

We provide a combination of all the above but offer it all in one place for the ~2m smallholder farmers, which is currently not available.

Therefore offering aquaponic technology for smallholder farms is innovative as it gives them access to increased yields and new food groups.

In addition to the technology, we are also offering an innovative Digital Health Monitoring System that we are currently developing with our University partner (University West Scotland (UWS)).

Our business model allows farmers access to this technology via a outgrower/credit model, which is innovative as it means they can compete with commercial farmers unlike before.

Our business model allows farmers to gain equity/ownership of farms that they work in, which is innovative as it allows them to build collateral for future investments.

Our core technology is built up of two components:

1) Aquaponic Starter Kit - This comprehensive kit compromises of all the materials and assembly support to build a proven aquaponics CHOP (Constant Height One Pump) system. This system uses the fish tank overflow to fill the vegetable grow beds. Sustainability is key to the design as it employs local building techniques and reduces the use of carbon throughout. The design also allows the farm to be decommissioned and returned back to its original site condition (or better).

Though this technology is proven to significantly increase yields compared to traditional farming, it not readily available in Rwanda and surrounding regions. However, to implement this technology requires awareness of/and effort to address surrounding implementation barriers mentioned e.g. access to finance, reliable supply chain, visibility of the best buyers to work with etc, which our business model considers.

2) Non-Invasive Digital Health Monitoring System - We are also developing an innovative technology add on IP product that will use a network of non invasive sensors to collect water, fish and veg health data across the farm. This data will be analysed (using AI/machine learning) to highlight failures, production trends and early warnings that will be fed back to farmers on the ground via an app/sms/F2F communication, which will further improve production. This is useful on a farm level, but when collecting data across multiple farms, this provides a wealth of technology and farming data that is currently not available in this context.

1) Aquaponic starter kit: Aquaponics is a globally proven solution with commercial examples such as Ichthys Aquaponics (South Africa), Manna CEA (South Korea), or Al-Arfan Farms (Oman) to name a few, proving its viability and profitability. Additionally, the Rwandan government have included aquaponics as a technology solution for investment within their published Plan for Agricultural Transformation (PSTA 4 2018 -2024), which supports the implementation of this solution at a national level. Technical literature such as “Small-scale aquaponic food production” (FAO: 2014), “Design and Operation of the UVI Aquaponic System” (Rakocy, Bailey, Shultz, Danaher: 2004) prove that this solution uses lower water consumption and doesn’t require to be rain feed like other farming techniques. The literature also explains how the mitigation of soil (through deep water culture or soilless hydroton grow beds) along with consistent access to water means that growth of produce can be supported all year round.

2) Digital Health Monitoring System: The technology is based on existing sensors/hardware components/software platform available on the market. The innovation is bringing the unique arrangement of sensors (pH, ammonia, nitrates, water flow, imaging etc.) together to present a health status summary of the aquaponic farm at any given moment. Additionally the innovation is taking that data and automatically analysing (through AI/machine learning) to provide meaningful feedback (app/sms/F2F) that will improve the efficiency of the farm, while also predicting errors/failures. This is all developed with our technology partner (UWS) who have a proven background in computer science, fish health & technology development.

On completion of our flagship aquaponics farm (starting build in July 2020), we will demonstrate how aquaponics can be implemented technically in the context of Rwanda. By using materials and equipment available through open supply chains, building it using local labour and selling the produce on the local/national market, it will demonstrate to the ~2m smallholder farmers that this technology is achievable and accessible in Rwanda. Currently, only examples of basic farming have been shared by competitors.

As part of demonstrating this technology through our first farm, we are documenting evidence and bringing our stakeholders and beneficiaries (those impacted by the change) along with us on this journey. Through the Innovate UK funding we have to implement our 18 month Digital Health Monitoring System project (being developed with our partners UWS, started Nov 19), we have outlined an entire work package aimed at engaging farmers and cooperatives, and the market buyers of the food produced. UWS are providing Gender and Social Inclusion expertise through Dr Dina Nziku, to help collect the quantitative and qualitative information (through interviews, focus groups etc.) generated through the implementation of the farm technology i.e. at the beginning of construction, once operational, once harvesting, at selling point etc. 

