The Wood Family Trust in Scotland has announced an additional investment of £7.5 million ($11.9 million) in two tea factories in Rwanda on behalf of roughly twelve thousand smallholder tea farmers.
In partnership with the Gatsby Charitable Foundation, the trust acquired majority stakes in the two tea factories with the aim of significantly increasing the incomes of the smallholder farmers who are minority shareholders of the factories — and eventually transferring full ownership of the enterprises to them. The purchase of a 55 percent share of the Mulindi factory and a 60 percent share of the Shagasha factory from the Rwandan government was made in December through Rwanda Tea Investments (RTI), a joint charitable company established by the two philanthropic organizations.
To help the farmers enhance their skills, knowledge, and ability to operate the factories, RTI will provide board expertise, while the Kenya Tea Development Agency will provide professional management services. The £7.5 million commitment builds on the Wood Family Trust and Gatsby Charitable Foundation's current investment of £5.6 million ($8.9 million) in the Imbarutso: Win-Win for Rwandan Tea project, which was launched in 2011.
"This represents an innovative philanthropic intervention which, if successful and further developed, could transform the viability of smallholder tea farmers in Rwanda and pave the way for more smallholder farmers owning their factories across the region, which in turn will substantially increase the incomes of the smallholder farmer tea producers and their families," said Sir Ian Wood, founder of the trust and board chair of RTI. "Experience in East Africa indicates that where the smallholder farmers own their own factories, they receive approximately 70 percent of the made tea price against only 25 percent to 30 percent if they simply sell their product to an estate-owned factory."