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Unreliable power, labour cost put pressure on firms’ earnings

By Antony Gitonga | Published Tue, February 13th 2018 at 10:55, Updated February 13th 2018 at 11:02 GMT +3

NAIVASHA, KENYA: Flower farmers have raised concerns over increasing cost of production and labour reducing profit margins in a sector that employs hundreds of Kenyans.

This has been worsened by unreliable electricity supply which has seen farmers resort to use of diesel power further pushing up the cost of production.

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A visit to one of the leading farms in Naivasha Van-Den-Berg Roses shows workers busy packing roses for the European market ahead of the lovers-day.

According to the farm human resource manager George Onyango, they are exporting 0.5m stems of roses every day to Germany and Holland.

Onyango said that the price of stem has for years remained constant against the rise in farm inputs and flight charges.

“Currently the biggest challenge that flower farmers are facing is the high cost of production and labor which are rising by the month,” he said.

He hit out at Kenya Power over the increased cases of power outages in the region noting that this had negative effects to the farmers.

“Power supply to Naivasha which incidentally is the source of geothermal power has been very unreliable forcing the farmers to use generators which are expensive to maintain.”

“There market requirements in terms of social land ethics demands are now stringent meaning an added expense for the farmers,” he said.

The HR manager at the same time noted that failure by Kenya to sign Economic Partnership Agreement (EPA) was causing anxiety among farmers.

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“The ongoing saga around the economic agreement is worrying as failure to sign it would mean an increase in taxes for our produce to the EU market,” he said.

According to the CEO Kenya Flower Council (KFC) Clement Tulezi, Kenya is third in terms of export cut-flower export in the EU market. “Plans are underway to expand the market to Russia and USA.”