We have already completed a customer discovery journey process through the EIT Seedbed programme during June-Nov 2019. During which we gained insight into pain points and feedback from users of our solution, which this current research continues to build on.

During this stakeholder engagement, we are also collecting data on the business model framework we have developed. This will allow us to refine the price points, rate of returns and general value we are offering to users, balanced against our operational needs. In turn, ensuring our solution is financially robust.

NjordFrey has developed a five year 3-phase strategy to reach scale. Note as of June 2020 we serve 0 people:

• Phase 1 (Months 0-6, starting July 2020) - Build flagship site to prove our starter kit solution technically & maximize cost savings. We will employ our Digital Health Monitoring IP product on this farm once ready within 9 for testing.

This will create 6 internal jobs to run operations, 10-15 jobs to operate the farm and an estimated 5 non direct jobs for local businesses e.g. additional delivery drivers, sales staff etc.

• Phase 2 (Months 6-18) - Build 1-3 farms through an out-grower model (i.e. partnering with farmers), this will allow us to prove our business & farmer engagement model which includes training modules. We will also stakeholder map and engage national & export customers to maximize markets available to farmers.

This will benefit a minimum of 40 members per farm, therefore 120 minimum farmers and 480 family members in total, and create an estimated 15 indirect jobs during this phase as a result of improved access to produce.

• Phase 3 (Year 3-5) - Scale up to 32 farms through private investment across Rwanda, with a focus on positioning the business structure for mass scale.

This will create up to 35 internal staff jobs (sales/technical) and benefit a minimum of 1,280 farmers, and their 5,120 family members in total and create up to 160 indirect jobs as a result of improved access to produce for buyers.

Impact goals:

• Increase farmer income 10 fold annually through access to our solution (currently $125/year).
• Increase employment through setting up local economies to service our farm (delivery drivers, maintenance workers etc).
• Increase caloric intake from the country average (FAO) of 1,950kCal to 2,500kCal though increased yields, which also allows a greater portion of produce to be taken to market (currently ~30% taken to market, we will increase to 80%).

On proving our solution through one farm, we will reach our long term impact targets through replication/scale up of this aquaponic starter kit.

Our overall impact target is for the company to reach 2,000 farms within 5-10 years, which will impact at least 80,000 farmers and their 240,000 family members (average 4 person per household, NISR), creating up to 950 NjordFrey jobs to support training, sales and operation plus up to an estimated 8,000-9,000 indirect jobs generated by buyers from improved produce. 

How we position ourselves to achieve our long term targets is outlined in the previous question. At the 5 year mark (through our Phase 3 strategy), we will have developed a secure foundation in terms of technology development, supply chain managements, sales/routes to market and capability/resource within our company that then allows us to replicate in different regions, with great efficiency and impact that could (if resourced) continue to be scaled up to impact millions of people.

Financial - Investment raising is our key barrier to reaching 32 farms in five years. We are offering farms through a credit model, so we require cashflow to be able to build the farms upfront and recover the costs through sales of fish/veg. To reduce the need for capital raising, we have discussed with banks in Rwanda the possibility of loans with farmers directly. Regardless once a farm is repaid, we can reinvest into another farm.

Technical - We will prove our flagship farm model (based on proven designs) in Rwanda, and use this to replicate and reach our 5 year target of 32 farms. Having our technology partner (UWS) also helps with our implementation of our technology add-on.

Legal - We need to develop a legal framework for working with farmers using an outgrower/profit share model. There are examples of this in country for energy production that can be used.

Cultural - Diverse crop and fish production at a smallholder level is generally new to farmers. Engaging them to ensure they understand and adopt this technology is important. Our feedback from last years customer discovery journey and ongoing engagement with the supply chain is very positive and supports its adoption.

Market - Understanding and gaining full visibility of the markets available is challenging. We have secured MOU's with a number of whole sale buyers to date. Plus we have also expanded our understanding through University of Glasgow who produced an export strategy report in June 2020.

The previous answer offers measures taken to mitigate challenges. Plus:

Financial - We intend to move from public/grant funding for the initial farms to private funding. This will be possible through the demonstration that we are revenue generating and addressing a need in Rwanda to produce nutritious high value foods. Once our initial 1-2 farms are operational this will demonstrate how financially viable our solution is for scale up, as its a replication model.

