Why IFC is investing billions in food safety programmes –
The Twiga Foods (Kenya) Case
The International Finance Corporation (IFC) last year signed a Sh1 billion with Twiga Foods, a Kenyan-based technology food distribution platform, to boost food safety and quality management systems in its produce handling facilities.
Sarah Ockman, the IFC’s Global Food Safety Lead, spoke to the Business Daily on the organisation’s support for Twiga and other food safety measures in the country.
WHY IS IFC TAKING INTEREST IN FOOD SAFETY AMONG SMALLHOLDER FARMING COMMUNITIES?
What we have seen at IFC is that when smallholder farmers improve food safety, they can find buyers more easily. As one retailer once told me, “When I trust more, I buy more.” For smallholder farmers, this translates into better income.
DISRUPTIVE TECHNOLOGIES HAVE BEEN DEVELOPED OFFERING SOLUTIONS FOR FOOD SAFETY AND SECURITY CHALLENGES. WHAT IS HOLDING BACK THEIR ADOPTION IN THE COUNTRY?
Great question! We have seen lots of new, innovative solutions coming to the market that can help food companies and farmers keep better records and be more proactive about managing risk.
Most are developed with the buyer firm in mind, who is usually focused on compliance. Several tools have the smallholder farmer in mind, and what his or her interests are. However, data input tends to be an issue — occasionally smallholder farmers tend not to see what is in it for them and find data entry cumbersome.
APPLICATION OF FOOD SAFETY REGULATIONS IN KENYA IS CURRENTLY LARGELY LIMITED TO AGRICULTURAL PRODUCE FOR THE EXPORT MARKET. THERE HAVE BEEN REPORTED CASES OF POISONOUS RESIDUES ON AGRICULTURE PRODUCE IN KENYAN MARKETS. HOW SHOULD THIS BE ADDRESSED TO PROTECT DOMESTIC CONSUMERS?
Oh, now you have asked the question that keeps me up at night. It’s quite clear that when there is financial gain to be had, companies will do the right thing.
Over the last 10 years, IFC’s food safety programmes have helped our clients increase sales by over Sh50.09 billion ($480million). If I were to dig into the numbers, I bet I would find that 99 percent of those sales were due to increased exports and new markets. I have seen first-hand how companies rush and find the will to do the impossible when they have a deadline to meet to sign a lucrative contract.
I have also seen how food safety is put on the back burner when the financial incentives are not so manifest. What we need are more local champions [like Twiga Foods] who have gone public to say that they will provide safe, nutritious food for Kenyan consumers every day.
Frankly, this is costing them money, but they are building their brand on it. In fact, they see food safety as an investment in their brand. I hope other companies in the region start seeing food safety as an investment in their future too.
HOW CAN WE ENSURE THAT FOOD SAFETY REGULATIONS ARE EXTENDED TO THE INFORMAL SECTOR, INCLUDING FOOD STALLS ON STREETS AND OPEN-AIR MARKETS?
I’ve just mentioned Twiga Foods as one example of a company that is providing safe, nutritious food to mama mbogas in Nairobi. Most Africans, though, buy their food from informal markets so we need more than one solution.
In other countries, the government has played a big role in ensuring safe food in the marketplace — this would require large investments in capacity building and support to the vendors for a sustained amount of time.
The studies I have read recently indicate that one-off training will not help and does not stick. We need a comprehensive, multi-stakeholder approach for the long haul. I would look to Thailand and India for lessons learned since they have come a long way.
THE IFC HAS BEEN ADVOCATING APPLICATION OF INTERNATIONAL FOOD SAFETY STANDARDS. HOW IS THE CAMPAIGN IMPORTANT TO ITS INVESTMENTS?
Investors care a lot about risk. They need to get their money back, so one could even say that they are obsessed with risk! Since IFC is the largest investor in agribusiness in emerging markets, with a current portfolio close to Sh417.4 billion ($4 billion) food safety is a risk to our portfolio, pure and simple.
We also recognise, however, that we not only need to protect our investments, but we also need to ensure that these investments are sustainable.
We, therefore, invest in capacity building for local service providers to ensure that our clients have the support they need, in their language and context.
We are also very excited to be releasing the fourth version of our Food Safety Handbook, a resource that will be available for free online and that can help any company build a robust food safety management system. Food safety incidents are rarely isolated, so we also see the benefit of raising visibility on the topic.
THE COUNTRY’S WATER BODIES ARE GETTING CONTAMINATED WITH HARMFUL CHEMICALS. LAKE VICTORIA, FOR INSTANCE, CONTINUES TO SUPPLY A BIG CHUNK OF FISH THAT IS CONSUMED BOTH LOCALLY AND REGIONALLY DESPITE RECENT EXPOSÉS THAT IT IS HEAVILY POLLUTED.
I hope that the recent articles can be a wake-up call to the industry and the ministries that our natural resources cannot be exploited to this extent.
We need proper regulation and enforcement of the law to prevent this from happening. I grew up in West Virginia in the US and saw first-hand how the lack of regulation there allowed polluting companies to set up shop in my state. We had polluted waters too.
Neighbouring states did not have this problem because their governments simply did not allow companies to dump chemicals in the water.
In my view, this is a case where government and the private sector need to work together to ensure the health of the local population—and the local environment
HOW CAN AGRICULTURE PRODUCE LOGISTICS AND TRANSPORT PROVIDERS ENSURE SAFETY STANDARDS ARE OBSERVED FOR THE PRODUCTS ON TRANSIT?
Food safety starts at the farm, but logistics and transport are a crucial link to the end consumer. There are several standards for logistics and transport providers. Like the question of informal markets, a lot depends on the incentives as to whether these standards are implemented. While the standards are common in Europe, I have not seen many certified companies here.
Appropriate logistics ensure food safety by ensuring proper temperature control, packing, and hygiene practices, which can all reduce food losses dramatically.
Given the current coronavirus diseases (Covid-19) crisis and accompanying uncertainty, strong food safety practices are more vital than ever. We need good systems and practices in all food facilities around the world, including at local informal markets, where 90 percent of Kenyans shop.
I am happy to see a renewed interest in good hygiene practice among the general population and hope that this is maintained after the crisis has passed.
Not only can good hygiene reduce transmission of the coronavirus, but it can also ensure safer food.
Source: Business Daily
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