impact-first's october newsletter

I1P2P QUARTERLY NEWSLETTER Issue 2016-1

i1P2P Quarterly Newsletter

October 2016

DEVELOPING CONNECTIONS IN THIS ISSUE

The Challenge: Working Capital for Village Processors Smallholder coffee farmers in and around Ywangan Township in Southern Shan State have organized village level coffee processor groups who have proven that they can produce high quality green coffee beans for the world market. Winrock International and others have provided the technical knowledge and training necessary to elevate their production to the ‘Specialty Coffee’ level. Unfortunately, the villages lack some of the working capital necessary to prepare this year’s harvest for the international market.

Our Solution: Pre-Sell the Product By preselling a portion of their harvest, the farmers will earn the revenue they need to bring the entire harvest to market without incurring debt or sacrificing equity. Impact-First Peer-to-Peer will partner with the village groups to connect them with customers in the United States who love coffee and are interested in learning more about where it comes from and developing a personal connection with the farmers who grow it. Ywangan’s Arabica coffee has all the

properties that consumers want in their coffee and the farmers themselves are articulate, motivated and business savvy.

Our Method: Crowd Funding Impact-First Peer-to-Peer will launch a reward based crowdfunding campaign with a minimum threshold sufficient to generate the working capital the farmers need. If/when this threshold is reached, we will transfer the money to Farm Tech Co., Ltd. who will partner with the farmers to process the coffee beans and prepare them for export. If the campaign gets serious traction and “goes viral,” we will endeavor to pre-sell one 20-foot shipping container of green beans (20 MT).

Our Strategy: Create the Perfect Christmas Gift We are going to take the coffee experience to a whole new level by connecting the coffee drinkers with the village that it grew in. We are going to introduce them to the farmers who grew it and allow them to walk with their coffee every step of the way as it travels from the fields of Ywangan around the world and to their door. (Read more about the campaign on Page 6)

Farm Tech Co., Ltd. We have incorporated i1P2P’s first foreign subsidiary in Myanmar! Farm Tech is off to a solid start with two strategic partnerships and three projects in the pipeline.

Page 2

Kaung Khant Mintun Kaung Khant is Farm Tech’s first employee and the brains behind the Farmer’s Market App that will be launching in the third week of November.

Page 4

Opportunity Knocks by Brian

I1P2P QUARTERLY NEWSLETTER | Issue 2016-1 2

Registered Even though the World Bank ranks Myanmar 146/190 on their ease of starting a business scale, Farm Tech Company Limited was incorporated under the Myanmar Companies Act on the 14th of September without any issues or delays as a fully foreign owned corporation. The laws of Myanmar require a minimum of two shareholders for foreign owned companies so i1P2P has a 95% stake and Brian Powell has a 5% stake. That same day, we received our five-year business permit. Since then, we have been able to open a USD bank account, transfer in money and begin doing business.

Excited While that may all sound a bit mundane, each of those points are widely considered significant risks to starting a business in Myanmar. The ease with which we were incorporated, registered and welcomed gives a clear indication that the country has not only opened itself up to foreign investment, but is actively embracing it. There is a sense of excitement and a welcoming atmosphere in the business community here that I have not felt in any of the other countries I have worked in over the past 17 years.

Ready We are now positioned to launch our services in what I believe is going to be the fastest growing and most exciting economy in the world for at least the next five years.

CERTIFICATE OF INCORPORATION

#504FC issued on September 14, 2016 by the Government of the Republic of the Union of Myanmar, Ministry of Planning and Finance.

The Problem: Statistically, 50% of smallholder farmers are not be able to link to a commercial market. They lack a way to market their produce, diversify their incomes and even get basic information about market demands.

Our Solution: We are developing a free, map based farmers’ market app in Burmese that will enable smallholder farmers to connect with customers simply and conveniently using their smartphones. This digital solution to the “market linkage” problem that smallholder farmers face will increase both their household revenues and resilience by diversifying the range of products that they are able to bring to market, based on what people are buying and selling around them.

Why this will work: This solution is possible in the Myanmar context due to the high penetration of smartphones and the relatively high education levels in the rural areas where over 70% of the population is literate.

Our Timeline: Esport Bee is currently developing the app, with the goal of launching the beta version in November and the full version in December.

Farm Tech co., ltd. by Brian

Farmers’ Market App by Brian


HEADING 4

Flatbed Grain Dryer The sidebars in this template use simple, single-row tables for the gray-shaded headings and thermometer charts shown below for easy alignment.

FAST FACTS

70% Of the population of Myanmar relies on agriculture for their livelihoods.

