Private and public sectors merge to support farmers in Africa

AECF is a 200 million dollar private sector fund started by the Green Revolution in Africa (AGRA) and is partially funded by Sida. They are focusing on financial projects, through grants and interest free loans, which will have a broad development impact on the rural poor.

The goals of AECF include providing funds to organizations in need who can use it effectively. They also must meet the broader aims of public policy. Moreover, these goals have to be carried out with transparency. Swedish support for AECF is allocated through Sida’s Unit for private sector collaboration and ICT. Sweden, through Sida’s private sector collaboration program, in cooperation with other development actors such as UNIDO and DFID, can collaborate with businesses to partially finance their initiative. However, the objective of the initiative must meet the objective of Swedish development cooperation.

The AECF fund is in the forefront and Jan Grafström, a senior advisor working for Sida, believes it’s a good one. “Projects are up to 50% supported by donors such as AECF and, in certain cases, it provides companies with professional counselling and mentoring as well.”

AECF is structured to match the commercial interests of private companies with the agricultural needs in a particular country, and at the same time emphasize sustainable corporate engagement.

AECF offers funding which target specific economic sectors in specific countries or for projects involving several countries. It includes research-based agribusiness, renewable energy and rural financial services.

Fish farming offers sustainable protein in Kenya

In western Kenya, AECF has co- funded the development of Dominion Farms aquaculture programme, which helps developing fish farming in Kenya. The project complements nearly 40 million dollars of existing operational investment and infrastructure development. Fish was once a reliable source of protein in the Lake Victoria area in western Kenya, but over-fishing has been a problem. Dominion Farms has stepped into this area to fill the gap.

Dominion has become one of the major producers of quality fingerlings (baby fish) and has been commissioned by the Kenyan government to produce two million fingerlings per month to sale across the country. Indeed, fish farming has taken off markedly and has the potential to ensure food security unlike most other indigenous crops.

Silvanus Obunaka was once a farmer of maize and other low value crops. But several years ago he responded to a government proposal to promote fish farming and has since then worked with Dominion. He has now established five ponds and purchased 5000 fingerlings. He describes the work as hard and intensive, but says that his life has improved since he began the programme.

In an effort to support the sustainability of the new fish farming market, Dominion is also working to develop a centre of excellence for fish farming. Among other things they will focus on fish breeding research.

Dominion aims to be fully self-sufficient and profitable, and with this in mind it is providing its own electricity for pond aeration. Contract farmers will produce the raw ingredients for fish feed on site to guarantee supply. The company will also use a blast freezer to freeze fish in 12 minutes for export to markets in Europe and in Africa.

So far the project has transformed one of the poorest areas of Kenya. When Dominion arrived it was reported that around 85% of the population was living below the poverty line. There were no bicycles, poor roads and the hallmark of malnutrition - children with bloated stomachs – was a typical sight. Tribal customs of land distribution into many tiny plots has contributed to the creation of ‘rural slums’.

In Tanzania, dairy farming has improved

AECF also works in neighbouring Tanzania, where it has invested in the efforts of the Tanga Fresh Ltd. to support the modernisation of its milk collection and communication systems. Tanga Fresh has become one of the major suppliers of fresh milk products to Tanzania’s commercial capital, Dar es Salaam. Jane Magawa’s standard of living has improved dramatically as a result of the programme. A 53-year-old widow, Jane has been supporting four children on municipal workers salary of about 7 dollars a month. But through Farm Friends Tanzania, she was able to buy a dairy cow, and through hard work, she now has seven cows. Jane now employs one worker and earns about 450 dollars a month. Indeed, Jane is delighted with the service and gives it credits for improving her life. Since she began participating, all four of her children have completed secondary school and she has even built a brick house with a new roof.

Another example is Mohamed, who barely earned his living as a subsistence farmer, has now begun dairy farming through the programme. He says dairy farming is “in the blood now” and hopes never to return to subsistence farming again. In 2008 Tanga Fresh developed a project called the Modern Dairy Service Network, which improved the organisation’s milk collection system. The project involved improving commercial milk collection, processing and marketing. Then in 2009, Tanga Fresh secured a matched-fund grant of 700,000 dollars from AECF. The grant was good for 3 years, to 2012. The project has enabled many subsistence farmers to take up dairy farming by improving deliveries to the market. AECF will also help fund the Dairy Farmers information service -- a mobile telephone text message service. The service provides milk producers with market information. About 2,000 out of Tanga Fresh’s 4,500 farmers access the service.