East African Sorghum Value Chain Development, 2009-2014
Donors: East African Breweries Ltd., Diageo, Common Fund for Commodities
The objective of the project is to implement a public-private-partnership project to develop a stable and high quality sorghum supply chain that will increase incomes of sorghum farmers and enable national beverage industries to substitute imported grains by locally produced sorghum. The targets are to produce 45,000 MT of sorghum, and reach out to 25,000 households earning cash income.
What we do
This 4.5 year project was designed in collaboration with East Africa Breweries Ltd (EABL), a subsidiary of Diageo (UK). The project objective is to develop a stable and high quality sorghum supply chain that will increase incomes of sorghum farmers and enable the national beverage industry to substitute imported grains by locally produced sorghum. The project started in July 2011 but the CFC portion of the agreement was only signed in October 2011. The targets are very ambitious, i.e. 45,000 MT of sorghum, and 25,000 households earning cash income.
The results of first three years were impressive as the annual volumes delivered to EABL doubled each project year. Unfortunately, a major crisis occurred in Kenya 2014 when the Kenyan Government removed the tax-free status of EABL’s Senator brand, the only beer brand made of local (white) sorghum. As a result the sales of Senator plummeted and EABL stopped the purchase of white sorghum for more than one year. Early 2015, the Government of Kenya reinstated the tax-free status on beverages which consist of 100% local raw materials and EABL resumed its local sourcing. The farmers have resumed the cultivation of sorghum but it may be a while before the previous annual EABL volume in Kenya (18,000 MT) will be reached – also because farmers have found alternative markets.
At the start of the project a number of large commercial farmers were expected to start growing sorghum. This move did not materialize – mainly because of the nuisance of grain-eating birds – and the EABL sorghum supply chain was forced to solely relay on smallholders. The happy consequence was that the project reached 56,000 farming households rather than the targeted 25,000.