Technical - Additional we are hiring a bio farm manager who will manage the day to day operation and training of farmers. We also have an advisory board that includes several aquaponic experts in the field that we will call upon for governance and reviews. 

Legal - We have legal representation in country and a draft of the legal framework that we can use to build on for our business model with farmers. Additionally, we are asking farmers about this now in our focus groups.

Cultural - Lars, CEO has been in Rwanda for 4 years and developed an extensive network of local nationals and experts in this area of cultural implementation that will be called upon throughout. Additional UWS have expertise in Gender and Social inclusion to reduce this barrier.

Market - We have hired a Supply Chain and Sales Officer in country, and collaborating with Strathclyde University, UK to produce a market study report (July-Sept 20) that will further support our in-country market strategy.

N/A

We have 5 full time staff and 3 part time staff:

Full time

• Lars H, CEO - Has a Masters in Global Studies and extensive stakeholder management experience in Rwanda.
• Faisal R, Business Director - A Chartered Engineer with extensive consultancy experience delivering international projects. 
• Ignace T, Communication Officer: Supporting engagement with stakeholders and raising awareness.
• Florence U, Finance Officer: Financial day to day management and budgeting.
• Everest B, Supply Chain Officer - Developing and improving supply chain and sales revenue of farms.

Part time

• Hilary H, Operations Consultant.
• Chantal H, Accountant.
• Richard B, Legal Advisor.

NjordFrey is an aquaponic based start-up duo of Lars Hededam, CEO and Faisal Razzaq, Business Director, located in Rwanda Both have over 10-15 years international/East African working experience in the corporate and development sector.

- Faisal's experience gives the company the ability to understand the importance of operational tools, governance and a delivery mindset.

- Lars experience give the company access to an extensive supply chain and network of people in the sector and provides the food technology know how to develop the solution. 

This nicely balances the companies ability to understand how to strategise and plan but also the importance and nuance of implementing.

- Ignace Turatsinze. With +5 years of experience in the hospitality and technology sector, he has been hired to document/share information, progress and challenges being overcome by NjordFrey with our stakeholders. 

- Florence Uwinema. With +3 years of experience in the start up and finance sector, she has been hired to manage company and farm finances in country. Florence will implement the farmer outgrower business model.

- Everest Baahati - With +9 years of experience in customer service, procurement/sales, he has been hired to develop/streamline our inputs e.g. materials, seeds etc. and lead the sales team that will sell fish/veg produce (local and export).

Part time staff have been engaged because of their expertise and proven experience in the sector and come with the necessary credentials.

To guide NjordFrey, we have put in place an Advisory board ((https://www.njordfrey.com/about), made up of industry experts.

We currently partner with University of West Scotland (UWS) as our technology partner. We are working with them to develop our Digital Health Monitoring System. The University provides Computer Science, Fish Health and Gender and Social Inclusion expertise. This is part of an 18 month project to develop a product for testing in country in Rwanda on our flagship farm.

This partnership is funded through Innovate UK (DFID) funding of a combined total of ~$430,000.

We meet with UWS every month formally to discuss progress and technical challenges, produce quarterly summary reports for Innovate UK, email and discuss issues regularly and will also arrange 2-4 site visits to Rwanda for the whole project team.

NjordFrey are offering ~2m Rwandan smallholder farmers access to:

• A sustainably designed aquaponic starter kits as part of 2-4-year (max) credit pay-back model, with the capital cost of the equipment being paid back through the sales of the fish/veg produced (removing upfront cost barrier).

• Seasonal inputs (seeds/fingerlings) through our secured supply chain.

• Training (plus access to our digital health monitoring system) to allow them to become independent, plus facilitate routes to market. 

Our business model works by partnering with farming groups/cooperatives (minimum 40 farmers), where we set up/build the farm with them. Once operational we support in the harvest/sale of the produce to reach maximum revenue. Once the aquaponic start kit costs are paid back through the sales of the farm produce, the farming group receive a majority share of the farm (providing agency).

NjordFrey retain a minority share for operational sustainability, therefore, our success is linked to the success of the farmers (removes predatory behaviour as seen by competitors) while allowing us to focus on building more farms to gain more revenue. As we build more farms, we are developing greater supply power/links to national and export buyers that provides greater visibility and access to farmers to ensure best prices.

