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Cargill’s Fast Response to Small African Food Processors During COVID Helped Them
The sudden speed at which Covid-19 spread across the globe caused a significant shock in local economies, especially those that were already fragile. Volatile shifts in demand, border closures, lockdowns and the unknown nature of the disease had an especially dramatic impact on the most fragile supply chains, particularly in essential industries such as food production and processing. In sub-Saharan Africa, where sixty five percent of the population are smallholder farmers and eighty percent of the food supply is produced by them, buttressing the processing sector was urgent and critical.
Cargill stepped up almost immediately with a $250,000 grant. This private contribution was immediately matched by the U.S. government through the US African Development Foundation (USADF), doubling the impact. It was quickly dispersed to small, local food processing companies to help them keep the supply chain from seizing up. Ten companies in Ghana and Kenya, who are all clients of Partners in Food Solutions, each received $50,000 distributed through the Coalition for Farmer-Allied Intermediaries (CFAI)*, a joint action platform of organizations working in support of businesses in agricultural value chains. “Cargill understands the critical role of each link in agricultural supply chains. When CFAI asked for our help in supporting the small and medium-sized businesses that operate in the middle of the chain and are often overlooked by traditional aid, we jumped at the chance,” said Annie Kneedler, Senior Director, Corporate Responsibility at Cargill. “These businesses are critical to their local food systems and economies, and by supporting them we support the entire system, from the farmer to the consumer.”
Companies like Prosoya, a flour miller in Kenya that makes fortified flours and porridge sold to relief organizations like the World Food Programme, received the funding coupled with technical assistance at a critical time. “Our cashflow was greatly affected by the effects of the Covid-19 pandemic...the grant has helped us purchase soybeans from farmers hence giving them a source of income. We used the soya to fortify our products, hence meeting the nutritional needs of our customers,” said Prosoya Managing Director Kaburu Muguika. “The grant has also helped us maintain our workforce at this time...this has helped in sustaining our employee’s livelihoods and those of their families.”
Not only did these grants provide a needed cash infusion to buy raw materials, keep staff, and adapt the workplace for covid safety, they were also coupled with technical assistance from the CFAI members like Partners in Food Solutions and TechnoServe so that companies could stay afloat and strengthen their businesses at the same time.
Wimssy Fresh Dairy, who faced a forty percent decline in demand for fresh milk, not only kept their suppliers paid but were also able to successfully launch a new product to the market in August called Long Life Milk, a shelf stable milk that lasts 180 days without refrigeration.
Another recipient, Tropical Lush, a fresh fruit juice company in Kenya whose main customers are the hard-hit hotel industry, faced an eighty percent decrease in demand for their products. It forced them to put 65 percent of its staff on unpaid leave and reduce remaining staff wages by 25 percent. “Without the grant, we would not have been able to continue operations,” said Managing Director Adarsh Shah.
Taken together, the grants and technical assistance have already shown a significant impact not just on the individual companies but also on the wider local food ecosystem. All the recipient companies retained their staff, and some hired more. Demand for farmers' goods was maintained and they were paid on time."
*CFAI was founded by a group of leading organizations with a shared commitment to supporting the growth and resilience of the African food system– including Partners in Food Solutions, TechnoServe, Bain & Company, Root Capital, Land O’Lakes Venture37, USADF and ISF Advisors.