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GROWING BUSINESS OPPORTUNITIES IN THE ORGANIC VALUE CHAIN

This article appeared in AFRONET ISSUE NO 3 JANUARY TO JUNE 2020

 

Organic agriculture has the potential to generate significant incomes for households, thus potentially uplifting smallholder-farming households from poverty cycles and food/nutrition insecurity. Through various interventions, the number or farmer and land under organic cultivation has been constantly growing in Kenya. With land under organic cultivation increasing from 4,894 hectares in 2016 [1] to 172, 225 hectares under organic in 2019[2], the writing on the wall is clear, organic is the future of sustainable farming.

The commercial appeal of organic farming has led to a rising number of entrepreneurs eager to rake in the money, caution should be exercised, organic farming should not be viewed as a purely commercial interest, in fact most successful organic farmers started off as subsistence farmers growing only for their own consumption. Through initial struggles to get their processes and practices right, they eventually saw the business opportunity in supplying others with such products. They were able to persevere through the initial disappointments and change in mind-set required to transition into organic. They were able to understand their own farms and create harmonious balance. Any seasoned organic farmer will tell you, no two farms are alike; each has its own set of challenges and character, much like human beings.

[1]FIBl and IFOAM, The World of Organic Agriculture, The World of Organic Agriculture, 2016 <https://doi.org/10.4324/9781849775991>. [2] FiBL and IFOAM, The World of Organic Agriculture, ed. by Helga Willer and Julia Lernoud, The World of Organic Agriculture Statistic and Emerging Trends 2019, 2019 <https://doi.org/10.4324/9781849775991>.

For the few out of the many who successfully convert to organic production systems, commercialization of their agribusiness endeavors, pose considerable challenges. Without formal organic market access, most farmers are resigned to selling their produce to undifferentiated conventional markets, where premiums for organic produce are lost. Many organic farmer actually regress back to conventional farming habits due to lack of market access.

This is a paradox, many retailers would like to have organic produce as part of their grocery portfolio, but find it hard to source. The needs is there but there is a mismatch in capacity to fulfill those needs. On closer observation of the problem, the following is clear.

  1. Retailers are looking for organic produce to sell, the produce has to be of specific quality standards, and not just anything will go. The visual appeal has to be of equal or greater quality than conventional produce. They will be competing for the consumers’ attention and nobody wants to pay a premium for poor quality products. Yes, consumers can be fickle, even organic consumers.
  2. Consistent supply capacity has to be proven before a retailer takes the risk of opening up a new line of organic products. For retailers, especially big supermarkets, a new product line is a big investment. It involves the physical set up, the capacity building of staff ( all staff need to be sensitized on what is organic, nothing puts off a consumer faster than retail staff who don’t know what they are talking about), the branding and marketing. Going organic is as much a strategic choice for retailers as is the physical positioning of beverages and snack items. They are always looking for crowd pullers and with the increasing focus on healthy foods and lifestyles, organic food is high on the consumer and health totem pole. Therefore, a retailer requires assurances that the line of business is sustainable, in the retail business empty shelves drive away customers.
  3. Farmers may not necessarily have the requisite skills sets to meet retailers’ demands. Quantities of particular produce maybe available during certain seasons and then they disappear when the product is out of season. Same with quality, it is easy to have high quality produce in the beginning of the season, but maintaining such standards consistently may prove too much for unseasoned farmers.

 

Therefore, a stalemate of sorts persists, the farmers have the produce in plenty, but the retailers cannot take it and will not take it. Nobody gains anything and the masses are denied access to safe food.

 

Well, the Kenya Organic Agriculture Network (KOAN) has been working on the problem for a number of years. Attempting to bridge this market-supply gap. Through trial and error several things have been established but not limited to,

1) It is not enough to introduce farmers to retailers and vice versa, there has to be some added capacity for the farmers to be able to reach the quality standards of the retailers. Here issues of marketing and branding emerge. Gone are the days when just saying something is organic will sell. Consumers are looking for branded merchandise, something they can trace back to the source.

2) Retailers need assurance of regular and consistent supply. Farmers cannot operate as individuals; marketing collectives need to be established, farmers need to take control of the process.

3) It is not enough to have a marketing collective; a planting calendar needs to be established. To ensure consistency and reduce internal competition a system for growing what and when needs to be developed. This system needs to take into consideration what the market wants and in what volumes.

4) The prevailing agroecological conditions need to be observed, what can be grown with least effort should be grown, farmers need to avoid problem crops (pests and diseases, access to quality seed, etc.). Farming is an enterprise, if the costs of growing particular crops outweigh the market prices and leave little margins for profit, then they cease to be viable and should be abandoned until prevailing conditions change.

