Ethiopia Earned $318 Million From Horticulture Exports in 2018/19

Ethiopia collected some $318 million from the export of flowers and other horticulture products Ethiopian fiscal year, which ended July 7, 2019.

Mekonnen Hailu, Public Relations Director of the Ethiopian Investment Commission (EIC), said the export of flowers alone generated $261 million of the mentioned sum, securing the rest, $57million, from the export of vegetables, fruit, and herbs.

... over a hundred companies have been engaged in the cultivation of flowers, fruit, and vegetables as well as herbs and supply of high-quality products to the international market.

Ethiopian horticulture products' main export destinations are the Netherlands, Saudi Arabia, UK, USA, Japan, Norway, Germany, UAE, Belgium, and Italy.

Merkato

Uganda: Cattle 'Birth Certificate' To Aid In Export Beef Traceability Requitrements

The Ugandan government has announced plans to register all farmers and their cattle, including issuing "birth certificates" for the animals, so it can trace their products.

Mr Vincent Ssempijja, the Minister for Agriculture, Animal Industry and Fisheries said the international market demands that all countries producing food for the European market should have proof of its traceability.

"They want to know where the [meat and crop] products are coming from. They have been impounding and banning all consignments from Uganda if they find one box with issues,” he said.

“Farmers will be registered and their products given barcodes so that if they find a problem with one box, they look for the source and sort out the problem. We cannot enter lucrative markets unless farmers register."

Mr. Ssempijja added that all the cattle must be registered and given "birth certificates."

"For cattle farmers, it is going to be worse. You will be registered as a farmer, the cow will be registered, numbered and will have a birth certificate because the importers of our products demand meat for cows aged between 15 to 24 months. So we are going to sell [the meat] depending on their age," he added.

According to Mr Ssempijja, an audit team from the European Union is expected in Uganda in September (2019) to ensure that all farmers producing commodities destined for Europe are registered.

"Apart from traceability of the products, the team also wants to ensure that farmers benefit directly because many of them are cheated by middlemen. Government will not cater for those who defy the order when it comes to markets,” he announced, refuting allegations that the registration is aimed at imposing a tax on them.

President Yoweri Museveni, in a message delivered by Prime Minister Ruhakana Rugunda, said Ugandans need to be more competitive in so they can benefit from the international market.

"People want to know what they are buying to eat, where it is coming from, its quality and what they are spending their money on. Registering farmers is a major requirement; we cannot do without it and if we ignore it, we will lose to competition in the international market," he said.

The Food and Agriculture Organisation (FAO) representative in Uganda, Mr Antonio Querido, said Uganda needs livestock traceability for better product transaction in the international market.

Full article...

Cameroon Exported 14,205 Tons Of Banana In June 2019

In June 2019, Cameroon exported 14,205 tons of banana, the banana association Assobacam indicates. Compared with the 16,979 tons exported in June 2018, this represents a drop of more than 2,700 tons.

During the period under review, PHP, subsidiary of French group Compagnie fruitière de Marseille, exported 13,021 tons while Boh Plantations exported 1,184 tons. Due to security and financial challenges amid the Anglophone regions’ separatist crisis, CDC is still absent from the register of banana exporters in Cameroon.


Business in Cameroon

Former Tanzania Coffee Farm Becomes Avocado Exporter

In 2007, after 15 years of working on a large coffee farm in neighbouring Kenya, British farmer, James Parsons out to convert the former German coffee farm into an avocado farm.

The 137-hectare site had long fallen into disrepair. Overgrown shrubs and bushes had spread across the land, surviving coffee trees were diseased and the roof of the old farmhouse was full of holes. Years of price volatility, nationalisation in the 1970s and poor management from local co-operatives had led to the farm’s collapse.

“This was a coffee growing area and the cooperative from which I rented the land wanted me to grow coffee. They didn’t understand why I wanted to do avocados. They thought I wanted to grow local avocados,” he says, referring to the variety of large avocados with big stones that are sold cheaply on street corners across the country.

Africado uses about 65l of water to produce one kilo of avocados – far less than the global estimate of 283l of water needed to produce a kilo of avocados, according to the Water Footprint Network.

With efforts to use less water, also comes efforts to reduce waste. Every year, around 20 per cent of the avocado production unsuitable for exports is sent to Kenya to be processed into oil that's often used for cosmetics. The rest is packaged on site and will reach consumers’ plates about 30 days after being picked.

In 2018, Africado exported 3,000 tons of avocados to Europe – about half of Tanzania’s production.

Parsons has started a second avocado farm – doubling Africado’s production capacity thanks to a £3.5m loan from the Finnish and Norwegian development funds, AgDevCo, a company funded by the UK’s Department for International Development that invests in African agribusiness.

“We should be able to reach more than 6,000 tons of exports,” Parsons says.

The new farm will grow gem avocados, a variety which has a tough skin with gold flecks, as well as a rich flavour that comes from staying on the tree for longer, and is anticipated to rival hass avocados on the global market.

With a different harvest period to the hass type, growing gem avocados will enable the farm to extend its production season from the current four months to eight months a year — retaining its seasonal staff for longer.

In 2010, Africado launched a small-holder scheme selling local people subsidised seedling trees, from the farm, with a guarantee that it will buy their production in return. Nine years later, the initiative counts more than 2,000 small-holder farmers across a 200 kilometre radius.

Full article...

