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The Unique Value Proposition of Urban Agriculture


To really “build” a business we have to understand how a business figures in society, as society gives it a reason to be and creates the needs business satisfy. What a business offers stands in a certain interaction with what other businesses offer, in addition to being in interaction with social needs, and customers. The way a business defines itself is in interaction with others, but the dynamics of this interaction favours difference and the creation of something unique to each business. This uniqueness could be part of any feature of the business, and could include the product, price (often most important), or even something like location and appearance.

The creation of a business and its identity depends very much on the consistency between the activities that occur in the business and the product or service. If one wants to create an “organic” product, there has to be consistency between this final “result” and the ways it is created.

The “Unique Value Proposition” of a business is this unique selling point and advantage the business has, and this shapes the interaction between the business and its customers, and the interaction with other businesses. In this chapter we will discuss this UVP for urban agriculture. What is it that urban agriculture can offer the world? What about this UVP is important and how can we build and enhance this?

In the previous chapters I have made many suggestions on how the ways of producing food could benefit urban agriculture, the technologies and enterprise models that may be appropriate, and the ways in which communities can be engaged in such enterprises. In this chapter I want to explain how all these hang together and how a farmer/retailer could combine them into a consistent and meaningful whole.

The suggestions I have made come from time spent in interaction with farmers. Many of these come from them. Many others are gleaned from the internet and other publications. How I combine them is of course my own creative work, but the way I articulate it is also mindful of a critical analysis of the food marketing system, and the place of small and urban farmers in it. I am trying to find and create a niche market for them in the gaps and market and ecological failures of the current system. Here where informality, ecological opportunity, economic productivity and food intersect, an alternative system is possible. This system can metabolise and process urban wastes into agricultural inputs. This system would have to organise communities, both as customers and suppliers of such urban wastes, as part of the enterprise. Its sales, marketing, branding and identity, and sales, are deeply intertwined with these communities, and bring a competitive advantage.

This competitive advantage is the source of community and human benefit, both in the form of products – food – and the value and processes they can command. It is by lowering food process that deepest impacts in food security, hunger, cuisine, industrialisation and human development can be felt. To sustain such below and competitive-with-market prices would need the farmer to be skilful in harvesting inputs from the community, and exchanging this for the value they pay for food. The economic opportunity for fresh “kitchen vegetables” is also created by the long supply chains of industrial agriculture. These may be appropriate for grains and high value fruits, but add an unnecessary logistic – transport, processing, and distribution cost to these vegetables. These vegetables are also the cornerstone of a good human diet, and lowering their costs, offset by ecosystem services, will have clear human and economic impacts. Farmers in industrial agriculture receive a small fraction of the final value of these products. Urban agriculture can be independent of these systems, provided it finds a way to manufacture its own inputs, and commands the whole value chain until retail. This is when prices can be commanded equalling those of retail. However, to establish a lower than retail price, the services of the ecosystem needs to be interlinked in the enterprise model. This is how the niche for urban agriculture can be created.

The unique value proposition for urban agriculture, can thus only be:

The creation of a price reduction mechanism for urban agricultural produce through the local recycling and repurposing of waste.

The cornerstone of this enterprise model – harvesting waste in exchange for food – brings in circular and regenerative processes into the enterprise. These circular flows, allow waste to be repurposed – through the biological mechanism of decomposition, and the social process of material recycling – as inputs in food production.

This relationship is the basis of the ecological sustainability of these enterprises. It is also the source of the UVP and its distinct competitive advantage. Harvesting these inputs can be done to secure them at lower than market price, and all else being equal, would lead to efficiency advantages in production.

The ways the community is engaged in this model is important. To continue with this model, the benefits of participating must outweigh what they would receive elsewhere. The benefits to the farmer would lie in receiving the waste in better than market rates, and hence this relationship is important. It is necessary, if a biologically based means of food production is adopted, to secure significant and abundant quantities of biological matter. The relationship between the urban farmer, her customers (and some other stakeholders) is important here. This waste exchange relationship must harvest significant quantities of waste, at lower than market replacement costs, to off-set the reduction in price the customer will receive. This will be beneficial if a fair price between these interests can be achieved, and this can only be established through trial and error by farmers, in an engagement process with their communities.


