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By Nicholas Waitathu
Kenya: At a Kenya @50 coffee forum in Ruiru last week, the Government expressed concern about the decline in production of the cash crop, saying it is contributing to low prices.
Agriculture Principal Secretary Sicily Kariuki said the trend is worrying, especially since coffee is already facing quality challenges and stiff competition from other enterprises that could see it drop from being the fourth-largest contributor to the country’s foreign exchange earnings.
And while that may be the case, it is not going to be easy to convince farmers to increase the acreage under coffee.
Newton Nderitu and Daniel Wachira are small-scale coffee farmers in Nyeri County. Three years ago, they received impressive earnings after the crop performed well in the international market.
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Drive to lift coffee output bears fruit
In the 2010/11 coffee production year, Mr Wachira of Baricho Farmers Cooperative Society earned Sh1.6 million from selling the berries from his 13,000 coffee bushes at Sh130 per kilogramme.
The same year, Mr Nderitu of Othaya Farmers Cooperative Society sold his berries at Sh84 per kilogramme, and was not complaining.
“But the boom was not sustainable. The following year [2012/13], the average price declined to Sh50 per kilogramme,” said Nderitu.
In 2010/11, the two farmers cashed in on high demand for fine Arabica coffee, which Kenya is famed for. They also benefited from the depreciation of the shilling against major currencies and the emergence of specialty markets in Europe and USA.
Other factors said to have contributed to the impressive prices that year included an expansion to new markets such as Russia, and changing consumption patterns in competing countries such as Ethiopia, Brazil, India and Mexico that became new consumers of coffee, reducing the amount of the berry that got to international markets.
According to data from the Coffee Board of Kenya, the average price of coffee reached Sh27,864 per 50-kilogramme bag in 2010/11, which works out to Sh557 per kilo. However, this declined to Sh18,920 per bag, or Sh378 per kilo, in 2011/12.
It went down further in 2012/13 to Sh14,620 per bag, or Sh292 per kilo.
Coffee Board’s acting managing director Isabella Nkonge, speaking last week at a separate coffee forum at the Strathmore Business School, Nairobi, said coffee production over the last decade has oscillated between 35,000 metric tonnes and 50,000 metric tonnes. Over the same period, foreign exchange earnings from the crop have ranged between Sh15 billion and Sh30 billion.
Ms Kariuki believes the country has the potential to produce up to 350,000 metric tonnes, but said this would only happen if all stakeholders in the sector teamed up.
Already, the ministry of Agriculture has promised to boost value addition initiatives in the counties, which is expected to increase farmers’ earnings.
But there are fears that the decline in coffee prices will continue to be experienced, with the global market expecting a commodity glut this production year following a bumper harvest in Brazil.
Brazil, according to an International Coffee Organization (ICO) report, will produce a record crop of 49.15 million bags, though there are mixed prospects in other major exporting countries.
The report further notes that coffee prices have fallen consistently over the course of 2013, with decreases recorded in nine out of 12 months.
Kariuki said Kenya is likely to be further disadvantaged in the international market as national average coffee production per tree remains at a low two kilos per year, despite potential productivity of 30kgs.
According to the Coffee Board, at independence, production per coffee bush averaged 5kgs, with production later increasing to 10 gs in the 1980s.
Today, farmers in Kisii average a harvest of 1.16kgs per tree, while in Nyeri, growers on average produce 1.93kgs, with 3.84kgs generated in Trans Nzoia. In Kakamega, the situation is worse as farmers produce 0.12kgs per tree.
“As new coffee frontiers emerge, consideration needs to be concentrated on boosting output per tree,” agricultural economist Kennedy Gitonga said.
North Rift, Nyanza and western Kenya have emerged as the new coffee-growing areas, as traditional regions give way to more profitable options like real estate and horticulture.
