Climate Change and Your Business Briefing Note Series | April 2014 Limited Increasing Climate Resilience through the Promotion of Sorghum-based Beer

Actions to Address Climate Change Box 2: EABL Partnership with the The promotion of sorghum as a replace- European Co-operative for Rural ment for barley was driven by cost con- Development siderations on the part of EABL, which was looking for a substitute for high-price barley. EABL introduced Senator Keg into the This project aimed to improve the level local market in 2003, a sorghum-based alco- of food security and living standards hol drink that was cheaper than barley-based of sorghum farmers in Eastern Africa beer. Senator was targeted at low-income consumers as a cheap and safe alternative by increasing the yields and overall to illicit liquors. Some analysts estimate that quality of, and providing a sustainable Senator now controls about 40 per cent of market for, sorghum. The project ’s regulated beer market, with a supply trained farmers on modern agricultural chain that employs over 100,000 people. methods relevant to sorghum farming, Sorghum production for beer brewing was provided subsidized seeds, and encouraged by a public-private partnership arranged agents for harvest collection. formed in by the Ministry of Agriculture, KARI, the provincial administration, Smart Logistics Improved agricultural practices meant Ltd., Equity Bank, and EABL. The partnership: that farmers produced up to 600 • Encouraged local production of high qual- kilograms of sorghum per acre in 2011,

Photo credit: Jo-Ellen Parry, IISD Photo credit: Jo-Ellen Parry, ity sorghum by smallholder farmers in the which translated into Ksh 10,200 Eastern Province by creating commercial per acre. production clusters of 20 to 30 farmers to hanging and unpredictable weather facilitate collection of the grain; patterns contributed to increased • Provided cheap loans for farmers; and • Guaranteed a fair price to farmers, with costs for local and imported barley, a timely payment. main raw ingredient in beer making. Anticipating possible cost increases Over a three-year period, EABL invested Ksh Cfor barley, East African Breweries Limited Box 1: East African Breweries 35 million in farmer mobilization, recruitment, (EABL) saw an opportunity to develop a new Limited (EABL) and training on sorghum farming and mar- product. They developed a low-cost beverage kets. KARI helped to produce and supply certi- brewed with sorghum, a drought resistant local fied gaddam sorghum seeds to 3,000 farmers in Eastern province. crop that is less expensive than barley. EABL’s EABL is ’s leading branded transition to sorghum as a main ingredient alcohol beverage producer renowned An additional incentive for sorghum culti- in its low-cost beverage was facilitated by vation was government and development dryland crop research undertaken by the for its brand and a selection partner efforts to reduce food insecurity Kenya Agricultural Research Institute (KARI). of products that range from beer and in semi-arid lands. An example is the EABL The move to a sorghum-based beverage has spirits to adult non-alcoholic drinks. partnership with the European Co-operative created new market opportunities for EABL The group is headquartered in for Rural Development that was launched in while providing a cash crop for farmers in 2011 (see Box 2). Another innovative partner- the semi-arid lands, helping them improve and has breweries, distilleries, support ship between EABL, KARI and Jubilee Insur- livelihoods, increase climate resilience and industries and a distribution network ance Company provides weather-indexed in- address food security. across the East African region. surance; meaning that farmers who lose their produce because of poor weather conditions 2 East African Breweries Limited: Briefing Note #12

creation of a sustainable value chain for the hedging against the risk of further barley grain has supported EABL’s strategic goal of price increases, bolsters local economies, and Box 3: Benefits of Sorghum substituting locally produced sorghum for increases climate resilience while enhancing Promotion imported barley as a raw ingredient for its food security in Kenya’s semi-arid regions. low-cost beer. This all makes sound business sense. These measures provide EABL with a local affordable The promotion of sorghum for use in EABL views corporate social responsibility supply of raw material, while providing a as integral to its business and supports EABL’s low-cost beverage has created reliable income for farmers. EABL’s initiatives adaptation-related efforts through its EABL numerous benefits: demonstrate how private sector leadership Foundation. Its Water of Life programme – in partnership with government, research • Commercialization of sorghum as a supports projects that provide safe, reliable institutions, and non-profit organizations cash crop. and sustainable water supply to communities – can improve business performance while living in water-stressed areas. • Enhanced climate resilience for boosting local economies, increasing climate farmers through improved and resilience and enhancing food security in reliable income streams and Business Benefits of Kenya’s semi-arid regions. enhanced food security. Climate-smart Action • Diversification of markets and lines The promotion of sorghum by EABL has of products for EABL, helping to provided a market for a crop that is more Acknowledgements hedge against the risk of barley reliable and adaptable than maize. Sorghum has proven to be a drought resistant crop that This briefing note was written by price increases. has helped farmers in the semi-arid lands, Samuel Alwala (Environment Cost areas that are vulnerable to climate change • Reliable supply of raw materials at a Management Centre) and Deborah and variability, and characterised by frequent price that benefits the producer and Murphy (International Institute for and prolonged droughts and floods. Farmers the buyer. Sustainable Development). The in the semi-arid lands will get a good crop authors thank Victor Ogalo, Kenya of maize once every five to six seasons, with Private Sector Alliance, Maliza this scenario expected to worsen with more will be compensated and have money to buy van Eeden and Margaret Kamau, frequent and severe droughts in a changing farm inputs for the next planting season. KARI Climate Development Knowledge climate. A viable market with a fair price means also remains a strategic partner in the promo- Network, Tom Owino, ClimateCare, that a farmer growing sorghum can buy maize tion of sorghum and works to improve sor- and Scott McFatridge, IISD, for to meet her food requirements from income ghum varieties for commercial use. Sorghum providing useful comments. earned through sorghum sales. Households farmers also benefit from micro-credit pro- also keep some of the sorghum for food, grammes that offer loans for the purchase of For further information, please enhancing food security at the household seeds and other inputs to improve farm pro- contact Victor Ogalo, KEPSA (vogalo@ level. Increased sorghum production and ductivity, while EABL reaps the benefits from kepsa.or.ke) or Deborah Murphy, IISD productivity builds climate resilience in these greater quantity and quality of production. ([email protected]). Infor-mation about communities by ensuring incomes and KESPA and its work can be found at EABL supports commercial sorghum growing enhancing food security. www.kepsa.or.ke. Information about in other parts of Kenya – including Nyanza, IISD and its work can be found at www. Mwingi, and Western regions, and Kirinyaga Sorghum provides an excellent substitute iisd.org. and Meru counties – In an effort to secure raw for barley, which is expensive and not always material for its low-cost beer brands. locally available. As a main raw ingredient in EABL’s Senator beer, sorghum is now a EABL has helped to create a common commercial crop that helps EABL diversify market for sorghum, providing fixed their market and line of products, assists in prices and income security to farmers. The

References

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(T) +254 20 2730371 | 2 | 2727936 | 883 [email protected] | www.kepsa.or.ke The Kenya Private Sector Alliance (KEPSA) Shelter Afrique Building, 5th Floor, Mamlaka Road P.O. Box 3556-00100 Nairobi Kenya