ACP producing/exporting nations are generally endowed with considerable local expertise and knowledge in a variety of areas. However, the countries can also lack structure and adequately informed and trained staff. Kenya is well-advanced in regional terms, but the fragmented nature of the local industry and the heavy reliance on small-scale producers make intervention by PIP as important as in any of its African-Caribbean-Pacific (ACP) counterparts.
Horticulture is the second largest industry in the Kenyan economy and as such has been responsible for an increasing proportion of the East African nation’s gross domestic product. Phenomenal growth of 70 per cent has been recorded since 1994 and it is estimated that the sector provides employment for around 2.5 million Kenyans in some form or another.
Kenya has a very diversified range of products - some of which are exotic. Within the country, exporters to Europe are also diverse, ranging from the major grower to the tiny smallholder supplying into the export network. Green beans for instance, are mostly grown by the larger companies, but a significant amount is sourced from smaller growers - the ability to meet EU traceability and pesticide requirements is lower at small grower level, putting a significant section of the industry at greater risk.
Kenya has shown its ability over a long period to supply high quality produce by air and more recently has developed its sea-freight potential with avocados. The emphasis for the market has changed through the years, and is now firmly placed on providing added value rather than volume to the EU marketplace. Certification schemes allow growers/exporters to demonstrate their ability meet stringent demands - but with no added value, the margins available diminish and it will prove very difficult for Kenya to remain competitive.
There is therefore, understandable unrest in the industry. More than 40 vegetable export firms are said to have closed their doors in the last five years, which despite overall growth, have been difficult times economically for the country as a whole. A recent report in The East African Standard by Simon Ethangata found the stark reality being faced by Kenya’s fruit, vegetable and flower producers. “The industry is the most risky amongst the main foreign exchange earners, principally due to the perishable nature of its products, the uncertainties and unpredictable variables inherent in the business and the absence of good trading terms such as letters and credits,” he wrote.
The EU imports roughly 80 per cent of Kenyan export volume and Ethangata pointed to “roadblocks” in the way of the country’s exporters in the form of traceability requirements and the setting of maximum residue levels (MRLs) that will effectively outlaw the use of certain chemicals. With January 1, 2005 deadlines in place for compliance, improvement is unlikely to be quick enough, he said.
Ethangata said that only the larger producers are able to meet these requirements and estimated that “only about 40 per cent of vegetables...meet those requirements...and 60 per cent of the volume exported grown by small-scale growers commonly known as “outgrowers” is far from meeting the requirements for years down the line”. The worst case scenario, surmised Ethangata, is that Kenya will lose 60 per cent of its foreign exchange earnings from vegetables and 90 per cent of its earnings from fruit, in total 40 per cent of all horticultural earnings - if a solution is not found in the next 10 months.
Mechanisms are being put in place to bring small growers/exporters into line with the required EU standards. The leading companies have already got themselves in order, there is no question about that. But outgrowers still represent the majority in Kenya and they largely depend on brokers to market their produce. It is here that the major problems lie.
In Kenya, PIP is at various stages of handling applications from companies that represent 80 per cent of volume exports from Kenya to the EU. The projects set up mainly aim at strengthening the capacity of local producers, in order to safeguard the working relationships among them.
The recognition of the need to be involved is encouraging for COLEACP, and has been fostered by a seminar mission last September, attended by 40 of the industry’s leading players. It is vital, says COLEACP director Catherine Guichard, that the momentum continues. While it is important to help companies improve their day-to-day control of the production and export process, it is equally important to improve the quality of the support and services provided to them by local partners.
At stake in Kenya is the entire structure of the horticulture industry. “Companies need to revise their internal organisation to ensure that there are recognisable chains of command, that everybody understands what their particular responsibility is, ,and the goal that they are aiming to achieve together with their colleagues,” says Guichard. “The same logic can be applied to companies of all scales. Of course the head of each company must be aware of the changes that are required, but it is not necessarily the general managers that PIP is targeting. At the intermediary level, the training of quality assurance staff to enable them to exercise greater responsibility and follow due diligence procedures and become trainers themselves is central to our aims.”
Henry Wainwright, formerly a professor at Writtle College, has established The Real IPM Company with his wife Louise Labuschagne, who herself is well-known in the UK fruit industry for her time spent working with soft-fruit and top-fruit growers in Kent. The company carries out a series of practical integrated pest management courses for horticultural growers, advisers and technical staff, on behalf of COLEACP and PIP. Dr Wainwright adds: “The small-scale outgrower who has a regular relationship with a larger exporter has a big advantage. The occasional grower working with the ‘briefcase exporter’ is at greater risk. This type of exporter will disappear unless they adapt significantly and the risk is that there will be nothing to replace them. Customers in Europe are no longer willing to source products from unknown growers and the bigger exporters in Kenya are fully aware of that.”
