1. East Africa: Farmers earn better profits by selling directly to Coca Cola and East Africa Breweries (Business Daily Africa, New Vision, Daily Nation)

| April 19, 2010

Download this story

Most farmers in the Thika district of Kenya’s Central Province grow a mix of crops. Passion fruit, coffee, and bananas to sell. Maize and beans for their families to eat.


Ephantus Mwangi farms a one acre plot. Rows of coffee bushes are intercropped with passion fruit vines. But he’s considering devoting more land to passion fruit. Sales of the fruit were his family’s main source of income last year. Thanks to a new deal with Coca Cola, his passion fruit harvest could be worth a lot more. If this happens, Mr. Mwangi will replace his coffee with passion fruit.


Many farmers in Thika are excited about selling to Coca Cola. Earlier this year, the giant beverage company announced a plan to purchase fruit from small-scale farmers. It intends to purchase passion fruit and mango from farmers in Kenya and Uganda. The initiative is supported by the Bill and Melinda Gates Foundation and an American NGO called TechnoServe.


Luba Vangelova is a spokesperson for TechnoServe. She says the deal will cut out the middlemen between farmers and the market. As a result, farmers will earn up to 30 per cent more.


It’s great news for the 50,000 small-scale farmers who will sell to Coca Cola. Especially mango farmers.
Willis Owino is a mango researcher at Jomo Kenyatta University. He explains that mangoes mature at the same time in every part of the country. So there is always an oversupply at harvest time. Prices plummet and fruit goes to waste. But with Coca Cola, farmers will have a guaranteed buyer.


The beverage company will benefit too. Many beverage companies based in Africa import fruit concentrate. With the new arrangement, they’ll get fresh fruit from local farmers at a lower price. The fruit will be processed and sold locally.


East Africa Breweries is also working to establish a deal with small-scale farmers. It’s looking for local sorghum to replace imported barley.


In the past, local breweries have been reluctant to use sorghum. They worried that local farmers would not be able to provide a consistent supply.


Farmers engaged to produce sorghum for East Africa Breweries will be eligible for low interest loans from Equity Bank. They will also receive technical support from the NGO Africa Harvest.


Mary Mutemi is a farmer in the Kang’utheni village of Kenya’s Eastern Province. She dedicated eight acres of her farm to sorghum. She was very pleased with the results. “At last, we’ve got our own cash crop with a guaranteed market,” Mrs. Mutemi exclaimed.


In the meantime, Mr. Mwangi is dreaming of increased profits from passion fruit. If Coca Cola provides consistent demand, he sees his family’s fortunes changing. He looks forward to making new investments. More land for his farm, an additional cow, and college tuition for his children.