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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

 

The Future is Not Organic

By a show of hands/clicks Who wants to be a farmer in Kenya right now?

Farmers in Kenya are grappling with multiple problems, from high input prices to frequent pest and disease infestations.

To be a farmer in Kenya is to accept suffering all in a bid to feed a nation that gives little thought to where their food comes from. Traditional crop farming has been replaced with more conventional farming methods; and it seems only those who have gone high tech seem to be reaping most of the benefits especially when middlemen come into the picture.

middle men in the agricultural value chain
Farmers are suffering because of exploitation by unscrupulous middlemen

So what?

The picture maybe daunting but there is always a way. On 22 September 2018, the world celebrated the World Organic Agriculture Day; in Kenya we commemorated the event a day earlier at the Wangari Maathai Institute for Peace and Environmental Studies. The KENYA ORGANIC FOOD FESTIVAL AND EXHIBITION (KOFFE) ,organized by among others Egerton University, the University of Nairobi and the Kenya Organic Agriculture Network, saw multiple players in the organic agriculture sector discuss the past, present and future recourse.

Wangari Maathai Institute (WMI) for Peace and Environmental Studies

Wangari Maathai Institute (WMI) for Peace and Environmental Studies

Farmers displaying their products were smiling all the way. Having worked with them for the past 4 years I could understand their mirth, they played the long game and are now reaping the benefits. Not to be overlooked, organic farmers still face the same challenges as conventional farmers, they suffer pest and disease attacks but the losses they incur are usually within the economic threshold.

Kenya Organic Food Festival and Exhibition (KOFFE) 2018

Why is that? What Makes Organic Farming so Special?

Crops grown organically in ecologically sound conditions grow hardier and more resilient to environmental shocks as well as pest and disease attacks. They are nutrient packed and fetch much better prices than conventionally grown produce. Due to poor traceability and hygiene standards in conventional systems, a growing number of conscious consumers are willing to pay a premium price for organically certified foods. Take for example a kilo of tomatoes, if grown under normal conventional system it will go for KES 80-100 at the local market, if it is organic the price will range from KES 120-180, where the latter will have spent much less to produce. This means that the organic farmers will always get a fair price for their produce and not suffer the exploitation of intermediaries.

Food security… Much Ado about Organic

Some pundits will argue that if all farmers were to go organic, Kenya would never be able to achieve food security. Nevertheless, despite over 50 years of conventional agriculture, Kenya is still yet to attain food security and this has nothing to do with organic agriculture, because it is all about systems.

In 2015, a national wide soil survey released by President Uhuru Kenyatta at Egerton University revealed that Kenya soils are exhausted. Farmers are now spending more on inputs but with diminishing outputs, this has led to Kenya being a net importer of food.

That is unless you are an organic farmer; through sound soil nurturing and production practices they are able to maintain high levels of productivity at a fraction of the cost.  It more about the farmers’ mindset, passion and sustainable thinking other than pure commercial interest are the driving force. Fairness to the environment, to the people and to all contributors is a central theme. As proven by the state of Sikkim India, food security is possible through organic practices. Going organic means farmers’ health will not be at risk thereby prolonging their capacity to produce food for the nation.

Organic farmer smiling all the way

What about cost of food? Too good to be affordable?

Organic food is perceived as expensive, and maybe it is and with rising cost of living not that many households can bear the additional cost. However, as any economist will tell you, once there are more players in the industry, market forces will drive down organic food costs. Majority of commercial organic farmers produce for export markets but if more farmers joined the scene, the local market will have adequate supply. This will also not only create opportunity for other players (input manufactures, processors, certifiers etc.) but will effectively lower other operational costs.

We’re living in the world of now, and many people will shrug and say they’ll just wait and see.

Martin Njoroge

The problem comes in when people are consuming pesticide residue laden foods, which is manifesting itself in myriads of illnesses, organic foods don’t have pesticide residues because the organic farmers don’t use them in the first place and they put in measures to prevent contamination from such. That’s the whole point of going organic really, plus the sense of safety in knowledge that twenty year from now some scientist won’t discover that the chemicals considered safe today aren’t that safe really.

“Proof of the pudding is in the eating” – Origins of GRAS. . .

The future..The Now.. And In between

Promoting organic agriculture in Kenya is all about promoting the health of the nation. With a serious cancer prevalence, the burden of disease is seriously impeding our developmental progress as a country. Kenya has a checkered past where commercial interests have overridden the health and safety of the people. This need not be. The Organic movement in Kenya is real and very vibrant but unfortunately not many people are aware of its existence. Farmer and consumer education on the benefits of adopting organic production practices is critical, because they can be used in tandem with conventional practices.

The National and County governments have a central role in sensitizing farmers, and working with NGO’s who have been the main drivers behind the organic movement, organic agriculture will be mainstreamed in policies and practices in Kenya. This does not mean the ball lies solely on the government’s court; all farmers should take up the responsibility and decide that their health and the health of consumers come first and do the necessary to bridge the gap in between.