Food for waste exchanges

We can distinguish between different wastes, and each one has value. An urban farm can become a place where all these can be reclaimed and recycled. There is already a well-developed sector of reclaimers in most of our townships, and the harvesting of waste brings them into the ambit of the urban farm. Urban farmers can “go it alone” in harvesting recyclable waste, but it might be good to consider how a partnership with a reclaimer can work, even if you are “going alone”.

Reclaimers will know the relative prices recyclable waste can command in the open market. You have to engage with them in order to establish what would be the right price for recyclables that you can harvest from communities. It is important that these prices are set correctly, at both parties’ benefit. The prize you are chasing is the low-cost harvesting of waste, and this may be more beneficial to both of you if customers bring this waste to the farm, as the high cost of searching through rubbish is avoided. To establish what these prices should be, would need quite a bit of interacting and discussion between the reclaimer and the farmer. However, approach this on a trial-and-error basis and give yourselves a few weeks to establish how this scheme will work. If this does not benefit both, we would have to either find another solution or “go it alone”. Studies of reclaimers have indicated they are able to command incomes that are above the median in South Africa, and the sector has a few development programmes in place. They are reforming the buy-back centres that structure this sector in the economy. Now is the time to engage with these processes.

The reclaimer also holds a lot of knowledge about the sorting of recyclables. Plastics especially are manufactured in many different kinds, and each receives a different price on the open market. By sorting plastics, a higher price can be commanded. In fact, all recyclable materials need to be sorted into their different types, and this is very important also for metals.

The kinds of plastics that can be recycled include the following:

1. PET Polyethylene terephthalate. Soft drink bottles, oil bottles and meal trays.

2. HDPET Hi-density Polyethylene terephthalate. Plastic milk bottles, washing up liquid bottles.

3. PVC Polyvinyl Chloride. Plastic pipes, outdoor furniture, bottled water and shrink wrap.

4. LDPE Low-density polyethylene: Plastic bags.

5. PP Polypropylene: Bottle caps, margarine tubs.

6. PS Polystyrene: Foam trays, plastic tableware, vending cups, packaging.

7. Other: Any other recyclable plastic.

There are some plastics that are not recyclable, and you may likely receive quite a bit if this. These would have to be discarded. To make this harvesting scheme effective, you need to develop an education programme with your community and include in the information on how to sort all other recyclable materials.

To educate the community you would most likely need a reclaimer to be involved as they hold the knowledge that the community needs to know about to effectively supply you with recyclables. What may also happen is that some people will almost exclusively supply you with such recyclables and it is with such persons that a partnership can be formed. There will be a lot of labour and time involved in setting up such a system, and it may be best to form a partnership so you as the farmer can concentrate on growing food.

Metals are a little bit less complicated, and the major categories include aluminium and steel (which includes almost all metals other than aluminium). Hence, a metal recycling system is much easier to set up, but you would have to consult your reclaimer. This information also needs to be brought to the information and education sessions you hold with your community. By making it known to them what metals they can exchange for food, you will create a supply chain that will bring these materials to your farm.

Once again, you need to ascertain the process that these recyclables can command on the open market. You have to exchange them for less than you can get on the open market and hence a discussion and interaction with the reclaimer is important. Then you need to establish the price you will give for the recyclable materials, and make sure that this does benefit you. However, you may also want to enter into an interaction with the customer, to ensure they also benefit. This is a complicated affair and I recommend that you discuss all these in a community event that you hold at your farm. In such an event you can establish the process amongst all the stakeholders to this endeavour and I discuss that below.

Food for high value biowaste

Some biowastes have high value and it will pay to collect these. Biowastes can always be composted (“Dust to Dust”), but this may take a long time. High value biowastes include:

1. Old cooking oil. This can be processed to biodiesel and on the internet several tutorial and guides can be found on how to make it. Should sufficient high value cooking oil be harvestable, a new enterprise can be created.

