Building Institutions For Private-Private Partnerships
Building private-private partnerships is based broadly on the idea of helping smallholder farmers to become ‘business ready’ by forming producer and marketing groups and linking those to commercial markets – something they are unable to do as individual smallholders. We have helped to build many partnerships across East Africa, identify viable commercial market opportunities, improve on-farm production, and develop supply chains that connect farmers to markets. Some focused on basic staples such as maize and soya bean, and others on wide range of cash crops such as barley for the malting industry, African indigenous vegetables, organic vegetables, onions, cassava, mushrooms, garlic, cashew, honey, poultry, fish, silk, and essential oils.
Under this category our legacy programme included the following projects:
- In Kenya and Uganda, the INSPIRE consortium (Integrated Soil Productivity Initiative in Research and Education) has helped over 1,500 smallholders growing maize and soya bean to develop production technologies, organise producer groups, and link them to markets. Household seasonal incomes rose from US$120 to US$360/ha and six agro-input dealerships were established. Some 15,000 are expected to join this year. Challenges remain in postharvest handling and storage, particularly as production increases.
- In Tanzania about 700 smallholders in six Districts have formed 10 legally registered producer groups with contracts to grow high quality malting barley for Tanzania Breweries Ltd – a crop not normally grown in Tanzania. Production this year is expected to reach 4,700 MT with a value of US$1.8 million. Another 1,000 smallholders are expected to form groups in the next two years. The brewery currently imports 150,000MT so there clearly room for import substitution.
- In Kenya, there is a growing market among urban consumers for African Indigenous Vegetables – a much undervalued source of nutrition. Smallholders now grow these crops commercially and have formed partnerships with formal markets in Nairobi, Arusha, Kisumu, and Busia. Farm incomes increased by over US$400/ha as farmers increased their planting; improved farm inputs and community based technical support; and learned to add value through branding, packaging, and marketing.
- Also in Kenya, 1,400 people living in absolute poverty (particularly women and children) in HIV and AIDs affected areas along the Kenyan coast have improved production both for home consumption and the market. The ‘Commercial Village Approach’ was used to cluster farmers. Sales in the past two years exceeded US$45,000.
- The remote West Nile region of Uganda has limited choices for exportable commodities but honey and bee products offered a novel way of increasing smallholder incomes. Uganda produces only 5,00MT of honey annually but local market demand is about 50,000MT and there is potential for export. A project linking honey producers, hive manufacturer, and Bee Natural Uganda – a registered honey processing company, has helped some 330 farmers to organize 20 business groups and thus improve the honey value chain. Production is on target to reach 21MT in 2011 and over 70MT by 2012.
- Cashew is the main cash crop in south-eastern Tanzania and smallholders are again beginning to profit as they cut out middlemen and overcome monopolies which impede trade. A project supported by the Trust helped growers in Masasi District to form business groups of producers, establish a processing company owned by those groups, and improve crop quality and production. The processing company is undertaking direct marketing under contract with buyers is working towards Fairtrade and Organic Labelling standards. In 2009 the producers’ owned company commissioned a cashew shelling factory which processes 200MT a year and employs 190 people.
- Using support from the Trust, Women in Mkuranga District, Tanzania, with support from various NGOs, have transformed their lives by growing and marketing organic vegetables. Individual income from vegetable sales increased from US$3 to US$21 per month. The high market demand and good prices for organic produce encouraged the women farmers to increase their cropped area and yields from 1,210kg/ha/year to 11,400 kg/ha/year. 8. Essential oils, produced from citronella and lemon grass, are now a key part of farm incomes in Pallisa, an area of high poverty and degraded lands in eastern Uganda. Some 1,000 farmers have set up production, processing, and marketing facilities to commercialise their crops. They planted 400ha of grass and produce 12MT of citronella oil each month worth US$150,000. There are still challenges to face but there are also opportunities for new local commercial businesses such as transport and value adding enterprises such as bottling, packaging, and candle making.
- In rural Uganda poultry rearing has always been a source of income and nutrition for the family. But the demand for poultry products is growing among Uganda’s urban population as people begin to shift away from starch-based foods to meat and dairy. A local NGO working with local smallholders institutions has improved chicken production using programmed hatching and exotic cockerel exchange. Some 2,600 families benefitted. The return on each US$1 invested was US$16.
- Commercial Fish farming is not widely practised although it is an important source of protein, vitamins, minerals and fats. A faith based NGO introduced fish farming, including marketing and value addition, to 120 farmers in central Uganda. Although uptake was slow one farmer established a market in Nairobi and Kampala for seasoned and smoked fish but lacked funds for improvements and expansion.
- Onion growers in Nyeri, Kenya and in Mang’ola Tanzania have formed nine ‘commercial villages’ comprising 39 farmer groups each with 25 farmer members who share ideas about production, add value, market their produce, and access professional advice. Most farmers have shifted part of the farm system from subsistence to commercial onion production.
- Cassava is an important source of carbohydrates for both people and animals and demand is growing. In Tanzania 280 farmers were introduced to two high yielding and disease resistant cassava varieties together processing equipment for cassava chips that reduced labour and drying time, and produced high quality marketable products. Production increased by 50%, farm incomes by 30% and marketing channels improved in three coastal Districts.
- . Uganda’s annual demand for silk is about 120,000 tons and fetches prices of US$20-30/kg. 80 farmers where trained in silk production who in turn trained 478 farmers, many of them women. A micro-credit scheme helped farmers to acquire low-cost silkworm rearing houses. This indirectly benefitted a further 2,230 households.
- In Uganda garlic production has provided smallholders with a welcome cash crop with quick returns. Two crops a year are possible, unlike crops such as sweet potatoes and cassava which have a two-year growth cycle. Annual farm incomes have increased six-fold to US$2,470/ha.
- Mushrooms are in demand among the main supermarkets and tourist hotels in Tanzania. For smallholders in Hai District they offered reliable income and also an affordable food for protein deficient families. The crop has a short growing cycle of 6-12 weeks and can be cultivated all year round. Mushroom production has increased in the District from 174kg to over 16,000kg with annual farm earnings worth over US$42,000.