By providing farmers access to our technology (with increased harvest seasons, without the financial and supply chain/market barriers currently in place) and means to increase their average income ($125/yr to £1125/yr) within 2-4 years we can deliver meaning impact that is commercially sustainable. 

Following our experience on the EIT Seedbed accelerator programme (June to Nov 2019), we understood and gained immense value first hand from the mentoring, programme structure, training and access to capital.

We are applying to Solve to again have access to these types of tools that can help us immensely propel our start up solution that looks to increase income and reduce malnutrition among smallholder farmers. We are applying for:

Mentoring - With every mentor we have been fortunate to have access to date, they have provided great value, not only to our business but to our emotional and mental capacity to keep going with our solution.

Peer/Expert Network - we want to be surrounding with like minded individuals and experts that continue to challenge our thinking and motivate us to solve issues we werent aware of.

Partnerships - we are looking to partner with organisations the compliment our position / help shortcut our route to market. 

Access to funds - to date we have had limited funds, which has helped us sharpen our business acumen and strengthen our offering. We are now at a stage where we have developed a robust solution that is mature enough to implement. To do so we need access to funds and investors that will add value to our company.

Business model - Short term support to further refine and sense check our model, for improvement and robustness in other regions would be of value.

Technology - Once we have a prototype for our digital health monitoring system, a commercial partner that can help turn it into a commercial product would be great. 

Funding/Revenue Model - partners to provide long term investment capital to allow us to reach our scale up targets, while returning them profit on investment.

Marketing - As are a turnkey/repetition/scale up model, then branding is key. The opportunity to franchise is also there, so a partner to look at marketing to help us expand would be great.

We would like to partner with such organisations / groups as the MIT Technological Innovation, Entrepreneurship, and Strategic Management and Information Technology academic groups. We would like to consult with them to test and further develop our existing work and build in greater innovation if possible at the root level before we scale up.

 This solution can be implemented in a refugee camp context. NjordFrey has already reached out to UNHCR in Rwanda and they have expressed interest in our solution once Phase 1 / Flagship Farm is complete. The implementation of this solution then opens routes to be deployed in refugee camps globally (60m displaced people globally).

The prize money will be used to develop our first outgrower farm, which will partner with a minimum of 40 farmers and prove our farmer engagement/outgrower model in the process. Demonstrating and documenting the value throughout. This could be done in a refugee camp setting in Rwanda as this would follow our flagship first farm.

In Rwanda, 79% of the agriculture working population (67% of total 12.3m population) are women (GMO.GOV). 

Any solutions that improve farming in Rwanda directly impacts and improves the livelihood for the majority of female workings in Rwanda. The effect from supporting the majority female workers will make national level impact.

The prize money will be used to develop our first outgrower farm, which will partner with a minimum of 40 farmers (majority female) and prove our farmer engagement/outgrower model in the process. Demonstrating and documenting the value throughout.

We are employing the use of AI/Machine learning on the digital health monitoring system that we are adding onto our aquaponic starter kits. Currently commercial farms use data collection (through sensors) on key parameters on farming solutions, however the use of AI/Machine learning is not adopted and neither data collection or AI/machine learning is employed on smallholder farming solutions. 

The prize money will be used to develop our first outgrower farm, which will partner with a minimum of 40 farmers and prove our farmer engagement/outgrower model in the process. Additionally there would be sufficient funds to further develop our digital health monitoring solution. Using the current Innovate UK funding we can reach a prototype stage. This funding could allow for it to be further developed to reduce the cost price and improve the functionality to compete on a business level.

Our solution has the ability to scale up significantly once the flagship model and first outgrower/partnership farm is proven. From this point it becomes a resource and logistical issue of deploying this solution. We are targeting 2,000 farms in 10 years that can impact 80,000 farmers and 240,000-320,000 family members. Our projections are have contingency built in to make them realistic and achievable, however this impact can be fast-tracked through greater investment and business model development, to reach millions of beneficiaries.

The prize money will be used to develop our first outgrower farm, which will partner with a minimum of 40 farmers and prove our farmer engagement/outgrower model in the process. Additionally there would be sufficient funds to further develop our digital health monitoring solution or further invest into developing the business model to reach impact quicker.