21 december 2020
Investments made by agribusinesses in Kenya, for example in French beans or mango production, are often dubbed inclusive: poor smallholders are assumed to participate and benefit too. However, research done by the Follow the Food programme shows that businesses tend to favour larger farmers and exclude smaller and resource-poor smallholders. Moreover, these investments tend not to have much effect on the food security of the households involved. Researchers James Wangu and Ellen Mangnus conclude that inclusive agribusiness can at best only be a partial answer.
Text: James Wangu and Ellen Mangnus
Meet farmers Brian and Justus. Both are heads of households in a smallholder farming community in Tharaka Nithi county, a semi-arid region in eastern Kenya where food insecurity is common. Brian’s household owns 1.2 hectares of land and has access to irrigation. Brian grows food for his own family and also sells produce at the local market. He also grows some French beans, which he sells to a local company for export. In contrast, Justus has no access to irrigation and depends on rain to cultivate a considerably smaller plot of 0.4 hectares, producing food for his own family only. Justus does jobs on the side so he can pay his schoolchildren’s school fees. A look at Brian and Justus’ houses confirms the differences between the two households. Built from bricks and mortar, Brian’s house has two storeys, while Justus has a small two-room house made of wood, clay and a zinc roof.
In the world of development organisations and policymakers, smallholder farmers are often talked about as a homogeneous group. And indeed, most smallholders face similar constraints: lack of access to agricultural inputs, technical assistance and markets, low farm productivity, low quality produce. Nevertheless, rural communities are hugely diverse in terms of the level of constraints and because of this addressing food security at household level requires a diverse set of strategies.
After years of the agribusiness sector being neglected by governments, international businesses and the development community, the global food crisis of 2007-2008 brought change. All over the world people took to the streets to protest about food price hikes. Policymakers and private sector investors saw opportunities in the agricultural sector to address food insecurity and other development challenges in Africa. This led to an influx of investments by foreign agribusiness in Africa, particularly in the ‘lion economies’ of Ethiopia, Ghana, Kenya, Mozambique, Nigeria and South Africa. The national governments largely welcomed these investments, as it was assumed that these companies would help modernise their agricultural sector by bringing in new technology and expertise. In many cases the foreign companies received preferential tax treatment.
Soon, however, it became clear that much of this investment was having serious negative impacts on local livelihoods and food security. Reports of outsiders exploiting local resources and people being chased off their lands started to come from civil society organisations, local NGOs and human rights defenders. In response the international development and donor community called for more responsible ways of doing business, in which smallholders would also benefit from the opportunities offered by the investments being made. An ‘inclusive business’ approach emerged and has gradually come to dominate much development policy and practice. It is also part of the Dutch government’s Aid for Trade agenda. The idea behind inclusive (agri)business is that smallholders can benefit from integration into inclusive business models as they get access to capital, knowledge and technology, as well as access to market information and new markets, while businesses stand to gain a more secure supply and profits.
Follow the Food research project
Over the past decade, the Dutch government, several other European countries and the European Union have taken the lead in promoting and implementing inclusive business models to address food and nutrition insecurity in sub-Saharan Africa as part of their development policies. Kenya, Ethiopia and Ghana face persistent food security and are among the countries where these business models have been introduced. The Follow the Food research project investigated the impact of ‘inclusive business initiatives’ on local food security. The project ran from 2016 till 2020 and was funded by the Netherlands Organization for Scientific Research (NWO-WOTRO).
French beans in Kenya
It is the Follow the Food project that brought us to Tharaka Nithi county, a green and hilly area known for its fertile soils, but one that has increasingly experienced periods of drought in recent decades. Here, a Kenyan export company works with smallholder farmers to produce French beans for Bonduelle, a French company producing processed vegetables. The company obtained finance from the Dutch government through a Public Private Partnership (PPP) set up to engage with and train farmers. Other stakeholders in the PPP were a Dutch NGO, a private Kenya-based Dutch agricultural advisory business and a local government agency. The idea behind the project was that introducing French beans, a high-value export crop, would boost local incomes and counter the problem of land scarcity in the densely populated county of Tharaka Nithi. The project held out the promise of improved food security for all smallholder farmers in the region.
As we walked through the community and talked to farmers, we soon found out that the company favoured some households over others. French beans require a lot of water to grow. The company had therefore chosen to work only with farmers that had access to irrigation. A local policy officer informed us that the community only has two irrigation schemes, and these only cover 20% of the households. ‘More irrigation schemes are not possible as the river runs through other communities that increasingly draw water from it for irrigation,’ Joseph, a farmer and chairman of one of the irrigation schemes, told us. Another farmer we spoke to explained why he was not a member of the irrigation scheme. ‘The membership fee is too high (between 60 and 120 euros). While this might not seem a hefty amount, other more immediate household needs such as school fees, healthcare, farming capital, make it a big challenge to meet these costs.’ As we visited the farmers’ fields, we soon learned that the company not only distinguished between farmers with access to irrigation water and those without, but that it also set criteria for farm size. The company only works with farmers who have plots bigger than 0.8 hectares. This explains why Brian was able to participate and Justus not.