The Fresh Produce Exporters Association of Kenya (FPEAK) has recognised the value of PIP and signed a formal agreement that will see the association promote the PIP to its members and assist in the empowerment of individual companies. Hasit Shah (Tiku), director of Sunripe (1976) Ltd, is also head of FPEAK. He says: “Companies in Kenya have to be able to meet European requirements by themselves. FPEAK’s role with PIP is to collate and disseminate information that will enhance the implementation of the programme and provide training for growers that PIP might miss.”
FPEAK will facilitate greater dialogue between the private and public sectors and act as the secretariat for the PIP task forces. “The programme needs us to maintain close contact with what is happening on the ground,” says Shah. “From our membership, we can deliver a consensus of the priorities here, and open up the communication channels for PIP.”
One of the misconceptions that is held by many in Kenya is that EurepGAP is a European regulation. Wainwright says: “EurepGAP is not a regulation, it is a code of practice developed by retailers in Europe that has been imposed on producers and exporters in ACP countries and elsewhere. Companies should have the power to make their own commercial decisions, but in this case if they do not comply with a voluntary standard, they are being told they will lose their business.”
The argument that this and other standards do not pay enough attention to the vagaries of local conditions in ACP countries persists, despite the fact that EurepGAP and BRC codes - to name just two - are well-established in English-speaking African exporting nations. “A lot of legislation and standards are written by people straight out of university,” says Shah. “But too often they are not allowing for sustainable trade when you factor in the social and economic impacts of implementation. They [the standards] are necessary to assure food safety for consumers, but if they are not practical, they simply will not be effective.
“What is also needed is that the people that set the standards take a closer look at the peculiarities of each country. A little more time for adjustment should be built into the equation. The smaller exporters are really struggling and when results are expected in Europe at next year’s deadlines it is going to be difficult to be there.”
FPEAK has set the wheels in motion to establish Kenya GAP, which will attempt to harmonise the set of legal and commercial demands placed on Kenyan growers into one compliance programme. Shah applauds the recently published Fresh Quality Guide, Freshfel’s attempt to make information on the plethora of European regulations available to everybody. “This is a good step - at least now we know what is required by law - if as a company you want to set your own standards above those levels, you have the choice.”
PIP and FPEAK will work together to set up the Kenyan code of practice and benchmark it against EurepGAP. A local code will be accessible to all sizes of producer,” says Shah, “taking into account the local costs or implementation and accreditation and make them achievable for people in this part of the world.”
Shah adds that the aim is not merely to benefit FPEAK members, but to roll any code out to non-members in Kenya and hopefully to share the work with all the ACP regions eventually.
The road to compliance has three separate stages, he adds. “Firstly the Kenyan industry as a whole must be aware of what is required of it, secondly the implications of that must be understood and only when the first two stages are complete can the industry begin to concentrate fully on achieving what is required.”
Kenya GAP hopes to be benchmarked against EurepGAP by December. “We need an industry and an environment here that encourages Kenyan people to stay in the country,” says Shah. “If there is no way of making a living here, they will get on a boat and get out. This is a 40-year old industry and it has become an integral part of the local economy. Kenya has been in at the start of the exotics market, a leader in the air-freight of vegetables to Europe and in the 1990s moved on again with its added value offer.
“But development came to a grinding halt between 1999 and 2001, while everyone waited to see what would happen with the government. It has picked up again since then, but I think we have now saturated the air-freight growth in this country. Exports by sea are now becoming more practically and economically viable - there is great potential for Kenya to develop there. We are growing new products, that are entirely market-driven and the potential to ship these products to the market in a more cost-efficient way opens up new markets too.”
The Kenyan industry, says Shah, has proved its worth as an exporter to Europe. “There are people who’ve been in horticulture for 30 years now and that is because they have shown consistently that they are good enough to supply the multiple sector in Europe. Much of the development that is needed is common sense and this industry will meet the standards expected of it. But let’s be a bit flexible and work in real partnerships, instead of jeopardising the infrastructure of the industry with impractical measures.”
PIP ON A PRIVATE-SECTOR MISSION
The European Union Delegation of the European Commission in the Republic of Kenya is the first point of contact in Nairobi for the private sector on which PIP is focusing its activities.
First secretary Guy Jenkinson says: “Broadly, we are facilitating projects between ACP and EU countries. Here in Kenya, we are trying to facilitate PIP as one of our roles. In its early days public authorities in ACP countries found it hard to understand that PIP went straight to the private sector and not through them. Recent history has discouraged development co-operation. Basic social indicators have deteriorated and we really need to be seen to be delivering the aid to the parts of the country that most need it.”
