Smallholder Patchouli Commercialization Project (SMAPACO) in Burundi

RugoFarm S.A
Essential Oils

RugoFarm S.A was founded in 1991 as a private agribusiness enterprise. RugoFarm, in partnership with TradeMark East Africa Research and Advocacy Challenge Fund (TRAC), is implementing a project over a period of 18 months to establish a fully integrated value-chain of patchouli essential oil production and marketing in 4 communes (Rugombo, Murwi, Mabayi and Mugina) of Cibitoke province in Burundi by linking and purchasing the entire harvest of dried patchouli leaves from 3,000 smallholder farmers (SHFs) in 60 farmer groups.

The patchouli is then processed to form patchouli oil, a product that will ultimately be exported to Astier Demarest, an established patchouli oil end user in France. Access to this customer is increasing Burundi smallholder farmers’ household incomes and enhancing their standards of living.

This project will ultimately improve the lives of women as it is estimated 65% of the 3,000 farmers comprise female led households. On average, a Burundi household has 4 children and as a result, 15,000 people’s lives should be positively impacted. The project aims to enhance patchouli production, quality and productivity through skill enhancement, the dissemination of new farming practices and the acquisition of practical skills in patchouli farming. Additionally, by enhancing access to relevant agricultural technology RugoFarm will promote improved field crop production and the strengthening of farmers’ organizations that recognize the benefits of partnership and cooperative approaches to community development. The project seeks to increase the total tonnage of patchouli oil exported to the international fragrance market from the current 1.3MT to 5MT per year. A total of 52 new full-time jobs in the four production zones will be created under the project.

The project implementation is structured into 4 milestones as indicated below:

  1. establishment of 4 nurseries and training of at least 50 training of trainer farmers on Patchouli Production

  2. rehabilitation of storage and drying facilities for a capacity of 6,000 MT and fair trade certification of 300 farmers

  3. oil extraction capacity enhanced to 12,500 litres and at least 1,000 farmers trained

  4. increase in the incomes generated by patchouli production of 3,000 participating farmers by US$ 150 per year and Patchouli Oil exports increased from 1.3MT to 5MT by the end of the project

Burundi Essential Oils

Project Outcomes

Burundi Oils
  • RugoFarm S.A has completed 5 nurseries in 4 communes – Rugombo, Mabayi, Mugina and Murwi. 4 more nurseries are being set up to help fast-track the multiplication of patchouli cuttings for the participating farmers. A total of 800,000 patchouli cuttings have been multiplied.
  • RugoFarm S.A identified ECOCERT South Africa as the fair trade certifying agent who certified 300 farmers in different patchouli growing zones. The training of 1,000 patchouli farmers commenced in April 2015 and was completed in 3 weeks.
  • Active farmers have begun generating additional incomes. During the period between May – August 2015, the number of trained farmers growing patchouli cuttings expanded from 150 to 1,000 thus, a larger volume of patchouli leaves was processed into patchouli oil than was the case before. As farmers see the benefit of this project, more of them will wish to join the patchouli farming business.
  • In order to scale up the project and respond to the new cash crop opportunity facing the 3,000 smallholder farmers, RugoFarm will need to expand the current steam boiler system and oil filtering process from a current 2,500 Ltr to 12,500 Ltr capacity; the smallholder patchouli production and aggregation business model will also result in an increase of exportable oil from 1.3 MT of patchouli oil to 5 MT.

Challenges and Lessons Learned

Despite the acknowledged successes, the project’s implementation was not entirely challenge free as there were delays in the accomplishments of the agreed milestones; the main obstacles to progress including the following:
  • There were delays in the multiplication of patchouli cuttings, which slowed down the processing of patchouli oil and the anticipated increase in the marketable volumes, owing to an unexpected delay in the rainy season in Cibitoke Province (the rains started in October instead of September) and the unexpected withdrawal of the local supplier of patchouli cuttings and tissue cultures. As a mitigation measure, RugoFarm increased the number of nurseries under its control to enhance the in-house multiplication of patchouli cuttings. To support future plans RugoFarm has also contracted Forestry and Agricultural Investment Management (FAIM) East Africa in Rwanda for the supply of tissue culture patchouli cuttings – supply beginning June 2015.
  • Being an export crop, patchouli is exposed to the fluctuations of the international market prices. However, international demand outweighs the current supply since patchouli is required for a buoyant high-end market which is proving to be surprisingly resilient, even in times of global recession. The limited patchouli supply to the international market means that the prices will remain at a premium until production is very significantly ramped up.
  • The failure to achieve the necessary crop production results with growers – primarily growers failing to achieve the necessary yields because of insufficient grower uptake – resulted in a failure to achieve the minimum commercial production levels of oil required, so substantial project resources were focused on the investigation and development of production protocols, and the establishment of incentives to support growers.
  • The inability in the first year of the project’s implementation to achieve sufficiently high levels of nursery productivity (% output) – particularly for patchouli meant that it was not possible to establish and maintain large scale commercially viable production, so RugoFarm responded by directing substantial project resources on improvements in its approach to nursery management.
Rugofarm Burundi
RugoFarm Essential Oils

Conclusion

This project while still undergoing implementation has the potential to significantly improve the lives of smallholder farmers. Even though there are many essential oils (geranium, lemongrass, lavender, rose, eucalyptus, agar wood, and lemon balm), used in the production of cosmetics, fragrances and perfumes, medicines and soaps, patchouli is a preferred ingredient and is used as a ‘base’ material in the production of all of the above. Additionally, as there is no synthetic substitute for patchouli oil, which increases its value and demand in the perfumery market, no aromatic herb and natural fragrance beats patchouli in terms of its value and qualities. Besides, patchouli is one of very few oils that, like fine wine, improves with age. It is also non-toxic, non-irritant and non-sensitizing which further enhances its value. With the high-end international market of perfumes and fragrances increasingly requesting more patchouli, there is a huge incentive to boost production. This growing market for patchouli is the “opportunity that RugoFarm and its partner smallholder farmers in Burundi intend to respond to”. – Chadrick Habonimana, RugoFarm S.A.