Tanzania's Agricultural Export Earnings Fall Byy More Than 50%

Tanzania’s agricultural export earnings fell by more than half over the past year, the central bank said in a report published on June 27, hurt by a government ban on cashew exports.

The report showed earnings from agriculture exports slumped to $554.1 million in the year ending April, from $1.225 billion in the year-earlier period.

Agriculture accounts for about one-third of economic activity and 67% of employment in the East African nation, according to the International Monetary Fund.

Reuters

Ethiopia 2019/20 Coffee Exports To Rise To Record High

 Ethiopia, Africa’s top coffee producer, is expected to export a record-high 4 million 60-kg bags of coffee in 2019/20, the U.S. Department of Agriculture attache in Addis Ababa said, as yields improve and the area dedicated to coffee farming increase.
Production of coffee is expected to rise to 7.35 million tonnes in 2019/20, an 1.4% increase from the 2018/19 season. Exports account for just over half of overall production, and are forecast to grow 0.5% in 2019/20 from the previous year to reach 4 million bags. Coffee is Ethiopia’s most important export.

Exporters in the country are facing increased regulation, the USDA said, with the government banning several exporters in recent months for defaulting on their contracts and hoarding beans.

While supplies are greater this year thanks to higher yields due to better rains and the reduced prevalence of disease, the USDA’s forecasted yield of 0.82 tonnes per hectare comes in well below the government’s target of 1.1 tonnes per hectare, the report noted.

And production continues to face the broader threat of farmers switching to other crops.

“One of the major challenges the Ethiopian coffee sector is facing is that many coffee producers, mostly from the eastern part of the country are tearing out the coffee bushes and replacing them with khat, a plant with stimulant properties,” the USDA said.

Meanwhile, domestic demand in Africa’s top coffee consumer is expected to remain robust, with the USDA expecting Ethiopian consumption to rise by 2.4% in 2019/20 compared to 2018/19.

Reuters

Cameroon's 2014/15 cocoa production up 10% over 2013/14

Cameroon's 2014/15 cocoa production increased to 232,530 tonnes compared with 209,905 tonnes the previous season, National Cocoa and Coffee Board (NCCB) data released on August 6 showed.

Cocoa bean exports from the world's sixth biggest grower rose to 198,129 tonnes by the end of the season on July 15, an increase of 23,500 tonnes or nearly 12 percent from 2013/14 levels, according to the marketing board's statement.

The NCCB did not give a comparative total figure for 2013/14 exports. The board announced exports of 158,000 tonnes at the end of last season. The statement released on Thursday, which marked the start of the 2015/16 season, did not explain the discrepancy.

The Netherlands was the top destination for exports, receiving over 73 percent of Cameroon's beans, the data showed, followed by Belgium at just over 8 percent and Indonesia at nearly 8 percent.

Meanwhile Cameroon processed 32,143 tonnes of cocoa domestically during the 2014/15 season, the NCCB said. Industrial grinders Sic-Cacaos, a subsidiary of Swiss chocolate manufacturing firm Barry Callebaut, and CHOCOCAM, an affiliate of South Africa's Tiger Brands accounted for 32,112 tonnes. The remaining 31 tonnes were processed by artisanal units. That compares with a total of 32,804 tonnes processed in 2013/14, according to figures announced by the NCCB at the end of that season.

In March, Cameroon announced plans to double its cocoa processing capacity to about 30 percent of its total production, or nearly 70,000 tonnes of beans per year, by adding 10 new processing units.


The nation's cocoa season runs from August to July. The main harvest is from October to January/February, followed by a light crop harvest period from April/May to June/July.

Reuters

Cameroon 2011/12 cocoa harvest was 210,034 tonnes

That was a little lower than the record 240,000 tonnes of 2010/11.

Companies from The Netherlands bought 180,075 tonnes, or 70%, of this year’s exports. Germany was the distant second biggest importer of Cameroonian cocoa, buying 7% of the total quantity exported.

More…

Bad weather reduces Ethiopian Valentine's Day flower exports

Officials at the Ethiopian Flowers and Vegetables Exporters Association say that cold weather saw the late cutting of flowers, affecting exports to European market for Valentine's Day.

The association said that the country failed to reach an expected 30 percent increase in exports as the bad weather delayed flower cutting by up to 15 days.

Horticultural products have, in recent years become one of Ethiopia’s major export products along with traditional coffee. In 2011, the country made US$220 million from the horticulture industry, making it one of Ethiopia's biggest foreign currency earners.

Flower growers are benefiting from financial incentives as they mount a challenge to Kenya – the current African leader in flower exports.

"This year, the flower price was up in Europe and we were expecting to get more income from the sector. But we are unable to achieve the goal," the association said in a statement.

Prices of flowers in Europe have risen significantly, with some flowers fetching 0.60 euro, up from 0.25 euro.

Ethiopia began exporting flowers in 2001-02, earning US$159 000, exports soared to US$2.9 million the following year.

In the past six months, Ethiopia has earned US$156 million and is expecting to get more than US$300 million from annual exports.

Africa Report

Not all sector players happy as Malawi, fearing shortages, bans maize exports

Malawi has banned the export of maize and maize-based products until further notice. The December 28 2011 ban has been spurred by fears of a shortage of the country’s staple crop over fears of a much reduced harvest in the current crop season, because of late and erratic rains.

A maize shortage would be a dramatic change from the last several years of an annual maize surplus, based on the combination of good rain and an agricultural inputs subsidy programme for the country’s farmers.

