Contract farming as an asset class: notes from Umoja

The recurring question was whether contract farming cashflows can be underwritten at all. Our answer was that the underlying trade is sound and the packaging is the problem — which is a different and much more tractable statement.

That distinction became the opening argument of the securitisation paper.

We moved from the general to the specific and walked through our own project. The Umoja Agricultural Hubs are contract-farming hubs in Uganda, and building them has forced us to answer the questions the earlier sessions raised in the abstract.

We covered the structure of the grower agreements, how side-selling is handled in practice rather than in theory, what the offtake arrangements look like, and where the revenue actually becomes predictable enough to lend against.

This was the session where the series stopped being theoretical, and it is also where the idea for the second white paper first came up — the observation that the cashflows are perfectly respectable and simply not packaged in a form an institution can hold.

• The Umoja hub model in outline
• Grower agreements and the side-selling problem
• Where the cashflow becomes predictable
• What an SPV around this actually needs to contain
• Open discussion