Kenyan farmers pull community from poverty to prosperity by striking supply deal with Cotton On Group

A 100 per cent farmer-owned cooperative ensures sustainable incomes for 15,000 Kenyan farmers through agreement to supply cotton to global garment giant.

Ukunda, Kenya, 3 December, 2018 – The Pamba and Viazi Cooperative (PAVI), a wholly farmer-owned cooperative on Kenya’s south coast, joined Business Call to Action (BCtA) with a commitment to integrate 15,000 cotton farmers in Kwale and surrounding counties, on Kenya’s coast, into the supply chain of global garment company Cotton On Group by 2020. The win-win initiative not only provides a steady source of income for the farmers, it also ensures that Cotton On has a sustainable and transparent supply of cotton that will ultimately improve the livelihoods of 50,000 people in Kwale and surrounding counties by 2020.

Launched in 2008, BCtA aims to accelerate progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that engage people with less than US$10 per day in purchasing power (in 2015 dollars) as consumers, producers, suppliers and distributors. It is supported by several international organizations and hosted by the United Nations Development Programme (UNDP).

PAVI was set up by the community, in partnership with Cotton On Group, Base Titanium Limited and NGO Business for Development (B4D), to generate income earning opportunities for farmers by creating direct links to market, such as the Cotton On agreement. The cooperative is owned by 1500 low income farmers, which it plans to increase to 15,000 by 2020. Farmers pay a membership fee of 2USD and purchase a minimum 100 shares @ 0.2 USD nominal value (20 USD) in order to join. The fees and shares are deducted from cotton proceeds upon agreement with individual farmers who are not able to pay in cash.

In addition to 30 tons of cotton for Cotton On, in the past two years PAVI farmers have produced and additional 70 tons of cotton, 247 tons of sorghum and 21 tons of pulses for local, national and international markets. While directly impacting farmers by providing reliable markets for their produce, the initiative has already generated more jobs in the wider community, as small businesses have emerged to provide support services to smallholder farmers. This includes four small and medium enterprises (SMEs) working in land preparation, 15 SMEs transporting produce after harvest as well as farm equipment, 15 SMEs distributing smallholder produce at local markets, and three SMEs processing grain and stock feed.

The initiative has transformed the prospects of the participating farming community. According to a baseline survey, before PAVI was set up, two thirds of farmers’ families were living off less than US $1.25 a day, and 63 percent of households had either only completed primary school or not attended school at all. Additionally, the majority of smallholder farmers lacked direct access to markets and had to rely on middlemen for everything, from purchasing agricultural to selling their yields at less than fair market prices.

“Farmers are no longer price-takers but price-makers, thanks to the negotiating power of the PAVI co-operative and the partnership with Cotton On Group,” said PAVI CEO Lenox Mwaore Mwachoo. “We are working to create an environment where even the smallest farmer can earn enough to live comfortably and support their families. We have committed to do as much as we can to address the difficulties they face by integrating them into the global value chain. By 2020, we believe that we will have made substantial changes for 15,000 local farmers and their families.”

Paula Pelaez, Head of BCtA, lauded PAVI for their community-driven approach, which would contribute to the initiative’s sustainability.

“With PAVI’s community-led approach, its members have a vested interest in meeting its commitments. PAVI has already been a game changer for so many families, and we look forward to seeing that grow under their BCtA membership,” she said.

For further information:
BCtA: aimee.brown@undp.org
Pamba and Viazi Cooperative (PAVI): meg.kauthen@businessfordevelopment.org

BCtA membership does not constitute a partnership with its funding and programme partners, UNDP or any UN agency.

About Business Call to Action (BCtA): Launched at the United Nations in 2008, BCtA aims to accelerate progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that offer the potential for both commercial success and development impact. BCtA is supported by the Dutch Ministry of Foreign Affairs, Swedish International Development Cooperation Agency (Sida), Swiss Agency for Development and Cooperation (SDC), UK Department for International Development (DFID), and hosted by the United Nations Development Programme (UNDP). For more information, please visit www.businesscalltoaction.org.

About the Pamba and Viazi Cooperative (PAVI): PAVI was launched in 2016 as the result of a joint initiative between the Cotton On Group (COG), Base Titanium Limited and NGO Business for Development (B4D). PAVI was established to support the advancement of income-earning opportunities for local communities through the creation of direct market linkages. The cooperative is owned by low-income farmers in Kwale County, Kenya and has a membership of 1500. PAVI exists to empower farmers with the resources needed to build an additional income source, improve utilisation of farmers and community resources, and lift farmer productivity and skills to deliver social and economic gain and link small yield farmers to global end markets.