Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

18 May 2012

Agribusiness partnership to tackle poverty, Mozambique

At the G8 meetings in Washington D.C. today world leaders committed to lifting 50 million people out of hunger by promoting new partnerships with private companies. AgDevCo, a social impact investment company, is delighted to announce the launch of one such partnership in Mozambique.

Cervejas de Moçambique (CDM), part of the SAB Miller group, has signed a three year purchase agreement to buy maize grown by local smallholder farmers to use in its Chibuku beer. Until now all maize used in CDM’s beers and non-alcoholic beverages has been imported.

The three-year agreement was signed In Maputo on Friday with Empreza de Comercialização Agricola (ECA) Lda, a Mozambican marketing company, which is 45% owned by smallholder farmers. ECA will this month start producing maize grits for delivery to CDM’s factories in Beira and Maputo.

ECA works with its farmers to boost yields by providing access to improved seeds, fertilisers and affordable finance. In its first year many of ECA’s farmers have achieved maize yields of more than four tonnes per hectare.

“Linking our farmers to reliable markets which pay a fair price is central to our business model” said Grant Taylor, ECA’s Managing Director. “By increasing farmer yields 3-4 times we can help ensure families have enough food to eat and can sell their surplus for cash”.

CDM’s Adrian Mitchell, Director of Chibuku, said: “Sourcing raw materials locally is a key objective for us. Doing so makes good business sense and it contributes to the economic development of Mozambique. We are delighted to enter into this partnership with ECA and we see great potential for it to grow.”

One of ECA's farmer members with his family in front of a good maize crop

The first Chibuku beer to come off the factory line using Mozambican maize
Chibuku and other beverages made with Mozambican maize will be on sale from July 2012. ECA will buy maize from at least 750 Mozambican farmers in 2012 increasing to over 2,500 farmers by 2015.

ECA received equity investment and technical support from the Beira Agricultural Growth Corridor Catalytic Fund, which is managed by AgDevCo. A local commercial bank and a microfinance institution provided farmer loans and working capital for crop purchases.