ECOM / SMS

INTRODUCING THE RULES OF THE INTERNATIONAL MARKET TO KENYAN COFFEE FARMERS

If you order a cup of coffee, you mainly want it to taste good. In the international market, however, more requirements are set. Are there good working conditions at the coffee plantations? Is production environmentally friendly? With the support of Hivos and coffee trader ECOM / SMS, small coffee farmers in Kenya receive training to be able to meet these requirements.

‘In many developing countries, poor people in the countryside depend on the national and international markets for selling their crops,’ Hivos employee Coen van Beuningen explains. ‘These products need to meet international quality standards. The problem is the increase in the number and the diversity of these standards – especially for food crops. In order to manage that increase, large producers employ full-time quality managers. But their small competitors cannot afford them. This causes them to lose market share. Hivos wants to support them in improving their competitiveness.’

Hivos therefore takes a market approach to the problem of poverty. Van Beuningen: ‘In Kenya we do this together with the international coffee trader ECOM. They know the dynamic developments in the coffee market. ECOM devotes much attention to social and environmental quality.’ The coffee trader founded SMS in 2006. In 2007 this daughter organisation started a three-year project together with Hivos, in which 11,000 members of four coffee cooperations receive training.

SMS employee Charles Nzioka explains the training programme. ‘The members chose 240 so-called promoter farmers. Each of them lives in a group of 45 farming families, gives the right example and supports others with growing coffee plants – from pruning, fertilising and harvesting to protecting the soil and managing crop disease and pests. They also ensure that the families plan their work carefully and that they deliver high quality coffee beans.’

The goal is for the farmers to succeed in meeting the quality standards. This also means that in case of problems, they take measures as a group. ‘Because’, Nzioka asserts, ‘only if they join forces can they maintain and expand their market shares.’

ABOUT THIS PARTNER (IN ENGLISH)

Kenya coffee is in high demand on the world market due to its inherent superior quality. Consequently, premiums for these coffees have the potential to be high. The introduction of certification (eg. Starbucks, Fairtrade, CAFE practices, Rain Forest Alliance, Organic Coffee and Utz Kapeh) has the potential of adding further value to those premiums.

Most co-operative farmers are ill equiped to take full advantage of these new opportunities in the coffee business. Low production levels, usually 4 to 5 times lower than that of well managed coffee plantations in the same region, are unlikely to guarantee them any tangible benefit. Cooperative farmers lack knowledge on basic mangement and crop husbandry skills such as pruning, coffee handling, soil management, etc. and yet today's coffee trade demand that they comprehend issues such as cupping, intergrated pest management (IPM), transparent record keeping and a respect for economic, social and environmental responsibility.

To take advantage of the opportunities and address the weaknesses of smallholder cooperative farmers, Sustainable Management Services Ltd. (SMS) was established on 24 July 2006 by Ecom Agroindustrustrial Corp Ltd in Switzerland and Sangana Commodities Ltd. Kenya. SMS focuses on the provision of management services for smallholders and small/medium estates, creating sustainable and feasible farming units through "best practices". SMS offers coffee extension and advisory services on all aspects of coffee business, farm management services, training on best coffee practice, and coffee liquouring and quality training services, coffee sustainability and certification, risk management in coffee business, proposal writing and project managent on behalf of producers and provision of farm inputs and credit facilities to run the coffee business.

Achievement of the first phase, include 258 promoter farmers trained 11,687 farmers on good agricultural practices. Premium grades increased from 60 % to 82 %, target was 70 %. Coffee yield increased from 1 kg per tree to 3 kg per tree, leading to better income to coffee farmers in a rather stable market. Promoter farmers are in the process of transforming into demonstration farms. There is continual improvement of coffee processing efficiency as a result of training wet mill staff. Lastly, there is a better cohesion of cooperative society members.

Hivos supports SMS because it addresses one of Hivos major concerns in Sustainable Production, namely improving smallholders economic position by their inclusion in world quality markets.

Type of organisation

Service organization /profit

Sector

Sustainable Production

Country

Kenya

Founded

2006

Hivos partner since

2007

Website

More information

» | About this partner (in English)

» | About this partner's projects (in English)

CONTACT

ECOM / SMS

» | http://www.ecomtrading.com/website.nsf/index?OpenPage

Nyeri Project Phase 2
DAC-sectors	Crop production Business and trade
Location	Kenya
Beneficiary	small farmers, fishers, pastoralists, forest dwellers
activity	functional QM systems 8 cooperatives
Direct outreach	8 - Policy level/ institutional
Indirect outreach	26687 - Beneficiaries: poor and/or marginalised women and men
activity	increase production high level farmers from 2.8 to 6 kg/tree
Direct outreach	258 - Intermediary level
Indirect outreach	11687 - Beneficiaries: poor and/or marginalised women and men
activity	increase production low lwvel farmers from 1 kg to 5 kg/tree
Direct outreach	280 - Intermediary level
Indirect outreach	15000 - Beneficiaries: poor and/or marginalised women and men
activity	train promoter farmers
Direct outreach	538 - Intermediary level
Indirect outreach	26687 - Beneficiaries: poor and/or marginalised women and men
Contract total	403.600
Contractperiod	01-01-2010 until 31-12-2012

Description

The second phase of the project aims to work with the 4 Farmer Cooperative Societies (FCSs) from the first phase, and expand to 5 new FCSs.

Increase of income is the first common objective to be achieved by improving quality and quantity of coffee. More income is expected to raise standard of living. Creating more transparency in decision making and provision of information in the 4 Societies is a second common objective.
Smallholder production maintains a higher level of employment in the Kenya coffee sector compared to the big coffee estates. The trend in the Kenya coffee sector is a decrease in smallholder production and an increase in the production of the big estates. So maintenance or creation of employment is a third common objective.
The 4 FCS are interested to develop a smallholder farming model which is attractive to the youth. The trend is that youth is leaving and that the average age of farmers is going up. Reversing this trend is a fourth objective.

Results and outcomes include income stabilization and increase, increase in premium grades, increase in average yields, enhancement of the performance of the promoter farmers and gender promoter farmers' training the farmers towards achieving the objectives and increase in number of young farmers.

SMS has proven that its approach contributes to a substantial income improvement at the level of smallholders, the cooperatives function better and are more transparent, whilst also addressing environmental and social sustainability concerns. With this project the promising results will be extended to 5 other FCS.