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     FPI Cluster Farming Model.   

Sphere on Spiral Stairs


Farmers Pride International invests in and funds agricultural activities through a

cluster model of farming, this is an advanced type of agricultural industrialization. It is of great significance in promoting community and national regional economic growth, enhancing the rural competitive strength, advancing the specialization of agriculture production, creating value chains, and increasing the incomes of the farmers.


Cluster farming is a new model for organizations in the agribusiness sector that seek to merge our social mission objectives with core agribusiness operating principles.

After clustering, our work creates food value chains, these business arrangements are distinguished by their commitment to transparency, collaborative business planning and exchange of market intelligence and business know-how among chain partners, and their interest in developing business strategies and solutions that yield tangible benefits to each participant in the system.

We believe that building food value chains will become a pillar of agribusiness success. 

Read more>>>>>


Image by Tomasz Bazylinski

Clusters /  Farming  Development 

The cluster model is best done in a geographically proximate group of interconnected individuals, farmers, companies, and associated institutions in a  particular field,  linked by commonalities and complementarities  (Michael  E. Porter, 2000). In recent years, more and more researchers and related institutes, such as policymakers,  legislatures,  business leaders,  academics,  economic development practitioners, and development agencies have paid substantial attention to industrial clusters.  In China, arrays of articles are about industry clusters. With the development of the agricultural industrialization process, we need a high emphasis on agricultural clusters

FPI-I's Cluster farming model promotes productivity and encourages the participation of large numbers of smallholder farmers in the agriculture value chain. According to the Food and Agriculture Organization of the United Nations (FAO), over 70 percent of the world’s food needs are met by small farmers.

As we create a chain of suppliers of highly differentiated—and highly sought-after—food products, our producers in food value chains typically will have the opportunity to exert significant influence in price negotiations with buyers and retain a greater share of retail food spending than their counterparts in conventional supply chains. They also benefit from ongoing exposure to information about consumer purchasing habits and preferences from their downstream supply-chain partners. Meanwhile, aggregators and recipients in food value chains benefit from the provision of specialized products that can command higher prices in the marketplace and reduce their risk exposure through advanced planning and price negotiations.

Cluster Set-Up

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Cluster Farming

Cluster Farming Strategy:

This emergent business model lays social goals onto the profitability and loss-prevention objectives observed in traditional food supply chains. A successful cluster will return profits for food distributors and agricultural producers, as well as generate social benefits through values-oriented food production and marketing..

The Benefits of Cluster Business Model


1. Better access to research/technical information

2. Better sourcing of good quality inputs/materials

3. Better quality extension services

4. Greater access to markets

5. Better access to financial support, etc

6. Improved negotiating power

7. Lower cost of operations

8. Promotes the establishment of cooperative groups

9. Promotes strategic alliances for agribusiness development

FPI-I clustered establishes Food value chains which can be most effective when the members involved in the cluster projects can agree upon a set of mission values, such as farm viability, farmland preservation, healthy food access, and sustainable production practices, and a set of shared operational values, such as accountability, long-term commitment, open and ongoing communication, and transparency, and use these shared missions and operational values as a means to differentiate and add value to the products they are offering to their customers


To those in the industry, farming is a way of life. Yet as farms consolidate and city populations grow, the farming lifestyle is becoming more and more unique. Investors looking to diversify have multiple options when it comes to investing in farmland. Here are the main options:


The FPI cluster model contains several guiding principles:

  • It must be locally owned and aligned with the country's goals

  • It must be market-driven with projects led by the rural and urban sectors

  • It must be multi-stakeholder with open and inclusive engagement

  • It must be Holistic, integrating the full value chain into the agriculture system

  • It must be globally connected and supported


In addition, there is an eight-step framework:



  • Engagement: Identify and engage influential champions

  • Alignment: Develop a shared partnership agenda

  • Structured: Establish a partnership structure


  • Planned: Define specific goals and action plans

  • Implemented: Implement action plans

  • Advanced: Leverage milestones to drive progress

       Adapt and scale

  • Scale: Institutionalized proven models

  • Review: Assess the partnership strategy and structures


The Great Value of Agricultural Clusters

Key characteristics of cluster farming include:

  • Coupling economies of scale with sales of differentiated food products that are designed to attract consumer demand and obtain premium prices in the marketplace

  • Using cooperative strategies to achieve competitive advantages and the capacity to adapt quickly to market changes • Emphasis on high levels of performance, trust, and responsiveness throughout the network

  • Emphasis on a shared vision, shared information (transparency), and shared decision-making and problem-solving among strategic partners

  • Commitment to the welfare of all participants in the value chain, including providing adequate profit margins to support the business and its owners, fair wages, and business agreements of appropriate and mutually acceptable duration

Additionally, farmers, ranchers, and other agricultural producers in food value chains:

  • Know their production and transaction costs and are able to negotiate prices based on acceptable profit margins above those costs.