All viable lessons. KOAN’s latest attempt at streamlining the organic supply chain in Kenya currently involves farmers from Machakos and Murang’a counties. Murang’a supplies most of the vegetables while Machakos supplies the fruits creating a healthy balance. The project supported by the Swedish Society for Nature Conservation (SSNC) started in 2018 with 90 farmers, 45 from each county with 3 retailers interested. This number has since grown to 200 farmers and 6 retailers.

With the experience gained from previous attempts, KOAN first selected entrepreneurial and market ready farmers. The farmers were taken through the usual capacity building sessions with particular emphasis on managing expectations as well as conveying the importance of professional conduct in approaching business. Retailers were also involved in order to eliminate any casualness, the gravity of the whole system needed to be appreciated. This was not business as usual and everybody on board got the message. Initial meetings were organized between farmers and retailers. This was mainly to get the farmers to grow exactly what the market required. KOAN engaged field coordinators to assist the farmers in aggregating their products. The coordinators served as the nodes between farmers and retailers. The farmer marketing collectives would eventually absorb them.

 

Proof of the pudding is in the eating. Sales began in the month of November 2020. By December the volumes had considerably increased and February 2020 saw the highest volumes traded since. By this time two farmer cooperatives had been formally registered, i.e. the Murang’a Organic Growers Cooperatives Society and Machakos Organic Cooperative Society. With increase in confidence, retailers also started demanding for more, the current volumes were inadequate. This warranted the increase in farmer supply base.  More farmers recruited into the cooperative and supply volumes ramped up.  Projected volume for supply had the situation remained constant would have been northwards of 10 tonnes monthly since the volumes had been growing by 30%monthly.

 

As with any worthwhile endeavour, challenges will be encountered and for this particular system, the COVID 19 pandemic struck hard. With limited movements and reduced consumption, most households are keeping a firm grip on their expenditures. Hotels and restaurants closed their doors to clients, retailers reported significant dip in consumer spending. These were by far the biggest buyers and significantly reduced their demand. The situation might seem bleak but it has also revealed opportunities.

  • Nairobi cannot be the only market for organic produce, with increased sensitization more viable markets can be cultivated closer to home. This will also lead to increased profits for the farmers with transport cost reduced substantially.
  • Third party traders and retailers need not be the only outlets; the cooperatives can develop their outlets and market their products as organic. This is a reality in other sectors, Fresha Milk, a popular brand in Kenya is owned by Murang’a Dairy Cooperative Society.
  • Post harvest preparation and Value addition needs to be part of the system. Today there might not be a market, but the situation might change overnight.

The story is not at an end yet, with the support of KOAN, the cooperatives are exploring the above options. Although demand from Nairobi still exists, the COVID19 pandemic revealed how fragile the system is. A pivot is needed, to where and what?  Only time will tell. Watch this space for updates.

 

 

[1] FIBl and IFOAM, The World of Organic Agriculture, The World of Organic Agriculture, 2016 <https://doi.org/10.4324/9781849775991>.

[2] FiBL and IFOAM, The World of Organic Agriculture, ed. by Helga Willer and Julia Lernoud, The World of Organic Agriculture Statistic and Emerging Trends 2019, 2019 <https://doi.org/10.4324/9781849775991>.

 

The following article appeared in AFRONET ISSUE NO 3 JANUARY TO JUNE 2020

 

Toxic Chemicals Everywhere, Our Lives on the Line…. #TOXICBUSINESS

After a recent expose on how supermarkets use chemicals (sodium metabisulphite) on meat to remain fresh, and the increasing cancer deaths among other Non-Communicable Diseases (NCDs), the link between food and disease among Kenyans is now alive. Sadly the proposed solutions are the usual reactional, mostly geared towards closing the supermarket meat butcheries, setting up more cancer centers, providing hospitals with screening equipment’s and less on preventative measures.

Tainted meat on supermarket shelves?

As a society we need to look back at where the rains started beating us. For a long time, we have lived in some sort of fool’s paradise, eating without any care about the safety of the food. Dangerous chemicals continue to be registered in the county including those banned elsewhere. Most of the extension is done by the manufacturers and distributors of these chemical. Farmers indiscriminately use them on regime basis rather on need as advised to increase sales.

 

From the Pesticides Control and Products Board, (PCPB) in 2018, Kenya imported fifteen thousand six hundred (15,600) tones of chemicals, more than double (2X) the amounts imported in 2015, six thousand four hundred tonnes (6400).  PCPB has registered 247 active ingredients  in 699 products for horticultural use. There are more products than active ingredients since one active ingredient can be in different formulations registered by different companies in different products. For example active ingredient glyphosate is registered in 39 products by 22 companies. Active ingredient imidacloprid is registered in 30 products by 13 companies.  It is also important to note that most products contain “inert ingredients”. These are carrier or sticking agents that help the product retain the active agent in a stable form. The inert ingredients quite often constitute over 95% of the pesticide product and are equally toxic as the active ingredient and sometimes even more. Sadly, when registering pesticide products, pesticide manufacturers are only required to list the active ingredients in a pesticide, leaving consumers and applicators unaware of the possible toxics present in the inert ingredients of the pesticide products they are using. Pesticide manufacturers argue they cannot release information on inert ingredients because they are trade secrets, and if released, their products could be duplicated.