2. Abattoir and butchery waste: Butchers often pay others to discard their wastes. Bones are a very effective bottom layer of a deep trench bed, and full of calcium and also some nitrogen. This is super valuable and farmers need to make dedicated arrangements with butchers and abattoirs to collect and use this waste.

3. Bulk food waste. At the fresh produce markets and other places – especially from large commercial farmers, and also from supermarkets and wholesalers, biological waste is often generated. A good farmer will have arrangements with such entities to receive and use this waste in deep trench beds. At times you would be able to find bulk quantities of waste, and this is a real source of nutrients for your soil.

4. Animal waste: Kraal manure is gold for an urban farmer. Many cattle farmers do not see value in kraalmis or manure and approach them about receiving this waste. This waste can be exchanged for food, and I am sure a beneficial relationship can be found. Such a farmer will be interested in receiving the 3rd degree produce that is unfit for human consumption, and here an exchange relationship can be built.

I have also noticed that at some places it is possible to obtain bird droppings. Doves congregate at certain places, as do Hadeda’s, and their droppings can be harvested. This would be a daily task, and find the tall building or trees where they congregate and harvest their droppings.

5. Human Waste: Composting toilets are available and there are some good examples to see at the Siyakhana Garden in Bezuidenhout Valley. These may be costly, but some are certifiable that they can safely compost human waste. This may be a solution for some who are able to invest in this. However, this kind of solution should also involve the state. Until there is a clear technology on offer, and an accompanying policy, this is a distant dream, but some may be able to realise it. Should you embark on this course of action, do your homework, but remember, this is possible and will emerge at a higher level in policy discussions soon. When this happens, urban farmers need to be ready as this will immediately secure their viability in the urban area.

Human urine is also a good source of nutrients as urine turns into urea but this may take a long time. Note, urine will start to break down immediately after passing, and will break down quickly in the soil. Urine may contain pollutants – that is why we pass it, and you should be careful. Always use it only in conjunction with soil. There are some farmers who exchange urine for food, and they can then harvest quite a bit from customers. This is unusual, but note these materials are all biological and if the urine is say, added to compost or soil, it would be safe to use, as it will break down quickly in a compost pile or in the soil.

6. Keep an eye out for how rain washes away biowaste. At certain corners and intersections of roads, often at the bottom of a hill, biomatter will accumulate. These may be contaminated by motor oil or other pollutants but often it is not, and this waste can be harvested.

7. Approach the Parks department to see if they can dump their grass clippings at your farm. Engage further with the state, as the Extended Public Works Programme can also supply workers for your farm. In return you can teach people basics about farming like composting. Note that these emergent farmers would in all cases be willing to buy seedlings etc. from you, and here a very beneficial relationship can be established.

Food for food waste

Food for food waste is another way to increase your penetration into your markets, and generate the inputs you need to sustain your farm. Remember, if you do not institute such programmes you are competing (on a non-level) playing field with others who sell foods, and you would need something unique to attract customers to your farm. Of course, the most effective way to create such a UVP is to lower your prices, and this will always be effective (due to the way we use and trade “money”). However, lowering prices does not often lead to more revenue. Hence, we recommend that you carefully set your prices (and if you can set them lower than competitors, it would be best) but then you have to somewhere make up for this shortfall.

The waste that you harvest must make up for this shortfall in your prices. The way you price the food or biowaste is important. Should you compost, say, a 25-litre paint bucket of biowaste, it will reduce by 2/3rds when it becomes compost. 25 litres will result in about 7-8 litres of compost. Prices of compost on the open market are about R30 for 5 litres (30dm3). Hence, if you give a R5 discount on the waste, you should be safe, but note you have to still process the waste to compost and this takes time.

The above prices are a benchmark, and you can use this to guide your decisions as you enter into negotiation with customers on the price you will pay for food waste. I would recommend not to give more than R5 for the food waste, but you would have to establish this price by negotiating with your community. This can be best done in a community event at your farm and I will discuss this below.

