The Kenyan government has released Sh200 million ($3 million) in arrears dating back to 2003 owed to pyrethrum farmers . A further Sh663 million ($10 million) was allocated for the same purpose in finance minister Amos Kimunya's budget speech last month. President Kibaki has instructed that all the outstanding debts to pyrethrum farmers are cleared by the Pyrethrum Board of Kenya before the end of the year.
But the payment of arrears tothe farmers is unlikely to yield increased production as many growers have turned to better paying horticultural crops. Farmers in pyrethrum potential areas say they are fetching between Sh80,000 ($1180) and Sh100,000 ($1470) per acre from the sale of French beans every six months, as opposed to pyrethrum, which earns them Sh50,000 per year.
The sub-sector, which only a few years ago had an annual turnover of Sh2 billion ($29 million), is on the verge of collapse.
Mr. Samuel Kihiu, a former PBK director and former chairman of the Pyrethrum Growers Association, said flower deliveries to the 70-year-old board had plunged from 13,000 metric tonnes a decade ago to the present all time low of 900 metric tonnes. "The break even point for the board is 5,000 metric tonnes of flowers," he said.
PBK managing director, Ms. Polyne Sego, admitted that lack of adequate flowers had caused the delay in commissioning PBK's newly upgraded extraction plant into which up to Sh400 million ($5.8 million) was sunk. " We need up to 350 metric tonnes of flowers for the plant to test run for seven days for it to be said to have been commissioned," she said.
As matters stand now, the commissioning can only mean that PBK will be forced to import pyrethrum flowers from Rwanda. When one of its three plants burned down in 2003, the board turned to Rwanda to process its excess flowers, a development that the board's MD said increased the firm's overhead costs, leading to the current stand off with farmers.
The new plant, upgraded partly by proceeds from insurance compensation for the burnt plant, is expected to add an additional 50 metric tonnes to the board's current pyrethrum extraction capacity. PBK plant manager Mr. Elly Owawa said the upgraded factory had a recovery capacity of 90 per cent.
Ms. Sego said the country still commands 70 per cent of the world's pyrethrum market. "We still hold 60 per cent of the American market, 30 per cent of the European market, 9 per cent of the Asian-Pacific market and over four per cent of Africa's pyrethrum market," she said.
Apart from the foreign exchange earned from exports, experts say pyrethrum directly supports seven per cent of the rural population, over one million people according to available population censures figures.
Business Daily
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