Organic trend grows demand for crop

Chinese investor finds opportunity in the blossoming of Kenya's revived pyrethrum sector

Production of a valuable flower crop is blooming again in Kenya after years of wilting sales.

Chrysanthemums, aside from being attractive, are prized as a source of organic pesticides, called pyrethrum, which are increasingly in demand as the world shuns synthetic agricultural chemicals.

After years of slow sales, Kenyan farmers are enthusiastically looking forward to re-entering the booming global pyrethrum market. The sector, which once ranked highly among Kenya's cash crops, has in recent past nosedived, leaving thousands of farmers in financial ruin.

But the tide is slowly changing after a strong government initiative to revive the sector. New regulations have liberalized the once closed market and spurred the interest of private players such as Li Changhong, who plans to export to China.

The 41-year-old director and founder of Eshine Agriculture Planting Co Ltd hails from Hubei province in Central China. He is a licensed producer and processor of pyrethrum, which means he can grow, buy mature and dried flowers from farmers in a given region and export them. He has invested about $3.3 million in the venture.

He is among other players who are jostling for market position in the lucrative market that has experienced hard times over the past decade. According to the Pyrethrum Growers Association of Kenya, a farmers' lobby group, Kenya's production sharply declined from 10,000 metric tons in 2003 to 250 tons in 2011, triggered by a market glut of synthetic versions of pyrethrins. In addition, mismanagement in the Pyrethrum Board of Kenya and outdated regulations saw farmers receive no payments for their deliveries. Currently, some 20,000 farmers are owed $520,000, according to the board.

It is in this landscape that Li is operating. The uptake by farmers to plant the crop is slow, since only 30,000 farmers are growing the flower compared with more than 220,000 in the '90s. To instill confidence, the Chinese entrepreneur is buying and distributing farm essentials such as seeds. His firm has so far distributed about 3,000 packets to more than 4,000 farmers who have inked contractual deals to deliver sun-dried flowers to his company. He promises to pay $1.4 for every kilogram delivered, depending on the quality.

On a gloomy Wednesday at the end of August, Li meets with around 30 farmers in Koinange village, Nyandarua county in the Rift Valley. This is about one and a half hours' drive from downtown Nairobi and the county is among 12 that previously depended on the crop. Heavy clouds hang menacingly over the sky as his field operation officer, Zipporah Mugo, demonstrates how to transplant four-week green shoots from nurseries to the vast farms.

She instructs that the seedlings must be spaced 30 centimeters by 60 cm to give room for the plant to spread and bloom in six weeks.

"We are doing this all over again because many farmers have scant knowledge of how to maximize yields from this plant. Crowding reduces productivity," says Mugo, who has worked in the sector for more than a decade.

She advises the farmers to use fork-jembe tools to weed while warning them against applying pesticides. Mugo explains that inadequate funding has previously denied farmers extension services as money from the government goes into clearing previous debts. But Li is investing in these services to ensure the farmers and his company benefit from both quality and quantity. On maturity, farmers pluck flowers every two weeks. An acre can produce 70 kg of dried flowers.

But this is not only a demonstration exercise but also meant to build farmers' confidence in him. "From experience the farmers are wary. Shrewd, unlicensed brokers are also lurking in the sector, promising to buy the flowers at better prices but eventually never show up," says Li.

Samson Ndia Mueni, one of the farmers, recalls with nostalgia the days when the crop was their mainstay. It not only enabled him to feed and school his children but also fund his acquisition of more farming land. After the decline of the market, he turned to dairy and subsistence farming.

"But maize and potatoes are not flourishing in the low temperatures and heavy rainfall. We are therefore eager to return to pyrethrum farming," Mueni says.

Li explains that the Chinese market is ready to buy the Kenyan produce. Nevertheless, he acknowledges that Kenya is coming back into a global arena where Australia dominates. China, Rwanda, Papua New Guinea and Tanzania are other producers.

He is, however, buoyant about Kenya's high quality and relatively low production costs. Moreover, the global demand for organic pesticide is steadily increasing as consumers shy away from synthetic pesticides due to health concerns. Research shows that global export demand stands at 112 tons of refined pyrethrum flower extract.

According to Justus Monda, chairman of the Pyrethrum Growers Association of Kenya, which has 6,000 members, the demand for organic pesticide is growing as markets such as the European Union demand that farmers stop using harmful chemicals that have potentially adverse effects on consumers.

About 5,000 Kenyan horticulture firms were banned in 2014 because of high levels of pesticides and other organisms in their produce. "This is the global trend that organic pesticides will address," says Monda.

Nevertheless, he concedes that the Kenyan sector will only become vibrant and sustainable if healthy regulations are put in place. Discussions with the government are ongoing to strengthen efficiency along the value chain and build resilience against external shocks. He adds that challenges such as high costs of farm materials, competition from synthetics and unreliable supply by producers still plague the sector.

Li says he is forced to meet high transport costs. "I pay $650 to transport a 6-meter container to Mombasa, compared to $600 to ship the container with China. This is prohibitive and makes the product uncompetitive," he says.

To remain in business, Monda says there is a need to invest in research.

"Due to population expansion, small-scale farmers need to learn how to get high returns from minimal acreage without compromising on quality. This is something we are pushing to be included in the new regulations," he says.

Josephine Ouma, an associate professor in the crop, horticulture and soils department at Kenya's Egerton University, says increased funding for propagation and agronomy research is necessary to ensure farmers use high-value pyrethrum varieties.

Funding toward research has been neglected, she says, and the revival of the Kenyan sector will hinge on the country's comparative advantage, which is quality. She notes that, unlike Australia, which has heavily mechanized the production process, Kenya's strategy to hand-pick the flowers will control quality at that level. "We need high-yielding varieties that are responsive to climate adversities such as drought and are resistant to soil-borne disease that causes the flowers to degenerate quite fast."

She says research would also inform Kenya's ambitions to improve its manufacturing sector. Value addition will maximize farmers' returns since the sector is labor-intensive, says Ouma, who lectures on industrial crop production.

In the meantime, Li is optimistic about setting up a processing plant in the country in the next five years. This will improve the value of his exports, he reckons, saying there are also plans to have a full manufacturing plant in the country. It will enable him take advantage of the domestic and regional market while competing aggressively against global firms.

Liu Hongjie contributed to this story.

lucymorangi@chinadaily.com.cn

(China Daily Africa Weekly 09/16/2016 page27)