So its The NOW but not the Future that is Organic

Organic Shift: Why We Should All Care

Organic food and fibre production safeguard the environment, protects consumers against non-communicable Diseases (NCDs) and creates just wealth and work. It is one of the fastest growing industries in the world estimated at 816 Billion USD in 2016.  During the same year the industry contributed 3 billion KES from exports and 439 Million KES in domestic consumption. East African Regional market is growing at 20% per annum, with the up-market outlets and the tourist industry as major consumers.

The Kenya Organic Agriculture sector is growing fast, currently with 150,479 Ha certified land with the main products for exports being vegetables, salad pre-packs, herbs, spices essential oils, nuts, coffee, tea, and cold pressed oils.

Organic adoption rates are responding to meet the growing domestic and export markets, overcoming scepticism, knowledge and technological challenges. Agricultural research institutions and universities are undertaking research to address most of the challenges that smallholders face and need a platform for sharing discovered solutions or to commercialize products or technologies. In addition, most of farmer innovations are not documented. The NGO/government extension systems have proved inadequate to meet farmers’ needs, lacking in organic competencies and diversity, often causing more confusion than help. This eventually drives farmers to farmer technology transfer which is a slow process, sometimes riddled with unnecessary failure, and in most cases confined only to those areas where the innovation was developed. Consequently leading to useful knowledge being scattered and fragmented among research institution departments and farms.

The need to collate all this data, information and knowledge into a farmer/end user accessible database has never been more urgent. So that useful practices can be validated to meet the different needs of stakeholders. As well, a forum for sharing technologies and knowledge in practice, word, song and dance will foster growth and exchange of ideas, experiences, expectations and views among farmers and stakeholders. Such a forum will also register and share success stories from organic production systems, moving it from kitchen gardening to commercial high dividend enterprises for wealth and food security. 

Where to Get your Organic Fix

The following article appeared in the Proceedings of the Kenya Organic Food Festival 2018. 

Last year on 21st September 2018, Kenya celebrated the 1st Organic Food Festival at Wangari Maathai Institute for Peace and Environmental Studies Upper Kabete. From the conference proceeding and key note speeches it was clear that the country has undergone a radical transformation in our food systems and feeding habits. Within the past 2 decades as globalisation has taken root in our highly capitalistic society, we have found ourselves shifting towards fast foods and out-of-home eating habits. Life has become faster and thus meal time is rushed and lacks the ceremony in socialisation and introspection we used to enjoy years past and has become a rushed affair of food takeaways and eating on the move.

To recompense this shifting attitude, fast food franchises have mushroomed taking up strategic corners in our busy town centres, with every corner of Nairobi’s CBD spotting a familiar food joint. They churn out tonnes upon tonnes of fried foods and sugar packed drinks to feed a hungry public, most of whom don’t really think much about the hazards of their unhealthy binges; if it quashes the hunger and at the right price, what more is there to think about?

‘Let food be thy medicine and thy medicine food’ ~ Hippocrates

Food is everything, it powers our bodies and helps us fight off infections. If you want Formula 1 performance from your car, you take care of the engine, do regular maintenance, buy the best motor oil and don’t just fuel from any petrol station, you become careful and considerate, you do your research and only buy from trusted sources. Same thing with your body and health, if you want peak performance, you go for regular doctor check-ups, eat the right foods and exercise often, take good care of yourself. In this day and age of increased prevalence of diabetes, high blood pressure, cardiovascular diseases, chronic respiratory diseases, cancer and other Non-Communicable Diseases (NCDs), you have to eat right to improve the quality of your life.

It’s no secret that fruits and vegetables are loaded with disease-fighting vitamins, minerals, and antioxidants. But even fresh, colourful produce carries its own risks, namely in the form of pesticides. That’s why eating organic food is recommended, because unlike conventionally produced food, organic foods have no pesticide residues or heavy metal contamination. As a study conducted by Egerton University revealed, pesticide residue contamination of food is much higher and more prevalent than previously thought. Another study by University of Nairobi also revealed that majority of urban farmers in Nairobi use untreated sewage waste to irrigate their farmlands, which not only exposed them and the consumers to heavy metal pollutants but also disease-causing pathogens like E. coli.

Organic foods, from certified sources, on the other hand, are much safer and are produced under stringent organic standards which guarantee the buyers that;

(1) No synthetic pesticides/chemicals have been used in production

(2) the farmer got a fair price for their produce

(3) The environment was not damaged in the process.

Despite the advantages of organic foods, majority of consumers in Kenya, either don’t have knowledge of their existence or where to buy them or both. Most consumers are as well not conversant with standards and certifications common in the organic food industry. According to a study by KOAN conducted in 2014 only 18% of consumers could correctly identify approved organic certification marks. This ignorance allows unscrupulous traders and farmers to benefit unduly from premiums designed to compensate genuine organic farmers for not using chemicals. For example, in Kenya, the Kilimohai Organic Certification Mark is the KEBS approved standard for all organic produce and processed products, but many traders still claim their products are organic even without complying to the standard. You will find supermarket shelves filled with products labelled as organic but without the Kilimohai Mark.

