A pioneering three-year project to improve local Ghanaian soyabean production has resulted in impressive levels of social and commercial success The project – an excellent exponent of public/private partnership in action - benefited from a BLCF grant, management, evaluation and business links support.
Since September 2004, Ghanaian soyabean producer, 3K&A Industries, has been operating the country’s first small-growers outreach scheme for smallholder Soya farmers, linking them with the first Soya processing plant. The farmers training and inputs distribution was funded by £255,500 BLCF grant and a larger private sector contribution.
The project, supported by a local fund manager and the Independent Ghana Business Links Challenge Fund Panel, exceeded all targets while positively impacting a large number of smallholders, local communities and the wider economy. Above all, the project has shown it is commercially viable to invest in remote smallholders - something similar initiatives funded by big multinationals have struggled to achieve.
The project aimed to improve local soybean production and processing capacity while boosting the local economy. Previously, the processing plants were small and too distant from the main markets and soya production was of too low quality and quantity to be commercial. Fortunes were transformed by the Soya Outreach scheme which established a robust linkage between the 3K&A processing plant and local farmers. Investment in farmers’ training and an inputs distributions scheme ensured a larger, better quality and stable supply of raw soyabeans. It also gave the farmers a ready market for their crop and guaranteed incomes.
3K&A, supported by the BLC, aimed high – and succeeded. The new refinery has introduced new products and has achieved commercial profitability, while the existing smallholder outreach schemes are now financially sustainable without donor assistance.
Impact on local poverty level has also been profound. In the target northern regions, which constituted the poorest regions in Ghana (an average 80% of people live below the poverty line) the project aimed to boost the income of over 1200 farmers, creating direct employment of 65 individuals in the processing plant. The processing plant has 85 permanent and 20 casual employees – on an average wage of £2,168 and with social benefits - with 3K&A employing an additional seven management staff.
The rapid increase in farmers joining the scheme in the first three years speaks volumes for its impact on livelihoods. From an initial 750 in 2004, a total of 2,800 farmers are now participating, earning an average income of £531.24.
Market share has improved from 0.5% to an estimated 9% while capacity utilisation has soared from zero percent to almost 70% utilisation in the project’s short lifetime. The processing plant produces three value-added products: soybean oil, poultry cake feed and coconut oil – all branded and packaged in-house. Local soybean production has rocketed by approximately 14,000 tons in just three years.
The scheme focuses on the areas inhabited by the most financially disadvantaged and most disconnected from markets, and is the first initiative to invest in improving smallholders’ agricultural productivity.
The uptake resulting from 3K&A activities increased average production to 2,000kg soybean per hectare where inefficient farming methods used to result in 400kg per ha. Since 3K&A paid $30 per 100kg of Soya in 2006 the impact on incomes has been massive with farmers able to make an average $480 extra per hectare for the same land and effort. This benefits the less well-off, as they were less able to afford seasonal labor or animal power, and women as the demands on their labor are greater (e.g. child and home-care, fetching wood, cooking).
Finally, impact on the local economy has also been significant: 3K&A employed local companies in the construction of its processing plant, sourcing of packaging materials, transport and distribution. Such achievements are particularly remarkable in the face of the inevitable challenges faced, from governmental delay on its promise to ban soy imports, to frequent electricity cuts and competition from speculative traders.
The 3K&A Soya Outreach project remains solutions-focused and looks set to go from strength to strength in the future. With the support of EMG, it is currently seeking secondary funding to expand into new districts and to upgrade the factory to ISO standards.
For more information contact BLCF fund manager, the Emerging Markets Group at this address