In a recent study undertaken by the Route to Food Initiative, (RTFI) and partners, of the 247 active ingredients registered in Kenya, by the Pest Control and Poisons Board (PCPB), only 150 are approved in Europe, 11 are not listed in the European database and 78 have been withdrawn from the European market or are heavily restricted in their use due to potential chronic health effects, environmental persistence, high toxicity towards fish or bees. From the PCPB records a total ofl 155 companies have registered 699 products in Kenya. Most of the products originate from Europe (288 products), followed by China (199 products), India (82 products), US (54 products), Israel (32 products) and Japan (19 products) while other regions/countries have registered the balance. This means Europe and not China, as often argued, is the market leader in terms of pesticide sale.

Double Standards

Unfortunately, agricultural exports to Europe from Kenya and Africa at large are put under stringent measures for sanitary, phytosanitary and Maximum Residual Levels, (MRLS) – the maximum detectable levels for pesticides in food products allowable for export. This is a measure importing countries put to ensure safety of products getting into their countries with a mission to safeguard their safety. The companies that manufacture these pesticides cannot sell some of them in the countries of origin but dump them to Kenya and other developing countries. They make sure they don’t get back to Europe by use of rigorous regular monitoring systems to detect and reject products distained to their markets at the points of entry. Strangely, the EU Regulation EC304/2003 allows European companies to produce and export banned or restricted pesticides for domestic use to other countries, the so called double standard. However in a recent report to the Human Rights Council (Elver, 2017), the United Nations Special Rapporteurs on Toxic Wastes and the Right to Food stated that to expose other nations to toxins known to cause major health damage or fatality is a clear human rights violation. They called on countries to remove these existing double standards especially with countries with weaker regulatory systems.

Back home, in a vicious treadmill we continuously import more chemicals that our farmers indiscriminately use without proper protection, disregard the harvest intervals and sometimes after harvest to increase the shelf life. While this is happening, the authorities have remained aloof as poison is served to citizens and the resultant cost of health continues to increase. The dynamics surrounding food safety and nutrition are too vital to be ignored or down played.

How safe is the food being sprayed ?

It is high time the Pest Control Poisons Board (PCPB) withdrew pesticides that have been banned elsewhere for their known adverse effects on human health and persistence on the environment from the Kenyan markets. The Kenya Plant Health Inspectorate (KEPHIS) needs to   revamp its National Pesticide Residue Monitoring Programme (NPRMP) and  make it regular in all counties. Kenya Bureau of Standards (KEBS) need tighten on the Standard requirements for chemicals used in Agriculture. The Ministry of Agriculture Livestock Fisheries and Irrigation  need to revamp our agriculture extension system so that farmers can be advised by neutral agricultural experts on the use of pesticides, when, how to use and which to avoid. Government extension agents  should play a key role on monitoring how farmers use chemicals and also to ensure that banned chemicals are not sold to unaware farmers. Private sector and Civil Society in the agriculture sector need to work more closely in a synergistic way and promote agroecology and marketing of safe agricultural produce. We need to educate our citizens/consumers so that they be more involved in deciding what is served on their plates, otherwise, our lives are on the line.

 

 

City Food Systems


By Prof. Raphael G Wahome edited by Zachary Kimari

Cities are largely dependent on the rural areas for food. Unwittingly, they usually are the final and most important component of the complete city food system. In a nutshell, the food system is simply  an economic system, that facilitates  production, aggregation, processing and distribution of food to city dwellers; with proceeds flowing back through the value chain actors’ and even further  back to input manufacturers. However, it is much more complex than that it seems. It has effects on soil structure, fertility and water-holding capacity; resilience to climate change, crop, animal and human productivity; food security, health and biodiversity; social capital, employment generation, gender; and general national development. It is therefore apparent, that it transcends geopolitical relationships, politics, governance, social and cultural aspects.

The demand for affordable foods in the cities grows at the rate of population growth modulated by changing tastes and cultural diversity. There is also a  similar increase in enterprises to meet this demand, driven by desire for profit.  These enterprises span across the provision of needed inputs and equipment, through aggregation transport and distribution to the consumer industry of retailing and restauranting. 