In Kenya for instance, life expectancy has dropped from 57 to 47 since 1990, for a variety of reasons. Poverty reduction is a central focus of the Kenyan government, and while it is also a focus of the assistance provided by Brussels, the EU wants to see its investments pay off. “We are all struggling very hard to demonstrate how effectively the aid is being distributed,” says Jenkinson. “Brussels wants a results-oriented framework. But how do you bring recognition that results have to be at the forefront of thinking, into discussions with a government that has understandably different priorities?”
The 1990s was, he says, a “wasted decade” for Kenya, when the Moy government under-utilised growth potential of five to six per cent a year through economic mismanagement. Kenya’s economy in fact grew at less than three per cent during the 1990s, and the latter part of the decade saw stagnation. A change of administration has brought a change of fortunes. “There is a long way to go,” says Jenkinson. “The process is like turning an oil tanker around.”
Horticulture as a whole has bucked the trends. “Fruit, vegetable and flower exporters have pulled the private sector along to some degree. The sector is a very good example of the manner in which business can expand despite difficult internal conditions. It has become more of a priority for the government, but I think the more the government stays out of it, the better. I’m not convinced that the instruments they use are always right for the development of the sector.”
Communication of PIP objectives and potential is extremely difficult to an industry that is massively fragmented. Jenkinson and his team, the agricultural section of which is headed up by Dr Maria Pia Palleschi believe it is a role they have to play. “To engage the whole private sector is a big challenge,” says Jenkinson. “Our education capacity needs to be improved, but the problem Kenya has is resources. We need bigger numbers of professional staff to carry out our role to its full potential.”
PIP ends in a little over two years. Will it leave a large hole and unfinished business, or will there be a coherent strategy in its wake? “The long-term objective has to be to use the achievements of PIP to frame ongoing complementary programmes,” says Jenkinson. “Local funding might be necessary to continue, but I’d be very surprised if there isn’t some sort of follow-up programme from Brussels.”
COLEACP’s Catherine Guichard adds: “PIP started from nothing - we began from a base of zero contact with the private sector. The first half of the programme has largely been spent generating those contacts. The second half will give better clarification and the dialogue we can maintain between local taskforces and delegations such as this one will be formalised. It is essential that PIP is put into a local context in every country in which work takes place and builds the capacity for the horticulture sectors in all ACP countries to continue the work themselves after PIP has finished.”
CERTIFICATION AIM FOR EAG OUTGROWERS
East African Growers (EAG) is the second largest horticultural exporter in Kenya. Made up of three companies - EAG Ltd, Wilham Kenya Ltd and Shalimar Flowers Ltd - the group employs 4,000 people directly.
As the biggest vegetable exporter in the country, it exports 300 tonnes a week with a range of products that includes French beans, snow peas, mangetout, babycorn, stick beans, courgettes, leeks, carrots, mixed vegetables, avocados and sweet peppers.
Vijay Kumar, group general manager, talked to the Journal at the EAG farm in Thika, which produces a wide variety of vegetables for the UK and other European marketplaces, as well as some products such as capsicum, that are principally for the Middle East.
EAG illustrates that PIP is applicable just as much to the larger firms as to the small and medium-sized exporters. “Thirty per cent of our produce is sourced from outgrowers,” says Kumar. “They are all exclusive to us and they range in size from five hectare plots to 200ha farms. We are already EurepGAP and Nature’s Choice accredited as a company, but we are in the application process with PIP. We feel that this is a different level of input that could prove very beneficial for our outgrowers, who are not certified.
“All growers now have to be fully aware of what is required of them. The different PIP protocols will help us to formalise our arrangements with them. Most growers recognise that products should be as close to free from pesticides as is practically possible - but they still need very clear guidelines telling them how to reach their goals. We are taking this initiative because we want our outgrowers to participate in certification programmes. We expect 50-60 per cent of them to be at EurepGAP standard, for instance, by next year.”
TRAINING PAYS OFF
From January 15 to March 15, in-company training was offered by PIP to three Kenyan exporters. The training was provided by eight local consultants and earmarked the technical staff of each company. Tommy Leighton visited two of them, Myner Exports Ltd and WAMU Investments.
Simon Maina, owner of Myner Exports Ltd, has been supplying the European market for nine years. He is not supplying the UK directly this season, but ships to customers in Rungis, Paris twice weekly.
Around 300 tonnes a year leave Kenya through the company. “We have 350 growers and that is being scaled down,” says Maina. “The EU conditions are not easy to meet and we face a lot of challenges before we are able to train everybody and bring them all up to date with the requirements.”
Myner has started the ball rolling. The Journal visited Maina’s Gachomo Farm, two hours drive from Nairobi when technical staff were receiving the final day of their training through PIP. The field agronomists were being trained in order that they themselves can go out and train Myner’s outgrowers. “We will do everything we can for our outgrowers, but the fact is some of them are too small - I expect to have around 150 at the end,” says Maina. “It is a major problem for those that miss out. Output may be very small - many of them supply me with 10kg of beans or less - but I am their only outlet. For Kenya, this is a crucial social and economic sector - we export massive volumes of horticultural products as a nation and outgrowers will always have a place in that.
