The Livelihoods Fund, an investment fund created by private companies, has joined forces with Brookside Dairy, East Africa’s n° 1 dairy player, and Vi Agroforestry, a Swedish NGO with proven track record in sustainable agriculture. Together, they aim to improve the livelihood of 30,000 farmers through sustainable farming practices and milk-water-carbon value creation. The project was officially launched on Tuesday 11th October in Kitale.
The slopes of Mount Elgon are home to 2 million people. This ever-growing population exerts pressure on agricultural lands and natural resources. Farmers are in a vicious circle. Degraded lands – due to deforestation, inefficient agricultural practices and uncontrolled grazing – lead to low yields and low milk production. This, in combination with dairy farmers’ weak links to the dairy industry make agriculture a poor source of income in the area. At the same time, the dairy industry faces unsecured milk supply due to low milk production and seasonality. Moreover, the fertile soil of farmers is washed away at each downpour. Sediment loads threaten water resources and the entire ecosystem of the Lake Victoria.
The Livelihoods Mount Elgon project offers an integrated solution to address simultaneously these issues. Farmers are trained on sustainable farming practices such as agroforestry, crop diversification, fodder production and livestock management. These simple techniques require limited investment but deliver substantial results. Crop yields are expected to increase by 30%, milk productivity is estimated to double and milk production in the area will be multiplied by almost 30 after 5 years. Farmers are involved in the project through 1,200 groups and 15 existing cooperatives. The cooperatives are strengthened to enable farmers bulk milk, obtain better supply contracts, and to offer more services such as artificial insemination and veterinary care.
“This innovative project will make life a lot better for people who live in western Kenya. But we also hope that it can set a new standard for how businesses and NGO:s around the world can partner to fight poverty, hunger and climate change. It is an important step towards reaching UN:s Sustainable development goals”, says Henrik Brundin, deputy CEO of Vi Agroforestry.
In addition, a more efficient access to market is offered to farmers as Brookside Dairy is committed to purchasing their milk over a 10-year period.
“If a farmer increases milk production for example from 5 to 10 litres a day, he or she will find a guaranteed market. As a result, the farmer will definitely enjoy increased income. The private sector input in the project will make it very successful”, adds Emmanuel Kabaki, General Manager of Brookside Dairy.
The Livelihoods Mount Elgon project is built on an innovative model. A private fund bears the investment risk and receives result-based payments. A dairy company pays according to milk production. An NGO implements it.
The project will improve the livelihood of 30,000 smallholder farmers by contributing nearly 2 billion Kenyan Shillings to the local economy. It will also sequester more than 1 million tonnes of greenhouse gases over 10 years, and create tangible environmental benefits.
“The Livelihoods Mount Elgon project illustrates how investments in rural communities and family farming can be designed to deliver mutual value for farmers, businesses and society. It opens the way to new investment models, moving from impact investment to performance-driven models mixing public and private funding”, highlights Bernard Giraud, President of Livelihoods Venture.
Livelihoods Funds and its partners have gathered more than 80 representatives from governments, the private sector, NGOs and international organisations to discuss the first learnings and perspectives of these new approaches at the World Agroforestry Center in Nairobi. Learn more about ‘Investing in performance: a multi-stakeholder dialogue for more impactful public-private partnerships”.