Case Studies
Madagascar:
Malagasy: an equitrade company
UK-based Malagasy currently specialises in cocoa-rich treats from Madagascar to promote “equitrade”, which means it helps its partners not only cultivate the beans but also make and package the chocolate, leaving more of the revenues in Madagascan producers’ hands. New product lines, offering a variety of spices, are planned for next year.
Equitrade encourages the development of trade in finished or part-finished products from poor nations for sale in mature markets. The idea is to find products that have a competitive advantage for poor nations and ensure that the added value of those produces is shared equitably, and that the profits contribute to the transfer of knowledge and technology to poor countries.
Located off the east coast of Africa, Madagascar is recognised for the quality of some of its cocoa beans, but it remains one of the 10 poorest nations in the world. Based in north-west England, the small Malagasy team has helped the cocoa farmers and manufacturing partners of Madagascar to produce chocolate entirely finished in their own country.
This includes the farming, fermentation, drying, roasting, winnowing, grinding, mixing, refining, conching, tempering, moulding, packaging and transportation – and means the value of the end product is many times higher than that of the cocoa itself.
Processing the product in Madagascar also makes it possible to capture the fresh flavours of the cocoa immediately after harvest, helping to make these products unique.
Malagasy uses the international currency it earns by selling its products in the UK and elsewhere to equip Malagasy producers with the know-how and equipment with which to harvest, select and package the kind of flavours that will appeal to sophisticated customer tastes and that will meet international hygiene and safety standards.
In 2007, Malagasy chocolate won a silver award in the “Best bean to bar” category of the Academy of Chocolate Awards. It is now sold in the UK in Waitrose, Sainsbury’s, Fortnum & Mason and the Chocolate Society as well as in health food shops and delis, and trade is now being developed with Germany and Scandinavia – all contributing to the incomes of the smallholder farmers of Madagascar.
Ghana
Blue Skies: an exercise in compliance
The challenge for Blue Skies – which has been supplying processed tropical fruits to Europe since 1998 – was to help its farmers meet the rigorous standards of GlobalGAP, a global accreditation scheme that promotes food quality and food safety, environmentally sustainable farming practices and worker health and safety.
Based in the eastern region of Ghana where tropical fruit grows year round, the factory employs 1500 local workers to assemble, prepare and dispatch the fruit to Europe every day. About 150 farmers supply the company, and these range from smallholders to large farms.
The problem, in many cases, was that because they lacked proper training and equipment, many smallholder farmers were deploying agro-chemicals improperly, ignoring food safety risks or using environmentally damaging farming practices, making it impossible for them to comply with GlobalGAP.
To address these problems, Blue Skies introduced a training scheme to educate farmers in areas such as use and storage of hazardous chemicals. At the same time, farmers had to invest in new infrastructure and equipment such as disposal pits for farm rubbish, clean toilets, hand-washing facilities and protective clothing.
This placed a high financial burden on the farmers, particularly on the smallholders. However, the improvements to their practices meant that, after Blue Skies achieved GlobalGAP compliance, it could increase the orders it placed with each grower.
Moreover, being part of a group in compliance with an internationally recognised standard – despite the big differences in the size and capacity of individual growers in the group – has greatly increased pride among the farmers.
The Blue Skies experience demonstrates that, with proper training and infrastructure investments, smallholder producers can become part of the high-value processed fruit salads industry, increasing the income they get from their crops.
Kenya
Homegrown: a lesson in vertical integration
When you’re trying to get a daily average of 55 tonnes of runner beans, as well as 20 tonnes of other vegetables, to UK supermarkets, having the right logistical infrastructure in place is crucial. And British-owned Homegrown has, through its parent Flaming Holdings, enough cold storage space in Nairobi to cover 10 football pitches.
However, the company has also recognised that in addition to infrastructure, its more than 600 growers – based in rural areas across Kenya – need assistance so that the company can meet the technical, traceablility and social standards of the European Union.
To manage this across such a large number of growers – many of them smallholders – Homegrown has established an outgrower programme, through which it offers services that include:
- Seed from bulk purchased first grade stock
- Advice, support and a market for rotational crops
- A team of 100 technical field assistants who train, advise and coach small farmers
- Access to micro-credit and group certification
- Health and safety, personal hygiene and agronomy training
As a result, the company has been able to meet the tough standards of EurepGAP, Tesco’s Nature’s Choice and Marks & Spencer’s Field to Fork schemes. Homegrown now has more than 1,000 outgrowers in Kenya and last year the company paid them more than $5 million for their produce.