Finish Your Beer, there are Poor People in Africa, Pt. I of II

NGOs won’t touch tobacco – Mr. Billy Gates couldn’t honestly try to stamp out smoking in China while funding tobacco farming for the poor in Africa – but apparently booze is cool. That’s an oversimplification – rather the attitude is “Beer is gonna be brewed, let’s just brew it with something different that helps the poor.” That something different is sorghum, which is produced strongly in Western Africa. Guinness Ghana Breweries is using sorghum supplied by 7,000+ TechnoServe-supported farmers in the northern regions. Over the past 5 years, TechnoServe farmers have supplied nearly 7,000 tons of sorghum to replace 40% of the barley in Guinness’ Foreign Extra Stout, a meal-in-a-glass that I’ve taken to drinking to help the farmers (it even lists sorghum as one of the ingredients on the label…really cool stuff). Guinness is saving money by not having to import barley from Europe and is supporting local farmers, which has that nice corporate image thing going for it.

I was brought on at TechnoServe (TNS) – partly…this is one of my four projects – to document the project’s successes (and failures). TechnoServe recently sent me (way) up north for a week to drive around to villages and interview farmers on what impact it’s had on them. Throughout the time I was with Steve Mwinkaara (pic 1), the amazing sorghum project director who’s one of the most impressive individuals I’ve ever met. He reminds me of Gerson from CLUSA in Mozambique – a no-nonsense local who works his behind off and isn’t all starry-eyed about big aid plans to save the Rest. He just wants to pump out sorghum.

We started in Kumasi, where he picked me up from the airport and drove us up to Wa, about as far away as you can get from Accra. We stopped for lunch and met a friend of his who was looking to start up a commercial tomato farm and was looking at possibilities for sorghum to rotate with it (why he wanted to meet Steve). Two equity investors, both bankers, one of which was from the US, were also there to look at investing in the tomato farm (equity is pretty much the only way to go when loans bring interest rates of 15-20% or more). It was really cool to see how business deals get done.

In Wa we went to several villages where TNS had organized focus groups, and I was blown away by the response. When they ask farmers to come out, boy do they clear their schedules. At our first group in Sabuli village, I counted at least 50 people. At the second group, we were late and they waited over two hours for us. I got to try pito (not too bad), the local brew made from fermented sorghum. They were really talkative too. Person after person kept saying the same thing: We have to have this program. The guaranteed buyer (in Guinness) and bulk payment is key. Explained outgrower Francis Vuurong, “And these school fees – I have three brothers in secondary school. Now, with this project, when you get the money you immediately just go to pay the fee, and then you are free, waiting for the next year.” With bulk payments they can do something substantial instead of spending it bit by bit on things like pito as they wait for the price to rise.

TechnoServe has also made available over $3 million of credit through a microfinance organization. This has allowed bigger farmers to buy tractors and provide fertilizers and plowing services on credit to the outgrowers, who sell their sorghum to the bigger farmers who in turn sell to Guinness. Says nucleus farmer Augustine Sandow,“With [the tractor], I have now increased the acreage on my own. Initially, I could farm maybe 10 acres, 20 acres, but now I farm up to 100 acres on my own…And I’ve got workers under me who are paid monthly, men and women.” I made a comment about the credit being provided in the form of inputs, not cash directly to the men. Steve and the women joked that the men would just go and buy another wife. All the men laughed. They knew it was true.

Needless to say, I've been pretty impressed with the project thus far. I'll explain exactly why in the next post, but I'll also talk about the major failing of the program. As this project is ending next March, I'm preparing this report as a guide for what the next steps are Guinness meets with TNS and other stakeholders (I hate that word) later this fall. How this major failing fits into that is pretty important.