A maize shortage would have the political fall out of people asking why more attempts were not made to build up a maize reserve in the years of bumper harvests. Neighboring Zambia, also enjoying recent good maize harvests and also fearing shortages this year because of poor rain, has justified the levels of its exports partly on the basis of limited storage facilities.

In the event of a shortage of the region’s main staple food, no one is likely to listen sympathetically to such excuse after several good harvests. Ordinary people may not care much about how much surplus maize is exported, with many even seeing that as a country proudly serving a regional ‘breadbasket’ function. All this will be forgotten in the recriminations that would accompany shortages, high prices and imports of maize.

Malawi president President Bingu wa Mutharika, the architect of the subsidy programme and also occupying the agriculture portfolio, has warned against the ‘careless’ selling of maize, urging farmers to hold on to their stocks until the current season’s prospects become clear.

Maize in Malawi is typically planted in October/November with the onset of the rains, with harvest in April/May. Many farmers who planted on the early rains had to replant in December/January when their maize plants died. Delayed planting will inevitably reduce yields.

Maize prices have already begun to shoot up in Malawi in anticipation of shortages, reportedly by up to 50% in some cases. Farmers who happily sold their maize during good harvests are now finding that they have to pay two or three times as much, with the next harvest still two months away and expected to be poor.

Not all sector players are in favor of the ban. Intra-regional maize growing inequalities mean that there is always a sure market for this key staple. Farmers and traders who target the lucrative regional market are, unsurprisingly, not happy about the export ban. Traders could take advantage of the low maize purchase prices when there is a glut, and make a good profit from exporting at much higher prices to countries experiencing maize shortage.

While the government must necessarily prioritize maize food security, Farmers Union of Malawi President Felix Jumbe argued against the ban on the grounds of lost foreign currency earnings for the country. The government, also wanting foreign currency proceeds at a time of generally poor economic performance compounded by the withdrawal of the support of some international donors, has been anxious to assure traders that the ban is temporary pending clear results on the size of this year’s maize harvest.

African Agriculture

Maize exports threaten South Africa’s food security

A government-backed plan to export a record maize surplus may leave local silos drained of South Africa’s staple food by the end of April. The price of white maize has risen to a record in Johannesburg and the country is importing yellow maize for the first time in two years.

Gina Schoeman, an economist at Absa, said in mid January that millers, chicken producers and cattle breeders faced a surge in costs, and food inflation might quicken to as much as 15 percent from 11.1 percent in November last year.

“It is clear now that exports were done irresponsibly,” said Chris Schutte, the chief executive of chicken producer Astral Foods. The price hikes “will hit that section of the market that can afford it the least.”

Facing a record surplus two years ago after the biggest crop in almost three decades, farmer bodies such as Grain SA, which represents 7 000 commercial growers, pushed the government into helping find new maize markets from South Korea to Italy and Mexico.

“There will be very little maize left in silos come April 30,” said Christo Booyens, the assistant general manager for Grainlink marketing service at grain storage firm Senwes. “Ideally you want about six weeks’ stocks to ensure smooth supplies to millers.”

South Africa needed to import 700 000 tons of maize between January and July, Grain SA chief executive Jannie de Villiers said. Senwes said the crop would mostly be delivered to silos in June and July.

South Africa has exported 2.14 million tons of maize in the marketing year that began in May, compared with 2.07 million tons in all of last season, according to the SA Grain Information Service (Sagis).

Maize inventories plunged 40 percent in November from a year earlier, the biggest drop in that month since 2000, Sagis said. Measured in dollars, the price of white maize has risen 69 percent over the past year on the SA Futures Exchange to about $335 a ton, while the benchmark price of maize in Chicago has fallen 8.8 percent.

Agriculture Minister Tina Joemat-Pettersson said in April last year that the government had successfully drained a grain surplus that could have damaged the maize industry.

Simphiwe Ngqangweni, the acting director-general of the Department of Agriculture, said in January that the price increases were a result of demand and supply forces in a free market.

While South Africa had traditionally bought maize from Argentina in times of need, that country now produced much of its grain using a genetically modified seed variety that had not yet been approved locally for import, said Schutte at Astral Foods.

The price spike is the latest disruption caused by government management of the country’s food supply. In 2005, officials overestimated the size of the crop, driving prices to a record low and forcing some farmers out of business.



“If it wasn’t for supplies from the Black Sea countries, South Africa would be in very big trouble,” Schutte said. “Does it make sense for a country where maize is the basic foodstuff to export it at R1 400 a ton and buy it back at R2 800?”

Sagis said 81 885 tons of Romanian maize had arrived in the country since December 10, and 58 321 tons of white maize have been imported from Zambia this season. South Africa has shipped maize to Zambia in three of the past nine years.

In rand, local maize prices have almost doubled in the past year.

“It would have been a different story if it wasn’t a basic foodstuff, and if food security wasn’t the third priority on the government’s agenda,” said Schutte. “In such a case, you need a more comprehensive strategy.”

Bloomberg

The possible challenges posed by Zambia’s maize exports to its neighbors

Zambia sold 226,229 tonnes of maize to countries in the southern, eastern and central African sub regions, for the marketing season up to January 27 2012.

The Times of Zambia reports (01 February 2012) that the Food Reserve Agency, which effectively also serves as the country’s maize marketing body, sold a total of 444,641 tonnes of maize valued at US$69million to the local market and in exports.

The FRA is the government body charged with buying maize from Zambian farmers, maintaining a strategic reserve of the staple crop and exporting any surplus. Zambia has enjoyed a number of years of good maize harvests, harvesting 3 million tonnes in the 2010/11 season, up slightly from the previous season’s 2.8 million tones.

