Horticulture defies Covid-19 to earn Sh151b
By Macharia Kamau | January 7th 2021
The horticulture industry is among the few industries that appear to have withstood the Covid-19 shocks to register growth in earnings last year.
Export earnings for the three sub-sectors of cut flowers, vegetables and fruits went up 4.6 per cent to Sh151.16 billion in 2020, up from Sh144.58 billion earned in 2019.
This is despite initial fears that closure of borders following the outbreak of the deadly virus in December 2019 around the world would cripple the industry.
The sector is among the largest foreign exchange earners alongside tourism and tea.
The growth in earnings was despite challenges that the industry faced, especially at around March when Kenya announced the first positive case of coronavirus and instituted measures to tame the spread of the virus.
The measures, which included the closure of borders, saw many farmers unable to export their produce as airlines grounded flights due to the inability to access certain key markets that had also closed their airspaces.
The lockdowns, especially in Europe, which takes 70 per cent of Kenyan flowers, also resulted in a drop in demand for the produce.
Large-scale flower farmers reported instances where they had to dispose of their produce after harvest as they had no markets to deliver them.
The industry also announced mass layoffs.
It, however, appeared to have turned the corner shortly after, with many countries allowing cargo flights into their airspaces.
Fresh Produce Exporters Association of Kenya (FPEAK) Chief Executive Hosea Machuki said while earnings grew, they were eroded by the high cost of freight and cash flow challenges that businesses experienced.
“Despite the challenges brought about by Covid-19 pandemic, the horticulture sector performed fairly well… however, a huge proportion of these earnings went to the payment of air freights. The growers and exporters did not realise the kind of profits they expected,” said Mr Michuki.
Flowers earned the country Sh108.7 billion last year from Sh104.1 billion in 2019, while fruits raked in Sh18 billion, up from Sh13 billion in 2019.
Among the sub-sectors, only vegetables registered a decline, earning the country Sh24 billion, down from Sh27 billion in 2019.
Machuki added that while the industry grew, it faced major hurdles as its key clientele were hard hit by the coronavirus pandemic.
Thus, he noted, there was low demand due to lockdowns especially in the European Union and the United Kingdom, high cost of airfreight owing to the reduced number of airlines that are flying and high taxes, including a recently introduced export levy on horticultural exports.
The industry now wants to government to give it a boost by way of a stimulus package for exporters, especially in paying for freight charges, develop fumigation facilities to enable farmers to meet the sanitary requirements.
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