Farmers in East Africa stand to gain from better returns in 2012 on bigger orders from multinational food and beverage companies as the firms bolster their production.

Demand for farm produce including milk, coffee, tea, fruits, soya, wheat and barley has shot up. The companies are expecting farmers to increase their production to meet this demand.

Among multinational with operations in the region are Nestle, and SABMiller, that acquired 100 per cent of Crown Foods Limited, producer of Keringet mineral waters and juices. The company has stake in Uganda’s Nile Breweries.

South Africa’s Promasidor Kenya Ltd, manufacturer’s of soya’s Sossi brand said it was considering contracting farmers from western Kenya to for its its manufacturing plant’s soya beans.

Regionally companies like East African Breweries Ltd and Coca Cola have engaged farmers in the production of raw materials. However, companies are seeking to make the best out of the raw materials.

“As requirements for quality end product goes up, farmers need to improve the quality of the raw material,” explained Pierre Trouilhat, head Nestlé Equatorial African Region that oversees operations in 20 countries including the five EAC member states, Somalia, Angola, Democratic Republic of Congo, Djibouti, Eritrea and Ethiopia.

Despite its presence in these countries, the Swiss company has not had confidence to purchase raw materials locally. For example, the company has been importing powdered milk from New Zealand despite increased milk production in the country, until this year when the company installed its own processor in line with its expansion plans.

Quality concerns are revived at a time Kenya is likely to experience a glut due to increased production, following onset of the short rains.

The country is registering more milk currently and a glut in the dairy industry is looming,” explained Matu Wamae, New Kenya Cooperative Creameries chairman.

In 2010, the country was hit by a milk glut that saw millions of litres go to waste, as processors could not accommodate increased production. New KCC is yet to establish new processors as promised at the beginning of the year.

Elsewhere, EABL is seeking to contract more sorghum farmers as it moves to reduce reliance on barley. In 2009,EABL signed a contract with the Kenya Agricultural Research Institute and Western Seed Company to produce and supply certified gaddam sorghum seeds to 3,000 farmers in over 17 districts in Eastern province. Gaddam sorghum is a unique variety that is approved for beer manufacturing.

In 2010, the company distributed more certified gaddam sorghum seeds to over 10,000 farmers in Kenya’s Eastern Province. The project has since enhanced farmer mobilisation and recruitment, training on sorghum farming and market linkage, hoped to span over a three-year period since last year. Peter Chege, EABL’s technical director local raw materials said EABL’s sorghum requirement is on the increase and the project should deliver the more than 50,000 Metric Tonnes of sorghum required.

“Challenges that will need to be overcome by the project range from low yields, lack of suitable varieties, limited use of good agricultural practices, bird menace and effects of climatic change, “ explained Mr Chege.