Presentation by Allan Mortensen, Chombo Project, Verstergaard. ZeroFly® Chombo is a grain trading system that connects large industrial offtakers with smallholder farmers. ZeroFly® Storage Bag is the first insecticide-incorporated storage bag to prevent damaging pest infestations. It reduces the loss of seed or grains that can be consumed, stored for security, or sold for optimized prices, while not having the hazards associated with fumigation or the potential for pesticide residues that come from inaccurate insecticide spraying. Presentation at the Online Forum on Building climate resilient food systems based on the 10 Ag (27 October 2020). Organized jointly by the Secretariat of the Thematic Working Group (TWG) on Agriculture, Food Security and Land Use at the Food and Agriculture Organization of the United Nations (FAO), Biovision Foundation and the World Wide Fund for Nature (WWF), this online forum was the second of a series that addressesed the adaptation and mitigation potential of agroecology in the Nationally Determined Contributions (NDCs).

1. October 2020 Webinar on
Agroecology & Food Systems

2. Industry refiners in Africa rely too much on imported products
and cannot accurately trace the source of domestic grains
2
Insufficient & inconsistent
Aflatoxin a serious issue
Nestle, WFP, Breweries ...
Industrial livestock, army …
Small chicken farms, local
processing …
High standards
High volume
High prices
Lower standards
Lower volume
Lower prices
Untraceable due to informal
trading
Unreliable: agricultural
risk & unenforceable
contracts
Smallholder farmers don’t meet industry standards… …leaving them without a stable source of volume offtake

3. ZeroFly® Chombo provides price stability and quality inputs
to help smallholder farmers make the jump out of poverty
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ZeroFly® Chombo:
▪ solves sell low & buy high
▪ circular village economy
▪ development impact
▪ self-contained
business model
Disrupt crops value chain
▪ Aggregation from smallholders through
ZeroFly® Chombo
▪ Supply to industry as a smallholder
commodity exchange
Can’t deliver
volume to specs
Buys $20
Sells $10
ZeroFly® Chombo
▪ solves challenges with
quality, traceability and
reliability of domestic supply
▪ avoids expensive imports
Smallholder Trader Middleman Industry

4. Can ZeroFly® Chombo deliver the economic engine needed
to pull farmers out of poverty?
Security of
Offtake
▪ Having security of offtake enhances farmers’ availability to invest
▪ Off-takers can support financing of smallholders through working
capital management practice
▪ Delivering inventory to offtakers at a higher price with security of
demand incentivizes smallholders to provide better quality crops over
time
Access to
capital
▪ Supply-side restrictions such as punitive interest rates and collateral
requirements stop any but the most unscrupulous lenders to provide
any form of credit
▪ Demand-side constraints such as high transaction costs and high
default rates make it an unattractive market to enter at scale for
traditional lenders
Risk
mitigation
▪ Volatile market prices, production uncertainty and human error are all
unhedged today putting crop supply at risk
▪ Crop diversification, overleveraging, and off-farm employment are
the most common risk management strategies smallholders rely on
today
▪ However, these unsophisticated strategies often lead to sub-optimal
farm outputs
▪ Micro-insurances are an excellent alternative with a proven track
record in India but have had limited uptake in SSA so far
Upskilling and
yield/quality
improvement
▪ There is evidence from individual studies that training
interventions improved agricultural knowledge
▪ Many smallholder farms rely on outdated practices and put their
soil quality at risk by continuing them over time
▪ Interventions to increase the profitability of smallholders should be
targeted at young farmers
▪ Access to information can be decentralized with greater
bandwidth and connectivity in rural areas
Access to
quality inputs
▪ The adoption rate of improved maize varieties in selected
countries in Africa is still low
▪ Policy inefficiencies, high seed prices, farmers’ lack of
knowledge and risk aversion prevent their access to quality inputs
▪ Seed adoption rates as a function of agricultural area only cover
about 30% on average, with some countries having as little as 5%
of farmland leveraging access to quality inputs
The missing link for smallholders is a functional and liquid
market for their goods…
… that can further enable durable value creation for
smallholders in the future
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5. The cycle - trading and storing focus on conversation farming
To be member of the ZeroFly® Chombo Micro
warehouse platform a farmer has to:
1. Sign up/participate in training at Chombo
warehouse (app)
2. Have sold once to Chombo Agent (to get
future profit share as quality inputs for next
season
3. Be introduced by Chombo Agent or other
farmer
4. Continue to use inputs from Chombo
platform and sell to Chombo platform
▪ For the offtaker, ZeroFly® Chombo offers
– Secure storage
– Crop traceability
– Quality supply with no risk of toxins or
contamination
– Lower shipping or import costs compared
to overseas stocks
▪ For the farmer, ZeroFly® Chombo offers
– Stable supply
– Additional income through profit sharing
– Upskilling in modern techniques and crop
rotation
ZeroFly® Chombo is a grain trading system that
connects large industrial offtakers with
smallholder farmers

6. Food Security – patented products made locally

7. Food Security – Products & services made locally
▪ Our technology reduces post harvest loss during storing
▪ Enables chemical free storage with no quality loss for 24 months (Hermetic
storage)
▪ Our ZeroFly® Chombo grain trading platform includes farmer in value chain
and aims to start a long lasting relationship with farmers on platform:
▪ Quality inputs – Access to capital – risk mitigation
▪ Upskilling/yield/quality improvement and Security of off-take

8. TIME
HARVEST HARVEST
Grain + Data
Full Payment
Grain + Data
Full Payment
Profit Cycles – Profit sharing upon sale at high price to off taker
Off TakerFarmer
Technology use and 10 Elements of Agroecology

9. Next Steps: Food Security ZeroFly® Chombo
Initial Pilots
11
Year Objective What are we testing Timeline Partner
2020
Profit optimized trade 500 MT
various dry commodities
through platform
Multiple cycles of trading of Maize, Beans, Green Grams
and Sesame from small holder farmers. Storing in lean
season in GPS and IFRD traceable hermetic storage in
web cam monitored and remote sensor containers sold to
industry with profit sharing to small holder farmer
June 2020 to May 2021 Farmshine
Saving
Grains
2021
Scale up of trading platform
to 5,000 MT
Above and added profitability of grain trading at scale with
initial pre-harvest extension work, and introduction of virtual
warehouses operated and financed fully or partly by rural
entrepreneurs.
June 2021 to May 2022 Farmshine
Saving
Grains
DEG
2022
Scale up of trading platform
to 50,000 MT
Above with fully functional pre-harvest extension work and
scale up of virtual warehouses – possible 500 MT pilot in
second country (Ghana). Test of financing rural tracible
grain assets
June 2022 to May 2023 Farmshine
Saving
Grains
DEG