East African Breweries Limited has started a new drive to recruit new farmers in Nyanza to produce sorghum, used in the manufacture of its popular drink Senator Keg.
The brewer says it is seeking to raise its sorghum uptake three-fold to 30,000 tonnes a year. Consumption of the low-end beer already soared more than three times in the last financial year, the firm’s managing director Andrew Cowan told investors on Friday.
Lawrence Maina, the General Manager of East African Maltings a subsidiary of EABL, said the focus was on small-scale farmers who can dedicate at least an acre to qualify for the production contract of the Sorghum.
“We have a target to provide up to 30,000 tonnes of sorghum in 2017, against the less than 10,000 tonnes that we currently get. This is why the drive to get smaller holder farmers, especially in arid and semi-arid regions is crucial for us,” said Mr Maina.
The firm is seeking to sign up smallholder farmers in contract-farming to grow White Sorghum. Maina added that as a business practice, EABL was looking at establishing a sustainable supply chain as a way of enabling rural farmers to utilise their semi-arid land by growing and delivering the critical raw material.
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Siaya, Homa Bay, Migori and Kisumu are the regions the firm expects to find farmers from. Brewers have turned to using white sorghum for their processes and this has seen farmers increase their cultivation of varieties such as Sila and Gadam.
Consumption of sorghum at home has declined over the years, causing many households to ditch the hardy crop. EABL purchases sorghum at Sh33 per kilogramme and an additional Sh1 to cater for transportation of sorghum for farmers from Western part of Kenya.
Sharp increments on excise taxes that came to effect last December resulted in higher prices for malted beer and subsequently, reduced consumption, according to Mr Cowan. Senator is, however, non-excisable since last year, and is the cheapest beer in the market where it retails at about Sh50 per half-litre serving.
It is expected that the slowdown in demand for EABL’s premium beers, which is the only listed brewer, is replicated across the market. But it is the experience with the Senator brand that helped the firm raise its beer volumes by a quarter for the financial year ended June 2016. Mr Cowan projects that the momentum in its consumption will be sustained to inform the decision to hasten the recruitment of new sorghum farmers.
Traditionally, the drier regions of Ukambani were the main sources of sorghum, where an estimated 32,000 farmers have been contracted. Siaya Deputy Governor, Wilson Onyango said the county government was ready to partner with EABL and local farmers in order to promote sorghum farming.
“Agriculture is now a devolved function; as such, I am encouraging our farmers to take advantage of this initiative that will not only enhance their livelihoods because of the available market at EABL, but also ensure that we are able to have enough for domestic consumption as well as food security,” said Mr Onyango.
He also encouraged farmers to form cooperatives in order to benefit from the contract adding that this was the only way farmers with small parcels of land could benefit. “Since the brewer will be offering seeds, as a county government, we are going to offer tractors for ploughing and fertiliser at subsidized rates,” he added.