Growing Food Security in Kenya with Improved Seed
Client Profile: Freshco
“We say in Kenya that if you don’t have maize, you don’t have food,” says James Karanja, co-founder and general manager of Freshco. In a country where people depend on maize for almost 50 percent of their daily caloric intake, a poor harvest can lead to hunger and starvation.
Many small-scale farmers entirely depend on seed they’ve saved from the previous harvest, which is low-yielding and vulnerable to pests and drought. A severe drought in 2009 drastically reduced maize production, and even though conditions have improved somewhat since then, climate change is believed to have permanently altered Kenyan weather patterns.
“There were always two seasons of rain in most areas – long rains and short rains,” explains Karanja. “But what used to be long rains are now short rains, and what used to be short rains is no rain.”Freshco was founded by Karanja and three partners to serve the small-scale farmers who make up 75% of Kenya’s rural economy, and who grow most of the nation’s food. To get better seed into the fields of as many growers as possible, Freshco must be more than just a seed processor. The firm has to convince local agrodealers to carry Freshco products, and must also educate farmers on how to manage their land for higher output.
Kamau Mbiri grows a variety of crops, including maize, in rolling hills at the edge of Kenya’s Mau Forest. He says, “Freshco is a good company because they are in touch with people on the ground. They hold meetings and workshops, and they come to your field to show you how far one row of maize should be from another, and how far apart each seed should be. I have used other seed in the past, but production was never as high as with Freshco.”
To meet demand, Freshco doubled production of its 11 varieties of maize seed last year – an increase that would not have been possible without Root Capital financing. The firm can only fulfill its orders if it has enough cash to buy raw seed well in advance of the planting season. Freshco must also maintain its staff of 18 during periods when little seed is sold, and employ dozens of additional workers during peak periods.
“The loan from Root Capital was a Godsend to us,” says James Karanja of Freshco. “It enabled us to pay our seed growers in time, and to plan for growth in coming years. In the past we couldn’t plan ahead, because we had limited access to capital. If we could get a loan, it would have a very high interest rate, and the term would be too short.”
As with most agricultural businesses, Freshco’s finances are tied to the harvest cycle; expenses are highest early in the season, when revenues are at their lowest. Root Capital lending is structured around the irregular cash flows of the rural economy. “The Root Capital loan touches all the farmers that we deal with,” Karanja says.
The distribution of Freshco seed also benefits small rural business owners, such as Esther Kiringu. She and her son own a store in Njoro that sells fertilizer, seed, and other farming necessities. The effort to increase maize yields in Kenya depends on small-town distributors like Kiringu, as traveling long distances to buy seed isn’t feasible for many farmers.
“My role as an agrodealer is to make work easier for the farmer. We are a farm family ourselves, so we understand what they need and can give them advice,” she says. “I know that the Freshco product works because now we have customers asking for it by name. Maybe they heard from a neighbor, or saw his field and wanted the same results.”
Esther Kiringu, like James Karanja and the people of Freshco, knows how important better maize production is to Kenya. She says, “What I like most about my job is that I am able to touch people’s lives.”