Agro-processing will stimulate agriculture

Governor Mwangi wa Iria of Murang’a County, in a stroke of pure genius, initiated and implemented an idea that in retrospect seems blindingly obvious: avocados.

Arguably Kenya’s national fruit, every homestead and household in Murang’a County is helped and encouraged to grow at least four Hass avocado trees. As a result — and in addition to the happy corollary of a greener country — the county now produces over 300 million avocados annually (as indicated in its website). And with plans afoot to grow even more trees, production will double to 600 million avocados annually in a couple of years.

Such numbers could lead to market saturation, if the focus remained on just producing and selling the fruit. This oversupply could lead to price drops, wastage, and even abandonment of the crop. Of course, the county could more aggressively explore foreign markets, and at an export price of Sh10 a fruit, farmers could earn more than Sh3 billion a year.

While this kind of return from a single well managed crop seems quite staggering, it is worth noting that a single Hass avocado readily fetches $2 (Sh200) in foreign markets. This means that by selling their avocado for Sh10 per fruit, Murang’a farmers would only be achieving 5 per cent of the true value of their crop.

Extracting value

The question therefore is, why doesn’t the county, through its resources and investors, engage in agro-processing, extracting value from avocados by processing them into such products as avocado oil, guacamole, canned avocado, healthcare and cosmetic products, for the local and export markets?

The answer herein is simple. On the surface, agriculture and industry should go hand in hand, with one feeding the other in an ever-growing cycle of productivity. However, while agriculture remains the economy’s mainstay, industry isn’t keeping up. It seems Kenyans have not taken manufacturing seriously, instead preferring to import finished produce and export raw commodities.

Take for instance, only 16 per cent of Kenya’s exported agricultural output is processed, even though doubling this would create 110,000 new jobs and earn the economy an additional $600 million (Sh60.2 billion). Only 30 out of the 8,600 fishing vessels in the East African Indian Ocean process their fish in Kenya, yet a proper such industry could put 12,000 people to work whilst earning Kenya $150 million (Sh15 billion).

Additionally, Kenya accounts for just over 0.4 per cent of the US textile market, even with AGOA, and while this slice of the world’s largest economy is hardly a number to thumb one’s nose at, improved, modernised textile production could easily employ over 105,000 people.

Finally, 90 per cent of Kenya’s leather exports are in unfinished leather; were the local manufacturing sector more developed, 35,000 jobs would be made available, whilst also saving $86 million (Sh8.63 billion) annually in leather shoe imports.

But what does our economic “Bible” envision? Encouragingly, Vision 2030 recognises agro-processing as one of the main pathways for the journey towards industrialised, middle income economy status.

Understand the industry

It envisages the setting up of industrial centres to support and add value to agricultural output. It seeks to develop a meat and leather processing cluster in Garissa and Kajiado. Kisumu is to be a bustling fish processing and packaging centre, while Mombasa is marked as a food hub, the centre of an agro-industrial cluster that would serve the local and regional market.

There is, admittedly, the temptation to expect established foreign agro-processing firms set up shop in Kenya and avail themselves of its agricultural riches. After all, isn’t it better to let someone with expertise and experience replicate their success here?

My view is that, for Vision 2030 to achieve its objectives, Kenyan agro-processing must be spearheaded by those who understand the industry, and who have the intellectual and financial wherewithal to make it work. The fact that East Africa imports $3.8 billion (Sh381 billion) a year in raw and processed commodities should be a wakeup call to the existence of an industry so full of potential yet completely ignored.

Governor Wa Iria therefore deserves hearty congratulations for making Murang’a a major producer of avocados, with such a single stroke. However, he can ill afford to rest on these proverbial laurels.

It is now incumbent upon Kenyans to innovate indigenous, ingenious industries that can process and add value to our produce, and afford Kenyans the quality and variety of processed food enjoyed in developed economies while creating millions of jobs.

-The author is a former Planning and Statistics Principal Secretary.