Showing posts with label Coffee Board of Kenya. Show all posts
Showing posts with label Coffee Board of Kenya. Show all posts

Wednesday, 16 January 2013

Mixed Basket - 2012 That Was


This post has been in the pipeline for the last 4 weeks but every-time I sit down to get word on the keyboard I’m quickly pulled out or called for this or that errand. The last 3 months for anyone is agriculture in Kenya especially has been a blessing or a curse depending on which activity you’re engaged in. 

{Incidentally CitizenTV had a feature on Charoza Farm on the news segment 'Movers and Shakers' yesternight 15th January which gave me renewed purpose to push work on the farm} 

‘Short Rains’?
For the uninitiated, the last quarter October to December usually has what in Kenyan parlance is called Short Rains. It represents the last chance to redeem yourself as a farmer if your work had not borne fruit in the Long Rains which usually come around March-May/June.
Out with 2012...2013 is the new bud

For 2012 though, the rains came and even as I write we have had a heavy downpour quickly filling up the water-tanks which we had just drained only last week for the 4th time (we have used rain water on the farm for the last 15 years, only twice have we fetched river waters). That’s 5 months of good weather where the Sun shines for at least 3-4 hours every day and there is rain 3-5 days in a week.
The land is plush with greenery and the area that I come from, farmers are spending nights in their farms figuring what to do with the tea leaves whose production in the last 3 months has increased Christmas break (the only other time I recall this happening was during the El Nino rains in the late 1990s).
Tea factories are operating at optimal levels and thus the demand for fuel in whatever form ( in 2009 factories from our area we given the go ahead to start using boilers fuelled by wood fuel thus the demand for timber shot through the roof endangering the trees around). It should mark a good start for one of Kenya’s main foreign exchange earner.
Back on my farm though the greenery includes napier grass, grass for the cattle which is now more than enough. We have also been replenishing the stock of silage as we prepare for rains to stop anytime (or whenever the weather changes drastically). There are supplies of Lucerne, desmodium, sweet potato vines among other foods available for cattle. The farm helps have also been busy adding more manure to the bananas which have flourished quite well in the last 1 year.
There have been the occasional fruits which keep up with this season. The passion fruit have done well ( though I don’t do this commercially, just for the family to enrich their diet), tree-tomato (or whatever you call it in your locality…the fruit produces an red ooze when cut in half & is popular for fruit juices in restaurants in Kenya), a few mangoes and avocadoes. These too I don’t invest heavily in but are for local consumption.
In another part of the farm, my mum has been working on her arrowroots and sweet potatoes which have been doing well. These she supplements some of her income and also come in handy when she’s visiting the city folks who have developed a palate for traditional foods. They have substituted the increasingly expensive loaf of bread on the breakfast table.

Birdie bland
Now on the flip-side, I have lost some of my poultry especially the rather fascinating geese. They had proceeded on well but come the ‘short rains’, some sort of infestation and change in weather patterns seems to have affected them. I have lost about 7 of these which has dealt a blow to my bird business; I sold 4 and now left with 3 which I’m still seeking to sell.
Graceful Geese
Initially we had 50 birds in the coop but lost some 15 chicks from the brood of hens, that we had gotten affecting the numbers too. For some strange reason, some of the egg-laying ones have become cannibalistic feasting on the eggs even after we tried supplementing their diet with all the appropriate nutrients and even feeding them with sand (and dropping feeds on a pecking stone …in the hope of blunting their beaks). These hens and cocks were quite unlucky to find their way onto the dinner table during the festive season as the city-folks came for the holidays. I have left that side of the work to my old lady who’s sentimental about kukus.
The weather also affected the goats where I had about 6 goats, 3 died and I slaughtered 2 for the family and the last one gave out to an in-law. They had served their time too and I couldn’t bear to see them all die.
The more profitable bit of my year has been the dog business. These have helped me tremendously recover from the heavy losses and though not yet fully streamlined, I’m bound to keep these and the cows for the coming year.

