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    Value ad­di­tion ef­forts in­spire farm­ing for ex­port

    Pas­sion fruit farm­ers in Rift Val­ley have been earn­ing a quarter from the sale of pas­sion fruits com­pared to the price of the value added product, in a sorry state of af­fairs de­pict­ing how farm­ers are los­ing to the un­ex­ploited value ad­di­tion sec­tor.

    In­vest­ment in the growth of fruits and ve­get­ables for phar­ma­ceut­ical, medi­cinal, con­fec­tion­ery, health and nu­tri­tion in­dus­tries is un­ex­ploited in Kenya.

    Growth of nuts – es­pe­cially cashew and mac­ad­amia – is also not fully ex­ploited, yet these products fetch high prices and there is a rising global de­mand, ac­cord­ing to a doc­u­ment titled “Na­tional Hor­ti­cul­ture Policy” pro­duced by the Min­istry of Ag­ri­cul­ture.

    It is not only in hor­ti­cul­ture that agro-pro­cessing and pack­aging is un­der­developed. This ap­plies to the whole ag­ri­cul­tural sec­tor, ex­perts say. “Kenya is the second-largest cof­fee ex­porter in the world after Brazil, yet its cof­fee is ex­por­ted un­pro­cessed and resold back into the coun­try after some de­veloped coun­tries pro­cess and add value to it,” said said Peter Gachomo, a hor­ti­cul­ture ex­porter.

    The hor­ti­cul­tural sec­tor in Kenya is set to be­ne­fit from gov­ern­ment ef­forts to en­cour­age in­vest­ments in the areas of farm­ing, agro­pro­cessing, ser­vices pro­vi­sion, cold-stor­age fa­cil­it­ies and trans­port­a­tion to over­seas mar­kets, among oth­ers.

    Ana­lysts say the coun­try has at­tract­ive op­por­tun­it­ies for in­vestors who wish to ven­ture into pro­cessing and value ad­di­tion. “Most of the pro­duce is ex­por­ted in its raw state and resold back to the coun­try after value ad­di­tion,” Gachomo said. The fruits- and ve­get­able-pro­cessing sub sec­tor is un­der­developed due to lack of ex­pert­ise and funds to set up pro­cessing factor­ies, he said.

    Agro-pro­cessing, a Kenyan gov­ern­ment re­port says, “im­proves shelf-life, re­duces post-har­vest losses and also im­proves product ac­cept­ab­il­ity in local and in­ter­na­tional mar­kets.” The gov­ern­ment is also en­cour­aging in­vest­ments in pro­duc­tion and ex­port of propag­ated ma­ter­i­als – plants that have un­der­gone cross-breed­ing - an area un­ex­ploited in Kenya, the re­port notes.

    But des­pite room for new in­vest­ment, the in­dustry has been suc­cess­ful, ac­count­ing for 60 per­cent of Kenya’s total ex­ports. Hor­ti­cul­ture has over­taken tour­ism to be­come the coun­try’s second-largest for­eign-ex­change in­come earner after tea. The trop­ical-to-tem­per­ate cli­mate that makes com­mer­cial ag­ri­cul­ture a vi­able in­vest­ment is partly re­spons­ible for this suc­cess, ac­cord­ing to the re­port.

    It was the fa­vor­able grow­ing con­di­tions that ini­tially at­trac­ted Willem Dolle­man, a nat­ive of the Neth­er­lands, to come to Kenya in 1978 to work for a Dutch seed house. He in­stantly fell in love with the coun­try. To­gether with Gor­don Mur­ray and Vitacress Salads, he foun­ded Vitacress Kenya in 1994. Mur­ray offered his 350 hec­tares of land in Timau, 225 kilo­metres north of Nairobi, in ex­change for a 30 per­cent stake in Vitacress Kenya. Dolle­man, who runs the op­er­a­tions, owns an­other 30 per­cent of the com­pany. The re­main­ing 40 per­cent is owned by Vitacress Salads, the largest wa­ter­cress grower and mar­keter in the U.K. and Por­tugal. 

    The com­pany spe­cial­izes in grow­ing garden peas, salad onions, broc­coli, sweet corn and baby leaf lettuce. The products are sold in Marks & Spen­cer and Sains­bury’s Su­per­mar­kets in the U.K.. The com­pany not only grows but also pro­cesses the products to mar­ket spe­cific­a­tions in­clud­ing pack­aging and la­bels. The Kenyan gov­ern­ment is bank­ing on the avail­ab­il­ity of ex­pans­ive, un­developed land to at­tract in­vestors to farm­ing. Cheap labor and fresh­wa­ter lakes and rivers make in­vest­ment in large-scale hor­ti­cul­tural farm­ing an at­tract­ive pro­pos­i­tion. 

