Financing and subsidy model for hermetic storage

By Kyle Poorman

Consortium for Innovation in Post-Harvest Loss and Food Waste ReductionIowa State University

In Uganda, Iowa State University is implementing a microfinancing model for the deployment of plastic silos that hermetically seal stored grain along with tarps for sun drying and grain handling. This program, initiated by the Center for Sustainable Rural Livelihoods (CSRL) through its Iowa State University Uganda Program, is overseen by a Consortium co-principle investigator. The aim is to foster the adoption of post-harvest technologies that will safeguard stored grain by reducing loss from mold, insects and rodents. Smallholder farmers benefit by being able to safely store their grain so they can sell it when prices rise a few months after harvest.

CSRL has documented the high incidence of mycotoxin (aflatoxins) contamination in grain in Kamuli District of Uganda where it operates. Aflatoxins can have profound health impacts on the lives of individuals in the area that eat grain with high concentrations of aflatoxins, especially children. Hermetic post-harvest storage solutions can limit mold growth that causes aflatoxin contamination. Therefore, implementing these storage solutions can have profound positive health and economic benefits for farmers. However, these storage solutions are expensive for a farmer in the Kamuli District and across Uganda. The high upfront costs for hermetic solutions have meant that farmers in the Kamuli district are typically not using these newer grain storage technologies.

To deal with these dual issues of cost and market availability, CSRL purchases the plastic silos and tarps and makes them available to the farmers directly. The silo technology being deployed is a $70 plastic silo that holds 300 kg of grain. The silos are manufactured in Uganda, based on a design by the World Food Programme. CSRL is subsidizing 50% of the cost and the other half is paid off over time by the farmer. The model of subsidy and micro-financed loan is an interesting hybrid solution to lower the upfront costs to farmers and provide access to the technology.

The CSRL post-harvest program is overseen by Dr. Tom Brumm of Iowa State University, a Consortium co-principle investigator. The Consortium and CSRL are both interested in developing and studying models for effective post-harvest technology uptake, including research on storage solutions, entrepreneurship, market development, and financing models. The Consortium believes the implementation of this program in Uganda will provide us insight in to how to roll out similar models to ultimately create a self-perpetuating market for post-harvest hermetic storage solutions.

In 2019, CSRL distributed silos that hold 300 kg of grain and tarps to 20 farmers in the district using the microfinancing model. After two growing seasons, all the loans were repaid in full. The program is continuing, and further analysis of the project is ongoing.