Summary

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Homegrown Kenya Ltd is a large-scale plantation that grows and processes a range of flowers and vegetables for export. It also buys in vegetables from local outgrowers for processing and export. 

Homegrown was certified to supply Fairtrade flowers in 2007 and had its certificate extended to export Fairtrade fresh vegetables under new producer standards in April 2010. 

Outgrowers are small-scale farmers who have mostly organised themselves into self-help groups or farmers’ associations but don’t have the systems and structures in place to be certified under the Fairtrade standards for small producer organisations (SPOs). The new producer standard enables outgrower groups to access the benefits of Fairtrade by supplying Fairtrade certified plantations.

Homegrown Background

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Homegrown commenced operations in 1982 supplying produce from Kenyan smallholders. In 1988 it acquired its first farm, Flamingo Farm, in Naivasha and over the next 18 years steadily expanded its Kenya-based growing operations and set up businesses in the UK to market its products. Throughout this period it continued to expand its outgrower network to over 1,000 small-scale farmers. Homegrown has a team of agriculture advisors working in the field with these small-scale farmers helping them meet international good agricultural practice standards, a requirement for them to access European markets.

In 2000 the business of Homegrown and its marketing businesses in the UK were consolidated into the British- based Flamingo Holdings Group. In 2007, Flamingo Holdings was acquired by Finlays. Finlays has interests in tea and flower production in Kenya, Sri Lanka and China. In Kenya, all Finlays flower farms and one tea estate are Fairtrade certified.
 
Finlays’ horticulture business is made up of 30% pre-packed and prepared vegetables and 70% flowers, 40% of which are produced on the Finlay Group’s six farms in Kenya and the balance from Holland, South Africa, Guatemala, Peru, Thailand and UK. Over 12,000 people are employed in Finlays’ horticultural activities world-wide, approximately 10,000 of them in Kenya. The Group’s main customers are UK multiples including the Co-op, Marks & Spencer, Morrisons, Next, Sainsbury’s, and Tesco, along with Omniflora, a leading German importer, wholesaler and distributor of flowers.

Structure

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Homegrown’s Fairtrade certificate covers a packhouse and five farms that grow and process flowers and vegetables. The main vegetable processing and packing unit is located at the Jomo Kenyatta International Airport (JKIA), Nairobi, which is also the site of the centralised freight hub which collects and consolidates product ready for air freighting to Europe. On average, 900 workers are employed at JKIA, and the farms employ a further 7,700 workers. Siraji and Ibis farms are located in the Mt Kenya area and Flamingo, Kingfisher and Hamerkop farms are near Lake Naivasha. Flamingo and Hamerkop grow flowers while Siraji, Ibis and Kingfisher grow both flowers and vegetables.

Flowers are grown all year round on almost 200 hectares (495 acres) in greenhouses or tunnels and include roses, lilies, standard carnations, spray carnations, gypsophila, and solidago. In 2009 more than 345 million stems were produced, mainly for export. Of these, 32 million stems, or 9% of the total, were sold to Fairtrade buyers.

In 2009, 7,000 tonnes of vegetables were exported of which 2,000 tonnes were produced in-house - mainly runner beans and tender stem broccoli. A further 5,000 tonnes of fine beans, extra-fine beans, baby corn, garden peas, mangetout, cascadia (saxifrage), and carrots were grown by a network of 73 outgrower groups. The ideal growing conditions mean that beans and peas, for example, may have up to four harvests a year. 

Processing

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Flowers are processed and packed on the farms while all the vegetables grown on Homegrown farms are transported to the JKIA packhouse in Nairobi for pre-cooling, processing, grading, and packing.

Farmers from the outgrower groups take their vegetable produce to the group’s shed where it is weighed, graded, and temporarily stored in a cooling station. It is then collected by Homegrown trucks, inspected for quality, and transported to JKIA where it is inspected again, weighed, and placed in cold store before processing. Depending on the variety, this can include top and tailing of beans, shelling of peas, bagging and labelling, weighing and boxing. The produce is then re-cooled prior to loading and air freight. Vegetables have a 16-hour turnaround from being picked to being flown out of Nairobi airport, with Homegrown having one fully loaded flight a day to the UK.

Homegrown & Fairtrade

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Homegrown was certified to supply Fairtrade flowers in 2007. Its customers now include the Co-op, Marks & Spencer, Next, and Sainsbury’s. In April 2010, Homegrown was certified to supply Fairtrade fresh vegetables (fine beans, extra fine beans, runner beans, garden peas and mangetout) grown on its own farms and sourced from outgrowers. Initially Homegrown will supply Fairtrade buyers with fine beans and extra fine beans produced exclusively by its outgrower partners. 

This development comes as a result of a review of Fairtrade standards for vegetables. Until September 2009, suppliers of Fairtrade vegetables had to be able to meet the Fairtrade standards for SPOs. This meant that most vegetables producers from Africa weren’t eligible for certification as the producer models in African supply chains didn’t fit with Fairtrade standards.

