Unlicensed agents pose threat to Pyrethrum Board

By Patrick Kibet

Three years after the Pyrethrum Board of Kenya (PBK) renewed efforts to revitalise the crop, illegal agents in collusion with farmers are threatening to bring the board to its knees.

Isaac Mulagoli, the board’s managing director, said a paltry 518 tonnes were remitted to the board for processing out of the 3,000 tonnes produced in last year.

"Farmers are hoarding flowers and selling them to brokers who smuggle the commodity out of the country," Mulagoli told Financial Journal.

He said the board had successfully increased pyrethrum acreage from 10,000 to 20,420 acres in the last three years by registering more than 40,000 farmers.

He said the board had written to Kenya Plant Health Inspectorate Services after learning that pyrethrum flowers were illegally leaving the country.

Some contracted farmers illegally process the crop thus denying the board revenue."We are putting in place various mitigation measures to stop smuggling. Apart from increasing delivery prices, we are also paying Sh100 per kilo as advance payment," he said.

Pay farmers

Mulagoli argued that the board, if well financed can pay farmers on time and competitively.

In an effort to boost PBK financial chest, Cabinet approved the PBK’s request to offload non-core assets to offset debts and enable the parastatal remain afloat.

PBK is seeking to raise Sh300 million from sale of 302 housing units in Nakuru and other non-core assets. "The board has earmarked Sh80 million for advance payments for deliveries, while Sh40 million will be used to install fire equipment and commission a new plant to boost the crushing capacity," says Mulagoli.

Another Sh40 million will be set aside for seeds; Sh20 million to overhaul the plant in Nakuru, which has been in operation for the last 50 years.

However, more than 400 pensioners have joined the Pyrethrum Growers Association to block the sale of non-core assets, blaming the board for acting without consulting all stakeholders but Mulagoli defended the board.

"If we don’t sell the non-core assets, then we risk even losing the core assets as our supplies might come for them to recover their money."

PBK woes started in 2002 when it lost Sh150 million in the collapsed Eurobank. The following year, the situation worsened when board failed to pay farmers for deliveries.

In 2006/2007 financial year, government injected Sh200 million through the ministry of Agriculture and appointed new management.

In the following financial year, the amount was increased to Sh693 million.

The board continued to get support from the Government in the 2007/2008 financial year when Sh55 million was disbursed. PBK received a further Sh150 million in 2008/2009.

Kenya produces 3,000 tonnes of pyrethrum flowers annually, which is far short of the potential to produce 20,000 tonnes. Rwanda can produce 5,000 tonnes while Tanzania 4,000 tonnes.

Major markets for Kenya’s pyrethrum are Europe, US, Australia and New Zealand.