Pyrethrum growing sector in Kenya faces many challenges

by Paul Wafula

In July 2008, then Kenya Pyrethrum Growers Association national chairman Justus Monda dismissed reports that pyrethrin stock worth over Sh1.5 billion had been stolen from the State-owned corporation.


He said the money had been used in 2004 by the Pyrethrum Board of Kenya (PBK) to clear an outstanding bank overdraft.

This was not the first time allegations of the mysterious loss of the insecticide killer ingredient were made.

In a Parliamentary Select Committee on Agriculture hearing, Mr John Macharia Kamau, a farmer in Narok, informed MPs investigating the collapse of the industry that farmers were not paid their 2002 bonus and for their 2003 deliveries, only to be told that “rats ate” their produce.

But unclassified records seen by Smart Company show that top managers at the Pyrethrum Board of Kenya (PBK) conspired to loot over Sh2.7 billion worth of pyrethrin stock between 2001 and 2005, pushing the State-owned corporation to its knees.

The documents that vindicate a forensic audit adopted by Parliament in February 2009 also suggest that delay by the prosecuting arm of the government to act on corruption cases may have abetted the decade-long plunder of PBK’s resources.

The records also reveal that channels of corruption ran deep and spanned the tenures of several management teams that conspired to dip their hands into the tills of the parastatal.

“Between 2001 and 2005, PBK lost stock worth Sh2.7 billion. The Criminal Investigations Department was called to investigate the losses. The CID has not submitted its findings to date,” read a management audit report prepared by the Inspectorate of State Corporations for the Office of the President.

The management report shows that as late as October 2007, PBK had no policy or systems on imprest and advances, enabling more than 670 of its staff and board members to get cash at will.

“No imprest register is maintained and as the team found out, board members and staff had left PBK with huge debts whose recovery is uncertain. As at 1 October 2007, debts totalling Sh21,159,152.80 were owed to PBK by both staff and board members,” reads the report.

The fact that the debts have been pending for more than six years further dims hopes of the firm ever recovering these monies since the current legislation favours debtors.

Trouble at the firm first emerged in March 2003 after a fire broke out at the PBK factory in Nakuru and extensively damaged one of the extraction plants.

Consequently, due to huge stocks of pyrethrum flower which were vulnerable to degradation, PBK was given authority by the government to transport it in grist form to Rwanda for processing.

Grist weighing 2,381.22 metric tonnes was transported to Rwanda, warming up relations with the Rwandese nationals and effectively taking graft to the regional level.

“The expectation of the board was that after extraction, 23,500.37 kilogrammes of pyrethrin was to be received from Rwanda. However, only 18,073,31 kilogrammes were received. Pyrethrin equivalent to 6,043.75 kilogrammes were never received at PBK.

“The board flouted the contents of the agreement signed between Rwanda and PBK and huge payments were made in cash as opposed to the agreed mode of payment through telegraphic transfer,” read the report.

Although the matter was recommended for investigation by the defunct Kenya Anti-Corruption Commission (KACC), not much ground has been covered.

“We are also concerned that despite telling evidence, the KACC is yet to take any action on the matter. As a committee, we are preparing to take on the KACC to find out why they have not acted as advised or if they also participated in the cover-up,” said Mr John Mututho, the chairman of the Parliamentary Select Committee on Agriculture after a meeting that resolved to stop the State corporation from selling its assets in efforts to revive its operations.

The financially-troubled PBK is seeking government approval to dispose of part of its Sh4 billion assets to jump-start its operations.

The current managing director, Dr Isaac Mulagoli, said the board needs about Sh300 million for smooth operation, including servicing of loans and settling farmers’ dues.

“We are also preparing a legal framework that will liberalise the pyrethrum sector to avoid a repeat of the theft that was witnessed at the Pyrethrum Board of Kenya as well as give farmers an opportunity to have a choice when it comes to selling their flowers,” said Mr Mututho.

The forensic report reveals that then managing director Polyne Sego flouted government procedures and regulations and went against the board’s advice and some junior employees, who questioned unilateral decisions to make huge payments for the purchase of pyrethrum from Rwandese firm SOPYRWA to supplement declining local production.