Because export produce has to meet strict rules for freshness and quality, many vegetable farmers in Africa either sell their produce to larger plantation companies that can invest in the necessary equipment and certifications or sell directly to exporters. Many of these producers are small-scale outgrowers who are either not organised into groups or whose structure doesn’t meet the Fairtrade criteria for SPOs. To overcome this, a new standard¹ has been developed to enable outgrowers to enter the Fairtrade system and access the benefits of Fairtrade. The standard allows for the certification of plantations that source additional volumes of vegetables from SPOs and outgrowers. Plantations must source a prescribed percentage of vegetables from outgrowers, starting with 10% in their first year of certification for vegetables, 20% in the second, and thereafter increase the percentage in line with an agreed sourcing plan.

Plantations must support outgrowers in forming self-help groups if they haven’t already done so. In the longer-term, plantations must provide support and training to enable outgrowers to put in place the systems and structures necessary to become certified in their own right under the Fairtrade standards for SPOs. If the outgrowers aren’t on track to meet the standards within six years, the plantation must contract a third party to provide additional support.

This new standard will help small-scale farmers to access social and economic benefits through the Fairtrade minimum price and premium and provide support towards implementation of more sustainable agricultural practices to reduce their impact on the environment and water resources. In Kenya alone, an estimated 800 SPOs produce vegetables, of which approximately 60% could potentially supply the European market.

Outgrowers

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Homegrown buys in vegetables from small-scale farmers from 10 areas located in the higher rainfall areas in Kenya. Initially, 23 groups in Mweiga and 11 in Meru have been identified to supply Fairtrade beans. Each group has a membership of between 2 and 20 farmers and represent a total of 343 farmers. Farms are up to 5 acres (2ha) in size and use family labour and seasonal casual labour. Homegrown provides the groups with the necessary technical support and training to ensure their produce is grown to the high standards demanded by their customers. This includes providing seeds and chemicals at subsidised prices.

Stephen Kairu is a member of Mwamba outgrowers, a group of 10 farmers from the Mweiga group formed in March 2008. He lives with his wife Mercy Nyambura, and two daughters as well as his mother and sister and her two children. His daughters are Joan Wanjiri, 4, who goes to nursery and Mary Wangechi, 7, who attends primary school. Stephen rents 4 acres (1.6 hectares) of land and grows vegetables on three of them. His main cash crops are fine beans and garden peas along with baby corn which is planted between the fine beans to maximise land use. Maize, bananas, cabbage, and spinach are grown for home consumption and cows are kept for their milk.

The global recession has seriously affected farmers’ incomes with dramatic rises in the cost of food and farm inputs like fertilisers. But Stephen cites the lack of water as the major problem for farmers and the wider community. They get their water from the Ewaso Nyiro River which flows down from Mt Kenya to water the dry plains that stretch east from the Great Rift Valley. In 2009, the river dried up when the rainy season from March to June produced very little rain, causing severe drought in the region. However, the traditional long rains started early in 2010 and there is now more than enough water for production.

Stephen says the farmers’ main problems are caused by their production being affected by unfavourable weather and changes in consumer demand that make their markets unstable, create insecurity and make their incomes unpredictable. He says: ‘If there were no financial difficulties we would spend money on development and we would be trying to develop the community around here.’ 

Stephen dreams of owning his own farm and a better life for his children. Primary education is now free but few children continue into secondary education because it is expensive. He says: ‘I would really like to invest in my children, particularly in their education. I would really like to give them the best education possible. And then they can go to greater heights.’ 

The additional benefits of selling their vegetables on Fairtrade terms can help outgrowers like Stephen invest in their families and communities. He has this message for UK vegetable shoppers: ‘The vegetables that we are growing are very healthy. We use fewer chemicals because that is best for human consumption.’  

Fairtrade Benefits

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Fairtrade certification for Homegrown flower farms and packhouses ensures the workers have the right to core labour standards including the right to join a trade union, the right to collective bargaining, freedom from discrimination, decent employment conditions, a safe working environment, and no forced labour or child labour. The workers also receive the Fairtrade premium, an additional sum for them to invest in projects of their choice to improve the quality of their lives and invest in their futures. 

Under Fairtrade fresh vegetable certification, the benefits to outgrowers include:
• payment of at least the Fairtrade guaranteed minimum price, which is calculated to cover costs of sustainable production
• the additional Fairtrade premium to invest in business and community improvements of their choice
• payment within seven days (instead of up to three weeks)
• support to build and strengthen the capacity of their farmers’ organisations.  

Fairtrade Premiums

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The Fairtrade premium from sales of Homegrown products can only to be used to fund projects selected by workers employed on the flower and vegetable farms and the packhouse in Nairobi. The premium fund is administered by a Joint Body (JB) made up of elected workers and one or more management representatives. The management members use their skills and experience to guide the JB in project management, finance, accounts, and administration, while the overall decision-making power rests with the elected members. Because Homegrown operates several sites the premium is paid into the account of the central JB then distributed to regional JB accounts at Nairobi, Naivasha, and Mt Kenya, according to worker numbers. The company appoints Fairtrade Officers at head office and at each farm to liaise and communicate with workers on Fairtrade related matters.

