On World Food Day, a look at one DFC investment reducing food waste in Africa
With close to 10 percent of the world’s population facing chronic hunger and millions on the brink of famine, expanding access to affordable and nutritious food is a top priority for DFC.
But while extreme weather and limited fertilizer supplies have each contributed to food shortages in recent years, food spoilage is also a significant factor.
DFC recently added to its robust portfolio of food security investments, approving financing to an aquaculture project in Kenya that is focused not only on producing affordable and protein-rich fish, but to ensuring that protein makes its way to consumers while it is still fresh. In a region where reliable access to electricity is limited, successful food storage and transport is especially challenging.
DFC’s $20 million loan will help Victory Farms Limited expand sustainable tilapia production on Lake Victoria and use an innovative but low-tech process to keep spoilage below 2 percent, compared to the 25 percent rate of spoilage that is more typical of regional seafood supply chains.
Matthew Miller, Managing Director and Associate VP, Agribusiness and lead investment officer on the Victory Farms project, explains the company’s innovative approach and the challenge it is seeking to address.
Can you speak about food spoilage and post-harvest losses and how this is a significant factor in food insecurity in Africa?
According to most estimates, anywhere from one-third to half of all food produced worldwide is wasted between the farm and the plate, often because of inadequate supply chains to preserve the food and transport it to end users. The challenge is especially great with a rapidly perishable protein like fish, and especially significant in Central Africa where up to 30 percent of children are not getting enough protein.
Explain Victory’s innovative process for preserving food in a region with limited electricity.
The fish are immediately placed into pre-iced boxes when they are harvested. Their temperature is kept extremely low as they are processed. They are transported in large, commercial-grade boxes that are kept cold enough for minimal ice to be required, and this enables Victory to move large quantities efficiently. There are solar panels at the site that are generally sufficient to produce ice for cooling without tapping the electricity grid. Because this process does not require consistent electricity, the fish can be transported to markets where grid electricity may be unreliable.
Why is tilapia such an important source of nutrition?
Tilapia is the one of the most cost-efficient animal sources of protein. In terms of converting feed into protein compared to chicken or goat or beef, it is less carbon intensive, and at least in East Africa, equally as affordable. It is also highly nutritious. Food security is critical, but we also need to consider if people are able to access a nutritious diet. Victory’s farm-raised tilapia fills a critical need in Kenya, where fish consumption has stagnated as wild-capture fisheries have declined.
How will DFC’s financing make more of this protein-rich fish available?Victory Farms is already the largest producer of tilapia in Sub-Saharan Africa, producing about 10,000 tons in 2023. DFC’s loan will enable them to expand to 35,000 tons a year by increasing the number of production sites on Lake Victoria, building a second hatchery, and doubling its number of distribution branches. Studies show that once Victory Farms enters a smaller city, consumers diets do shift, and more protein is consumed.
About the Author
Matthew Miller is DFC’s Managing Director and Associate Vice President for Agribusiness. Miller is also the lead investment officer on the Victory Farms project.