    “The soils are rich in nat­ural nu­tri­ents for growth of fruits and ve­get­ables. With the re­cent E.U. re­stric­tions on max­imum residue levels for ex­por­ted food products, no farmer wants to risk using ex­cess fer­til­izers,” Gachomo said. Most of Kenya’s hor­ti­cul­tural pro­duce is ex­por­ted to the E.U., while some is con­sumed loc­ally. Pro­duce grown in Kenya that fetches high profits in­cludes snow peas, as­paragus, chil­lies, pas­sion fruit, apples, ba­na­nas, rasp­ber­ries, mango, pine­apple, avo­cado, or­anges, papaya and ba­na­nas. 

    Cold-stor­age for hor­ti­cul­tural products, which are gen­er­ally highly per­ish­able, is an­other area that the gov­ern­ment says is un­ex­ploited. Most farm­ers suf­fer losses due to spoil­age. This is es­pe­cially true of small-scale farm­ers since they can­not af­ford the huge in­vest­ments needed to pur­chase and in­stall cool­ers and freez­ers. 

    Kenya is also hop­ing to at­tract in­vestors in the man­u­fac­ture of green­house plastics. Most hor­ti­cul­tural pro­duce is grown in green­houses, en­sur­ing fast ma­tur­ity and pro­tec­tion against ro­dents, in­sects and pests. Green­houses also guard against un­ex­pec­ted harsh cli­matic con­di­tions. Des­pite this, most of the con­struc­tion ma­ter­ial for green­houses is im­por­ted from the U.S., China, and Europe. 

    This short­age of green­house con­struc­tion ma­ter­i­als has given rise to com­pan­ies such as Mavuuno Green­houses Ltd., which im­ports green­house kits from the U.S. The kits were de­veloped by Prof. Mehta Khajan of Pennsylvania State Uni­versity. An­other com­pany, Amiran Farm In­puts, also im­ports green­house kits. “It is wor­ry­ing that no in­vestor has come forth to ex­ploit the man­u­fac­ture of the green­house kits…yet green­houses are a major input in ag­ri­cul­ture, which em­ploys 80 per­cent of the pop­u­la­tion and is also the coun­try’s highest in­come earner,” said Mavuuno Green­houses Dir­ector Wanjiku Kamau.

    The gov­ern­ment is also en­cour­aging in­vestors to pur­sue the field of ser­vice pro­vi­sion. “Pro­vi­sion of ac­cred­it­a­tion ser­vices to en­sure pro­duce meets mar­ket and reg­u­lat­ory re­quire­ments is being en­cour­aged,” ac­cord­ing to the hor­ti­cul­ture policy doc­u­ment. Kenyan farm­ers have re­cently lost in­come due to strin­gent re­quire­ments im­posed by the E.U. on food im­ports. It is as a res­ult of this chal­lenge that the gov­ern­ment is ap­peal­ing to in­vestors to provide ac­cred­it­a­tion ser­vices. 

    Air trans­port­a­tion ser­vice is an­other area that calls for more in­vestors. Be­cause hor­ti­cul­tural pro­duce is highly per­ish­able, quick de­liv­ery to con­sumers is cru­cial. The gov­ern­ment says more pro­viders for air­lift­ing ser­vices to Europe will push trans­port costs down. “Though sea trans­port is cheaper, many ex­port­ers in Kenya opt for air trans­port due to delays at the port of Mom­basa,” Dolle­man said. 

    A well-es­tab­lished ex­port mar­ket, af­ford­able labor and in­vestor-friendly ar­range­ments give Kenya an ad­vant­age in its pur­suit of po­ten­tial in­vestors, Dolle­man said. Ex­port pro­cessing eco­nomic zones, with their added pack­age of in­cent­ives, provide even more ad­vant­ages to ex­port-ori­ented in­vestors. The gov­ern­ment of­fers in­vest­ment and cap­ital al­low­ances to such in­vestors. 

    Not all is rosy, though. Ac­cord­ing to Dolle­man, the in­vest­ment cli­mate is hampered by poor in­fra­struc­ture and com­plic­ated bur­eau­cracy. The com­pany pays 32 taxes that, he said, should be con­sol­id­ated into one. Roads are poorly main­tained, potholed and rough, the rail­way sys­tem is dilap­id­ated and delays at the port of Mom­basa dis­cour­age in­vest­ment.

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