Interest to make money has overridden core needs of sustainability, health, fairness and care

Opportunity for gain abounds, since people must eat. In modern times, interest to make money has overridden core needs of sustainability, health, fairness and care. The consequences are manifest in depleted and poisoned soils, loss of biodiversity, exponential increase in non-communicable diseases,  oppression and exploitation of the producing communities and urban poor.In their current state, city food systems are not sustainable and are failing to meet food and nutrition needs for all.

Farmer Spraying Farm

Increasing demand for food is linked to greater, intensified and extensive  use of synthetic agricultural inputs. Ultimately Modern farming has  been equated to desertion of nature for production needs. It does this at a high cost to the environment and resultant loss of resilience among the poor.  The cost of biodiversity loss or for ecosystems services is not met by the current system. Approximately 60% of the ecosystem services examined in the Millennium Ecosystems Assessment are being degraded or used unsustainably (Millennium Ecosystem Assessment – Synthesis, 2005).  Finally, nature has started to fight back. Now even FAO has recognized the need for “production intensification through ecosystem management” (Plant Production and Protection Division, www.fao.org/ag/AGP). That ideally, consumers should care about what they eat is produced, how safe and nutritious it is, has come as a revelation to many. 

Despite this “revelation” agricultural production tends to follow the same old cue. It seems as if the only approvable model of agricultural production in the developing world must ape that in developed world – meaning greater intensification and mono-cultural production dependent upon stronger push for more synthetic input. It is thus easy to predict the outcome. With nature fighting back, more inputs must be made available for less production until vast portions of hitherto productive land lies in waste. Examples abound globally and locally.

The following article appeared on the Kenya Organic Food Festival and Exhibition 2018 Proceedings

Health and Agriculture – The “Missing” Links

Agriculture produces the world’s food, fibre and materials for shelter; and in many countries it is also an important source of livelihood among the poor. Also, sometimes agriculture is related directly to poor health including malnutrition, food-borne illnesses, livestock-related diseases and chronic diseases. In turn, health also affects agriculture influencing demand for food, work performance, productivity and income.

People eat to live; to be healthy; and for the simple joy of it. However, bad eating can lead to Non-Communicable Diseases (NCD) including diabetes, heart disease, blood pressure, gout and cancer. In fact, the prevalence of NCDs and the risk factors at local level is high and on the rise. NCDs account for 63% of mortality globally. By 2030, the four main NCD-related deaths (cardiovascular diseases, diabetes, cancers and chronic respiratory illnesses) in Africa will exceed the combined deaths from communicable diseases, nutritional, maternal and neo-natal deaths by 75%.

The cost of care for NCDs dominates health care budgets. In Kenya, NCDs accounts for more than 50% of total hospital admissions and more than 55% of hospital deaths. Finally, mental illnesses such as depression are rising and associated with other NCDs. Kenya’s health care system is not adequately equipped to manage such NCDs burden.

 However, healthy diets can help reduce the risk. Eating nutrient dense foods and balancing energy intake with the necessary physical activity and a healthy weight is essential. The density of nutrients in foods is dependent on production practices.  Although complex to explain, it is clear that diet and foodstuffs production practices impact on consumer’s health. Informed authority has it that foods, rather than nutrients, should form the basis for dietary recommendations on the rule of the thumb: “eat a variety of real foods; mostly plants”.

 However, current systems of agriculture are designed to reduce food diversity. Four main crops – rice, maize, wheat and potatoes – provide two-thirds of global dietary energy intake. Agriculture has increasingly become an engine for generating animal feed, biofuels and industrial ingredients (e.g. sugar-sweetened beverages, ready-to-eat meals and snacks).

New investments in food systems research and production are needed to develop technologies for production of nutrient dense crops at lower cost; in tandem with efforts to develop food value chains to meet the new demand efficiently. These efforts are important for supporting stable incomes for farmers, expanding the production, preservation and distribution of vegetables, pulses and fruits. They are also needed to popularise healthier production environments, food business, healthier eating and healthier lifestyle. Indeed, widespread behavioural changes towards preference for pulses, vegetables and fruits in schools, workplaces, markets and in homes may also be effective without restricting choices. The desired change may be achieved by public policy, strategy and practice at community level.

 We now see that new thinking is needed to afford these multiple benefits. For example, pulse, fruits, vegetables and traditional varieties production and processing businesses can offer new livelihood opportunities for millions. In this way, food systems can be leveraged to affect human health and nutrition: positively influencing food safety, food prices, household incomes and women’s access to productive resources. It can have a positive impact on the environment and many human health and nutrition outcomes related to extreme weather.

 All stakeholders should confront the challenge and find solutions for improved nutrition and health; ending hunger and malnutrition while protecting the ecosystem services.

Health and Agriculture – The “Missing” Links written By Eustace Kiarii appeared in The Kenya Organic Food Festival and Exhibition 2018 Proceedings