Last Updated: Friday, 26 December 2014, 10:12 GMT

Trading your way out of poverty

Publisher Integrated Regional Information Networks (IRIN)
Publication Date 23 November 2012
Cite as Integrated Regional Information Networks (IRIN), Trading your way out of poverty, 23 November 2012, available at: http://www.refworld.org/docid/50b5dc4c2.html [accessed 26 December 2014]
DisclaimerThis is not a UNHCR publication. UNHCR is not responsible for, nor does it necessarily endorse, its content. Any views expressed are solely those of the author or publisher and do not necessarily reflect those of UNHCR, the United Nations or its Member States.

As M23 rebel fighters marched into Goma, in eastern Democratic Republic of Congo (DRC), a small group of people in the UK were watching anxiously to see what would happen next. They had spent the past three years working with coffee growers south of the city to get their goods on the shelves of Sainsbury's, one of Britain's biggest supermarkets, as part of a wider initiative to help Africa trade its way out of poverty.

The DRC coffee project was one of the first to get funding from the UK government's Food Retail Industry Challenge Fund (FRICH), which was set up by the Department for International Development (DFID) to encourage the food industry to buy more from Africa.

While British companies were comfortable buying traditional crops from traditional sources - coffee from Kenya, for instance, or cocoa from Ghana - DFID believed further trade with Africa was inhibited by a reluctance to explore products from untraditional sources.

Mark Thomas of Nathan Associates, which manages the Fund on behalf of DFID, explained: "We don't fund the business. We co-fund a project within a business to try something out, to get them over the risk hurdle which is preventing them doing it."

Coffee was a familiar African crop, but DRC was not a familiar coffee source. Farmers in South Kivu had been growing extremely high quality coffee, but because there was no easy access to markets, they had to smuggle it across the lake to Rwanda. There, it was sold for far less than it was worth.

Sainsbury's and its supplier, Twin Trading, got a FRICH grant to work with a growers' cooperative in Kivu to improve the quality and work out the logistics of exporting to the UK.

The scheme was a success, says Thomas. "The important thing was that they proved that extremely high quality coffee could make it out from this area. Now in the latest, fourth round of funding, the idea is to scale-up a bit, moving to the next valley down and another cooperative and put in more equipment. But all the coffee goes out through Goma, so obviously they won't be shipping just at this minute."

Enabling experimentation

For the recipient of another first-round grant, a trading company called Tropical Wholefoods, the risk was not political but about trying new crops and methods.

One of the company's founders, Kate Sebag, told IRIN, "The grant was to help our farmers diversify from pineapples and bananas into berry crops - strawberries, raspberries, blueberries and cape gooseberries. Strawberries and cape gooseberries have been the most successful.

"Raspberries were always seen as the most risky... Although they grew into large bushes, we got very little fruit… I think our farmers felt that if a crop was not going to survive the dry season without watering, it was better to grow something else. We have learned a lot. It's what they call 'action research' - you don't know until you try it."

Sebag says there were other challenges, too. "In a country where there is no tradition of eating dried fruit, it can be a challenge to get people to dry to the right consistency; there's a tendency to over-dry and obliterate the fruit just to make sure there's absolutely no chance of its going mouldy.

"But the grant from FRICH allowed us to take a risk, and to bring in strawberry and raspberry plants and subsidize the sale of drying equipment to the farmers. What I think this fund is good at is enabling innovation, and it is willing to work with private companies. It recognizes that private companies with an ethical orientation have a self-interest in getting the product to market but also a commitment to service provision for the farmers."

While first-round proposals concentrated largely on familiar commodities, recent projects have been more novel. For example the Eden Project and PhytoTrade Africa are exploring a project to import and popularize baobab powder and to develop a range of baobab products for the British market.

Changing perceptions


Something of a breakthrough has been achieved with the first grant to develop a market for African meat in Europe, says Thomas. However, the programme in question will see Namibian beef going on sale in Denmark rather than the UK.

"Right from the start there was some element of consciousness-raising," he told IRIN. "Not all products were going to have Africa written all over them, but we were never going to hide the African-ness of the products. But there are some products from Africa it is hard to sell in the UK - like meat, for example.

"I used to live in Namibia, so I know that Namibian beef is absolutely fantastic, and Namibia is one of only two countries in Southern Africa that are allowed to export meat to Europe. But at the moment, virtually all the meat goes into food processing; it's not sold as a prime cut, and a lot of that is about perception. But the Danish co-op will be selling steaks branded as 'Savannah', an African brand with an acacia tree on the pack."

This round of funding will be the last for the time being. It uses up the rest of the £7.4 million (nearly US$12 million) allocated to the Fund. DFID has recently had a change of minister, with Justine Greening replacing Andrew Mitchell.* "We are going to keep an eye on it, and draw any lessons we can to see where we go from here, but the new minister has already shown a very definite focus on helping countries to trade their way out of poverty," a DFID spokesperson said.

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