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February 16, 2010

Real estate taking up Kenya coffee farmland

by Helen Nyambura-Mwaura

Land under coffee cultivation near Kenya's capital is being converted into more profitable crops or real estate, the head of a Kenyan coffee sector association has said.

Coffee production in east Africa's biggest economy has fallen from a record 130,000 tonnes in the 1987/88 season to 54,000 tonnes from the just concluded crop.

Coffee sector authorities are alarmed that farms on the outskirts of the capital Nairobi are giving way to apartment blocks or high-end gated communities, and they want the government to create a policy to protect the coffee fields.

But the tide will not be turned unless beans again become the "black gold" they once were, said Etienne Delbar, chairman of the Kenyan chapter of the 10-nation Eastern African Fine Coffees Association.

"The movement of agricultural land being converted into real estate is seen worldwide. It is in South East Asian countries and Central America countries that it is most visible," he said. "We also see that some coffee land now used for other crops -- bluegrass, cut flowers, macadamia nuts -- why? Profitability. It is very expensive to grow coffee in Kenya."

Electricity, water and labour costs have gone through the roof, said Delbar, who was formerly head of Kenya's biggest coffee producer, Socfinaf. It is more difficult to get labourers and water for irrigation is scarce nearer the city, he added.

One of the big low-lying estates pulled up over 1,000 hectares of coffee bushes in 2004 and planted pineapple and avocado instead, which proved to be more profitable, he said.

Global warming means low-lying farms see higher temperatures that quicken cherry maturing. The early crop is traditionally less appreciated than the late crop and fetches less.

To keep farmers growing coffee, the government has to fully liberalise the sector, Delbar said. Small farmers, for example, receive their payments more than a year after they deliver cherries to factories. Liberalising the sector to allow farm gate sales could hasten the process, Delbar said. It is illegal at the moment to do farm gate sales, but the trade does happen, Delbar said.

"It is estimated that 5,000 tonnes of coffee is smuggled into Uganda where trading in cherries is liberalised," he said. "Today it is illegal but a lot of transactions happen."

"Productivity for smallholders is very low, 250 kgs green coffee per hectare. In Vietnam it is 2,200 kgs per hectare," he said, adding that doubling output to 500 kgs would keep small scale farmers cultivating coffee.

Presently, 60 percent of Kenyan coffee is grown by smallholders and the rest on estates, Delbar said, compared with 100 percent in Rwanda and Uganda and 80 percent in Ethiopia.

Out of the 170,000 hectares under coffee in Kenya, estates represent around only 12 percent but produce 40 percent of the harvest.

To counter the loss of farm land near the capital, the government should encourage investors to start operations in western Kenya in areas such as Kitale and Mt. Elgon, he said, which have the potential to produce good coffee.

The fact that the big trading houses were investing in milling machinery shows that their long-term view on coffee growing in Kenya is positive, Delbar said.

Reuters

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