Once you are harvesting food waste you need to safely process it. The best way to process such waste would be to do so in a container that keeps pests like rats out, but allows insects and smaller creatures to enter the composting area. A compost cage can easily be constructed by an inexperienced welder. Remember, the food that is being composted does not really know where it is, and keep in mind that everything will turn into compost after some time. Should you not have a compost cage, you can simply build a neat pile – or a cage with old pallets, neatly in a square, until you can get such a cage.

The safe composting of food waste will create a clear image for your farm. The acceptability of this will make a big inroad into convincing your customers that your food is their preferred choice. Please note that Pick n Pay has started with such a system to compost their own food waste, and they give this to one of their suppliers, a piggery. This kind of process will soon become mainstream, and an urban farmer is in fact positioned much better than anyone else to set up such a system.

Your food waste system does not have to include a compost cage. However, you need a strategy to deal with this waste and this is a key opportunity that you need to address in setting up your business. My own strategy in dealing with food waste is a 5 step process.

1. I first of all soak the food waste, with cardboard and cartons, in my wheelie-bin which is full of water. These materials will immediately turn rancid in the water. The cardboard bulks up the water, and is a source of carbon. Cardboard, newspaper or paper in general is always added to the wheelie-bin as this is hard to compost. It is not very nutritious, and worms will eat it, but they prefer what we ourselves eat. However, the food waste enriches the waster with nitrogen and prepares the cardboard and other waste for the composting bin.

2. The Composting bin is a 2 stage bin. It is made up of two rubbish bins, with one suspended above the other. Waste from the wheelie-bin is added to the top rubbish bin, and I also add leaves and other biomatter. The cardboard and food waste is by this time starting to decompose rapidly. The top bin has holes and some compost falls to the bottom bin, but every 2 weeks or so, I empty the top bin in the bottom bin, and it would take about 3 months for the bottom bin to be full. By this time the compost is ready and is highly fertile. This is however very concentrated, and to maximise the value of this, I will mix it once again with biomass.

3. I add the compost from the bottom bin to my open air compost heap, made mostly from leaves. Because most of my compost is made of the same leaves of London Plane trees that grow in my road, I am expecting it to be low in nutrition and possibly acidic. Adding the bottom bin compost to this pile enriches it and gives the opportunity to build it even bigger with new leaves. The nitrogen from the bins stimulate bacteria and fungi and this processes the compost once again. I leave this for two weeks and by then the whole pile is close to being very mature.

4. What I did here is to build several interlinking cycles of nutrient use in this composting process. These Nxazonke build value in each cycle. In building such a system, I am able to add unprocessed – dry – leaves to each cycle and this speeds up the process and builds on the nitrogen from the food waste. In this way a pretty good compost can be made. However, from this example a few lessons can be learned. We will mostly use the same material for compost, as this would be the most prevalent source in your area. This bulk material will most probably be leaves and sticks and these are rich in carbon but you need nitrogen in the mix. Hence, the food waste will complement the carbon and you should aim for a carbon: nitrogen ratio of 7:1 in your compost. Of course, it will be difficult to ascertain this without expensive analysis, but keep in mind that you need quite a bit of nitrogen in your compost, to complement the inevitable high quantities of carbon in the leaves and wood that you will be composting.


Integrating the Unique Value Proposition with your urban farm and shop

The above exchange schemes, together with the price at which you sell, is the heart of the Value Proposition your farm makes to society. This arrangement is very different than a normal consumer could expect from a supermarket. What is important here is that you are enabling the consumer to lower the prices of their own food by their own behaviour – bringing recyclable and other waste to the farm. Note that each person consumes more than R800 of food per month, and at most R 400 per month could be spent on the kitchen vegetables that you grow on your farm. This mechanism, I believe, will enable you to gain access to and keep the majority of customers at your farm. In addition to this, you have quite a few additional strategies and tactics at your disposal to cement and consolidate your position as a leading retailer in your area. The things you could consider are the following:

1. Set your price point as lower or equivalent than your competitors. Setting prices lower than others is a sure way to attract clients, but keep in mind they are mindful of traveling, distances and convenience. Set your prices as lower than local supermarkets, and advertise this on the fence or wall outside your farm. They may buy from others at higher price if it is easier to get to them. To combat this, make the farm a pleasant place to relax as this will offset distances and convenience. The point of the food exchange service and other strategies you adopt, is to enable you to set this price as lower than others, and this is paid for by the waste. Concentrate on setting up these systems so they pay for you.

