A Sustainable Canola Value Chain linked to Sustainable Farming System

Growing demands for edible oil in Kenya offer opportunities to build stronger value chains, as well as to upscale the practice of conservation agriculture. This is what a group of eight commercial farmers realized when they invested in a canola oil processing factory and entered into a partnership with SNV and Unilever. This article summarizes the lessons from a visit to these commercial farmers, Agventure and to their canola and sunflower processing factory. The venture has also established a Centre of Excellence for Crop Rotation, whose outreach officers assist medium-sized and smallholder farmers to apply conservation agriculture.

A group of Food Security Advisors and Agricultural Counselors from 12 Dutch embassies across Africa, Asia and the Netherlands visited Kenya from June 12 to 15, 2017. This “learning journey” was meant to jointly learn and reflect on results, successes and failures from implementing the Food and Nutrition Security (FNS) policy in the context of the aid and trade agenda. They visited selected projects implemented with support from the Dutch government. This article summarizes the findings from the third field visit.

Agventure Ltd.

The learning journey participants visited Agventure Ltd., a farmer-led business owned by eight large scale commercial farmers involved in growing rapeseed as a rotation crop for wheat and other crops. The company has a processing factory for rapeseed and sometimes sunflower, which supplies oil to Unilever as input into its margarine brand, Blue Band. The oil is sold to consumers through select shops as well. The venture has also established a Centre of Excellence for Crop Rotation whose outreach officers assist medium-sized and smallholder farmers to apply conservation agriculture. The Centre has observed that farmers gradually take on these practices as they see that yields can substantially increase. Currently, 5000 tonnes of canola are grown per year, of which 20% originates from smallholder farmers.

At the Madrugada Farm, one of the Agventure farmers, Jonti Barclay welcomed the learning journey participants and explained that the Agventure farmers are passionate about the concept of conservation agriculture. The main elements that they apply and promote are crop rotation, minimum tillage and control of traffic, and maintaining organic soil cover with previous crop residue. To minimalize weeds, farmers use recommended pesticides and fungicides. While the scientific basis for conservation agriculture is still debated, many donors are promoting this approach as it could promote soil health, productive capacity and ecosystem services.

The participants visited the canola and sunflower processing factory where 30 tonnes of canola are processed per day. The factory was established in 2011 at a time when the company was looking for a market for the rapeseed produce.  It currently supplies to Unilever’s Blue Band factory in Nairobi, although it does not yet meet Unilever’s full demand of 14,000 tonnes of oil per year. The company in partnership with SNV has been contracting about 500 out grower farmers to respond to this demand gap.

In principle, the factory pays the world market prices to the farmers. When discussing the viability of the business, it was explained that it wouldn’t be viable without the sales of the protein-rich byproduct used as animal feed. As compared to producing sunflower oil, the rapeseed oil production is more profitable.

Highlights

There are several highlights from the plenary discussions after visiting Barclay’s farm:

• Scaling up – With technical and marketing support from the Centre of Excellence, Barclay has seen the potential for scaling up with small and medium-sized farmers. He assumed that this works better for medium-sized farmers given that they have better economies of scale compared to small-scale farmers (or even large-scale farmers). From the experiences of Madgrugada farm, medium-scale farmers with 5-10 acres of land are more likely to increase their acreage on the next growing season. In Narok for example, a barley farmer has increased his acreage considerably after learning from the Agventure commercial farmers. The remaining learning question is where is the optimal returns to scale in this farming system?
• Promoting good agronomical practices – The canola case shows a large-scale application of conservation agriculture principles and practices, such as crop rotation and minimum soil tillage. For the Madrugada Farm, the switch to conservation agriculture was a matter of necessity given the yield decline of conventional crops due to erratic rainfall. The new management practices have resulted in less root disease, higher levels of water retention in the field, less soil erosion, and the possibility to harvest twice a year instead of once as explained by Barclay. He explained that some years ago his farm used to have contours and a draining tank to control soil erosion. However after implementing conservation agriculture, they no longer need to do the contours and the draining tank is mostly empty. “This is in fact about farming systems,” commented a learning journey participant.
• Partnerships – This business case is financed by SNV’s hortIMPACT program (33%), Agventure Ltd. (33%) and Unilever (33%), and it forms a part of Unilever’s sustainability agenda of increasing the share of locally grown and produced canola oil from the current 20% to 100% by 2019. The tripartite relationship between the partners has been exceptional. While public private partnerships may take time and trust to build, in this case SNV has been flexible, realistic and focused in terms of expectations, according to the Agventure team. SNV has been instrumental in supporting six field officers who carry out training in the field, making available its facilities in Nanyuki and Eldoret, and developing publicity materials. Agventure itself is also an important partnership.
• Spreading the lessons learned – Agventure Ltd. is passionate about building the capacity of small and medium-scale farmers to get to farming rather than leasing lands to farm more themselves. The experienced farmers who have experienced setbacks in their businesses are ready to spread their experiences and to train and contract SME farmers in Kenya, to initially purchase their rapeseed harvest. SNV has invested public funds to support and work with SME farmers through establishing knowledge ecosystems that transcend the sometimes limited farmers’ skills. Still, conservation agriculture is often a hard sell to smaller farmers as it requires good management skills and a long-term financial outlook. A question was asked whether Agventure Ltd. has any links to agricultural research or knowledge institutions, their team explained that there are numerous knowledge actors, but these are mainly focused on theoretical knowledge that may not apply to Agventure’s commercial practice. Agventure Ltd. however appreciates the role of research in informing practice in agriculture value chains.
• Enabling environment – The Centre of Excellence sets a demand of farmers as there is no agricultural infrastructure in most parts of Kenya, especially after the breakdown of effective extension systems. There is also no regulation regarding the importation of edible oil in Kenya.

Further reading

• Unilever, Agventure and SNV signed memorandum
• Brochure Conservation Agriculture by SNV and Center of Excellence for Crop Rotation