which now allows small-holder farmers in Kenya to marginally earn a
fraction more on their bananas than they would have made if they sold
it in the local markets.
Eric Muthomi, founder of Stawi Foods and Fruits, totally redefined
value addition. His company is making effort to reconnect society, and
provide genuine benefit to surrounding communities. In providing a
major buying culture change, he appears to have called time on the
model where middlemen served their own interests.
To create sustainable growth, banana farmers in Meru, one of the
largest banana producing regions in Kenya, needed buyers willing to
purchase their produce at responsible prices. Eric says, "It has been
the same cycle over and over. Farmers would invest heavily in banana
farming, only to end up disappointed by an oversupply in the market or
poor pay by middlemen. I thought farmers deserved better."
Middlemen were profiteering at the expense of the farmers because of
the low market prices caused by an oversupply of bananas to the market
during harvest time. Muthomi believed this situation required a shift.
Farmers reacted positively to this change, as they saw the replacement
of opportunistic minded middlemen with a more modest entrepreneur at
the top of what is becoming a major institution, Stawi Foods and
Fruits.
"I am happy when farmers come up to me and thank me for getting them a
market for their product. It is such a satisfying feeling," says Eric
Muthomi.
Partly due to the shadow cast by bananas not being available all year,
they usually become cheap during harvest time and expensive in the dry
season. Furthermore, the volatility in price was dangerous for
bananas, as it was a crop used to avoid famine and served as food
buffer in times of scarcity between cereal harvests. Due to this,
thousands of farmers remained poor as a result of waste and poor
yields from their banana harvests. Lack of storage and processing
facilities, bad roads and poor access to markets, also did not help
matters.
"I was looking for ways of providing a market for small-scale farmers
and increasing the shelf life of bananas, which would rot in farms,
especially those belonging to farmers who could not reach the
collection centres set up along the tarmac road on market days," says
the CEO of Stawi Foods and Fruits.
The farmers held their breath for many years, as about half of the
bananas harvested in Kenya either got rotten, wasted or never got
sold. Several farmers were left teetering on the brink of poverty, as
they suffered serious losses as their produce go to waste or was sold
at throw-away price. Muthoni's Stawi Foods and Fruits changed that
cycle. His company improved farmers lives by gauranteeing an income
for them.
Muthoni's banana flour is big business. On how he came up with his
innovative idea, he says, "My business idea was simple to come up with
because in my home community back in Meru bananas were grown in
plenty, and also it is not like banana flour is something common in
the country. It is a unique product for the market."
Stawi Foods and Fruits' competitive advantage is the nutritional value
that their banana flour adds to the health of every individual who
consumes their product," Banana flour can play an important role in
providing nutrition to consumers and solving the malnutrition problem.
Bananas are rich in nutrients, which are absent in conventional flour
such as maize and wheat flour. This means that banana flour is a good
source of nutrition to …infants and adults," explains Muthoni.
Another competitive advantage for the company is value addition. We
have been strong advocates for African businesses to engage in value
addition, and not just concentrate on selling raw products that can be
later processed, only for us to import what we had in the first place
as unprocessed raw material, Muthomi explains. "The food processing
industry is critical in providing a market for farm produce, creating
employment and curbing rural-urban migration. Value addition promotes
the export of finished goods rather than raw materials and earns the
country more foreign currency."
Viewed in another context, Stawi Foods and Fruits' rapid growth is
creating employment opportunities and empowering the youth and women,
which are two groups most vulnerable to being marginalized in any
economic set-up anywhere. Eric Muthomi was once quoted to have
said,"We are working with a group of 100 farmers. As we scale we will
need additional farmers to meet the demand for more raw materials.
Farmers benefit by earning more income. They also have a ready market
for their produce and do not have to incur additional costs of
transportation to Nairobi. In this country if you empower the women
and the youth; you are making great strides towards growing the
economy. Apart from employing young people, most of our contracted
farmers are women."
Despite the endless entrepreneurship promotional crusades by African
governments, little traces on the ground suggests any progress in
encouraging enterprise. From chaotic and ill-advised indigenization
laws, to blind protectionism policies, not to mention tiresome
business registration processes and over-regulation, entrepreneuers
have so much to contend with setting up their busineses. "Like for a
food processing business like Stawi, we have to get several approvals
and licenses from various government authorities, and it can be
tiresome. It would be good if the government could streamline this
such that whatever licenses a business needs can be obtained from a
single authority," lamented Eric.
However, the young entrepreneur says, "The best time to start is now
when you have nothing, because innovation, creativity and
resourcefulness are terms which define entrepreneurship.
"My intentions all along, even when I was studying at the university
was to go into business, run my own company. Do not wait for things to
be perfect for you to work on your goal, start with the little you
have. I had no money, I borrowed capital for the business from my
family."
Business opportunities never shrink. Inspiration, belief and
motivation is what lacks. Stawi Banana flour is fast becoming a
popular brand, which has successfully served the interests of
stakeholders equitably, and created a model and case study for other
African farmers and entrepreneurs with an interest in agriculture,
value addition and willing to join the African transformation agenda,
to rethink their objectives and refocus energies towards creating
sustainable agri-based ventures.
