NAKURU, 9 November 2011 (IRIN) - Mismanagement of Kenya’s once globally dominant pyrethrum industry has dealt a harsh blow to the 200,000 or so farmers who used to grow the natural pesticide, many of whom have not been paid for three years, leading them to uproot their crops. Farmers are hoping their fortunes will be reversed if and when the state’s monopoly on buying, processing and marketing the plant is lifted.
A government bill proposing the liberalization of the pyrethrum market has yet to be tabled in parliament. Once agreed, the bill will enable pyrethrum farmers, mainly from the Rift Valley highlands, to seek competitive markets for the plant.
A decade ago, the pyrethrum sector earned Kenya at least KSh2 billion (US$20.8 million) annually, with the country accounting for up to 70 percent of global production. But now Rwanda and Tanzania are the leading pyrethrum producers.
According to Isaac Mulagoli, the new managing director of the Pyrethrum Board of Kenya (PBK), the industry has the potential to earn about KSh13 billion ($135 million) annually in foreign exchange.
But mismanagement and bad debts are adversely affecting the industry.
At present, the pyrethrum board owes some 20,000 farmers about KSh52 million ($541,000) for pyrethrum deliveries made between August 2008 and July 2009. Farmers deliver harvested and sun-dried pyrethrum flower heads via rural co-operatives to the centrally located PBK factory and are paid according to the weight and content of the harvests.
“PBK owes me 60,000 shillings [$625], which I would have spent on educating my grandchildren, whose single mother is jobless,” said Isaac Kariuki, a pyrethrum farmer.
Kariuki is growing the plant on just 0.2ha of land from an initial 2.4ha but is hoping to revert to pyrethrum farming when the situation improves.
According to Mulagoli, the board also owes the government funds it was allocated in the 2006/2007 and 2007/2008 financial years - hence the government’s reluctance to bail it out a third time.
Staff and management have not been paid for at least two months.
The government has allowed PBK to sell some assets to offset the more urgent debts, such as paying farmers.
Mulagoli said he had spoken to farmers in a bid to convince them to continue growing the plant amid attempts to revive PBK.
“We even increased payment for the farmers to 100 shillings [about $1] from the earlier Sh60 [$0.6 per kg] in a bid to encourage them to deliver produce to PBK,” said Mulagoli. “But the factory which earlier operated day and night only operates once a month, when enough deliveries are made.”
The payments are also based on the pyrethrin content of the harvested flowerheads, with 100 shillings being the lower limit.
Pyrethrins are naturally occurring chemicals with active insecticidal components found in the pyrethrum flower heads.
Liberalization
According to Samuel Kihiu, patron of the Pyrethrum Growers’ Association, which represents some 50,000 farmers, liberalization may be the solution.
“If there were a competitor to PBK, then there would be better pricing and better payment but we cannot re-invest in pyrethrum farming while we have not been paid our dues. How will we tell if another debt will not accumulate?” posited Kihiu.
Pyrethrum has a ready market but farmers need assurances of better and faster payment for their harvest. “There are a lot of brokers who show interest in this field, but the fear of being caught on the wrong side of the law has been a challenge,” said Kihiu, adding that corrupt leadership interfered with PBK operations.
“Between 2001 and 2005, pyrethrum products worth KSh1.8 billion [$18 million] could not be accounted for,” said Kihiu, who was the Rift Valley Provincial Pyrethrum Officer. “We have lost hope in PBK and want to try other markets which will be completely independent from government interference.”
Those who depended on pyrethrum farming for their livelihood in the past are counting their losses.
“I did not only uproot it [the pyrethrum] because it was earning me no income but also because it gave me bad memories; memories of when I had a comfortable earning for my family,” Benard Bii told IRIN.
Bii said pyrethrum farming had earned him an average of KSh12,000 ($125) a month. Then, farmers enjoyed bonus payments based on the level of surplus funds generated by PBK from the world markets.
But since PBK stopped making regular payments in 2008, the situation has changed. “I had taken a loan from a local micro-finance [group], which I was servicing using earnings from PBK, but I could not continue after payments failed,” said Bii, adding that his two dairy cows, four goats and furniture were auctioned at a local market to cover the loan balance.
Source: Integrated Regional Information Networks (http://www.irinnews.org ) 
August 30, 2009, 01:00:31 AM