“The managing director ignored proper advice given to her by the board, refinery manager, finance manager, and the management staff finance committee. Huge payments were paid to SOPYRWA at the expense of farmers. Most of the officers opposed to the importation have since been dismissed,” said the report.

The report recommended that Mrs Sego be held accountable for flouting government procedures by purchasing oleo resin from Rwanda before submitting the proposal to the tender committee.

“The idea to import oleo resin was noble, but the implementation was improper as government procedures and regulations were flouted with impunity by the managing director, Mrs Polyne Sego,” a report by the Inspectorate of State Corporations noted in the 2007 report.

It recommended that the MD be held accountable for approving the down payment of $500,000 (Sh36,500,000), in breach of the agreement and against the advice of the finance manager.

The board had also invested Sh150 million in the collapsed Euro Bank, contrary to the State Corporations Act, which required it to handle the money “in a manner directed by Treasury”.

“There was no authority granted by Treasury for investing such colossal amounts of money in Euro Bank,” the report said.

But it is the way the firm kept its financial records that exposed the depth of misappropriation.

According to the audit, PBK’s cash books, telephone, advances, and imprest registers were neither maintained nor kept as required.

The firm, as at October 2007, was operating more than one cash book and 20 local and five foreign bank accounts.

Sixteen of the local bank accounts were regional and their main purpose was to facilitate payments to farmers. The audit report shows that management was only able to provide information on 11 of the regional accounts.

“Despite the frequent enquiries by the team about the position of the last five accounts, no information was availed by management,” said the report. “Examination of the cash books availed to the team revealed that they were in shambles,” it said.

The team found that no reconciliation of cash books had been done for more than four months, neither were records of transactions maintained.

During random spot inspection, it was observed that cheques amounting to Sh252,841 written between March 2005 and June 2007 were still kept by clerks. Most of the cheques had gone stale, yet they were neither cancelled nor replaced.

“This clearly indicated that the amount indicated in financial reports as paid to farmers does not reflect a true position of arrears payable to them,” the report noted.

For residents of Nakuru who saw the factory in full operation in yesteryears, it would seem like a fairy tale to ask them to recall how it was when lorries laden with pyrethrum flowers from Kisii, Nyandarua, Limuru, Naivasha, Gilgil, Mau Narok, Molo, and Subukia would deliver their load before 2003. The silence now is deafening.

The Nation

A brief history of Kenya's Pyrethrum Board

by Eliud Miring’uh

Pyrethrum was introduced in Kenya in the 1920s by colonial farmers who influenced enactment of the Pyrethrum Act. The Act provided rules for production, processing, and marketing of pyrethrum until 1980, when Parliament enacted the State Corporation Act Cap 446 to govern all State corporations, including the Pyrethrum Board of Kenya.

The new Act gave powers to the President to name directors and top managers of State corporations, including those in agriculture, without consultations with farmers. Pyrethrum had become the most important crop after coffee and tea and by 1963, Kenya was the word’s largest producer, accounting for 70 per cent of production.

However, with the enactment of the State Corporations Act, the Pyrethrum Board of Kenya saw political appointees who had no knowledge of the crop between 1980s and 1990s. These directors and managers ran it down. Cases of theft of pyrethrum stocks were rampant in the 1980s, while managers engaged in corruption through tendering systems and purchasing of equipment.

Between 1980 and 1990 production of pyrethrum was adversely affected, with farmers uprooting the crop in favour of other cash and food crops after PBK reneged on payments. And since farmers abandoned the crop, the board has closed down key regional offices.

Other challenges include inability by the Government to introduce modern pyrethrum processing plants.The industry has also not been liberalised.

The Standard

Tanzania urged to pay more attention to non-traditional export crops

Traditional export crops, on which this article focuses, are crops that have been the major foreign exchange earners for the country over the years. These include coffee, cotton, cashew nuts, tobacco, tea, sisal and pyrethrum. Non-traditional export crops include oilseeds, pulses, spices and cocoa.