Challenges:

Commercial feed – from cattle, chicken to the dogs, commercial feed costs have been rising and are not coming down anytime soon. Feed companies may need to seek rebates and tax relief from the Government otherwise many a farmer is opting out of these. There are also companies which have brought feeds in the market which don’t quite measure up to the quality expected. You feed the animals for the longest time yet no improvement is seen on the output. This is so with the cows and poultry.

Reliable veterinary services – there are either too many quacks operating in this field or there is a new breed of diseases and infections or worse still they don’t train them as well as they used to in colleges anymore. The geese problem opened up my eyes to this deficiency. Check the Kenya Vet Board website, enough said...
Jab it here! That won't hurt

Marketing – there are too many hurdles and also loopholes that see many a farmer exploited for their hard-earned work. There are enough middle-men and obstacles before you get to sell some of your produce and even if you do this through a co-operative, the price is heavily under-cut by market forces. Commodity markets, anyone?

Credit – too many co-operatives and micro-finance institutions have been sprouting all over agricultural zones. But many of these have not engaged their clientele in educating them ways of using credit, cheaper repayment schedules and the benefits of saving. Many a farmer is heavily indebted to the co-operative societies and micro-finance lending institutions that by year end, they still owe monies in their thousands. Most farmers still take advances for educational, conspicuous spending, unnecessary trips which end up eating into the income that they may receive.
Where I come from tea and coffee are the two main cash crops and we used to have boom or bonus periods (used to be from October to December). Patriarchs in their families would make major farm works, buy new items, livestock, repair houses and build new structures etc. while others disappeared from their address for days on end. We don’t notice these anymore. In fact, some old men are said to go into hiding to avoid loan repayment officers who may come around.

Weather – in our part of the world, agricultural activities are still heavily dependent on weather patterns. That’s why the food market is now flooded with cheap vegetables which cost an arm and a leg not too long ago. It’s the reason there is milk flowing even to the dog’s bowl and even this mongrel pushes aside. If the rains subside and disappear for 3 months, some parts of the country will beg for relief food, a rather embarrassing thing for the authorities.

Deforestation – though in our part of the country squatters were chased out of the major forests, there is a crisis in the making where farmers are not replanting trees in their farms and their surroundings. A quick survey in our locality found that our farm had some of the widest and oldest varieties of trees ( I try planting at least 50 trees every rain season). Trees species such as cedar, cypress, fig tree are almost folklore where plenty existed. Even the infamous eucalyptus tree is under threat as the alternative timber source.

Well, folks that was my brief for the last months of the year that was. If the rains continue, 2013 should be a blessing for us, but then again its early days! Have a fruitful one to you all! Hope the blogging muse is still alive in the coming weeks...

Friday, 10 February 2012

Commodities Trading in Kenya - Illusion or Possibility?

One of the reasons behind this post is the rise of incidences of robbery coming from coffee farms and factories alike especially from the Nyeri side of Central Kenya, and challenges facing Kenyan farmers in the selling of their produce - be it for cash crops or food crops. As you would know coffee one of Kenya's prized commodities and major foreign exchange earner has over the year taken a major dip in production.
Black Gold 


Black Gold of Kenya?
Part of the reasons this happened was because of the low prices that the international markets attracted up to and around the mid-2000s.  The changing weather patterns and expensive farm inputs have also contributed to a lowered interest in the crop. There is also the swelling population that has put pressure on land and this has seen many farmers opting to go into property development and also partitioning their land for other commercial purposes.
But in the last 2 years, global prices for coffee have been on an upward trend, thanks to increased consumption of the product and also reduced output from the one of the world's biggest coffee producers, Brazil. Locally some would say the rise in coffee establishments have contributed to the same but then again much of the coffee sold has been Grade II and Grade III while the Grade I is exported and repackaged selling at a fortune in major stores worldwide.
A little over 5 years ago, the Government liberalised the coffee milling process ending KPCU's (Kenya Planters' Co-operative Union) monopoly. This encouraged private millers to buy coffee beans from local farmers but it has also seen a rise in theft of the same since most milling companies operate at below optimal or optimal capacity. Again the lure of the improved prices has meant increased demand for the beans.
Calls have been made to brand our coffee and authenticate it as being from this part of the world and Brand Kenya has made a weak case for the same. But this requires more focussed branding and marketing of the product if Kenya's to expect to earn more from its traditional cash crop product. Lessons can be learnt from our northern neighbour, Ethiopia. Some say it's the birth-place of the product hence the general acceptance as the 'national choice of drink'. They have managed to leverage their coffee to be labelled and branded as having come from the country. Also helping their cause is the fact that they have a vibrant Commodities Exchange, Ethiopia Commodity Exchange ,one of the biggest in Africa.
Goodies, Take your pick

