Kenya's horticulture business in wilt
Horticulture, Kenya's leading foreign exchange earner, is faltering. Eleven months after the industry registered an impressive performance of over Ksh 73 billion (US$1 billion) earned from exports for the period ending December 31, 2008, it is faced with two serious challenges: prolonged dry weather and low export demand due to the global down-turn. In addition, Kenya has yet to recover from the effects of the post-election violence which rocked the country in early 2008.
Horticultural demand and value are currently around 75 per cent and 80 per cent of their peaks in recent years. Kenya Flower Council's Jane Ngige says of the industry, that even though the situation is changing positively, performance has been poor since the beginning of the year. "Volumes of flowers from Kenya to international markets declined by 30 per cent between January and April this year, back to the situation in 2006 when the industry exported 80,000 tonnes," she says.
As a result of the global financial sector crash last year, foreign consumers' appetite for Kenyan products has declined drastically. Ngige explains that even though Kenya enjoys a substantial market share of the European fresh produce market, due to the credit squeeze, customers no longer give automatic preference to Kenyan horticultural products. Businesses have also been affected by volatile fluctuations in currency rates; Kenyan exporters are paid in euros or sterling pounds but inputs are paid for in dollars.
Finding new markets and technology to survive
Drought, combined with restricted spending by importers and a consequent glut of produce on the world flower market, has also led to a year-on-year decline in income from cut flowers. Currently, Kenya exports around 80 per cent of its flowers to the European cut flower trade with almost half sold to the UK. But, to ensure that that Kenyan flower growers remain in business, the Kenyan Flower Council (KFC), together with other players in the export sector, have embarked on a search for new markets in the US and Asia, including the Far East.
Ngige claims that despite their problems none of her organisation's members have closed their business. But the prolonged drought ravaging many parts of Kenya has contributed to horticulture's problems: many rivers and most water towers are dry, including around Naivasha, the main flower producing area. Water levels in Lake Naivasha remain critical and water rationing has been imposed to control extraction.
To counter the effects of drought, growers are adopting new technology, including hydroponics, and improving the efficiency of water and nutrient usage. Stephen Mbithi, chief executive of Fresh Produce Exporters Association of Kenya (FPEAK), points to significant savings. "Hydroponics saves 30 to 50 per cent of water: half the water used on soil-grown crops can be lost to evaporation," he says. Investing in water harvesting and recycling of wastewater is essential if growers are to survive, he adds.
Dr Romano Kiome, Kenya's Permanent Secretary for Agriculture, confirms that the government is developing an irrigation master plan to help the country's farmers and growers change from a reliance on rain-fed production to more water-efficient techniques. "Water usage in agricultural production is not efficiently managed or organised," he warns. "This leads to users experiencing problems even during the rainy season."
Whilst the rains have recently returned to Kenya, it is not yet known what impact this will have on the horticulture industry for 2010, although Mbithi is optimistic that production levels will return and Kenya will be able to regain its international market share. However, it is clear that in the long-term, those engaged in horticulture and agriculture in Kenya will need to make major changes to their businesses, both in growing and marketing their crops. Some are already doing so. But further support and incentives will have to be put in place if they are to keep their businesses viable.
Written by: Nick Waitathu
Date published: November 2009
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