Late and erratic rains during the current (October 2011-May 2012) maize growing season throughout the sub-region have raised alarms of a maize deficits in several countries, including Malawi and Zambia, which in recent years have made up for the production shortfalls in countries like Zimbabwe and others. With almost the whole region having experienced late and erratic rains, there is a real risk of significant maize shortages in many countries.

The current doubtful maize-growing season will severely test the overall food security strategy of Zambia. Having overcome the basic issue of producing enough maize for local consumption plus a surplus over a number of seasons, the 2012 harvest season may show whether enough has been done to prepare for poor maize seasons. There will be a political, economic and food security implications if the maize harvest is much lower than expected and if the FRA does not have enough of a reserve in its silos to cover the difference.

Questions will be asked about the wisdom of having exported so much of the surplus in the good years. On the other hand, the FRA has many capacity constraints that limit how much of any season’s surplus it can soak up. One key such constraint is limited storage facilities, which in 2011 saw some exposed stored maize being rained on.

Agriculture minister Emmanuel Chenda dismisses such concerns. According to a January 19 2012 Reuters report, he said, "We are monitoring the situation very carefully to ensure that we don't end up importing maize. I think we are standing on very firm ground in

terms of food security. We had more than one million tonnes of surplus maize. We decided to export 600,000 tonnes because we didn't have storage space and so far we

have sold 200,000 tonnes,"

Maize is, unfortunately, almost the very definition of ‘food security’ in many African countries. The given reason of lack of storage space for selling off some of Zambia’s maize surplus is basically sound. And of course, maize is also an economic commodity like any other, so if there is extra of it to earn a country hard currency export earnings, that is always welcome. 

The Reuters report quotes a Zambian economist as alleging that the Zambian government was buying the maize at above market prices and selling it at reduced prices. He said this meant the government was effectively using "Treasury funds to subsidize the region."

The economist did not explain why Zambia would export its maize at a loss, assuming his charge was true. But it must be pointed out that an additional element of the mythical importance that maize has been allowed to assume is that for many African countries, being able to export maize is seen as a matter of great national prestige; a universally understood marker in maize-dependent countries of agricultural success.

All this will be turned on its head if Zambia finds itself needing to import maize in 2012. The ‘prestige’ of maize surplus will suddenly turn to the ‘embarrassment’ of maize shortages and imports.

This will be further complicated by the maize deficits that seem likely throughout the region in 2012. A regional maize shortage would mean more expensive exports from further away.

When there are good rains, Zambia seems to have found the answers to growing enough maize for its needs plus a surplus. However, 2012’s expected poor maize harvest may expose the many remaining challenges that need to be addressed for longer-term food security. Among them is more investment in grain storage facilities, as well as an expansion in irrigated versus rain-fed maize cultivation.

African Agriculture

Ethiopia records its first banana exports

The Ethiopian Horticulture Development Agency (EHDA) has celebrated a key milestone as the east African nation began exporting bananas for the first time ever.

In a nation where agriculture is the foundation, Ethiopia’s economy has long heavily relied on thriving coffee yields as its main cash crop. In recent years the EHDA has been encouraging Ethiopian farmers to acquire
new farming techniques and new crops.

This week the country recorded its first shipment of 40 tons of organic banana to Saudi Arabia to meet growing demands for the produce in that market.

According to the EHDA, at least 11,400 farmers are involved in the project covering 3100ha. It added Ethiopia was in the process of exporting 200 tons of bananas per week for the Jeddah market following an agreement with a foreign company interested in exporting.

more...Somaliland Press

Ethiopian coffee exports in sharp decline

Halfway into Ethiopia's fiscal year, only about 20% of the targeted 270,000 tonne coffee export has been shipped.

There is some confusion about the cause of the sharp decline in exports.

About 100 coffee exporters have been suspended from buying coffee from the Ethiopian Commodity Exchange for periods ranging from three to six months by the government, over allegations that they engaged in speculative hoarding of the country's key export.

Analysts say other changes demanded by the government in the trade of coffee, which would effectively require exporters to invest in storage silos, are impractical.

Others maintain the real problem is simply that the US$2.40+/kg price of coffee at the commodity exchange is higher than the international price (New York) of US$2.20/kg. 

According to Addis Fortune website, Ethiopia earned $314 million in the last six months from coffee exports a  6.28 per cent decline over the same period a year ago, quoting figures compiled by the Ethiopian Revenues & Customs Authority (ERCA).

Addis Fortune says Ethiopia exported 196,118 tonnes of coffee valued at $841.7 million dollars in 2010/11, representing more than half of the 370,569 tonne of total production in the country. The rest is used locally.

Talks between government and traders to break the export impasse are on-going, but have yet to yield any concrete results

African Agriculture

Africa is not growing the food commodities China imports

On the face of it, it should be a logical tie-up. China, with its burgeoning middle class and shrinking arable farmland, is facing increasing strains in its agricultural sector to meet domestic food demand. Africa, with its vast stretches of fertile but underdeveloped farmland would appear to be a natural partner to help the world’s most populous nation meet its food needs.

Yet for all the polemics surrounding Chinese “land grabs” in Africa the continent remains a bit player in Beijing’s food security strategy – at least according to this new report from Standard Bank.

The numbers served up in the report certainly offer food for thought.