Premium use from flower sales
The premium has been used to organise various workshops such as audit programme training to build the capacity of the JB and its members. The farms have funded literacy projects and a revolving fund for workers to improve their living standards and purchase household items. They have funded various training courses to improve employment or income opportunities, such as driving skills, computers, hairdressing, and accountancy. A classroom was built at Longonot school in Naivasha to reduce high class numbers and improve students’ performance. A solar panel project provides an alternative to the unreliable rural electricity system, and gas cookers provide an environmentally friendly alternative to charcoal and firewood.

Premium use from vegetable sales
The vegetable outgrowers will receive their first premiums in spring 2010. Members will decide democratically how to invest the premium and an elected committee will manage the fund. They have identified several areas for investing the Fairtrade premium to benefit their communities:
• construction of local schools: secondary schools are often too far for children to attend daily so they have to be sent away to stay with relatives or friends
• water conservation projects: improve irrigation schemes to reduce waste by run-off; replace water channels with pipes; dig water pans to collect rain water and run off from the fields (requires the hire of expensive diggers)
• construction of a clinic: improve access to medical treatment
• electricity provision: most homes don’t have electricity and use kerosene lamps for lighting
• training centre: for computer skills, adult literacy etc
• infrastructure: construction of new roads and improvements to existing roads damaged during the rainy season.

Environment

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Fairtrade fresh vegetables are supplied to existing markets in the UK and elsewhere in Europe when local vegetables are out of season or when there is insufficient local produce to meet demand. 

Importing fresh vegetables raises important questions about food security, food miles and water use which were carefully considered before introducing Fairtrade standards. For example, vegetables are highly perishable and therefore must often be air freighted, but air freight actually accounts for only 0.3% of total UK greenhouse gas emissions against the 8% associated with meat and dairy production². 

While reducing the carbon footprint of food is important, the issue is more complex and it is important that producers in poor countries responsible for only a fraction of overall global emissions are not penalised in the transition towards a low-carbon global economy. 

Agriculture can play a critical role in the economic and social development of developing countries – up to one and a half million livelihoods in Africa alone are estimated to be dependent upon UK consumption of agricultural and horticultural produce. 

Small-scale farmers in Kenya grow vegetables for export alongside those for household consumption and for sale on the local market. For them, export vegetables represent an opportunity to diversify away from the usual commodities and benefit from higher prices. With Fairtrade sales, there are additional benefits in income and organisational support, as explained earlier.

Simon Karuai is a member of the Kismu Wenga Outgrower group in Kenya, which is expecting to receive Fairtrade certification in 2010. He said: ‘The people here are blessed with the weather and technique to grow vegetables, yet they remain poor. UK consumers can help us by continuing to enjoy our produce. It’s not just vegetables that pollute the air, it’s the tourists too. We know our environment and protect it through stopping soil erosion, protecting animals and planting trees. Despite this huge challenge, limited electricity supply and basic equipment we use, we are penalised for our produce which we must sell – especially when it is those in developed countries who consume our vegetables who are enjoying air travel, have cars and electricity.’ 

As well as providing benefits to farmers, Fairtrade also ensures that environmental considerations are paramount. Fairtrade standards include strict environmental criteria including:
• ongoing reduction in the use of chemical pesticides and fertilisers
• conservation and protection of water sources
• protecting the local ecosystem
• protecting soil fertility and preventing soil erosion
• responsible disposal of waste products
• a ban on growing and using genetically modified organisms (GMOs). 

While producing certain vegetables uses a lot of water, Fairtrade farms carefully manage water resources – one Fairtrade flower farm in Kenya, for example, has reduced its water use by 30%–40%. The Fairtrade premium also provides farmers with resources they would not otherwise have and enables them to invest in projects which have an environmental benefit, for example:
• tea estates in India and coffee growers in Costa Rica have funded projects to convert their energy supplies to hydroelectricity by responsible use of local water systems
• coffee drying ovens powered by waste such as coffee hulls and macadamia nutshells are being used by coffee producers in Nicaragua and Costa Rica as an alternative to wood, thereby preserving hundreds of hectares of forest that were previously cut down for fuel each year
• solar power is being developed in some Indian tea estates, for example, as an alternative to using traditional wood burning methods for heating and lighting the homes of workers and their communities
• biogas for cooking is being introduced by tea estates in India to reduce the demand for firewood.

[1] Fairtrade Standards for  Fresh Vegetables for Hired Labour, 28 September 2009
[2] Flying Food. Responsible retail in the face of uncertainty. Food Ethics Council, April 2008 (www.foodethicscouncil.org).

Fairtrade Foundation May 2010