Negotiating for Fertilizer
Moises Postigo, manager of external relations and research for One Acre Fund (OAF), needed to buy fertilizer for farmers enrolled in OAF’s program in Bungoma, Kenya. The conditions under which he would do so were complex: OAF was just two years old. This would be its first large acquisition of fertilizer. Postigo had five potential suppliers, none of whom he had ever met face-to-face and would not during these negotiations. Over a period of several weeks, Postigo leveraged his knowledge of the relationship-oriented Kenyan culture, his sensitivity to the fact that the product he was buying was a commodity, the growth strategy of his NGO, and his awareness of the Kenyan government’s evolving farm support policies to successfully negotiate a deal for fertilizer and build a relationship with a new supplier.
The One Acre Fund
“Empowering the chronically hungry to pull themselves out of poverty.”
OAF was founded by Andrew Youn in January 2006 as a not-for-profit organization with the goal of solving the chronic hunger problem in Africa—not by giving food away, but by providing the resources necessary for farm families to grow enough food to feed themselves. OAF’s approach to eradicating hunger in Africa rests on these principles: •
Empower local, pre-existing self-help groups
Provide farm education
Provide capital, including environmentally-sensitive planting materials and fertilizer
Connect members to established output markets
OAF works with the poorest of the poor: farm families that do not raise sufficient crops to feed themselves, much less sell surplus to buy seed and fertilizer. OAF’s core mission is to “empower persistently hungry farm families to grow their way out of hunger” (One Acre Fund home page). Its core values are:
We don’t give handouts—we empower permanent life change. Lasting change must rely on the poor themselves.
©2009 by the Kellogg School of Management, Northwestern University. This case was prepared by Katherine Nelson ’09 and Nicole Tilzer ’09, with additional assistance from Teena Lee ’10 and Brian Bohl, under the supervision of Professor Jeanne Brett. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 847-491-5400 or e-mail [email protected]
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November 1, 2009
We provide a solution that is realistic for the extreme poor. Our solution includes tools, training, and market access, making it realistic for someone starting from nothing to grow for high-value markets.
We must dream big. Limitless human need demands an ambitious response. Eighty percent of the extreme poor in the world are farmers, and we must aggressively scale to meet demanding milestones.
We must remain 100% accountable to both our biggest donors and our littlest children, measured by hard operational metrics that are reported, good and bad, to stakeholders. If we are not improving the lives of children, we are failing, and must find a way to improve.
The Importance of Fertilizer
Fertilizer is a key element in OAF’s ability to help African farmers. According to Moctar Touré, executive secretary of the World Bank, “Soil is sometimes the only asset farmers have. You get out of it what you put in. African soils are by nature...
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