Food consumption in China over the past decade has increased at an average annual rate of 23.4 per cent (or five time faster than in India) from $57bn in 2000 to $463bn in 2010. The figure is expected to double to over $1,000bn by 2015 as income growth fuels food demand further.

Within this, average per capita consumption of meat in China is expected to rise from 71.2kg in 2010 to 82kg by 2015 – China currently consumes half of the world’s pigs each year.

Higher demand for meat in turn causes a spike in demand for agricultural produce that feed animals – namely corn, wheat and soybeans. Adding to the supply tensions, industrial activity has also spurred demand for certain agricultural commodities. i.e – car manufacturing has stimulated demand for rubber, and textile manufacturing for cotton.

So why is it that Africa – whose wealth of energy and natural resources have long caught the eyes of Beijing – remains on the sidelines when it comes to agricultural trade with the Asia powerhouse?

As Standard Bank noted, the majority of Chinese agricultural imports come from Asia and the Americas. Total China-Africa trade in agricultural goods amounted to less than $4bn, compared to $100bn between the two for the year.

From the report:

…there is a clear disconnect between the agricultural commodities which Africa principally exports and those which China is increasingly importing. In comparing lists of the top ten Chinese agricultural imports with the top ten African agricultural exports, Chaponniere et al (2009) show how only two commodities, cotton and rubber, emerge – and even these products remains relatively modest.

One reason is that boosting domestic agricultural production is a key plank in Beijing’s long-term food security policy. At the moment, China is a net exporter of food and has enormous stockpiles of most soft commodities. Thanks to state support, China’s agricultural output is expected to increase by 26 per cent in 2019. Another reason is agriculture in Africa simply does not enjoy the same economy of scale and subsidies that make food products from Asia and the Americas so much more competitive.

Standard Bank – being the Africa bulls that they are – thinks the relative undeveloped nature of Africa’s agricultural sector can be an attractive proposition for a country like China, particularly as demand-overhangs, driven by demographics, continue to develop. According to the Food and Agricultural Policy Institute, for example, China will adjust from a net wheat exporter of 2.3m tonnes in 2007/8 to a net importer of 1.4m tonnes in 2017/18, while cotton imports will double from 3m tonnes to 6.1m tonnes. Meanwhile, the report reckons that 60 per cent of the world’s available and unexploited cropland is in Sub-Saharan Africa.

According to Simon Freemantle and Jeremy Stevens, authors of the report:

In Africa, two core areas create an allure for China. First, given the manner in which the continent’s agricultural sector has persistently underperformed, the provision of develop-mental and technical assistance allows Beijing an important avenue in fostering and building deeper bilateral ties. And, second, Sub-Saharan Africa’s (SSA)immense and largely untapped agricultural potential is being increasingly viewed by China as a cog in an unfolding and inclusive food security strategy. For now, China’s strategy is overtly developmental, and, though commercialism inspires many of the cooperative farming projects, profits are generated almost entirely in local and regional markets.

However, it is notable that for all Standard Bank’s bullishness about China in Africa there is little current evidence to back it up. Trade between the two – while rising – is low and direct investment by China in Africa is minuscule by its own standards. According to the report, Chinese activity in Latin American agriculture has been substantially more pronounced than in Africa. Thus, predictions of massive Africa-specific growth in the future must be treated with caution – especially given the rising backlash against Chinese investment on the continent.

Perhaps that should be the report’s real message.

Financial Times

Ugandan farmer makes good with fresh fruit exports

Having ventured into the world of commercial farming 15 years ago, James Kanyije has manoeuvred his way around quite successfully.

After graduating with a diploma in business studies in 1996 from Makerere University Business School, then referred to as the National College of Business Studies in Nakawa, Kanyije joined the employed ranks.

He worked with the Uganda Fish Parkers, where he received a wage of sh80,000 per month, eventually joining Icemark Africa Limited five years on.

Armed with a good knowledge of the fresh fruit industry in the UK, Spain, Belgium and other countries in Europe, Kanyije ventured out on his own at the turn of the millennium.

“I started small and gradually expanded. I was using farmland that I jointly owned with my brothers,” he says. “I sent my first consignment of fresh produce to Holland around September 2000, and after two years, orders started coming from France and other parts of Europe.

“People would read the labels on the boxes and would call me. We reached 1,000 tonnes of exports in 2007,” he says.

 Kanyije’s 100-acre farm, where he grows matooke, apple, banana, sugarcane, okra, sweet potatoes, hot pepper, gunda and carrera for the European market.

“Twice a week, we send at least 200 boxes of potatoes, 20 boxes of okra, 240 boxes of matooke to Europe. We also ship at least 5,000 boxes of bird eye chilli every week, but we need much more,” he says.

Ugandans in Europe also love the matooke, while Asians and a big portion of the West Africans generally like the white and the purple egg-plants commonly referred to as entula in Luganda.

“I have at least seven dedicated buyers in the UK, but most times I am unable to fulfil the orders. Even with 500 outgrowers getting the required quantities is still a struggle,” he notes.

Kanyije says the current heavy rains are as much a blessing as they are a challenge. With rains going into a third straight month, some of the matooke plantain stems are weakening and eventually breaking under the weight of full grown plantain.

To ensure that maximum output is derived from the plantation, Kanyije employs about 44 workers on the farm to tend the farm. Even then, he says additional labour is still needed to tend the 40 acres of matooke, four acres of apple banana, two acres of sugarcane, four acres of sweet potatoes and the other crops.