Cash crops production in Tanzania has been recording an upward trend since independence in 1961. Tanzania produces an average of 70,000 tonnes of wheat annually. The major production area is Hannang Wheat Complex in Arusha Region. The complex consists of seven autonomous farms with about 4,000 hectares of cultivated land. The farms recorded steady development from the 1970s with the financial and technical assistance f the Canadian International Development Agency (CIDA) to 1993 when they became autonomously operating schemes. Wheat production is complimented with large-scale private farmers in Arusha, Iringa and Kilimanjaro and other small-scale farmers in Ludewa, Njombe and Makete districts.

Another cash crop is sugar cane. For decades, it has been primarily grown in four estates, namely Kilombero Sugar Company, Mtibwa Sugar Estate, Tanganyika Planting Company and Kagera Sugar Limited. Apart from some out growers in Kilombero and Mtibwa estates, reports from the Sugar Board say that the annual sugar production is recorded at bout 115,000 tonnes per annum. This is an indication of a gradual increase, though the quantity is short of meeting the estimated market demand of 300,000 tonnes. Recent export reports show that this shortage has forced the country to import over 200,000 tonnes of sugar.

Then we have coffee, which enjoys a high ranking among the traditional export crops and is grown in various parts of the country. Agriculture experts say that in the past 20 years, coffee production has doubled, currently reaching about 50,000 tonnes per year. Production has declined due to reduced production in public estates; old age of trees, low input use and increased incidence of diseases, low returns to producers and the escalating costs of production. Coffee is predominantly produced in Kilimanjaro, Arusha, Mbeya and Ruvuma regions especially Mild Arabica, while Bukoba region produces Robusta. Hard Arabica is produced in Kigoma and Morogoro regions.

Another cash crop is cotton. It is traditionally grown in the Lake Zone, Tabora, Morogoro, Singida and Coast regions. Cotton Board reports show that in recent years, production of the cash crop has been on the upward trend, though yield per hectare is low, at 0.4 tonnes, as opposed to 0.6 – 2.0 tonnes in other African countries. The reports show that lack of better varieties, non-use of fertiliser and inadequate application of pesticides are threatening productivity. The soil infertility in the cotton producing regions has been depleted and disturbed. The ecosystem imbalance among others also contributed to low productivity. Experts say that to meet the market demand, production should be increased to a sustainable level of about 300,000 metric tonnes of cotton seed per annum.

Cashew nuts are among the traditional cash crops in the country, especially in the southern coast regions and their hinterlands. It is mainly grown in Mtwara, Lindi, Coast, Ruvuma and Tanga regions. The main cashew growers are smallholder farmers. Cashew nuts in Tanzania are primarily grown for export. A very small proportion of the crop is processed and consumed domestically. Current production is 90,0000 tonnes per annum. Major threats to the recovery of this crop are lack of effective operating factories, poor quality control and organization of primary procurement. Although total rated capacity of existing factories is over 100,000 tonnes of raw per annum, effectively only about 30,000 tonnes of raw nuts can be processed.

Also in the list is tobacco. It ranks fourth after coffee, cotton and tea in foreign earnings. The crop has considerable prospects to gain the number one slot as the country has great potential to hold acreage or increase productivity or both. Tanzania produces three types of tobacco; which are flue cured, fire cured and burley tobacco. The main tobacco growing areas are Iringa, Tabora and Mbeya regions, which grow flue-cured tobacco. Ruvuma, Kagera and Kigoma regions grow fire-cured tobacco while burley is widespread in Morogoro, Tanga, Lindi and Kagera regions.

Major threats to tobacco industry are low level of technology and adverse environmental effect. Production of the crop has continued to expand from 16,000 tonnes in 1990/91 to about 40,000 tonnes to date.

One of the highly earning exports in Tanzania is tea; Tanzania produces both organic and non-organic tea in both large and small-scale farms. The bulk of the crop is produced by large-scale estates, which are increasing in number as a result of the general policy of opening up the agricultural sector to private investment.

Tea production is labour intensive and offers substantial employment to people in the rural areas where both farms and processing plants are located. Tea is grown in Mbeya, Iringa, Tanga and Kagera regions. It is among the cash crops whose production has maintained an upward trend for several years; currently it is above 33,000 tonnes per annum, according to the Tea Board reports.

