A water rationing mode currently effected in Naivasha, the bedrock for flower farming, is likely to deny the country the revenue from improved sales ahead of the onset of the peak flower season later this month.
Analysts say the move is adding to the troubles the sector is facing. The industry reported a decline in demand for its products in key markets since the onset of global recession last year, as production drops further with the ongoing drought.
About 80,000 tonnes of the produce is expected this year, a decrease from last year’s production of 93,000 tonnes, said Mrs Jane Ngige, the Kenya Flower Council (KFC) chief executive.
Naivasha-based horticulture farmers, just like many other Kenyans, bear the brunt of a raging drought that has forced the country into an electricity rationing mode and left millions starving.
The prevalent drought has taken a toll on the sector even as it reawakens from the current lull ahead of the September – July season, said Mrs Ngige.
Flower producers in region rely on Lake Naivasha to water their farms, but priority is given to human consumption.
Limiting the amount of water going into the flower farms could slash productivity in the horticulture industry that accounts for five per cent of the gross domestic product (GDP).
Overall agriculture contributes 25 per cent of the country’s wealth.
It also threatens the performance of small and medium sized enterprises as well employment of thousands in the flower firms.Apart from irrigating the farms, water is also used to reduce dust on the loose surface roads used to transport the produce to the airports.
Kenya is the world’s leading exporter of cut flowers with Europe as its main market that takes in more than 80 per cent of total exports. Farmers are now seeking government support to grow the sector and move into emerging markets.
“We need a government fund to organiser flower farms. We are looking at Sh150 million per year to organise the sector.”
In 2008, Kenya earned Sh40 billion from flower exports; that, along with other commercial crops contributes a quarter of the country’s wealth.
According to KFC, the share of Japan has grown by 20 per cent in the last one year. While the US market has embraced Kenyan flowers, the industry is unable to supply the niche flowers and in the right volumes.
“The US is a volumes market. There is renewed demand for small head roses, but we are unable to supply them currently,” said Mrs Ngige.
According to the Trade ministry, the Cabinet has already approved the transformation of export processing zones into special zones in a deliberate move aimed at encouraging more investment as well as retaining existing investment in the country.
If the plans go ahead, the country will be adopting a Chinese model for development by transforming the Export Processing Zones into Special Economic Zones (SEZ’s).
Under the programme, the area along the railway line and the main Nairobi-Mombasa highway will be transformed into the Athi Basin Industrial Corridor.
Trade assistant minister, Omingo Magara said the move will reduce the ‘prohibitive’ cost of doing business.
“Two major flower farms have relocated to Ethiopia due to high cost of doing business in the country,” he said.
The government says it intends to increase the volume of water reserves through long-term measures, including the building of eight dams.
The sub sector has recorded very high growth in volume and value of cut flowers exported over the years. Remarkable growth is attributed to massive investments by both local and overseas investors, aggressive marketing by growers and availability of air freight. Kenya is a lead supplier to the European Union, contributing over 35 per cent of all flower sales. Export volumes has grown from 14,000 tonnes in 1990 to 93,000 tonnes exported in 2008 an increase of about 700 per cent over the period. The value of flower exports in 2008 stood at Sh40 billion.
Source: Business Daily Africa (17 Sept 2009)