“Around this time last year, there was insufficient rain and we had to search for water to irrigate the land since the soils here are not so good. We even hired a rain maker, who failed to deliver the much-needed rain,” Kanyije says.

He adds that the rains fell shortly after the rain-maker was sent away. However, it dawned on him that he needed to mulch his farm, especially the banana plantation, to check soil erosion.

He says finding the required amount of grass to cover all the 40 acres of matooke will take a while.
He also uses the hot pepper rejects as a pesticide and fungicide in the banana garden, something he says, has added to the quality of his crop output.

“The scent from the hot pepper is strong enough to drive away dangerous insects from infecting the matooke stems. Additionally, when the hot pepper rots, it forms manure,” he says.

Without giving a detailed account of his earnings from the exports to Europe, he says he has been able to sustain his household and build a clinic of sh650m for residents of Busika, a neighbouring town.

He says each box of matooke and okra is sold at 14 pounds in the UK, that of African eggplant is 10 pounds, with the average prices of the rest of the crops at 14 pounds per box in the European market.

In October, Kanyije sold about 10,932 boxes of hot pepper, 2,306 boxes of matooke, 3,716 boxes of bird eye chilli, 1,875 boxes of African egg plant and several other boxes of sweet potatoes, apple banana, avocado, mango and beans.

Kanyije says without a cooling unit, losses occur when flights to Europe are cancelled or delayed because fresh fruits are perishable.

“The Government talks about supporting agriculture, but people like me with large farms are receiving little or no support. The Government should finance us and pass legislation that bans the importation of certain inorganic fertilisers,” he says.

He adds that there is need for all stakeholders in the fresh food export business to approach the international market as a single group from the country.

Kanyije argues that by approaching the international market as an individual erodes gains from exporting and weakens chances of penetrating foreign markets.

Pointing at a plantation of okra that is withering due to poor quality seeds, he says the Government should source for good quality seeds from countries like India.

Kanyije says a kilogram of okra seeds purchased from India costs 100 euros (about sh360,000).
To make things worse, a section of the farm has been hit by a rare virus streak that eats up the stems of the sweet banana locally known as ndizi, drying up the stem and the leaves of the crop, eventually killing the plantain or making it ripen prematurely.

He adds that fresh fruit companies that send contraband into the UK alongside their merchandise are making it harder to do legitimate business in the country.

New Vision

Kenyan farmers to benefit from export of packaged tea

by Rawlings Otini and George Ngigi

Marks and Spencer, a major retail outlet in Britain, will start stocking packaged tea directly from a factory in Nyeri — a move that could mark increased partnership between Kenyan tea factories and retail outlets in Europe.

Farmers from the little known Iriani Tea Factory, located four kilometres off the Othaya-Nyeri highway, are set to enjoy increased earnings following the launch of the tea value addition centre.

Marks and Spencer head of sourcing Louise Nicholls said the supermarket will boost speciality Kenyan tea consumption in Britain through its 700 branches.

Partnering with retail outlets boosts efforts to brand Kenyan tea and differentiate it from similar products from across the globe, creating a niche market for the country.

Kenya accounts for 24 per cent of the international tea market share.

Facilitators of the transaction, Fairtrade Africa, said the success of the project between Marks and Spencer and Iriani tea will see other retailers, such as giant outlet Sainsbury, seek to enter similar arrangements, upholding the practice of ethical sourcing which is highly valued in Britain.

Under ethical sourcing, outlets seek partnerships that have impact on the lives of disadvantaged or developing communities, contributing to raising their welfare.

More than 21 million people visit Marks and Spencer’s over 700 stores in the UK annually. Over half of the retailer’s business is in the food business.

In the pilot project, Iriani Tea Factory will deliver 1,350 kilogrammes of value added and packaged tea to the outlet in what could culminate into a long term contract. The first 10,000 packets, which bear the Fairtrade brand mark, left the country on November 20.

The farmers have high hopes that the product will be well received, warranting an official launch tentatively planned for February next year in Britain.

Iriani Tea Factory is fully owned by 6,000 farmers who are also its source of raw materials.

This year, the factory received Sh536 million from tea deliveries with Sh402 million being paid out to farmers.

The members look forward to receiving higher returns from the sale of processed tea. Kenya exports most of its tea, 95 per cent, in bulk raw form at the Mombasa auction.

At the auction, a kilo of the beverage fetches an average of $2.50 (Sh250), but with the value addition it will fetch approximately $6 (Sh600) with $0.50 (Sh50) being premium earned for selling under the Fairtrade mark.

The shilling, which has been battered for the better part of the year, could benefit from such initiatives which would increase the value of our exports tilting our balance of payments to a favourable position.

Kenyan tea is normally blended with other brands, an activity that dilutes its quality and identity.

“This means that pure tea from Kenya is likely to fetch higher prices due to its high quality, just as Ethiopian coffee differentiates itself (fetching more money),” said Amos Thiong’o, regional manager Fairtrade Africa-East Africa.

The project is funded by the British government through its aid arm, the Department for International Development (DFiD), to the tune of Sh7 million in a programme called FRICH.

The number of private companies investing in tea value addition has been growing in the recent past.

Value addition is done by flavouring, colouring, and repackaging into required measures. Products such as green tea and white tea emerge from the process.

High taxation and costly imported paper for packaging have retarded growth of value addition centres, industry players said.

To cut high transport costs, the few value addition firms in the country have set up bases around Mombasa, away from farmers who don’t benefit from them.

