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July 16, 2008

Ghana, Sierra Leone sorghum farmers partner with international beer brands

The key ingredient for a successful public-private partnership (PPP) is profit, albeit different kinds of profit for those involved. For private sector businesses profit is economic, whilst for public institutions, profitable outcomes are social. In successful partnerships, however, each brings something of value to the relationship, thereby ensuring that investment is secured and greater efficiency achieved.

In Sierra Leone, a poor post-conflict country, a PPP - which started as a social experiment - has resulted in a sustainable business: brewing.

Sorghum is used in brewing the beer consumed at many African weddings. But until recently, it has not been the grain of choice for international breweries such as Heineken International, a Dutch company, and the third largest brewery in the world. In all the 170 beers that Heineken produces and sells for national and international markets, the key ingredient is malted barley. However, in Nigeria, Ghana and Sierra Leone, barley is now being supplemented by sorghum.

Diageo, the world's largest premium drinks company and owner of stout-brand Guinness, has also become involved. The company has provided its support to sorghum farmers in Sierra Leone and Ghana and, if trials are successful, it plans to brew stout from sorghum in countries across Africa.

The five-year project in Sierra Leone began as a corporate social responsibility initiative, with the two multinationals supporting farmers to grow the high quality sorghum required for brewing. Linking up with the European Co-operative for Rural Development (EUCORD), funding was provided by the Common Fund for Commodities (CFC), as well as by Heineken and Diageo themselves.

Since 2006, EUCORD has trained farmers and organised them into groups, as the drinks companies do not buy from individual farmers. Heineken and Diageo have supported the supply of inputs at discounted rates and bought the sorghum produced at a guaranteed price. During the pilot phase in 2005, the Sierra Leone Brewery Limited (SLBL), a Heineken/Guinness subsidiary, bought local sorghum from 1,500 farm families, who delivered their grain to central collecting points. Since that time, the project has expanded across the country and the number of farmers involved has more than doubled.

Ghana's sorghum farmers have also been benefiting from the Heineken, Diageo and EUCORD partnership. Around 1,000 farmers have been involved and by the end of the first growing season they had surpassed their target of 800 tonnes by more than ten per cent.

At the end of the five year project, the partners believe the sorghum supply chain in Sierra Leone will be sustainable. Indeed John Mbonu, general manager of SLBL, reports that some of the farmer cooperatives are already self-sustaining and no longer require seeds on loan. Within the next two-to-three years, he expects most groups to be self-sufficient.

In less than three years, the economic impacts of the project have been impressive. Almost a quarter of Sierra Leone's population is defined as food-poor, surviving on less than US$0.35 per day. For farmers involved in the project, receiving up to US$15 per 50kg bag of sorghum, has brought about significant improvements in livelihoods. In 2005-6, the 1,500 families involved in the project received a total of US$210,000 for their sorghum. However, the wider impact within the local economy of paying smallholder farmers was estimated at around US$630,000.

For John Mbonu, these figures are particularly encouraging, as they indicate that wealth is being transferred from the non-poor, who buy the beer, to the food-poor who have an opportunity to improve their lives. And he admits that SLBL is also benefiting, particularly as the cost of imported malted barley has recently doubled. Malted barley is still an important constituent of its beers, but with local sorghum now providing a greater proportion of the grain used, the company is looking to expand its activities into other sorghum-producing countries, including Rwanda, Burundi and Democratic Republic of Congo.

As a result of the project's success, the governments of Ghana and Sierra Leone have become more involved and are now providing farmers with microcredit for seeds and fertilisers. A similar project is now on-going with USAID co-sponsorship in Nigeria, and another one is planned by Winrock International, EUCORD's parent organisation, in Cameroon.

Whilst donors are often uneasy about funding initiatives that they feel multinationals themselves could support, and are aware that bringing together partners with different business objectives is not always easy, this successful PPP has demonstrated that innovative, demand-led agricultural development is possible even in post-conflict countries such as Sierra Leone.

New Agriculturalist

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