WOCCU Supports Stevia Crop Introduction in Kenya
Experienced Tea Growers Expanding into New Markets
March 30, 2010
KERICHO, Kenya — Growing global soft drink consumption is raising concerns, but for reasons other than its questionable effects on consumers' health.
Soft drinks' increasing global popularity is creating an economic crisis for the world's tea leaf growers, many of whom have seen a significant drop in demand for their crop. Thanks to a partnership between World Council of Credit Unions (WOCCU), Ndege Chai Savings and Credit Cooperative (SACCO), or credit union, and PureCircle Kenya Ltd. (PCK), Kenyan farmers in Kericho, northwest of Nairobi, are now growing stevia, a natural sweetener that could one day overtake its artificial counterparts.
Stevia, a member of the sunflower family, has its origins in South America and can be found growing as far north as Arizona, New Mexico and Texas. Sometimes known as "sweetleaf" or "sugarleaf," stevia's leaves have a natural sweetness 30 to 45 times that of regular sugar. It is widely used as a sweetener in Japan and as a food ingredient or dietary supplement in other countries. Medical testing has shown that stevia can be an effective sugar substitute with a positive impact on obesity and high blood pressure. It also has a negligible effect on blood glucose levels, making it attractive as a sweetener for people on low-carbohydrate diets. The U.S. Food and Drug Administration (FDA) approved stevia extract as a food ingredient in December 2008.
After two years of testing, PCK, wholly owned by PureCircle Ltd., the world's leading supplier of natural high intensity sweetener ingredients, started contracting stevia growers in 2009. Under a business partnership with Kenya's Ndege Chai SACCO, these growers join the SACCO and receive loans earmarked to support stevia growth. Thanks to funding supplied by USDA, WOCCU has helped the SACCO finance these rural farmers, as well as provide the SACCO with assistance necessary to develop an agricultural lending unit and technological support for agriculture loan underwriting and administration.
"The majority of Kenya's poor still live in rural areas and many of them are small landowners and subsistence farmers looking for crops that will provide additional household income. Stevia is a crop that has the potential for strong demand," said Brian Branch, WOCCU executive vice president and COO, "Poor farmers with training from PCK as the crop's buyer can produce stevia sustainably and profitably on their small landholdings. The challenge will be achieving the scale of production necessary to match stevia's market potential."
Under PCK's guidance, most Kenyan farmers start their stevia crop on a half-acre of land. The stevia, which grows to be three feet tall, requires two-and-one-half months of cultivation before harvesting. The leaves are stripped from the plant, dried and then sold to be ground into a fine white powder that is the basis of the sweetener.
The very soft drink companies that are competing with tea leaf production are the world's largest users of sugar and sweeteners, offering tremendous potential for stevia growers. But to tap that market requires significantly more stevia than the farmers can currently grow.
Ndege Chai currently finances operations for 850 members who are growing stevia and anticipates that number could grow to 2,500 by the end of 2010. PCK's projections suggest that 25,000 area farmers could be growing stevia in five years, a capacity far beyond the financial capabilities of Ndege Chai and other small SACCOs.
Business alliances with companies like PCK could provide the capability necessary to raise Kericho's stevia production to the levels needed to attract the attention of major soft drink conglomerates, according to Branch.
"As a complementary crop for Kenya's tea growers, stevia can help small farmers whose income has been declining in recent years," Branch added. "The potential of stevia to close the income gaps that have developed appears to be unmatched by any other crop."
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 60,500 credit unions in 109 countries serve 223 million people. Learn more about World Council's impact around the world at www.woccu.org.
NOTE: Click on photos to view/download in high resolution.