Agribusiness ideas to bet on in the New Year

Every New Year, The Smart Harvest brings you its best predictions on the most promising farming ventures prospective farmers could invest in.

Having interviewed hundreds of farmers throughout the year, we have a wealth of knowledge and understanding on potentially lucrative farming ideas.

A big lesson many have learned in the last two or so years is that employment is not always guaranteed. Something could happen [like a pandemic] and you are out of a job.

It, therefore, makes sense, to invest, in an economic activity that one could fall back on in times of crisis. Or, a side hustle that bolsters family earnings.

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According to the Ministry of Agriculture, close to 80 percent of Kenya’s Gross Domestic Product is linked to agriculture. The food we eat comes from farming. It is almost certain that one will have clients interested in their produce. 

This is not to say that farming is not risky. It is. Hence, this analysis.

BEEKEEPING 

Beekeeping — mostly for honey — has shown a lot of promise. Pauline Otila, a professional apiarist, says beekeeping is not as labour intensive as crop production or animal husbandry.

“With beekeeping, you do not need to plough, do weeding, apply fertiliser, or anything of that nature. You just need a good beehive. The rest, bees will do – for free,” she says. 

Hold on: don’t get the wrong idea. You still have to work as a beekeeper. You need to put in some effort.

“I conduct bi-weekly inspections on all my beehives (more than 900 of them). This is important because one needs to see progress of the colony. Also, a beekeeper needs to understand the general health of the hive: pick out any pest and disease infestation early,” she says.

A beekeeper interested in honey production, Otila says, should buy a Langstroth hive.

“Langstroth hives are the most ideal for professional honey production. They are easy to handle, yield higher compared to other hives, are durable and easy to repair when damaged.

“Also, Langstroth hives guarantee higher frequency of production since combs are not crushed and destroyed during honey extraction – which cuts the length of time between harvests,” she says.

The other type of hive, common locally, is the Kenya Top Bar hive (KTBH). Unlike the Langstroth, KTBH, Otila says, produces more wax than honey. Hence, for a beekeeper interested in wax production, it would be the ideal choice.

“As an apiarist, having both is important. Because new Langstroth hives need to be seeded with beeswax before mounting. Considering that the Langstroth produces negligible amounts of wax, an apiarist has to use some KTBHs to have the wax,” she says.

A beekeeper ought to ascertain that they have land with vegetation and a water source nearby on which they will install the hives. They also need protective gear — from bee suit to first aid kit for stings — to carry out inspections and for harvesting.

It is important to note that there are other products, other than honey, that a beekeeper may produce from their venture. Some, like royal jelly and bee venom, are premium products. 

HASS AVOCADO

What you need

• Avocado seedlings – Sh100 per seedling
• Manure (from organic matter and animal waste)
• Labour (to do spraying, manure application and occasional watering) – approximately Sh10, 000 per year.
• Harvesting, sorting and transport – approximately sh15, 000 per year
• The life span of a hass avocado tree is more than 50 years.
• Spacing can vary around 5m X 5m. This yields approximately 150 trees per acre.

Possible profits

• The tree starts producing three years after planting. In the first year about a tree produces between 50 and 100 fruits annually. By year five production goes up to 400 fruits per tree and 2,000 fruits by year 10.
• Farmgate price per avocado ranges between Sh8 and Sh30.
• Total revenue Year 1-3: Sh60,000 annually Year 4: Sh430,000 Year 5: Sh580,000 Year 10: Sh2.1 million. 

Last year we told you that Hass Avocados would make for good investments. This crop still bears very high potential.

Last year, Dr. Simon Kibet, then acting Managing Director at Kenya Plant Health Inspectorate Service (Kephis), said the export market for avocados is “large”.

The Horticultural Crops Directorate (HCD) Head of Directorate, Benjamin Tito, said the market for avocados is both local and international.

In 2019, Kenya exported 60,000 tonnes of avocados. At the Ninth World Avocado Congress, held in Medelin, Colombia, in September 2019, Kenya was ranked seventh among leading avocado exporters in the world. 