60% Rice yield per acre in Myanmar compared to neighboring countries

FOR MORE INFORMATION

We recommend the eBook by Proximity Designs “Paddy to Plate, The Rice Ecosystem in Myanmar: Challenges and Opportunities”

The Problem: Smallholder rice farmers in the Shwebo District of the Sagaing Region of upper Myanmar can grow two rice crops per year, which is outstanding. They grow paddy rice during the monsoon season and winter rice during the dry season. However, due to the rain patterns in the area and the short turnaround times between harvesting one crop and planting the next, these farmers can loose as much as 50% of their crop to moisture damage each year. They also receive low prices for their rice at the millers because it is not fully dried and therefor does not mill properly.

The Solution: Rice farmers in Vietman faced a similar situation and were able to overcome it by using flatbed grain dryers. By using similar dryers, not only will the farmers in Sagaing avoid the potential post-harvest losss but they will also receive a 10-15% higher price from the millers due to the consistencacy and quality of their product over that of farmers who use traditional methods. They would also be able to offer drying services to 5 to 10 other farmers each harvest season to generate additional revenue.

The Second Problem: It costs about $6,000 to fabricate and install a grain dryer once you include the additional equipment and training needed to do it right. These farm families are living on between $1,700 and $2,500 per year, so for them, it is like buying a house and the loans they need simply aren’t available.

Our Solution: Cash-Flow-Positive Rent-To-Own. We have designed a business model that will enable the farmers to generate positive revenues while paying for their grain dryers. By organizing the farmers into groups of 10 families each, and working with them to dry for other farmers in addition to their own crops, we will be able to split the 10-15% premium the millers will pay for their rice each harvest to pay off the dryers over the course of 4 harvests.

Our Partner’s Product: This is a joint project between Pioneer Agrobiz and Farm Tech in collaboration with the Myanmar Rice Miller Association, Sagaing Region.

The rice drying package that the farmers receive includes:

A 2 ton capacity dryer capable of processing 8 to 10 tons of rice per day, which is the current expected yield of 6 acreas of rice.

A digital moisture meter A digital Scale A dehuller for quality testing A drum seeder for winter cropping

Shipping, Installation, and Training by the professional staff of Pioneer Agrobiz

Cash-Flow-Positive Rent-to-Own by Brian

Mr. Khan Gyi, one of the first rice farmers that we worked with. We made a video of our trip out to see his farm. You can find it on Youtube under “Myanmar Rice Farm Trip.”


Hello I am Kaung Khant Min Tun. I went my first programming class when I was 16. It was C++ and from that time, I can't run away from the beauty of codes. I founded my first web portal when I was 17.It was about hacking and security knowledge and name is Ghost Area ( www.ghostarea.net ) At that time, it was the very first website in Myanmar, but I don't know how to earn money from that website and we can't get access to Google Ads service because of sanction. I shut that website down when I was 19 and decided to concentrate in learning technologies more. I got my first freelance project at 18 and it is still alive ( www.polymermyanmar.com ). As an Asian son, I must listen my mommy's words, so I had to go the university she chose for me. It was the Technology University Mandalay, where I majored in Civil Engineering. After attending for three years, I decided to leave my home and university. I moved to Yangon and worked as a web developer at a local company. I made many friends and developed a large network there. After seeing the gamers, and from my technology and athletic background ( I was wushu player and one of the selectives for Mandalay Division, Myanmar ),I decided to start my first esports platform and media, Esporst Bee ( www.esportbee.com ) . It's the very first esports start up in Myanmar. But we still must work outsource projects to survive and we are trying to accelerate my Esports Bee :)

Our Timeline: The first two grain dryers are currently being fabricated and will be ready for installation at the beginning of December. The rice harvest in Sagaing normally begins by mid-December, but it is expected to be a bit late this year due to the weather.

Our Objective: This initial project will test the following assumptions:

The 2-ton mechanical dryer package is properly sized and appropriate for a group of 10 farmers who grow 6 acres of rice each.

Farmers will form groups, based on their farm size, to collectively rent and/or buy the equipment.

The dryers will prevent immediate post-harvest spoilage which can run as high as 50%.

The dryers will increase each farmer’s gross earnings every harvest by 18%.

o 12% through increased price at mill

o 6% through contract drying for other farmers

The dryers will increase farmer’s net earnings every harvest by 9% for the 4 harvest periods when they are paying off the dryers and 17% thereafter.

Rent-to-own is a viable approach to high-impact investing in the agriculture sector in Myanmar.

Farmers will opt to buy after seeing the rental equipment’s impact on their earnings.

