Meet Cropital, the crowdfunding startup for local farming

We find groundbreaking ideas in the most unusual situations or ordinary circumstances a lot of times. Cropital seems to represent that idea as it started out as a project, an idea to pitch for two competitions, and turned into a platform that could change our local agricultural landscape.

Advertisement

Rachel de Villa, whom we got to talk to last month for our Entechpreneur feature on Voyager Innovations, shares with us her startup’s history and what they hope to do for our local farmers.

A quick look back
Cropital began when de Villa (CTO) and her two old friends Ruel Amparo (CEO) and Everett Ubiadas (COO) were thinking up ideas for two different competitions. One is an accelerator program in Malaysia and the other is the Talk ‘N Text Mobile Developers Challenge. It came up during a brainstorming session, which had them thinking they could do something like real-life Farmville. But the practicalities of that approach—of having empty lands and filling it with crops you like—isn’t optimal. What later became Cropital was a good enough idea for them to win both prizes.

But what do they really do? Cropital is similar to familiar crowdfunding sites like Kickstarter but instead of you funding your next phone or board game purchase, for example, you’re investing in local farms.

Teach them how to farm
It isn’t a secret that our local farmers get the shorter end of the stick, even if they’re the ones who are actually putting in the work to make sure we’re fed. But let’s put that into perspective. De Villa gives us the example of one farmer who earns around $50 USD a month, which is roughly P2,000. How can that be a sustainable way to live? Unfortunately, a lot of our farmers share that experience.

According to de Villa, we currently have around 11 million farmers and two out of three of them live below the poverty line.

“When we analyzed why the situation was this way, why we import produce and why they’re so expensive, it was because of lack of funding of the farmers,” she says. “They borrow from the banks with such high interest rates, most of them will just sell their lands to convert these into buildings. Wala na mauubos na yung food.”

But for those who stick it out, another problem is productivity. A lot of the farmers still use traditional methods to farm, which won’t be effective in the long run.

“There are so many studies but it doesn’t reach the end of the line,” de Villa says. “Hindi nakakadating sa kanila yung bagong technology on how to improve their productivity. Kahit yung mga simpleng tanong like what’s the best fertilizer to use isn’t available to them.”

But it isn’t just about providing funds for the farmers, de Villa sees their venture as an end-to-end process. They want to help out the farmers by connecting them to experts who can help them out and give them access to different resources. Teaching them to farm, so to speak.

“This is the core of the business: to improve productivity. If you just keep giving them funds, then at the end of the day that won’t empower them. You’re not really helping them.”

How it works
As of this writing, Cropital’s current farms have been fully funded. But for those interested in investing in the future, you’ll need to make a minimum investment of P5,000. You get to choose which produce you want to support or if you want to invest in a farm that will be ready for harvest in three to six months or a more long-term investment.

One good thing about it for backers is they aren’t just donating money to help the farmers. They are also sharing the profit from the harvest. “The success of the farmer is your success also,” de Villa says. But she emphasizes they’re not after backers who are just in it for the money. They want people who just genuinely want to help.

Support has been good so far. When they started in May 2013 and went public four months after, they were able to complete funding for five farms in just three days. They weren’t even fully advertising the site. They just posted on Facebook and let the power of connections and social media do the work. But de Villa knew at this point they had something that could change people’s lives.

“Cropital’s focus is not for profit really. We aim for social impact. We want to empower our farmers for them to sustainably increase their productivity,” she says.

They offer trainings post-harvest to teach the farmer about financial responsibility because she says a lot of farmers just end up spending their earnings on drinking or on cockfights. She hopes they could help these farmers increase their incomes, too.

Through the ringer
But how do these farmers get chosen? De Villa says they start looking at what’s in demand. They want to make sure the harvest is bought to bring profit to everyone involved. After that they take different criteria into consideration to select which farmers to support. These include their area, the weather in their area, and the farmer himself/herself and his/her motivations.

Of course, they also look into skills. She understands that the farmers are experts but they do background checks just as well to make sure they can be trusted. A lot of the farms that are up for funding with them approached the team themselves. So, yes, they are open to applications, too.

“We don’t want farmers na may ere na ‘Ako yung beneficiary, kawawa ako.’ We want those with motivations like wanting to get their children through school,” she says.

They need to trust the farmers, especially with all the people and resources being placed into the venture. It pays off for the farmers, too, as they get majority of the profit. She admits the farmers can’t believe when they hear they’re getting majority of the profit instead of the bare minimum.

Growing all around
The farms they support aren’t concentrated in one area. They have one in Laguna, Quezon, and ongoing reviews for Visayas and Mindanao. Some of the crops they back include high-valued ones like tomatoes and Napier grass, which is a source of renewable energy. They hope to bring the platform to countries around the world, too, in hopes of solving agricultural issues there.

The team hopes to scale up and support a thousand farms by next year. They also aim to incorporate all components of the agricultural life into their ecosystem—from the farmer, the investor, the supplier, to the buyer. It’s a promising concept but we have to wait and see how this works.

When asked about dealing with the middle men, de Villa says, “It’s more of including them into the system. Parang si Uber, they took away the taxi component so a lot of people got angry at them. For us, we have to include people who might lose their job or give them other sources of income to benefit everyone.”

It’s an ambitious project to say the least but one that seems to be bearing fruit (pun intended) and could possibly do a lot of good for our farmers and our food supply.