Farmers pocket Sh43.5bn from horticulture sales

Workers at Oserian Flower Farm in Naivasha last year. FILE
Workers at Oserian Flower Farm in Naivasha last year. FILE 

Horticulture farmers earned Sh3 billion more from exports in the first half of 2013 compared to the first six months of last year.

Data from the Kenya National Bureau of Statistics shows that production of cut flowers, fruits and vegetables for export went up from a cumulative 99,700 metric tonnes in the first half of 2012 to 111,892 metric tonnes in the corresponding period this year.

The total value of these horticulture exports hit Sh43.5 billion, compared to Sh40.5 billion in 2012.

Vegetable exports registered the highest growth in monetary terms, bringing an increase of Sh1.67 billion to stand at Sh11 billion for the first six months of this year. This followed an increase from 28,881 metric tonnes by June 2012 to 38604.9 metric tonnes by June 2012.

Cut flower exports, which bring in the bulk of horticulture income, grew by Sh1.07 billion to Sh30.34 billion in June 2013 compared to a year earlier, with quantities increasing from 54,781 metric tonnes in June 2012 to 56,177.5 metric tonnes by June 2013.

Flower producers however expressed concern over the cold spell affecting production in the second half of the year.

“The overcast weather may lead to a slight drop in tonnage, but prices have increased slightly so we expect the earnings to remain just about the same as last year,” said Kenya Flower Council chief executive Jane Ngige.

She said that income from flower exports stands at around Sh40 billion so far this year, similar to the income at a similar point last year.

Fruit exports, which stood at 16,036 metric tonnes in the period to June 2012, saw an increase to 17,109 metric tonnes in 2013. This translated to an increase in earnings by Sh229 million to Sh2.13 billion for the first half of the year.

The increased earnings from horticulture export come at a time when there is concern among industry players over the unresolved issue of trade pacts with the European Union, the biggest market for Kenyan horticulture products.

Vegetable exports to Europe have also been subjected to more stringent food safety standard requirements over high agro-chemical residue.

Ms Ngige said the uncertainty is hampering planning for flower producers, with the window for negotiating a new deal set to expire in October 2014.

“We get our orders for up to one year ahead. We need the trade agreements concluded so that we can plan ahead,” said Ms Ngige.

Failure to agree new terms would see Kenya revert to the less favourable terms under the General System of Preference where some of its products, which it has been exporting to the market at zero duty, attracting between 8.5 and 15.7 per cent tax.

Favourable terms

A motion introduced in Parliament in July is seeking to have the government and its East African Community (EAC) partners to abandon economic partnership agreements (EPAs) with Europe.

Under EPAs, European Commission has asked ACP states to open up their markets to EU products in exchange for duty-and-quota-free access to its market.

Instead the motion wants EAC to restart the negotiations with the European Commission (EC) on new, favourable terms to the region.

Under EPAs, the European Commission has asked the states to open up their markets to EU products in exchange for duty-and-quota-free access to its market.

Kenyan flower producers have also been eyeing a larger share of the Asian market, taking advantage of increased direct flights to key Asian hubs such as South Korea and China.

The new markets in South Korea and Japan are expected to account for between five and 10 per cent of the flower exports this year.