China, with its 1.4 billion population, also opened its market for avocados from Kenya in April 2019. Hosea Machuki, CEO of Fresh Produce Exporters Association of Kenya (FPEAK), an avocado farmer has an assured market – whether locally or abroad.

There are hundreds of avocado varieties in the world. Hass Avocado, Machuki says, has the most demand in the world. It is estimated that Hass Avocado accounts for as much as 90 percent of global demand.

Augustino Njoroge, an avocado farmer in Gatundu South, says the crop (a fruit tree) has low cost of production. Avocado trees, he says, should be spaced 8 metres by 6 metres for best results. The seedling should be planted in a hole measuring 2 feet by 2 feet.

“Once the seedling becomes established, the avocado tree can last forever as long as it is pruned every few years, watered, and given some manure and fertiliser.

“Avocado trees are not demanding. A farmer only has to prune every few years and let the tree grow and produce fruits,” Njoroge says.

Njoroge has over 300 trees (planted along the edges of a tea farm). Every year, he says, he produces an average of 1,000 tonnes of avocado fruit.

Avocado farming is for long-term planning. Profits won’t be realised in the immediate years. However, by year five, profits should be apparent.

GARLIC

What you need

Estimates according to Gilad, an established garlic farmer in Kajiado county:

• 350-400Kg of garlic cloves per acre
• Cloves cost Sh600-650 per Kg = approx. Sh200,000 per acre per season
• Fertilisers, pesticides, and labour – Sh100,000 (over more than three seasons)

Possible profits

• Harvest between 4,000– 10,000kg per acre
• Farmgate price – Sh150 – Sh250 per Kg
• Let’s say you harvest the lowest possible (4,000kg) and sell at Sh150 per Kg = Sh600, 000
• Profit Sh300, 000 in four months: 100 per cent profit

Other statistics

• Kenya produces 2,000 metric tonnes of garlic annually. This represents about half of the demand locally.

That is why a few years ago, musician, Gilad, a former Israeli diplomat, and his friends started Ole Raha farm: a garlic haven.

Demand for garlic is high

“We decided to go into garlic farming because the demand is high,” he says.

According to data from Horticultural Crops Directorate (HCD), Kenya produces 2,000 metric tonnes of garlic annually. This represents about half of the demand locally.

The other half is imported – mostly from China. It is highly likely that the garlic you have been eating is not grown locally.

Gilad says locally grown garlic is rich in taste due to the fact Kenyan soils are fertile. Ole Raha itself buys garlic from farmers it supplies garlic cloves to. But one could sell at local markets, supply to supermarkets, sell to hotels and food joints or even export their produce. Supply is low than the current demand.

Garlic farming needs a hands-on approach. One has to create time and supervise the farm regularly – even with farmhands at their disposal.

There are few garlic farmers in Kenya, Gilad notes. “Because it is expensive to grow,” he says. “And it needs an active farmer: not a telephone farmer.”

Returns are however guaranteed, Gilad says if crop husbandry is followed to the letter.

But before you start, make sure you have an adequate source of water. This can be a borehole or a river. “You can’t do farming without water. Period!” he says.

Of course, you also need land. Gilad’s advice is: “Start with an acre. And if you like the results, scale up slowly.”

DRAGON FRUIT

What you need

• Every erected post can take four dragon fruit cuttings; spaced at 2.5m by 2.5m. These can accommodate anything between 1,800 and 2,000 plants per acre.
• A cutting costs anything between Sh200 and Sh500. For an acre, one would need Sh900, 000.
• One off-costs for setting up posts and trellis would be dependent on timber availability. An acre of land can accommodate 450 to 500 posts. Mugambi spent Sh300 per post, amounting to Sh120, 000. This is however a one-off cost.
• Labour: land preparation, pruning, watering, and harvesting, is also dependent on location. 