Kilimohai Organic Certification Mark

Consumers are also hard pressed to purchase organic foods due to the perceptions that they’re expensive, but organic foods are normally about 30% more expensive than conventional produce. Which begs the question over how much value people really put on their health and well being. Most people are too caught up in daily hustles and bustles to really think about their daily investments in present and future health. Several studies have shown that people are less likely to invest in their health if they have not been to the hospital or a check up in the recent past. This is not a diatribe on Kenya consumer habits but a call to action to all people in our beautiful country to be more mindful of their health.

Organic food production, retail and consumer protection has been championed the Kenya Organic Agriculture Network (KOAN), through its activities and many other Non-Governmental Organizations, organic agriculture is securing a firm footing in policy, production and distribution Kenya.

Although it is possible to get organic food countrywide, getting certified organic produce can only be found in limited locations. Currently the most consistent and reliable organic food outlets are located in Nairobi, some of them have been in existence for over 10 years, while others are upstarts and need the support of consumers and farmers to make them trending successes. Without much ado here are the top trending organic food retail outlets in Nairobi;

Farmers’ Markets

  1. Farmers’ Markets

Farmers’ market appeal to the innate sense of community and common purpose, different from the commercial municipal trader dominated markets. While offering value, diversity and freshness in produce, organic farmers’ markets close the gap between farmers and their customers. Globally farmers’ markets have been community driven, where local farmers are able to sell their products and exchange notes with each other as well as their customers. Without delving too deeply into the symbolism and importance of Organic Farmers markets, here are the main ones to look out for;

  1. Kids Ventures Garden Estate – Officially opened in 2017. Open every Saturday from 9.00am, you can find the freshest organic fruits, vegetables and other dry cereal products. It is supported by farmers from surrounding Kiambu, Nairobi, Machakos and Rongai.
  2. Organic Farmers Market KSPC Next to Hillcrest (Formerly at Purdy Arms) – One of the most prolific farmers market in Kenya with a good following of farmers and buyers. You will get your pick of fruits, vegetables, cheeses and animal products. Open every Saturday, the Organic farmers’ market has been consistent and reliable in service to its stakeholders.
  3. Karengata Farmers’ Market – Also found in Karen, it’s a relatively new organic market but with great potential. With a relatively moderate but growing number of farmers and buyers it is poised to be a considerable contender for the biggest Organic Farmers Market in Nairobi.
  4. US Embassy Organic Farmers Market – Open every Thursday, most of the farmers you’ll meet are regulars at other Farmers Markets.
  5. Community Sustainable Agriculture and Healthy Environment Program (C-SHEP) Farmers Market Rongai- Run by local Farmer CBO CSHEP in Rongai, this farmers market has been great conduit for local farmers who don’t have the ability or need to travel to Karen or Nairobi to sell their organic produce locally. This group also participates at the Kids Ventures Garden Estate Organic Farmers’ Market.

SuperMarkets

2. Supermarkets

Not everyone has the time to visit the local farmers’ market to get their organically grown groceries, supermarkets have been able to disrupt the traditional grocery shopping experience. The following are the main supermarket that have organic grocery sections;  

  1. CarreFour – 2 Rivers
  2. CarreFour – Karen

3. Tuskys Supermarket have contracted an agent company that will manage organic health sections of their retail chain. Plans are underway to start with Karen branch and eventually roll out in other branches.

Green Groceries

3. Green Groceries

Closely tied with supermarkets, green groceries have steadily become more popular especially near estates and other urban and sub-urban settlements. To get your organic groceries you can visit ;

  1. Kalimoni Greens -Karen
  2. Zucchini Groceries ABC Place
  3. CornerShop – Diamond Plaza Parklands
  4. Chandarana FoodPlus – Diamond Plaza

Organic Basket Deliveries

4. Basket Schemes

Sometime it is not possible to go out to get your organic supplies. Maybe the listed locations are out of your usual routes and you still need to buy the groceries. Worry not, Basket Delivery Schemes are available, the following providers give you fairly comprehensive lists of produce to pick from and deliver right to your doorstep;

  1. Sylvia’s basket
  2. Bridges Organic Restaurant
  3. Kalimoni Greens
  4. Mlango Farm

Hotel & Catering

5. Hotel and catering

Organic food is more than just grocery shopping, its about experiencing food as it was meant to be grown and eaten. Currently only 1 restaurant in Kenya serves over 80% purely organic certified menu and that is Bridges Organic Restaurant. The restaurant ha the rustic contemporary flair that feels upmarket but also quite homely. It is conveniently located in Nairobi CBD near city market.

Bridges Organic Restaurant Nairobi

For a more comprehensive list of organic retail outlets, Check Out KOANS Farmer and Trader Members’ Profiles.