Sisal, which is not indigenous to Africa, is one of Tanzania’s main exports. It was introduced to Tanganyika (now Mainland Tanzania) from Mexico at the end of the 19th century. The leaf tissue of this plant yields hard, flexible fibres, which are suitable for making rope and twine, cord matting, padding and upholstery. International trading reports show that sisal accounts for two-third of world’s production of hard fibres, and about three-quarters of sisal consumption is for agricultural twine. The economic importance of sisal declined in the 1970s due to falls in world market prices caused by the introduction of synthetics as alternatives to sisal. The sisal industry in Tanzania is currently facing problems at both productions as well as on the world market.

There are about 82 estates in the country, mainly in Morogoro and Tanga regions but still annual production is as low as an average of 34,000 tonnes, reports from the Sisal Board reveal.

Small-scale farmers using traditional methods of farming in the Southern Highlands regions of Mbeya and Iringa grow the bulk of pyrethrum; the crop’s industry is in a situation of increase and decline in production threatening its viability. Currently its production is estimated at 2,500 tonnes putting the industry in great need for improvement reforms.

Another export crop found in the country is cocoa. It was introduced in Tanzania at the beginning of this century. It has gained importance as an export crop over the past two decades. The major global issue facing its production at present is over-supply of the commodity and the collapse of the international marketing arrangements. This crop is said to be a good small-scale foreign exchange earner, earning almost 6 million US dollars, surpassing many other non-traditional exports. It is mainly produced in Mbeya, Tanga and Morogoro regions.

Pulses produced in Tanzania include beans, cowpeas, pigeon peas, green beans, yellow and green grams, Bambara nuts and lentils. Some of these crops are important food items in both rural and urban areas. Production of pulses in Tanzania is mainly done in Kagera, Shinyanga, Mbeya, and Arusha regions.

Experts say that inadequate support services in terms of research, extension and modern inputs have combined to depress yields and total production. Other problems include disorganized domestic and export marketing system, coupled with insufficient information to link domestic market with the export markets.

Tanzania also produces spices for both domestic and export markets, these include sweet and hot pepper, chillies, ginger, onions, coriander, garlic, turmeric, cinnamon and vanilla.

The most challenging issues are availability of improved seeds and storage problems due to oversupply during the growing months and severe shortages during off-season. Export prospects are good for cardamom, onions and pepper (dry).

Daily News TZ

Better paying crops lure Kenyan pyrethrum farmers

The Pyrethrum Growers Association (PGA) has joined Kenya National Federation of Agricultural Producers (KENFAP) as it seeks to push for value addition and liberalisation in the sector.

PGA National Secretary Joshua Odede said they would push for value-addition by the Pyrethrum Board of Kenya, which mainly exports raw pyrethrin now, in order to boost earnings.

Although the board has introduced its own branded aerosols in the market, it has a paltry 5 per cent of the African market as most African countries import finished pyrethrin-based products from Europe.

Farmers have also taken issue with various fee deductions and a per bag transport levy charged by the board.

PGA officials want the board to increase prices of pyrethrum to match other cash crops that are fast invading pyrethrum areas. They want the board to pay them Sh210 ($3.15) per kg of flower with 0.8 per cent pyrethrin content, up from Sh70 ($1.00) that is currently offered, and Sh450 ($6.70) per kg of flower with 2 per cent pyrethrin content, up from sh150 ($2.25).

Recently, former PBK Director Samuel Kihiu warned that the acreage under pyrethrum was facing stiff competition from french beans, which assure farmers of higher and more prompt returns. An agricultural official said that apart from good returns, french beans are fairly resistant to bacterial infections prevalent in the cold environments.

In Naivasha, efforts by Kenya Agricultural Research Institute (KARI) to promote sorghum production to meet the country’s shortfall have eaten into the acreage of pyrethrum in its traditional zones. KARI’s field extension programmes in the last 3 months have assured the farmers that sorghum has a big market and a potential to fetch higher prices in the country, as 90 per cent of Kenya’s sorghum requirement is currently being met through imports.

On its part, PBK has stepped up field extension services to popularise pyrethrum growing. The board’s Managing Director, Pauline Sego, says over 7.5 million seedlings had been distributed to farmers freely to boost the crop’s production.