2. Emphasise the freshness, local character and benefit to the community of your enterprise. Your enterprise is in fact creating value and capital in the way it operates. By producing food out of waste you are creating capital that was not there before. This value translates to lower food prices with the effect that people can now live better. Over time, you will benefit the community.

3. Emphasise the local circulation of capital. By producing from waste, and by trading locally, you are stimulating the local circulation of capital. The aim of this is to let capital circulate locally before it leaves the area.

4. Create a Bulk Buying Clubs and specials where you source staples like otatoes or maize meal from a wholesale supplier and make this available at a good price at your farm. You may not be producing these staples and use this to build clientele and give people a good deal.

5. Selling consumer goods. Once you have established a shop at your farm nothing stops you from building a spaza shop wit consumer goods.

6. Selling farm supplies: You can stimulate the growth of other farmers by selling seedlings, compost, training, and mentoring others. This will build systems of food production and stand you in good stead as together you can collaborate with fellow farmers on bulk-buying specials, on consumer goods, and in events at the farm. You could collaborate and build your own local brand.


The farm/shop: enterprise

You should be thinking of yourself as a producer/retailer and this concept is very unusual, but not unwanted, in the economic sphere. However, this integration is part of the Value Proposition that you offer, and this hints at the character of your business. You need to integrate the food exchange schemes with your food production systems, and supplement this with your pricing strategy, your bulk-buying events, your loyalty programme, and the events that you hold. It is in the integration of all these functions, and the development of multiple enterprises or multiple revenue streams, that you will create this Unique Value Proposition.

Economists and business managers also talk of the Minimum Viable Product and this will be the act of producing food. I am not too sure merely producing food is viable, and I am developing the additional ideas as I am unsure a farm will be viable without a dedicated system to produce abundant inputs for biologically-based food production. It is unclear what would constitute a Minimum Viable Enterprise (or product), and to be safe, and to enable the creation of more robust enterprises, I am recommending these additional strategies and tactics.

To integrate the different systems, you should reflect this in how you create your enterprise. To do this may sound difficult, so let’s go through a step-by-step process that may help:


The brand and name of the farm. You should have a beautiful name for your farm, and this anchors your farm in the minds of your customers. Try to add a phrase that indicates you are collecting waste, and that this can be used to lower food prices: “Jabulani farm and Waste exchange”. Something like this will create an imaginary in the minds of your customers and this is the cue you need to build on this imaginary.

Service: food exchange: You are now providing both a service and products to your customers. The service is the management of the waste of your customers. This service flows into your production system, and the systems of exchange and processing (composting) is the link between the service and the product.

This system will be unusual for your customers. What you need to do is to showcase this system to them in an event at your farm/shop. You have to show your customers what happens to their food waste, and the recyclables that you harvest. They have to see how your compost pile or cage works, how your wormery looks like and how you use the compost in the soil. This will show them how you turn waste into value and this will integrate them into your enterprise. This can be extended so they also understand how the biological systems stimulate fertility and hence higher production. They need to see how they influence this higher production, as this influences the price they will pay for food. Now you have a system in place that you can enhance, maintain, and establish with community engagement methods.

Production systems: Sequences of biological cycles. The sequencing of biological cycles is what creates fertility and moving material, like food waste, from one sequence to another builds value. You should first of all feed food waste to animals. Animal manure should be composted or fed to worms, creating another Nxazonke or cycle. After the worms processed the waste, extract the tea and sell excess worms. Take the casings to either a liquid manure system or compost it. A part of the final compost should always be used to make a liquid manure or compost extract, and to stimulate the new batch for the future.

