Sorghum Soars in Kenya
Sorghum production in Kenya is set to expand rapidly, following a recent government decision to roll back taxes on sorghum beer. To help stakeholders take full advantage of the new opportunities, 2SCALE hosted a meeting of industry stakeholders, aiming to create business linkages and introduce enterprise-management tools to increase efficiency of the sorghum value chain.
The meeting, held in Nairobi in June, brought together East African Malting (EAML, a major sorghum buyer), aggregators and financial institutions. It provided a platform to discuss market requirements (volumes, quality parameters), contracting mechanisms, delivery schedules, financing and other issues. The brewery aims to purchase 15,000 tons over the next 12 months, as raw material for their popular Senator beer. The challenge for aggregators is to overcome financial, logistics and other challenges to purchase and deliver sufficient quantities of high-quality sorghum.
One session focused on ICT tools for companies whose supply chains involve large numbers of small-scale farmers. 2SCALE is helping to promote E-Prod, an affordable software platform being used by a number of horticulture, dairy and grain enterprises in Kenya. Two E-Prod users led a discussion on how ICT could improve nearly every segment of the value chain.
Laurence Maina, who coordinates EAML’s sorghum purchases, is impressed by what E-Prod can do.
“I could not believe it,” Maina says. “Most of our suppliers rely on pen and paper. One supplier uses E-Prod and now has comprehensive data on 7,000 farmers – quantities supplied, payments, loans, deductions, even the physical location of each farm. If all our suppliers could be so organized, it would make our work much easier.”
Another session was about finance. Teams from Chase Bank and Financial Access described their product portfolios. They are keen to expand agricultural ending, and are already working with 2SCALE to design innovative financing mechanisms for aggregators and smallholder farmers. The prospects are encouraging. For example, Chase Bank lent $ 6 million last year through its inventory credit program alone. E-Prod can act as a catalyst for these transactions, because it enables lenders to quickly screen large numbers of loan applicants to identify the most suitable.
Other discussions focused on low-cost storage, mechanization and other areas. Gerald Gacheru, EAML Agribusiness Manager, said:
“This kind of forum is almost unique. Everyone is here, and we can discuss practical solutions to practical problems. If only we had more platforms like this!”