Last week, Agriculture minister Kipruto arap Kirwa said the government would release Sh663 million ($10 million) for clearing outstanding debts to pyrethrum farmers once Parliament passes the Finance Bill.

Business Daily Africa

New Kenyan pyrethrum factory near completion

A new pyrethrum factory at Njambini in Nyandarua South District is almost complete, Kenyan minister Mr. Amos Kimunya has said.

The minister said machines would soon be installed after construction of the main building to enable it to start receiving pyrethrum flowers from farmers. He added that after the putting into operation of the pyrethrum factory, a second phase of the building will be set up for a processing plant for fresh farm produce. Driers had been installed and the factory is set to start receiving vegetables for export. Kimunya said that the next phase at Midlands Limited would entail the construction of a cold storage for potatoes and later, a fresh produce processing factory.

Kimunya said residents of the district would also be able to sell their produce to another privately-owned factory, Kipipiri Foods Limited.

The pyrethrum factory in Njambini is the second in the country, with the other being that owned by the Pyrethrum Board of Kenya in Nakuru District.

Daily Nation

Opening of upgraded Kenyan pyrethrum factory delayed

Kenyan pyrethrum farmers will now have to wait for at least two more months before a new plant, recently upgraded at a cost of Sh400 million ($59 million, is put to use by the Pyrethrum Board of Kenya (PBK). The board had earlier expected to commission the new plant in May.

PBK's managing director, Ms. Pauline Sego, said the commissioning of the new plant, which was postponed due to flower shortage, is expected to take place by September this year, when most farmers begin to harvest and deliver their flowers to the board.

Sego ruled out reports that the board intends to import flowers from Rwanda, saying that apart from the obvious increase in the cost of operations, Rwanda has the same crop cycle as Kenya and was also currently experiencing its low pyrethrum flower season.

PBK's factory manager, Mr. Elly Owawa, told the PS that although the new computerised plant would require an optimum flower quantity of up to 1,000 metric tonnes to test-run it for 20 days, a minimum quantity of 350 metric tonnes would be enough for its commissioning. The plant's pyrethrin extraction capacity is 50 metric tonnes per day.

The upgrading of the plant followed a trail of destruction left by a fire in 2003, which left the world's leading flower processor with a limited extraction capacity driven by only two outdated plants; one constructed in 1958 and another one in 1974. The board was therefore forced to transfer its excess flowers to Rwanda for pyrethrin extraction, a development which increased the cost of doing business.

Kenya accounts for 70 per cent of pyrethrum traded in the world. The country mainly exports extracted pyrethrin, which other companies use as raw material for manufacturing various chemicals.

PBK officials say the new plant will significantly lower the board's factory overheads and may lead to upward review of flower purchase prices and reduction of prices of the board's products to its customers.

Daily Nation

Pyrethrum farmers switch to horticulture in Kenya

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

Kenya to revive pyrethrum industry

Kenya's stagnant pyrethrum sector is set to get a boost with the opening of a 400 million Kenya Shillings ($6 million ) factory in Nakuru. The plant, based at the headquarters of the state-run Pyrethrum Board of Kenya (PBK), will be used to extract pyrethrins, a natural product used to manufacture insecticides. The factory is expected to give a value-addition boost to the industry,
as extracted pyrethrin attracts higher prices than raw flowers.

A list of reforms meant to revitalise the Kenyan pyrethrum industry should be commissioned by May 2007, according to industry sources. The industry has hit a slump in recent years with the racking up Sh1.8 billion ($26 million ) in debts to farmers for previous deliveries.

Ms. Polyne Sego, the PBK managing director, said that currently two-thirds of Kenya's pyrethrum goes to the international market with the United States being the largest consumer. And while the board already exports five bulk insecticide products to European markets, the new factory is expected to harness local demand for natural insecticide products. The PBK says consumers are turning more to natural products over conventional insecticides made with synthetic pyrethroids, which carry environmental and health hazards.

The plant will be supplemented by other incentives to bolster the sector, including a revamped Pyrethrum Act, to encourage liberalisation of the crop's marketing by removing the monopoly status the PBK has enjoyed. A new pyrethrum plant and marketing agency, Midlands Limited, is already under construction in Nyandarua district ahead of the impending
liberalisation.