The number of active value addition companies could not be verified. Among the key investors in the market are Crown Gold Beverages Kenya Ltd, Kericho Gold, and Chai Trading Kenya Ltd.

Kenya is also seeking to increase the volume of its value added tea exports with a new licence for a processing plant in Nandi County.

Trade minister Chirau Ali Mwakwere gazetted 4.05 hectares of land south of Eldoret as an export processing zone (EPZ) to be used by investors to set up the plant.

“We expect it to start a value addition facility for tea exports having just met the first legal requirement of being officially gazetted,” said Export Processing Zone Authority public communications manager Jonathan Chifalu.

He said the investor’s choice of Nandi district was informed by availability of tea, adding that the investor did not want to go public about their identity or business structure.

The value addition initiative could see Kenya’s tea earnings rise beyond the Sh78 billion realised last year.

The Eldoret Export Processing Zone will become the 43rd in the country, in a race that began with only two such zones in Athi River and Mombasa.

The Eldoret tea plant is set to open new markets for farmers and create employment opportunities for thousands of jobless youth. It will also support Kenya’s long running campaign to diversify exports by shifting from raw materials to value added products. Leading importers of Kenyan tea are Egypt, Pakistan, Britain, and Afghanistan.

The Eldoret factory will, however, have to bear high transport costs being far from the Mombasa sea port. Most existing value addition centres are located at the coast to save on transport costs.

The move to woo local investors into EPZs comes at a time when the government’s figures point to growth of business in sectors that have traditionally been criticised for failing to use locally available resources to create quality employment.

The Economic Survey 2011 indicates a sharp rise in the value of exports from EPZs, boosting investor confidence even as industrialists blame the drastic drop in the number of jobs created on tough export market conditions.

Korean investors are currently running the Athi River-based Technology Development Centre, an institution that provides industrial and technical training to EPZ firms.

Kenya is seeking to boost its export base with rapid investment in industrial processing.

A significant volume of raw tea from Kenya ends up in Egypt, Pakistan, and Dubai for processing before it is distributed to other parts of the world.

The Tea Board of Kenya has hired a consultant to find ways of encouraging investors to put up value addition centres in the country.

Business Daily Africa

Ivorian cocoa reform to impose buy quotas for exporters

by Ange Aboa

Planned reforms to Ivory Coast's cocoa sector will impose quarterly quotas on

exporters' purchases to prevent big players from using their dominant position to manipulate the market, according to the latest draft obtained by Reuters on October 14.

The reforms in the world's top grower, which supplies 40 percent of the world market, will also scrap individually negotiated tax breaks to some exporters with local grinding capacity. The export tax is 14.6 percent, but some exporters who grind beans into semi-finished cocoa products locally managed to negotiate a discount, which will now be removed.And it will require exporters to pay a 10 percent deposit on all cocoa purchases from the state, the document from the agriculture ministry says, though it does not give details on how quotas would be worked out beyond saying they would apply to all exporters.

President Alassane Ouattara's government is attempting to introduce sweeping reforms to the sector with the core aim of guaranteeing its hundreds of thousands of smallholders a minimum selling  price. However, nothing has yet been finalised. Officials involved in

the reform talks say the government hopes to publish a definitive reform  plan by next month before it is adopted. The reform will also need the approval of the World Bank to

enable Ivory Coast to secure much needed debt relief, which was delayed by a violent four-month post-election conflict.

The reforms will effectively end a decade of liberalisation, which critics say left farmers beholden to the whims of international commodity markets, creating uncertainty that discouraged investment in their plantations and left the industry in disarray. Exporters have raised some concerns about the draft plans relating to transport costs and quality controls.

The reforms will guarantee farmers a minimum selling price, bringing the sector more in line with the regulated industry in Ghana, the world's No. 2 grower whose cocoa farming is more efficient and delivers yields per hectare around double those of Ivory Coast.

Farmers will get at least half of the average export price for the season, including insurance and transport costs -- a price the state will establish by selling more than three quarters of the cocoa ahead of time in forward contracts. But it will also place limits each quarter on the amount of cocoa each exporter can buy, according to the document obtained by Reuters on October 14. The limit will be the same for everyone, the document says.

 “To prevent the abuse of dominant positions in the market, an

upper limit will be imposed to licensed exporters," the document says.

Regulatory officials say this will not affect big buyers such as Cargill and Archer Daniels Midland, which will still be able to meet their production needs. It will deter only speculators seeking to buy up cocoa to manipulate the price, they say.

In another section, the draft says tax reforms would "erase the tax advantage currently accorded by the state to cocoa grinders".

Ivorian officials complain that grinders are registering beans for processing to get the tax break but only using some of them, while others are still exported raw.

Exporters will have to pay a 10 percent deposit on forward cocoa orders in order to "guarantee the viability of the system," the document adds. "Each trader will pay the deposit 48 hours in advance," it says.

Ouattara wants reforms in motion as soon as possible. They were temporarily derailed by a violent power struggle between him and former president Laurent Gbagbo over a disputed election last November. They now are seen as the last hurdle to IMF and World Bank debt relief on some $3 billion of obligations.

Reuters

Uganda coffee exports, September 2011

Uganda exported 340,378 bags of coffee weighing 60-kg each in September, up from 169,728 bags in the same month last year, a source at the Uganda Coffee Development Authority (UCDA) said on Friday.

The rise was due to good rains and to exporters clearing warehouses of old stock to make room for the new crop.

