Felix Koskei banks on agriculture fund to boost horticulture

The government is betting on the yet- to-be established agricultural development fund to finance the horticultural sector as low production and few market openings slow down its growth.

Agriculture, livestock and fisheries Cabinet secretary Felix Koskei said a significant chunk of the agricultural financing would go to raising productivity, commercialisation and competitiveness of horticulture.

“Let me assure investors, growers and our customers that the government will put in place policies to facilitate further growth of horticulture, and by extension flower industry,” Mr Koskei said when he officially opened this year’s International Flower Trade Expo (IFTEX) in Nairobi Wednesday.

Horticulture, a star performing segment of agriculture growing annually between 10 and 20 per cent up to three years ago—has since lost its lustre, recording export earnings growth of only 1.5 per cent to close 2012 at Sh89.9 billion.

Kenya National Bureau of Statistics data released last week shows that this plateau phase of growth still persists.

In the cut flower segment, the country’s exports data showed a flat growth of Sh21.95 billion in the first four months of 2013 compared to Sh21.5 billion over the same period last year.

Over the same period, earnings from vegetable exports grew by 24.8 per cent from Sh5.77 billion in 2012 to Sh7.2 billion in the first four months of 2013 while fruits grew 33 per cent to Sh1.41 billion.

Experts blame uncertainty over the conclusion of a binding preferential trade pact with European Union and a relatively cold weather for the poor performance.

The European parliament has since imposed a strict deadline for concluding of Economic Partnership Agreements (EPAs) after which taxes will be raised on Kenya’s horticultural produce.

“Apart from heightened politics at the beginning of this year, excessive cold affected production while the anxiety that EPAs might not be extended come the October 2014 deadline has forced investors to avoid long-term commitments,” said Jane Ngige, CEO of Kenya Flower Council.

Mrs Ngige, however, said that growing dominance of Kenya’s flowers in new markets such as Japan and Eastern Europe (mainly Russia) was a reliable signal that with increased financing, horticulture could thrive.

The sector plans to use its portion of the agricultural development fund in strengthening its direct sales campaign which is still struggling in the shadows of Dutch flower auctions.

“The fact that we have consistently earned more than Sh70 billion in the last five years when we are able to export only five per cent of our total production means we can earn much more when we get development financing to expand our markets and raise proportion of what we export,” said Mrs Ngige.