Possible profits

• Dragon fruit fruits in 2 to 3 waves during one season.
• Each pole normally yields approx. 10 to 40 kg of fruits. Each fruit weighs about 400 to 900 grams.
• Peak fruit production is usually from the 3rd year onwards and the average yield per acre is 5–6 tonnes.
• Dragon fruits are sold locally at a retail price of Sh1, 000 to 2,500 per kilogram.
• The general farm gate price is approximately between Sh500 to 800 per kilogram.
• A general calculation of annual income for 1-acre plot may be calculated as follows:

One Acre x 450 poles x 10 kg (least) x Sh500 (minimum) = Sh2, 250,000 per acre per year.

This is the one crop that you can be certain there are not many farms growing it in Kenya right now.

Antony Mugambi is a connoisseur of dragon fruit farming in Kenya.

Mugambi has 20 acres under dragon fruit. He is rapidly expanding the farm. In 2015, the fruit fetched a cool Sh2, 500 per kilogram.

“The fruit has a unique taste and is touted as a superior food: in Asia it is consumed as part of a healthy nutritional routine,” he says.

Mugambi produces about five tonnes of dragon fruit per acre annually. “Demand for the fruit is so high. I sell locally – to neighbours – and I have never had surplus,” he says.

Dragon fruit holds the record for the most expensive fruit locally. The farm gate price for the fruit currently is Sh1, 000 per kilogram.

But the profits don’t come with one resting on their laurels. “You have to roll your sleeves and put in the work,” Mugambi says. Dragon fruit is a cactus. Dragon fruits are climbers. They need support. A farmer has to erect poles measuring two meters high to support the plant.

A horizontal frame (some farmers use tyres) on top of the post would allow the plant to fall into an umbrella shape once it reaches the top. 

Dragon fruits are non-climacteric: they don’t ripen further once cut off from the plant. The most prominent symptom of ripening is colour change from green to red or purple. 

Cuttings grow to productive in 9-12 months. With irrigation, one can harvest throughout the year.

However, depending on weather and climate, the crop has a peak fruiting season lasting about five months. The average weight of a fruit ranges between 0.4Kg and 0.9Kg. But, some outliers can weigh as much as 1.5Kg. 

CAMEL MILK

What you need

• Free access to community land for grazing or a ranch
• Female camels in reproductive age – Sh100, 000 per camel
• Farmhands to help with watering, management, and milking

Possible income revenues

• One lactating camel can produce 3 -7 litres of milk per day
• Farmgate prices for camel milk range from Sh80 to Sh180
• The Kenya Agricultural and Livestock Research Organisation study indicated profit margins of about Sh123, 500 per year under subsistent model of keeping camels in Isiolo. This can therefore improve under professional conditions.

According to Dr. James Janja, the vice-chairperson of Kenya Camel Association (KCA), camels are the most undervalued domestic animals. 

However, make no mistake; camel milk is more valuable than milk from cows and goats. A litre of cow milk retails at Sh100. A similar amount of goat’s milk retails at Sh150. A litre of camel milk goes for at least Sh280.

Jama Warsame, the proprietor of White Gold Camel Milk brand, processes 600 litres of fresh camel milk every day.

Tumal Ardo, a 64-year-old from Marsabit North, owns about 80 camels. He says: “In our culture, camel milk is precious. It is highly medicinal. Fresh camel milk cleanses the gut in 24 hours. When a person is sick we give them fresh camel milk.”

Camel milk is often prescribed to patients with diabetes, high blood pressure, high cholesterol levels and autism.

According to David Hewett, the Ranch Manager at Mpala Ranch Limited in Nanyuki, camels are best reared as free-range animals.

“Because of its size, the animal consumes a lot. While in the Middle East the animal has successfully survived under a feedlot system, in Kenya that has never been tried,” he says.

“In my opinion, the camel in Kenya should be reared as a free-range animal where it is allowed to graze on its own; especially within a ranch setting.

“A good camel farming business would require that the farmer is milking about 50 camels. To reach this number one ought to have a large herd. At Mpala we have 114 camels but only 12 are being milked,” he says.

In a study published in 2016, researchers with KALRO found that in Isiolo and Marsabit, the market price for camels ranged from Sh20, 000 for female calves under one year to Sh97, 143 for mature females.

With high demand and professional handling, camel keeping for milk production would be a promising venture.