Commodities Exchange ala Kenya style
This brings me to the gist of this post, what is a Commodities Exchange and why do we need this to be actively pursued in Kenya?
According to Wikipedia; " a commodities exchange is an exchange where various commodities and derivatives products are traded. Most commodity markets across the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, pork bellies, oil, metals, etc.) and contracts based on them." It goes on to say, "...Commodities exchanges usually trade futures contracts on commodities, such as trading contracts to receive something, say corn, in a certain month. A farmer raising corn can sell a future contract on his corn, which will not be harvested for several months, and guarantee the price he will be paid when he delivers; a breakfast cereal producer buys the contract now and guarantees the price will not go up when it is delivered. This protects the farmer from price drops and the buyer from price rises"
Right here in Kenya, we have 4 known commodities exchange namely;
1) Africa Mercantile Exchange - a commodity futures and options exchange, privately registered and is said to be ' Africa's first mercantile exchange, with a truly diversified product portfolio.
2) Mombasa Tea Auction - as the name suggests this is for trading in mainly Kenya's tea as well as other regional tea and used by major tea producers and marketers to buy and sell the product to regional and international buyers. It is managed by among others Africa Tea Brokers Limited. 
3) Nairobi Coffee Exchange - this is run by the Kenya Coffee Producers and Traders Association. This has been actively engaged to buy and sell Kenyan coffee to the wider global market. 
4) Kenya Agricultural Commodities Exchange - This is run by a privately-owned firm started by one Dr. Adrian Mukhebi  - one of Kenya's foremost authorities in agricultural economics. This particular exchange helps small-scale farmers and producers as well as middlemen access price information from various regions on the produce and its availability. It has been able to provide up-to-date info using mobile and other ICT platforms to access commodity prices.


As you can see from the list above, most of these commodities exchanges are privately run ( some bordering on cartel-like structures...) which makes it quite difficult for budding or established smaller-scale farmers to be able to buy and sell their produce. If you look at some like the coffee-farming, most of the time, unless one is a large-scale farmer and managing/running his/her own coffee bean factory, the produce is most;y bought by co-operatives and sold to the milling firms as a body, thus making it more difficult to access price margins.
Tea farming has similar challenges and this explains the reason why most small-scale farmers are still paupers 10-20 years since planting their first bushes. 
Mixed basket - images from www.google.com/pictures & worldcloud


As regards other commodities such as dairy, maize and wheat, the former has seen much appreciation thanks to the State-run milk processing firm Kenya Co-operative Creameries( renamed New KCC after 2003) whose revamped processors meant competition with Brookside Dairies making them the 2 largest milk processors in the region. Other smaller dairy firms have also seen the price of milk rise upwards though a large number of smaller-scale farmers still prefer 'hawking' their milk to kiosks and individual consumers. (Once in awhile, I must confess I do use the KCC collection points for an extra shilling but much of the milk's consumed at home and the rest sold to neighbouring farms...).


All in all, I do hope the little educative post I have done is bound to spur interests in commodities trading which ought to be a gold mine for budding entrepreneurs and ultimately help develop our agricultural marketing skills which have been largely exploited by middlemen in the country. Back to the farm now for a wrap on the week's work...