COVID-19 Response in Rural Businesses: How Impact Investors Switched to Remote Work

It has been weeks since we closed the Root Capital offices and switched to remote work across the globe. First and foremost, I’m grateful to report the good health of our team and clients and wish the same for you and your loved ones.

A lot has changed over the last five weeks, but one thing that hasn’t is our dedication to farming families and the agricultural enterprises that sustain them. We’ve now surveyed the majority of our client businesses to better understand their needs and challenges in this moment. I wanted to provide you with a brief update on what we’ve learned and how we plan to support these businesses throughout and beyond this pandemic.

The challenges for rural communities

While the virus hasn’t yet reached most rural areas, many farmers are facing labor shortages and increased food insecurity as local governments restrict movement into town centers. Though these steps are critical to protecting public health, they are putting the livelihoods of farming families at risk. It’s clear that agricultural businesses will play an ever more important role in connecting these families with much-needed resources.

Drawing on our long, personal relationships with these businesses, our team is uniquely suited to gauge how COVID-19 is affecting rural communities and how we can best assist them. Our survey results so far have underlined the dire need for intensified support for rural communities at this time, while also highlighting how agricultural enterprises can meet the needs of farmers and their families.

A small sample of the challenges our clients reported include:

  • Delays in shipping their products;
  • Unpredictable changes in demand, including some cancellations of contracts;
  • Decreased processing capacity as businesses limit the number of employees that can be working at once in order to practice social distancing;
  • Stoppage of in-person agronomic assistance to farmers; and
  • Inability to plan for the future given the uncertainty of the near-term.

Fortunately, our clients have taken steps to change their operations to confront the myriad challenges of COVID-19, including:

  • Implementing social distancing inside of processing centers or when buying crops from farmers;
  • Switching to remote work when possible for office jobs like accounting and sales;
  • Providing grants or lines of credit to their members during periods of income instability;
  • Delivering food and other materials to those who can’t leave their homes;
  • Continuing to offer remote training to farmers through mobile technology; and
  • Sharing educational public health materials with farmers and employees about how to stay healthy.

While these measures differ across countries and clients, the unifying theme is resilience in the face of unprecedented hardship. Agricultural enterprises are continuing to invest in their employees and farmers, and we remain committed to them.



Root Capital’s response

One thing is clear from our conversations with these agricultural businesses—their need has intensified, not diminished. Our clients emphasized how, in the midst of this COVID-19 crisis, access to our credit-plus-capacity model can ensure that preserving livelihoods and saving lives go hand in hand. Our rapid response will focus on meeting urgent health and economic needs while continuing to build these agricultural enterprises’ core business interests and long-term priorities so they can transform rural communities for years to come.

Above all, these actions are tailored to each client’s specific circumstances. We’re supporting the efforts our clients are already undertaking, while finding ways in which our model allows us to provide innovative help. And, as always, we will continue to approach any challenge with a  gender lens, supporting women—who are feeling a greater share of the burden from this crisis—as the linchpin of their community’s recovery.

We continue to meet the financing needs of our clients, especially those operating on accelerated timelines or experiencing increased demand as international buyers build stockpiles. Meanwhile, our advisory team—who are all safely working from home—have continued to offer digital business intelligence (DBI) services to ensure that businesses can use data like harvest forecasts and farm location to inform their crisis response and plan for the future.

One example of how we’re pivoting comes from an all-women coffee cooperative in Honduras. At the start of this year, our Women in Agriculture Initiative awarded a $20,000 grant to this cooperative so they could build the climate resilience of women coffee farmers. Just as the project was getting underway, government restrictions led to the closure of food stores and commercial banks in the region. This means that even though the cooperative has continued to operate, farmer-members don’t have access to sufficient food nor the cash to buy it.

The cooperative has requested—and we’re approving—a reallocation of their grant. It will now go toward setting up a fund for their members to buy food crop seeds to ensure their families will have enough to eat for the months ahead. Root Capital advisors will help the organization manage the harvest effectively and provide remote financial advisory services to evaluate costs and risks of the project, guiding the cooperative to success.

The challenges facing rural businesses have never been greater, but neither has our sense of urgency. We’re proud to report that, thanks to your continued support, we haven’t slowed down. Working hand-in-hand with transformational agricultural businesses, I’m confident that we can meet these challenges together.

I hope to be in touch soon with more news as we receive more feedback from our clients and adapt our model to work for these times. Until then, please be well.


About the author: Frances Reid is the Chief Operating Officer at Root Capital


EDITOR’S NOTE: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com. Photo Credit: Neil Palmer – CIAT

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Root Capital invests in the growth of agricultural enterprises so they can transform rural communities. These businesses purchase crops such as coffee, cocoa, or grains from smallholder farmers. With growth, they become engines of impact that can raise incomes, create jobs, empower women and young people, sustain peace, and preserve vulnerable ecosystems.

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