Hives of economic activity
Honey Care Africa was founded as a social enterprise to offer sustainable economic development opportunities to very poor families in rural areas of Africa. These families have few options to earn cash income, often subsisting on the crops produced from their own land. Only cash, however, can pay cover some of their critical needs, such as school fees, medicines for treating common but life-threatening health problems such as malaria and farm inputs such as animal feed, hybrid seeds and micro-irrigation systems.
Beekeeping and honey production offer high potential returns to small farming households thanks to the low opportunity cost and minimal space required. The resulting cash provides a much-needed diversified income stream. Honey Care's Business in a Beehive management services programme enables these farming families to continue investing their labour in primary crop production. Moreover, on-farm pollination by honeybees increases yields and enhances the quality of many of their crops.
To achieve economic efficiency in difficult rural conditions, Honey Care operates in concentrated geographical areas, or clusters. Whilst many rural communities could benefit from becoming a cluster, the start-up operational costs of doing so are often prohibitive. Honey Care therefore provides each cluster with support until it becomes economically self-sufficient, which usually takes about 18 months.
The main objective of this project was to integrate more than 2 000 very poor families in Western Province and Upper Rift Valley, Kenya, into a commercial honey value chain, enabling them not only to generate additional annual income of up to USD 50 for each beehive they own but also to boost production of their other small farm crops through on-farm pollination. A further objective was to deploy more than 4 000 modern beehives (known as Langstroth hives) in the region, with each family owning two or more. The development of these clusters was expected to create a number of jobs for people in the region as Honey Care sales representatives, hive technicians and cluster supervisors.
In Honey Care’s business model, the first 12 months of the cluster development are critical, with activities structured in three phases:
- Launch: The first phase includes all the initial assessment activities, establishing relationships and education initiatives in the communities, investing in assets and staff and mobilising the communities to participate. Much of the capital investment occurs during this time.
- Deployment: More and more beehives are deployed each month, and a strong emphasis is put on bee colonisation and inspection. The number of farmers participating, as well as Honey Care's local staff, grows with the network.
- Production: After about 12 months, the cluster begins producing honey on a commercially viable scale. Production increases each season, as the hives are optimised and inspected and harvesting schedules become more efficient, and with it the income of individual household and smallholder group producers.
Honey Care Africa guarantees the participating families the market price for all honey produced, ensuring them a positive return on investment. Once a cluster reaches its production capacity, Honey Care is able to cover its operational costs through the margins earned in consumer product markets.
In this project, the non-profit microlender Kiva provided financing to enable the individual households to purchase their hives. The average lifespan of a well-maintained beehive is 10 years. Kiva’s financing for each hive is to be repaid from the proceeds of honey harvests within 36 months, with each hive generating free cash flow after that period.