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: 04 September 2019; Hits: 11095

Limuru entrepreneur launches honey processing plant that will buy produce from all-comers

Wilson Karanja, a Limuru based farmer cum entrepreneur has launched a honey processing plant that will provide market for farmers across Kenya.

“Local and international demand for honey is high, however, Kenya’s honey production is so low to meet the demand and as such I would like to drive production by farmers in Kenya,” said Karanja.

Currently, Karanja sources more than half of honey for his plant from Tanzania.

According to the United States Agency for International Development (USAID), Kenya produces an estimated 7300 tonnes of honey annually against a demand of 100,000 tonnnes. To bridge the supply gap, Kenya imports honey worth approximately Sh23m every year from Tanzania, Egypt and Australia according to the United Nations Commodity Trade Statistics.

Company sells improved Longstroth beehives that doubles honey yields

Backyard beehives can offer farmers 13 per cent increase in annual honey yields

karanja honey

Honey processing at Karanja's plant in Limuru. Courtesy

In advocating for more honey production in the country, Karanja seeks to produce more pure honey as there is a lot of fake honey circulating in the market.

According to the National Beekeeping Institute, 30 per cent of honey delivered for testing in August 2019 was found to be substandard, compromised in quality or adulterated.

“I am recruiting farmers from all corners to set up apiaries in their regions, in this, they can form a group for to enable easy collection of the produce,” said Karanja.

In this, the price will be negotiated between the seller and the buyer.

“The impact of keeping more bees locally is that communities will be empowered economically, people will also realize benefits in crop pollination and in health for reduced risks of heart attack, strokes and some types of cancer,” said Karanja.

Karanja’s plant has the capacity to process 1500kg of honey weekly for local consumption and export to the international markets such as the United Arab Emirates where demand is high with a kilo fetching at least Sh1500, double the price in Kenya.

Currently his processed honey has been taken to the Kenya Bureau of Standards (Kebs) for testing and certification to enable him sell to supermarkets and for exports.

“My brand is called Bounty Forest Honey and I have already started selling it in bars, hotels and lodges. I sell a kilo at Sh800, 500g at Sh400, 300g at Sh300 and a dozen with 33g sachets retails at Sh420,” he said.

He has employed three permanent people at the plant.

Karanja can be reached on +254 725 906 721.

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: 03 September 2019; Hits: 4505

Busia, Kericho counties plans a tax waiver deal to enable farmers access markets and curb food deficit

milk Workers at a milk processing plant measuring milk received from farmers. Photo courtesy.

Busia and Kericho county governments are planning for Cess tax waivers on produce of the farmers from both counties to enable the producers find market for their produce and bridge deficit gaps of the food which may be falling below demand by residents of either of the areas.

Kericho Governor Prof Paul Chepkwony revealed at an event over the last weekend that his government will enter into a memorandum of understanding with the County Government of Busia for Cess tax waiver on milk and other agricultural products from Kericho and vice versa.

This follows therefore that farmers and traders from Busia wishing to sell their goods in Kericho will be given similar preferential treatment.

“I have already informed my counterpart and Hn. Sospeter Ojaamong on the planned trade partnership with his Busia County which will go a long way in promoting trade between Busia and Kericho which are also members of the Lake Region Economic Bloc (LREB),” he said.

Apart from milk, Kericho has comparative advantage in tea leaves and both sweet and English potatoes while Busia can export to Kericho fish, cassava and sugar among other products.

Tax experts say the proposal is good if implemented, adding that the ball is now in the court of technocrats to either come up with a policy or amend tax regulations to accommodate Cess waiver clause.

County Director Livestock David Mukabane said the move to import Milk from Kericho is good as it will help bridge the gap of 32million litres per annum from the total annual consumption of 60 million litres, adding that the county currently imports milk from Uganda and Nandi.

However, the Director said the County has introduced ambitious programs in the dairy sector that might see the county meet the annual consumption target and export surplus milk.

He said Governor Ojaamong administration has introduced two dairy parks (boarding school for dairy animals) and replacing them with the old system where the County Government purchased dairy cows and gave them to groups to breed.

Mukabane said the World Bank through the Kenya Devolution Support Programme has allocated Sh22m for the two parks; each park will have 80 dairy animals to be under county livestock and veterinary officers, while farmers will be vested with the task of providing pasture and fodder to the animals at the parks.

“To help cushion against drought, the Director said the county has set aside 8 acres of land at Busia Agricultural Training Centre for planting silage and hay,” he said, adding that plans are in the offing to add more dairy animals through Ward Development Fund in 2020-2021 financial year.