“PIP has already been very good for us. The trainers have shown us things that we have already implemented - things that we just didn’t see the reason for until we met PIP. Every grower of French beans in this country has a fair idea of what they are doing, but PIP has taught us the real value of record keeping and enhanced storage facilities for products and chemicals.
“Some of the chemicals that will be banned by the EU have been vital to growers in Kenya - what we are doing with PIP is attempting to find the solution - we could not do that without assistance.
The 12 days of training include areas such as pesticide safety, packhouse management and integrated pest management (IPM) and the final day of IPM was being carried out by Rikki, who explained he was instilling the foundation principles. “We aim to improve understanding of IPM, as well as teaching measurement and implementation methods on the farm,” he said. “The field supervisors can then pass this on to outgrowers. The nature of the training is based very much on self discovery and there is an exam to assess progress at the end.”
Maina says: “The small and medium producers in Kenya are having a difficult time. Maybe we’ll survive. I would certainly put myself in the category of being at risk, but we are doing what we can to secure a good future.”
Peris and Ephraim Muriuki’s WAMU Investments is an exporter of vegetables, fruit and flowers with customers across Europe, including Ferryfast and Roshin in the UK for the wholesale and catering markets. The company prepares and packs French beans, snow peas, sugar snap and passionfruit at its recently refurbished packhouse, a stone’s throw from Nairobi airport.
WAMU grows 30 per cent of the products it exports itself, but is also heavily reliant on outgrowers to sustain its offer. Additional demands from the European marketplace are making this a harder proposition each year. “We used to have 100 growers, but EU requirements have obliged us to reduce this to 60,” says Peris Muriuki. “We feel very bad about this because their livelihood has gone, and when they lose that outlet they have nothing. Horticulture is a very good business for the small-scale grower.”
WAMU has begun to work with COLEACP and the PIP and Peris Muriuki adds: “It is going to be a very big benefit for us. The training for our staff and for staff at our outgrowers should enable us to meet EurepGAP by next year. But the cost of the accreditation process is colossal for Kenyan exporters, particularly the use of external auditors.
“However, we are committed to keeping our outgrowers going - we don’t want to lose any more. They need to be prepared and well-trained to deal with the demands being made of them now and PIP will help us to achieve that. The 60 growers we have now will all do it, because WAMU and PIP will help them with financial and technical assistance.”
After EurepGAP, WAMU intends to move onto BRC accreditation. But the lack of fixed programmes reduces the potential for security. “It is not just the UK market; there is uncertainty surrounding all of the markets we deal in,” says Ephraim Muriuki. “We conform with all of the traceability requirements of our customers. Between 15 and 20 tonnes of product goes through the packhouse in peak weeks and orders change by the day. But our planning has to be perfect because largely we don’t pack to programmes and if we over-produce, it is wasted. We do feel quite isolated here - but once we have established relationships we have found it gives us more security.”
TECHNOLOGY POSES NEW CHALLENGE
Traceability and the need for electronic systems to manage it are at the heart of the role of Ritz Africa Consultants. Director Lorenzo Rizzini-Bisinelli, is carrying out work within PIP, and says: “PIP is totally working in terms of awareness. But the computing part of traceability is a nightmare in Kenya. There are all sorts of obstacles and problems. The guys in the field don’t have power and they have serious security problems. So not only do producers have to purchase a computer and a generator to run it, they have to build a secure building to house it and employ security guards to watch the equipment during the night.
“Already, we are 75 per cent there in terms of traceability, but large numbers of farmers are still basing their record-keeping on paper. EurepGAP asks for farmers to collate information on the farm and that is being done, but the costs of transferring the data from paper into electronic format are prohibitive. On top of that there is the need to have trained people to do these jobs. Producers around the age of 50 have rarely had formal schooling and therefore find the calculations are beyond them, while the younger generation doesn’t want to go into production-based roles.”
Training programmes, such as those being funded by PIP, are vital, says Rizzini-Bisinelli. But, he adds that the timeframes are against Kenya. “If the EU insists on the deadlines it has now, Kenya is going to find it very difficult to meet them. EurepGAP is not working here. It costs too much and the structure of society does not support it - why can we not see a more reasonable ACP GAP scenario?
“Having said that, the initiative has to be driven from within and we are seeing the right signs. Outgrowers must be better networked by exporters - outgrowers should not be thought of as independent, but as representatives of the exporter. This of course requires commitment of resources.”
Back in the IT world, Rizzini-Bisinelli adds: “Companies are extremely happy to use a computer, many employees would do anything to be the person who inputs the data. Larger exporters could set up common buildings to house computers for their outgrowers, but maintaining them and managing their use is the major difficulty.”