If an individual farmer chooses not to continue renting, the remainder of the group will either:

o Redistribute the exiting farmer’s portion of the rental agreement or

o Recruit a replacement farmer to assume their portion of the rental/buy-out agreement.

If an entire group of farmers discontinues their rental agreement, another group will take over the rental and/or buy-out of the equipment.

The Next Steps: After we test our cash-flow-positive rent-to-own model with the first two dryers, we plan to run a larger pilot project with up to 30 dryers during the May/June harvest season before we take the project to scale with US investor

Kaung Khant Mintun by Kaung Khant


Su Su Aung and her three sisters grew up in Southern Shan growing coffee, processing it in the traditional ways, and selling their coffee in the market at Aung Ban. Coffee first arrived in Shan State in the early 1930s, and some of the first to grow it were Su Su Aung’s grandparents who not only grew coffee themselves, but also bought coffee cherries from their neighbors and took them to the market together, hoping for better prices. Coffee has been a way of life for Su Su’s family for generations.

Initial Growth In 2004, Su Su began buying fresh cherries from local farmers and carrying them to market, carrying on her grandparents’ entrepreneurial spirit. When the buyers stopped purchasing fresh cherries, she taught herself how to do wet processing, and later bought a pulping machine and began producing 7,000-10,500 pounds of coffee per day during harvest season.

Community Mobilization Then in 2010 the market was monopolized by a large company, driving down prices. “Even though I live here and I have all the resources such as land,” said Su Su, “I didn’t put my efforts into producing locally-sourced quality coffee widely - while (watching) other business people from outside Ywangan come to set up coffee and trading and processing here. We should have our own name as well as Ywangan local people.” That’s when Su Su and the other farmers from Ywangan began organizing themselves into a group to manage coffee prices in their market.

Professional Training In 2014, Winrock International introduced Su Su’s family and many others to the idea of trying to produce specialty-grade coffee. Su Su said, “even though I pay a cup of coffee for 2,500 Kyat ($2 US) in Yangon, I didn’t know that we should upgrade our coffee quality for better prices, before.”

Going International Su Su immediately implemented the newer methods, such as drying coffee on raised tables instead of on the ground, saying “I will try my best to produce specialty coffee even if I could manage only a (small)

volume, such as a ton…” and the coffee in her region went from normal to very high specialty ratings in only a few months, resulting in the ability to export internationally for the first time and getting prices her grandparents could never have imagined possible for their coffee.

Founding Amayar Su Su is continuing the legacy of her grandparents as a leader in her community, and recently founded the Amayar Women’s Coffee Group. “In the case of potential for our coffee market,” she says, “I am leading a women’s group that is working with six villages to produce specialty coffee to export to the US this next year. I believe that this will support the life of the people in Ywangan and increase the incomes of the farmers.”

The goal of the Amayar Women’s Coffee Group, which represents over 600 families, is to improve women’s capacity as coffee entrepreneurs, create new job opportunities for women, increase incomes, and improve technology accessed by women in the coffee business.

“I hope there will be more women in

leadership positions in coffee.

We need more training, and growers

need to know that good prices will come

with good coffee, if the quality is there.”

- Su Su Aung

THE COFFEE PEOPLE

Su Su Aung Founder of Amayar Women’s Group and our partner in bringing the best of Myanmar’s coffee to the American market this Holiday Season.

Myanmar Specialty Coffee Show (From Left to Right) Thu Zaw – Managing Director of SITHAR Coffee Brian and Antonia – i1P2P Founder and Wife Marcelo Pereira – The Coffee Expert at Winrock Amy VanNocker – Managing Director of Mandalay Coffee Group

www.StartSomeGood.com/Coffee Our crowdfunding campaign is being hosted on the website www.StartSomeGood.com.

October 28 – November 28

Su Su Aung’s Story by Geri


i1P2P Quarterly

Newsletter

242 Robert Simmons Road Graysville, TN 37338

Looking Ahead

We are off to a great start. Having only incorporated in the US less than four months ago, we already have the business plans, legal structure and strategic partners we need to launch our first three products in the next quarter.

October Launching Our Coffee Crowdfunding Campaign with smallholder coffee farmers in Shan State

November Meeting with Farmers in Sagaing to finalize the December Rent-to-Own Test Project

Launching the Farmers’ Market App nation wide

Wrapping up the Coffee Crowdfunding Campaign on the 28th

December Installing the first two grain dryers and training the farmers to run their new businesses

The Coffee Harvest Begins in Shan State

The Rice Harvest Begins in Sagaing

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