"Farmers and exporters are clearing their warehouses of old stocks to create room for a new crop and that explains the huge jump in exports. Also the crop in the second half of this coffee year (Oct-Sep) matured under sufficient rains which made it good," the source said.

South and southwestern Uganda account for 45 percent of Uganda's annual coffee production while central and the eastern parts of the country account for the rest.

Uganda, which mainly cultivates robusta, is Africa's leading exporter of the beans and their earnings are a major source of foreign exchange. It forecasts it will export 3 million bags in the 2011/2012 (Oct-Sept) season.

New Vision

How would an investor export maize or rice from a famine-hit country?

by Chido Makunike

The controversies over foreign investment in African land continue to rage. From the many issues heatedly raised will hopefully emerge models of investment that achieve the aims of the various parties without being seen as exploitative. It is and will continue to be a huge challenge for all concerned, but foreign investment in African agriculture is neither new nor will the factors driving both investors and host countries to consider it diminish in the near term.

The first modern Africa land rush was when European countries carved up the continent into the economic spheres of influence that correspond to Africa's borders today. A key part of the colonization process that followed involved the introduction of 'cash crops' like coffee, cotton, groundnuts and many others on huge estates to supply the raw materials for the colonial metropole's industrial processes. Sometimes long after some of these crops have ceased to be economically viable, many African countries' economies still heavily depend on them, creating all sorts of problems that have so far defied easy solution.

Together with the introduction of new crops and farming techniques, that first wave of land 'investment' also involved conquest, large-scale dispossession and relocation, forced labor and many of the other lingering effects that today cause many Africans to be instinctively suspicious of modern-day investors. In theory the self-governing status of today's African countries should protect against the abuses of the colonial era but this is far from straight-forward and certain to skeptics.

So finding a model that works to maximize the hoped-for benefits for investors and locals while minimizing the many issues of concern is clearly an on-going process.

The drought and famine in East Africa is already throwing up some uncomfortable questions for the model of large scale agro-investment in a poor country for export.

How would an agribusiness be able to export maize from a famine-stricken country that depends on the crop as its staple food? The furore over South Korean company Daewoo's plans to grow export maize in Madagascar was at least in a mainly rice-eating country. But imagine an investor had spent years and millions of dollars developing export-maize plantations in a mainly maize-eating east African country amidst the region's current famine.

How would it look for the investor to cite 'but that's what we agreed' as a reason to export the maize in the face of mass local maize starvation? More to the point, regardless of the investment agreement signed, would the government dare to allow such exports in a time of famine?

Easy, some might say, the investor should take this into account by incorporating a special 'famine' escape clause into his contract with his export markets, explaining that in the event of a local shortage he would not be able to supply, and would have to sell the maize locally.

But is this as clear cut as that may sound? Because of of the fraught, political importance of maize in Africa, it is not really a fully freely-tradeable crop, especially in times of scarcity. In the midst of a maize famine in which the government has prohibited exports but also does not have money to pay for your maize, what happens? In a 'free market' situation you should be able to keep the maize in your warehouse until you have negotiated a satisfactory payment arrangement, but how realistic is that in a time of famine?

What about if the government issues an emergency decree setting the maize purchase price below the investor's cost of production? This is far from a mere rhetorical question: in many countries this has often been a reality. The government needs to keep maize prices high enough to encourage farmers, but also low enough to keep this highly political crop at prices 'affordable' to the voters. Government price subsidies are sometimes part of the mix of answers but they are expensive and hard to sustain. Price ceilings whose considerations are as much political as economic/agricultural are sometimes another part of the answer, especially in difficult times.

If the government commandeers all the country's production of the staple crop by requiring all of a season's maize production to be sold to the government-owned maize marketing monopoly (not unheard of), promising to pay when it can, how does the investor pay his debts in the meantime? This is a problem that has plagued African commercial maize farmers in almost every country at one time or another.

Of course the investor may hope he is given special dispensation in the event of any of these matters arising, which could be the case, but in a famine all bets are off.

So the investor looks at all this and says, ''Okay, I will avoid growing locally 'political' crops for export in case these issues come up. I will grow something more safe, lucrative and non-political, like flowers.''

The investor buys or leases huge parcels of land to grow flowers for export. All seems to go very well for some time. Everyone is pleased at the new jobs, revenue, etc. When drought hits, the investor's hands are 'clean' because he doesn't have to get involved in the inevitably messy supply/price politics of staple crops during times of shortage.

But then the drought persists and there are growing concerns that your export flowers are using up too much of the water that should go for other more pressing concerns. You immediately point to the appropriate clause in your investment contract promising you X millions of liters of water for Y number of years. But if a government is forced to choose between honoring the promises it made to an investor in a 'normal' time and the needs/demands of hungry, angry hordes during a time of famine, well...

Africa needs all kinds of investment in its agriculture; that much everybody seems to agree on. The potential negatives of the current waves of large-scale investments have mainly been examined from the perspectives of how the host countries have not done enough to ensure a fair deal for themselves. But as the few examples presented here try to show, there are also investors who will get burned not because the idea of investing itself was wrong, but because they were naive, over-eager and failed to do sufficient due diligence before deciding how, where and in what specific sectors to invest in.

All you investors who are sure you 'know Africa,' if and when your carefully laid business plan goes belly up during a famine, don't say you weren't warned at the beginning about the many not so-obvious factors to ponder.

African Agriculture 

Related reading:

Africa increasingly questions the sustainability of dependence on maize for food security

African maize dependence needlessly increases the chances of every drought becoming a famine