  • Perceived contracts and agreements as fair, having been freely agreed to, providing equitable treatment to all partners, and including appropriate timeframes.

  • Are able to own and control their own brand identity as far up the supply chain as they choose. This may involve co-branding with other strategic partners.

  • Participate fully in the development of mechanisms to resolve conflicts, communicate concerns about performance, and alter directions within the value chain.

Preparing to Enter a Cluster Arrangement:


Look Before You Leap


Before a farmer or business decides to enter into a cluster partnership with other businesses, it is critical to perform due diligence. Conducting thorough assessments of the market, the strengths and weaknesses of prospective partners, and one’s own capacities will go a long way towards making good decisions and building strong, long-lasting partnerships. Know Yourself, Know Your Market Entering or building a value-based food supply chain requires an understanding of how each business fits into the chain and why they are part of it.


Questions that should be considered by the cluster leaders and partners include:

  • How does each partner organization contribute to the chain, and how does it help the chain support its core operating principles?

  • What motivates each partner organization to work within the chain?

  • What does the chain require of each partner organization?

  • What does this food value chain look like structurally, and how do the organizations’ structures mesh with this? By coordinating business planning and operational strategies, businesses within the value chain can maximize the benefit they receive from natural synergies resulting from their overlapping scope of activities, needs, and interests.


Know Your Collaborators


The best cluster collaborators are those that have similar values, different competencies, and compatible business structures and scales. They also need to be willing and able to participate fully in information sharing, decision-making, and investment. In short, are collaborators willing to be forthcoming and engage with questions, conflicts, and new perspectives? To answer this question, businesses building value-based food supply chain relationships should determine if potential collaborators have these characteristics:

  • Commonalities and mutual interests

  • Compatible values

  • An understanding of the rights and benefits of each partner

  • An appreciation of the obligations and responsibilities of each partner

  • The capacity to interact and consult extensively with others in the chain

  • A willingness to consider new collaborators and perspectives

  • Equal risk exposure

  • A willingness to share brand identity or allow for a separate identity (carrying the farmer’s story through to retail packaging, for example, can be important for the farm’s business but difficult for the marketer’s business to accommodate)


Potential collaborators should be prepared to make the investments and commitments required by answering questions such as:


  • What resources, infrastructure, or products is each party willing and able to contribute?

  • How much time is each party willing and able to invest? It is important that all parties are honest and realistic about their schedules and are able to balance available time with the work of maintaining and building the relationship.

  • How committed is each party to the cluster-based food production supply chain?


Value-based food supply chains require reliable collaborators, the kind who will stand firm by their commitments even when another opportunity or better price beckons.

Do Research To Protect Assets


In a value-based cluster, the greatest asset is business reputation. Customers want to trust that what they see is what they get. Researching business partners is a necessity, just as an individual who is hiring a new employee would perform a background check on the potential employee. Checking into a potential collaborator’s past can uncover warning signs. Sample issues to investigate might include looking at the prospective partner’s record on:

  • Upholding agreements

  • Meeting orders and coming through with products

  • Paying suppliers on a timely basis

  • Reputation for fair business dealings

​The time may come when the relationship is clearly not working. One way to prepare for that possibility is to plan for failure—that is, develop an exit strategy upfront for all collaborators. A third-party mediator can also help parties reach a mutually acceptable arrangement. Another option is to identify other, more beneficial, ways in which the relationship might evolve.

Strong Cluster Relationships: Some Indicators for Success

  • The business collaborator keeps the triple bottom-line (economic, social, and environmental outcomes) in mind and is consistent with the value chain’s criteria.

  • Collaborators are able to offer and accept constructive criticism.

  • Collaborators with more economic power do not wield and abuse it, but check their power in favor of balanced relations with value-chain partners.

