Training and improved market linkages drive new Business Call to Action member, Equator Kenya.
Equator Kenya Ltd, a food-processing company that produces African Bird’s Eye Chilies for export, has joined the Business Call to Action (BCtA) with a commitment to provide climate-smart technologies, training and market linkages to 8,000 smallholder farmers along the Kenyan coast. This inclusive business is designed to reduce the crop risks posed by climate change, which will sustainably increase incomes among the farmers (6,000 of whom are women) as well as improve crop yields and quality.
At the core of the initiative is a low-cost water-efficient drip irrigation kit: Equator offers farmers the opportunity to purchase the kits on credit at subsidized prices. Since 2014, more than 1,500 farmers have acquired these kits, increasing production by 54 percent on average while significantly improving quality by eliminating water stress. Drip irrigation has also allowed farmers to produce chilies for ten months of the year (compared to between four and five months previously), creating year-round income. Equator aims to distribute an additional 8,000 kits, coupled with environmentally sustainable blended fertilizers and bio-pesticides, by the end of 2020. It will also provide marketing and sales training to more than 100 women entrepreneurs, and create ten new full-time jobs – also for women – in the company’s water filter production facility.
“Equator Kenya’s business model is guided by a social inclusion strategy where no farmer – however small – is excluded,” said Almut van Castern, the company’s CEO. “By creating linkages throughout the value chain, we will ensure that our profits – and the benefits to poor communities in Kenya’s coastal region – continue to grow. We are honoured to be recognized by the Business Call to Action and look forward to leveraging their expertise and that of our fellow members to further our work.”
African Bird’s Eye Chilies, also known as Piri Piri, are Equator’s principle crop. This variety of chilies is highly valued in the high-end retail markets of Europe, Japan and the United States. The company has a loyal and committed network of 7,000 active smallholder farmers working in some of Kenya’s poorest districts. In some areas, nearly 80 percent of Equator’s farmers are women. Most have low, seasonal incomes and many are illiterate.
Equator’s farmers receive intensive training from project experts on pest management, soil fertility management, erosion control and the use of ‘shading’ to protect against the higher and more fluctuating temperatures caused by climate change. Higher farm profits (through higher yields and price premiums paid by Equator) will increase household savings, creating a cushion against economic shocks that might result from climate change. Equator projects farm yields to multiply 20 fold, increasing incomes from US$21 to US$430 per planting unit.
Equator has established solid relationships with key importers and is projecting growth through 2020. It will export more than 100 tons of chilies during the 2014/2015 season and is on target to export 500 tons per year within three years. To handle improvements in productivity, Equator will employ a continuous belt dryer, which will enable the company to absorb farmers’ increased production and reduce its carbon footprint through a more environment-friendly heating and drying process. Importantly, it will also ensure the dried chilies are bacteria-free and meet stringent international quality standards. This will enable the company to increase the price premiums (up to 30 percent above market price) that its pays farmers.
“Equator Kenya’s inclusive business is a prime example of the power of the private sector to bring market-driven solutions to development challenges, creating a win-win-win situation for the company’s clients, its suppliers and its bottom line,” said Suba Sivakumaran, BCtA Programme Manager. “We are pleased to welcome Equator Kenya to the Business Call to Action alliance and look forward to working with them in the months, and more, ahead.”