Food processors benefit from financial, technical support from Visa Foundation, farmer allied organizations

AFRICA – The Visa Foundation, the philanthropic arm of Visa, partnered with the Coalition for Farmer-Allied Intermediaries (CFAI), to support eight food processing entities spread across the Eastern and Southern African region mitigate the effects of COVID-19 pandemic.

The CFAI members include TechnoServe, Partners in Food Solutions, and the United States African Development Foundation (USADF), who work with more than 600 African food companies.

Its mission is to catalyze a movement around vital small and medium-sized agro-food businesses in order to transform and build more resilient African food systems.

In support of CFAI, Visa Foundation provided resiliency grants to eight Ethiopian, Kenyan, Tanzanian, and Zambian food companies in 2021.

These companies include Delish & Nutri ltd based in Kenya; Beri Food Complex, Melkam Endale Dairy Farm and Milk Processing and Theday Agro Industry from Ethiopia; A.A. Nafaka Store Supply and Profate Investments based in Tanzania; and Zambia’s Legacy Manufacturers and Omega Foods.

Other than the financial backing, the organizations benefited from technical assistance from USAID’S Feed the Future initiative – Alliance for Inclusive and Nutritious Food Processing, and CFAI members.

The support enabled the food processors to weather the crisis, further stabilizing markets for more than 1,500 farmers (of whom approximately 45% are women).

It also contributed to maintaining 300 jobs and creating new employment opportunities for nearly 100 workers (of whom 55% are women), and supported the production of nearly 2,000 MT of nutritious foods for local consumers.

Food processors manufacturing essential products like flour, milk and yogurt, and therapeutic foods are vital links in the center of value chains, purchasing crops from smallholder farmers and producing nutritious, safe, and affordable food for consumers.

This financial and technical support helped the businesses overcome some of the most significant challenges they faced, including disruptions to their markets and sales channels, scarcity of raw materials and rising sourcing costs, adapting manufacturing operations to keep their employees safe during the pandemic, and a lack of sufficient capital to pay workers and suppliers on time.

With the resiliency grants and technical assistance, the eight food processors were able to increase their annual sales by 70% from US$2 million to US$3.4 million, retain and expand their workforce by 15% (86 new jobs, 55% women).

Also, they were able to purchase 480 MT of crops grown by 1,500 smallholder farmers through on-time payments totalling nearly US$240,000, and increase production of nutritious food by 75%  from 2,370 to 4,180 MT in 2021.

Without this support, “We would have greatly struggled in maintaining operations and staffing since the cash flow was much affected,” said James Muturi, the founder of Delish & Nutri, a Kenyan company that manufactures peanut powder as an affordable source of protein for low-income consumers.

The firm was squeezed by disruptions to its supply chain, which caused a 40% increase in the cost of raw peanuts.

The backing from the parties enabled Delish & Nutri to purchase 19 MT of peanuts from smallholder farmers, and look to the future with optimism.

“We now have adequate stocks to process current orders, and the farmers we have purchased from are happy due to timely payments and significant quantities purchased,” said Muturi.

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