  • The cluster enterprise is flexible enough to quickly make business decisions, adjust to market downturns, and capture new market opportunities.

  • The cluster scale, structure, and locale fit its purposes (big enough, nimble enough, close enough to key suppliers or buyers).

Weak Cluster Relationships:


What To Avoid


  • Unmeasured goals and expectations of collaborators

  • Switching loyalties, such as to outside buyers

  • Inability to make effective decisions

  • Inability to accept criticism

  • A lack of trust, can build resentment and an adversarial relationship

  • Unwillingness to share risks and benefits

  • Unbalanced distribution of work, risk, and benefits.

Cluster Farming


Cluster Farming creates real profit by merging several smallholder farms = Satellites attached to the Hub farm, to a solid entrepreneurial group = Cluster, which is capable of sharing both the benefits as the burden.

The Hub farm is a mixed farm and consists of a nursery for various (local) crops, fish farm (catfish and tilapia), chicken hatchery and a production station for animal feed. The Hub farm acts as a supplier of crops, young animals, feed, fertilizers, etc. in this cluster. The crops and animals are grown at the Hub farm and the Satellite farms will then grow these products to consume. In addition, the Hub farm will execute the sales and distribution of these consumption products for the Satellite farms, so that the farmers can reach a larger sales area across the world.

The Hub farm accompanies the farmer families for a period of 5 years in all facets necessary to run their farm successfully in order to promote their independence. Our goal is to provide large accessibility to home-grown agricultural products. More available and affordable products for the local market are important elements to achieve positive results. We believe that this is the best guarantee of employment, economic growth and poverty reduction across Africa.


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Cluster based Value Chains 



Cluster Farming formation:

Farmers are asked to establish and register clusters. It’s a bottom-up initiative.

What benefits do clusters bring to members?

Through clusters, small-scale farmers and SMEs can win together on things such as negotiating discounts on inputs, marketing their products, or lobbying policymakers.

For example- clustered agribusinesses can share workers amongst themselves. If these businesses were on their own, they might not have been able to offer full-time jobs individually. At the same time, these jobs provide a solution to rural unemployment and migration, which municipalities struggle to deal with. Local universities and extension services benefit from a growing agriculture sector that employs its students and drives policy dialogue on research and innovation.

  1. The cluster is composed of 6  to 10 individuals and existing local farmers who are practising small-scale to commercial agriculture and link them to Hub Farm, they must organise themselves in a committee with leaders from Chairperson, vice, secretary, vice, treasure and 3 committee members.

  2. These farmers will become Cluster Farms/ satellite farms or out-growers, together they will form a solid entrepreneurial group capable of sharing both the benefits and burdens.

  3. Satellite Farms must be within a radius of 50 km to Hub Farm and will be set up as a mixed farming company;  producing a variety of crops, animals, and other products such as fish, grass,  crops,  goats, sheep and crops and others will be poultry farms for broiler and other poultry products, etc.

  4. The Hub farm will supply Satellite Farms with training and inputs.

  5. To match all products that are produced and grown on Hub Farm to ensure quality and sustainability.

  6. Next to this, the Hub Farm will provide the necessary infrastructure such as barns and/or fish ponds.

  7. Satellite farmers will be trained by Hub Farm in the field of crop production, animal husbandry, preparing feed schedules, identifying diseases, record keeping, accounting, management and planning in order to promote their independence.

  8. Distribution, marketing, and trading of the products are done by the Hub farm, allowing the Satellite Farms to focus on the production of their crops and animals.


FPI's main focus is on clustering  to build the capacity of the urban and rural farmers and open up  domestic and international markets for them through the following steps :


  1. Providing funds and incentives for farmers

  2. Finance the Hub farm:

  3. Finance of Satellite Farms:

  4. Investment period of 5 years;

  5. Takes 20% profits from all sales and investments ;

  6. Annual interest ___ %;

  7. All loans issued out must be paid back at agreed interest and during agreed periods.

We believe that our approach shall support the building of sustainable food systems across the world, besides meeting  SDG 1 and 2 Targets, the project shall enable Africa to feed its continent and the world at large. 

Clustering is a great way to formally organise a complex sector like agriculture, promote development and accelerate change. To quote the old proverb: if you want to run fast, go alone; if you want to go far, run together. Read more>>>>


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