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: 27 August 2019; Hits: 4480

Free market far more advantageous for the sugar sector than a heavily regulated regime

Michael Arum, SUCAM coordinator

The sugar sector employs over 250,000 Kenyans and supports six million livelihoods. Yet it has become one of the country’s loss-making ventures. Not because the industry is not viable and that farmers don’t have the experience and skills to farm the crop, but because government policies are overriding a free and fair market system, breaching the Competition Act, 2010.

The Act advocates market forces, promoting effective competition and preventing unfair and misleading market conduct, and specifically prohibiting dominant undertakings and restrictive trade.

While the government is supposed to develop laws as tools to implement these policies, the proposed Crops (Sugar) Regulations, 2019, have no element that upholds these requirements, instead creating a buyers’ market – known as a monopsony - that will lead to the final death of Kenya’s sugar sector.

At the heart of this ‘fix’ of the sugar industry is zoning, renamed cane catchment areas during the national sugar taskforce draft report validation forum. This force sugar farmers to register and then be assigned one mill they are allowed to sell to. The results are set to be irreparably damaging to Kenya and to western Kenya.

Sugar farmers chase government to follow law in forming regulations

Sugar cane farmers callout new zoning law that restricts market access

sugarcane tractor

By giving all the sugarcane buying power in a region to a single miller, the government is indirectly granting them absolute control over prices and farmers’ income too. Indeed, millers can treat their supplying farmers however they like, pay slowly, pay late, shift prices, demand off-sets, they can do anything, because there will be nowhere else any farmer can go that won’t be illegal. All competition has been ended.

It’s a policy-based redistribution of power that raises questions about why the Kenyan government passed the Competition Act in the first place. If the ideal way to rescue an ailing and high cost, uncompetitive industry, such as sugar, was to override all market forces, why was a policy commitment to competition ever put onto the nation’s statute?

Yet, the anti-competitive combination of power being relocated to buyers and intense and highly-staffed government control mirrors many similar approaches by the Ministry of Agriculture and Irrigation, of late, in policies that seem to be employing large numbers of staff to proscribe the minutiae of agro-industry mechanics.

In the current climate of avowed determination to end corruption, its new regulations, furthermore, appear filled with opportunities for rent seeking, across requirements for letters of comfort as confirmation of commitment by investors to install a factory, special approvals, permission-based registrations, and extra licenses. All of these are put in without reason or justification, but all of them grant government employees power over industry players - which is an unusual way to stop requests for ‘appreciation’ payments.

Numerous extra barriers to market entry have been added too. No farmer or Kenyan can produce sugar seeds, grown sugar, process sugar, transport it, distribute or wholesale it with any normal business license, but must now go through complex bureaucratic registration processes that include exorbitant licensing fees in a now fully controlled market and industry.

In the end, for sugarcane farmers and their dependents, the sum is set to be grave for it will be very expensive or near impossible to transition into alternative crop. This will open up a bigger trade deficit as Kenya imports even more sugar.

Additionally, centralising and allocating sugar processing operations and all distribution trade to millers will lead to further operational inefficiencies by millers; arbitrary deductions during ploughing and in provision of seed cane, delayed services such as provision of seed cane to farmers, harvesting and cane transportation as well as defective weighbridges.

If the country were to allow the forces of demand and supply to prevail – as the Competition Act does specify – with everyone free to participate with minimal government control, we would achieve far better results.

Sugarcane farmers would be at liberty to sell their cane to mills of their choice, which would drive millers to set their buying prices at the right market value or jeopardise their raw material supplies.

Competition would force all of the industry’s participants to strive for greater efficiency or risk going out of business; seed producers would ensure they sell the highest quality of seeds to farmers to avoid losing market share to competitors, farmers would strive for higher sugar content, and everyone would earn more.

As a result, the existing cane factories and infrastructure would be utilised at a far higher rate than the current 58 per cent.

Ultimately, if we were able to achieve 90 per cent utilisation of the existing capacity, the country would end up saving Sh16.6bn a year in import costs, significantly reducing our trade deficit. Over time, the volumes of sugar produced would not only be sufficient to meet consumer demand, but also to provide a sustained surplus for exports, thus improving the country’s balance of payments. In 10 years, the net revenues would amount to Sh172bn based on industry spending of Sh20bn.

But instead, we are stuck with spending at least Sh23.8bn a year on sugar imports to supplement the mounting production deficit, and a huge civil service bill to override the market and devise ‘letters of comfort’.

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