Food security effect is limited
The ultimate goal of the PPP was to improve local household food security. Has this been the case? To our surprise, even those who participated in the PPP have not been able to improve their livelihoods. Despite having access to water for irrigation, their crops failed, largely due to harsh weather conditions – mainly drought, which is not uncommon these days. Farmer Rose explained to us that the company rejects a lot of the French beans because they do not comply with Bonduelle’s quality standards. And rejected beans get thrown away. ‘Local people prefer their own traditional bean varieties such as kidney beans,’ she adds. This throws into question the whole idea of promoting an export cash crop as a way to address local food insecurity.
Mango in Makueni
From Tharaka Nithi county, we travelled further south to our next destination: Makueni county in the semi-arid south-eastern part of Kenya. This county has extreme fluctuations in rainfall, and climate change is worsening the droughts. Massive crop failures are common. In an attempt to overcome the agro-ecological challenges, Makueni farmers have been expanding their mango tree plantation over the recent past. Mango is more versatile than many crops, having the ability to thrive under low rainfall and a wide range of temperatures. The rapid and widespread adoption of mango farming in Makueni has made the county the leading producer of mangos in Kenya.
However, there are challenges here too. The mangos are low quality as farmers have little knowledge about how to grow them and there are few storage facilities. There is a glut between February and October, when prices are low and post-harvest losses are high. So, farmers do not actually earn much from their mangos. To counter these problems, in 2017, a processing factory, the Makueni Fruit Processing Plant (MFPP), was established in the village of Kalamba. The factory processes the mangos into juice and mango concentrate as a way of dealing with the wastage. It was set up as a PPP between the European Union, the Makueni local government and two cooperatives of mango farmers. The farmers receive inputs, credit, training and extension services, and can always sell their mangos to the factory.
Higher income not spent on food
Everywhere you look in Makueni you see mango trees, with dark green leaves and full of light orange fruits. It is difficult to see any differences between the various farms, and mango trees do not require irrigation. Nevertheless, as soon as we talk to farmers, we find out that here too it is only the better-off farmers that sell to the company. The company requires a minimum weight of mangos. Farmers with only a few mango trees are still dependent on brokers.
The farmers that are able to sell to the company do earn a higher income. But this has not contributed to better household nutrition security. Most farmers spend additional income on education, healthcare or agricultural inputs. As he guides us through the community, a farmer explains that even if farmers spend their income on food, it does not mean they buy more healthy or nutritious food. ‘The food items bought are mainly staples like maize and beans during “hunger periods”, and common ingredients such as cooking oil, onions, tomatoes, tea leaves and sugar. Only on rare occasions do households spend money on ingredients for special meals such as wheat flour for chapati, rice, eggs and meat.’ It seems there is no proof that higher income leads to improved food security. Unlike French beans, mangos do add to the local diet, but only for two months a year during the harvest season, and that depends on how much of the total yield is sold. As mango is primarily a cash crop, it might not be the best fit for pursuing local food security.
Businesses fail to see diversity
Our research findings from the Follow the Food project show that while inclusive agribusiness has a role to play in improving smallholder food security, its scope is limited. The businesses only benefit the relatively well-off, meaning the smaller farmers – often the most resource poor who are the most in need – are excluded. This happens, we believe, because the businesses fail to recognise and understand the rural diversity. And yet part of inclusive businesses’ raison d’être is to reach the very poor and marginalised. Hence, if the limitations of the current projects are not addressed, these businesses risk perpetuating the existing inequalities in smallholder communities.
In our view, businesses should be seen as only part of the answer to tackling food security in poor communities. It is important to acknowledge that an increase in income does not always translate into improved food intake, because of among other reasons, competing spending priorities. Therefore, any initiative aimed at addressing household food security in a poor community should be accompanied by policy and interventions targeting social services, particularly education and health, which compete with household food needs. In conclusion, given the dwindling land resources in developing countries, we suggest that international and local development policies should also focus on promoting alternative livelihoods opportunities beyond farming such as employment elsewhere or innovative alternatives to regular farming. Social protection programs such as cash transfers as an alternative strategy should also be pursued for the most resource poor.
In the autumn of 2020, Vice Versa publishes a series of articles on transforming African food systems to provide sufficient and healthy food to the growing population, while at the same time generating income and employment for the increasing number of young people. Our aim is to generate debate on this important topic within the Dutch international cooperation sector, running up to the parliamentary elections in March 2021.
The series is an initiative of Vice Versa in cooperation with Solidaridad, IDH Sustainable trade, Wageningen University & Research and the Food & Business Knowledge Platform and AgriProFocus, merging into the Netherlands Food Partnership this year
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