Many add several additional systems. Animal manure will attract flies, and the manure can be left out in the open to attract them. After 1-3 days the flies will emerge and this can be given to chickens who will find the worms and eat them. After this, earthworms can receive the manure, and value can be extracted from this. After removing worms (which can be fed to indoor chickens), and the tea, the rest can be used for compost in the soil.

Showing customers how these systems work, will convince them of the acceptability of this way of producing food. This system includes the customers and their experience of engagement with the enterprise is what will keep them as customers. This experience can be enhanced by hosting events at the farm.

Engagement: how to keep it all together. To organise an event, you do not need to be an expert in engagement. Organise an event that includes a tour of the farm/shop and all the systems. Take a group of people through your farm and show them how you produce food. Show them your food exchange systems, including the recycling systems. Show them the shop. Show them the recycling systems. Talk about your intentions to produce food, allow customers to influence the price, your price point, and the deeper effects of operating this farm in this way: over time food prices can be lowered and the general human development of the community, as well as waste management, will improve.

You should extend your face-to-face events to social media. Even SMS is relevant here and is sometimes a cheaper option than WhatsApp. You need to establish some kind of on-line relationships with your customers and a message service like SMS and WhatsApp may be all you need. Should you engage with platform social media like Facebook, Instagram etc. you need to note the data costs, but this can also be effective.

You should start with building lists of customers. Create groups on your phone, and also take the number of all customers who come to your farm. Let them know you will use their number for advertising specials, harvests, and other events at your farm/shop. This will be the most used form of engagement.

When using these forms of advertising, sequence it with buying behaviour. In South Africa social grants are paid in the first week of every month. Wages come in in the last week of the month. Government employees are paid on the 15th. These dates are important for planning your sales and sequence your harvests and your events with these days. If you have a big harvest outside of these days, you will need your distribution lists!

Your events thus act as a way to educate the community about the benefits of your produce. You should be aware that you as an urban farmer can deliver quality better than anyone else of the kitchen vegetables we consume. Your freshness is one hallmark of your UVP, and emphasise this. You have now established a base upon which you can build a loyalty programme (for surplus harvests), a bulk-staple buying club, and in fact an enterprise.

Establishing an enterprise – a shop – enables you to also sell consumer goods in addition to bulk specials and other offers. This enterprise will grow and sell food, harvest food waste, collect recyclables, collect high value biowaste, host events and make available special deals like bulk buying specials. You could be very creative in setting this up. Note there are quite a few local industries in our townships, from furniture manufacturers to clothing manufacturers. They may be interested in occupying space at your farm, and this will be possible if you can attract sufficient numbers of people to your farm.


Partnerships

Partnerships will be key in setting up the systems above, particularly in the early days of the enterprise. Partnerships need to be approached with some thought and circumspection. You have to understand the interests of your potential partner and understand that they are also seeking value in such a partnership. You should also know your own interests in approaching a potential partner, and be aware of what you are able to offer, and what you need to get in return.

It may benefit us to think of the “game theory” of partnerships. In a partnership one partner may exploit the other partners, or you could compromise your own interests. You should approach the partnership in such a way that you want to find the “sweet spot” where your interests and the interests of the partner is secure. Else there would be no reason to engage in such a partnership. Be aware however that one partner may compromise their interests in this partnership, and this could undermine the whole deal.

Structuring the partnership: you need to know what would benefit your partner, as you need to know what lies in your own interest. Approach this negotiation with integrity and honesty, as this will condition the relationship. However, keep your eyes on the business that this may generate, and let the business, and making the deals, lead this relationship. This is not about “getting” something from the other party, but the creation of new opportunities that would not be there is both of you were alone.

Contracts and enterprises: Engaging in a partnership will introduce you to the world of contracts. The terms of the partnership should be seen as a form of contract. It is important in this regard to honour the written word, and to build your integrity and trust based-on this contract.

You will have to deal with contracts, particularly for land, sooner or later. It is possible to gain access to land for an extended period, but this should; be secured in a contract. In the next chapter we will discuss your engagement with stakeholders, and this is an extended form of engagement. This is a key in securing protection from society for your business. This is where you can secure the long-term functioning of your farm, and this is really important.


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