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Wood Foundation helps thousands out of poverty

Wood Foundation
Images for story on Wood Family Trust delivers it end of year review Imbarutso focuses on improving Rwandan smallholder farmers’ performance and earnings in the tea industry (Submitted)

In the stifling early morning heat, hundreds of tea farmers work to pick leaves in Rwanda’s northern province.

Working in small groups they methodically strip each individual plant into sacks and take them to be weighed, before the leaves are taken to the nearby Mulindi factory for processing.

The site is one of two that the Wood Foundation has had a significant stake in – the other is Shagasha in the south – for the past six years.

In 2012, the charity, led by oil and gas billionaire Sir Ian, invested £8.6million in both factories, which equated to about 60% of the shares in each. In the long term, complete control will be transferred to the smallholder farmers, whose crops feed into the tea-making process.

Tens of thousands of farmers are now being pulled out of poverty, with their incomes trebling, while the quality and output of the industry has soared.

The Press and Journal was invited to the country to get an insight into the life-changing work the foundation has carried out.

Currently there are about 6,000 smallholders supplying each of the  factories, who collectively own some 3,100 hectares.

Since the foundation took over, the price of tea has gone up about 70% while their yields have improved by almost 50%.

While initially resistant and suspicious of the charity’s motives, Sir Ian said the farmers were now beginning to feel the benefits and were enthusiastically on board with the new model.

He said: “Initially it was really a lot of quite aggressive questions like ‘why are you doing this?’ and ‘what are you charging for this?’ and ‘what are you doing here?’.

“It wasn’t really about how they could improve what they are doing, which is what we wanted to get round to and slowly we worked our way through that and had some very good discussions about improving what they’re doing.

“They can see the change and that’s what’s really important. We’re now getting really good performance from them and they’re being paid for it.”

One of the key changes the charity has brought in is farmer field schools, where people have the chance to learn about best practice on their land, business and other subjects.

About 7,000 farmers have graduated from the schools since they were first launched.

The organisation has also introduced an electronic system for paying the farmers as well as recording their yields, meaning they get paid for what they pick where before they would potentially be ripped off by the tea estates.

The foundation has also introduced a bonus system and interest-free loans to help farmers cover the cost of fertiliser and other necessary tools.

At the same time the farmers are being schooled in corporate and management skills so that they are ready when they gain full control from the foundation.

Sir Ian is adamant that this hand-over, which had initially been estimated at seven years, will not take place until he is satisfied the farmers are ready.

He said: “The key thing is that whoever we hand it over to will have the exact same motivation we have: how can we improve the livelihood of smallholder farmers, not how can I make some money out of this for myself or how can I make the dividend or all the other things you might do.

“So that’s where we cease being a business because all the benefit must go to the smallholder farmers. I think on one it could be reasonably close and then the other I don’t think it will happen within the seven years.

“But that’s what the deal said, we’ve got to achieve certain financial standards and you’ve also got to get the governance correct.

“And that’s been absolutely clear all the way through this and the government of Rwanda were involved with that and they know what’s going on.”

The partnership with the government has been so successful, in fact, that the charity is in the process of setting up two more factories in Rwanda, and another in Tanzania, with surrounding plantation lands. The Rwandan sites, at Kihebo Munini in the south and Rugabano in the west, are not traditional tea planting areas.

However the acidic land, which inhibits other plants from growing, is ideal for tea.

Before the launch of the new sites, which are being run by British-Dutch company Unilever and Luxmi, from India, many of the population were living well below the breadline.

According to the World Bank’s classification, 40% of people were living below the poverty line of $190 per year, and 16% lived in extreme poverty of below $130 a year.

However when the factories are up and running, 10,000 farmers are expected to benefit from the industry, with national production boosted by about 19,000 tonnes.

The total investment for all three projects will come to about £86million, with about £54million for the investment in the three new factories, and £32million to finance the tea planting and to set up the service companies to assist the farmers as well as pay for fertiliser and other tools.

Sir Ian, who retired from the North Sea industry the same year that the African venture began, was inspired to take up the interests of the farmers after he met a group in Tanzania, where the charity also has interests.

He said: “I met them in a small hut, there was about 10 of them and we had a translator and they had no education, and no negotiating capability whatsoever.

“They were clearly to some extent being taken advantage of by some of the big tea estates who never considered the ways of helping the smallholder farmers to get more tea for their factories and that just said to me this is just not right.

“And secondly I felt we could do something about it.”

And while he stressed their goal was still a long way away, he conceded that he was cautiously optimistic about their success so far.

“I mean to tell you, honestly that was the start.

“This is now a story of a terrific management team working in Africa, both here and in Tanzania, who are doing all the right things and helping their country to help themselves,” he said. “This is sustainable, it really is, because we’re adding huge value to the land by improving the tea in some areas and planting new tea. Now you can’t take that away.

“We’re significantly improving the farmers’ knowledge and capability. You can’t take that away.

“And we’re significantly improving the economy of the region and you can’t take that away.

“This is long-term sustainable, as long as the people factor doesn’t get in the way,” he added.

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