Farmers too are hoping to get morale boost from 800 million Kenya Shillings ($12 million ) released by the treasury to pay them for previous deliveries to the PBK. Sego said PBK expected to begin paying farmers the arrears in the second half of April, putting a dent in the Sh1.8 billion in debt the board has racked up. She said officers had been deployed countrywide to verify what pyrethrum farmers were owed by the PBK and the findings had been sent to ministry of agriculture headquarters in Nairobi.

According to an expert in pyrethrum production, if proper measures are instituted the country's previous high production can bounce back in two years because of relatively short time it takes for the crop to mature.

Pyrethrum is currently produced on about 26,000 hectares, with an average annual production of about 10,000 tonnes of dry flowers. But production has fallen from about 18,000 tonnes in the 1990s to just 1,000 tonnes in 2006, with the main blame being put on unreliable payments by the PBK. Agriculture minister Kipruto arap Kirwa said the country was targeting an annual production of 16,000 tonnes to regain its market share.

Pyrethrum earnings had been ranked fifth in the country's foreign exchange earnings after tea, coffee, horticulture and tourism but have since been overtaken by sisal.

Sego said that the farmers are working to improve productivity and are going back to the farms with much optimism. As a result production has improve and farmers receive Sh50 (75 cents ) per kilo of pyrethrum, which is now paid on delivery.

Business Daily

Kenya's pyrethrum industry faces synthetics, liberalization, competition from neighbors

Kenya has long been the world's leading producer and exporter of pyrethrum extracts, with the country responsible for 70 per cent of the sector's production.

The natural pyrethrins in the extracts are used in making various pesticides. The extracts include crude oreoresin, refined pale extracts, superfine pyrethrum powder and pyrethrum marc (vegetable matter left over from extraction). The increase in the production of synthetic insecticides has led to a decline in pyrethrum production since 2003.

Plans are reportedly under way to license private processing firms to compete with the Pyrethrum Board of Kenya (PBK), currently the country's sole processor. Politically-connected prospective players in the industry are said to be scheming to position themselves to benefit from a liberalized trading environment and to gain control of the industry.

Six PBK directors from pyrethrum-growing regions have vowed to resist the alleged attempts to license private processing firms to compete with the parastatal. Samuel Kihiu, one of the six, said about 10 years ago there were 30,000 hectares of land under pyrethrum in the country, but today there were only about 9,000.

The controversial importation of huge amounts of partially processed pyrethrum from neighboring Rwanda is linked to a plan to take over the industry, according to the East African Standard's sources. Speaking anonymously, the sources said a powerful group that included three cabinet ministers was working to bleed the industry before starting their own large enterprise that will then dominate the industry.

The PBK signed a deal in March 2006 to purchase 100 tonnes crude extract from Société de Pyrethre au Rwanda. PBK employees allege that it is an ill-advised deal that will prejudice Kenya, and that it is aimed at running down the local industry ahead of the licensing of private processing firms.

The deal, sources now claim, will see millions wasted to buy "substandard pyrethrum." One consignment, for which PBK paid 149 million Kenya Shillings is said to actually be worth Sh94.5 million. So far, PBK has received three consignments of 25 tonnes each under the deal. A final consignment is due in June. Meanwhile, the government is said to owe pyrethrum farmers Sh900 million in outstanding payments.

The move by the parastatal's top management to import flowers from Tanzania and crude extract from Rwanda has been linked to an apparent plot to wind up PBK. Industry players say PBK management is encouraging growers from Tanzania, a relatively new growing country, instead of supporting Kenyan growers.

"The government has a duty to revive the pyrethrum sector," said Stephen Yakan, another PBK director. The directors asked the government to give PBK Sh1 billion to revive it the way it had done for the Kenya Meat Commission and other sectors like cotton, sugar and coffee. The board had inherited debts amounting to Sh979 million when it took over PBK management in 2004.

The directors also announced that a new pyrethrum extraction plant would be commissioned in a month’s time to replace one that was burnt down before the current board came into office.