Oikocredit Journeys - About sponsoring
As part of the Oikocredit Journey to Kenya in 2024, Oikocredit is offering participating investors to contribute towards a capacity building project. The project will promote sustainable farming, community development, and environmental conservation among smallholder macadamia farmers in Kenya.
Macadamia farming in Kenya
Over the past few years, the farming of macadamia nuts has been the leading income earner for thousands of smallholder farmers across Kenya. The country is the third largest producer of macadamia nuts in the world and second largest after South Africa in the continent. The role of macadamia as a cash crop has steadily increased in recent years, making it one of the most lucrative cash crops in Kenya. Production in Kenya is dominated by smallholder farmers. The farmers cultivate macadamia trees primarily in mixed cropping with coffee and other products.
Macadamia trees were originally planted to provide shade for coffee bushes. However, prices of macadamia nuts have more than doubled since the late 1960s, which has motivated producers to gradually switch from growing coffee, maize, tea, and sugarcanes to cultivating macadamia nuts. With local production constituting around 25% of global supply, macadamia farming is a promising sector if carried out well. Demand is expected to continue growing. The global macadamia market is expected to expand at a compound annual growth rate (CAGR) of 11.2% from 2022-2032.
Jungle Macs EPZ Ltd.
Jungle Macs EPZ Ltd has been an Oikocredit partner since 2021. Jungle Macs is a Kenyan-owned and -operated company processing and exporting macadamia nuts since 2006. It accounts for over 50% of total macadamia production in Kenya all along the value chain. The company has a guaranteed 20% share of conventional macadamia farming and processing and currently carries out 80% of Kenya’s organic macadamia processing. Jungle Macs works with over 100,000 small scale farmers, field agents, transporters and factory workers, creating a significant number of direct and indirect job opportunities.
Jungle Macs has established itself as a brand locally and internationally over the years through its support of Kenya’s macadamia sector and through its work distributing high quality and fast-maturing macadamia trees. This is coupled with the offer of extra services for the smallholder farmers Jungle Macs works with (e.g. farmer trainings, provision of (organic) inputs, provision of seedlings) and networking with like-minded partners for the growth and sustainability of the sector.
About the project
Organic farming has become increasingly popular and important in recent years. Consumers all over the world are looking for safe food which can be traced back to the origin and certified as non-GMO, as well as food produced in a fair and sustainable way that’s free of chemicals. Organic farming is also becoming more important due to the environmental benefits. Organic farming can help to improve soil health, promote biodiversity, and reduce greenhouse gas emissions.
Demand for organically certified macadamia has continuously increased in recent years and is expected to grow even more in the coming years.
The key objective of this two-year project is to offer support to 10,000 smallholder macadamia farmers to transition to organic farming with an overall aim of improving quality and quantity. The goal is to plant 50,000 seedlings and increase the current production of 80kg per tree to 100kg.
Organic farming encourages diversity in terms of crops and animals. The smallholder farmers involved in this project will not only farm macadamia but will also grow other food crops under the organic system. Reduced use of chemicals will greatly improve their health and maintain long term soil fertility, encouraging sustainable rural livelihoods.
- Jungle Macs will conduct a mapping of the farmers in the growing regions in order to identify those with the right potential for this project. The potential farmers will be grouped into 50 clusters and registered into the administrative system of Jungle Macs. Subsequently, the 10,000 selected farmers will be trained for certification by Jungle Macs’ staff (50 trainers). The aim is to build a pool of 50 competent trainers who can then teach the material to other farmers to ensure sustainability in the long run.
- The 10,000 trained farmers will be provided with organic macadamia seedlings (50,000). These seedlings will be partly subsidised to make them affordable for the farmers.
- Certification of the farmers is done by Ecocert, the leading specialist in certification of sustainable practices. Based on the inspections, corrective action support will be provided where necessary. Kenya Organic Agriculture Network (KOAN) is the selected service provider for all capacity building. KOAN is the only network coordinating organic activities in Kenya.
- Ongoing monitoring of the farmers will be done by Jungle Macs’ team.
Benefitting farmers, consumers, the environment and the economy
One loan condition with Jungle Macs is that 30% of organic sales will be funded by Oikocredit. This project seeks to support this goal. The borrower wishes to enhance the loan amount from the current USD 7 million to USD10 million in the next season.
It’s Oikocredit’s intention to finance more organic nuts with market demand in Europe. Organic nuts fetch better margins for both the Oikocredit partner and the farmers the partner works with. This further strengthens the financial performance of the partner while positively contributing to improved smallholder farmer livelihoods.
Certification is done per farm, meaning all other crops and farming activities within the certified farm tend to benefit from the certification. Certified macadamia farms that also have avocados will further be able to sell the organic avocados to Jungle Macs, boosting the farm’s income. This is also in line with Oikocredit’s desire to get farmers to diversify sources of income and enhance the profitability and sustainability of smallholder farming.