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Kenyan coffee farmers forced to diversify
Kenya is known for its high quality Arabica beans grown mainly near Mount Kenya and used by roasters to blend with coffees from other origins.
Coffee farmers here, suffering from low earnings, are diversifying into higher-paying crops like macadamia nuts and even vanilla, in an attempt to boost their incomes. But the country's coffee production has been falling from a peak of 130,000 tons in 1987/88 to an estimated 50,000 tons as poor prices and mismanagement have forced farmers to neglect their coffee trees or turn to other crops.
In the central highlands of Kenya, where 80% of the east African country's coffee is grown, macadamia trees and vanilla vines dot coffee farms in the districts of Nyeri, Kirinyaga, Embu and Meru.
No one has given up on coffee completely.
But low earnings due to mismanagement and weak global prices over several years have pushed farmers to look for alternatives, Patrick Nyambari, a research associate at the French Institute for Research in Africa, said.
"After 10 years, farmers lost hope in coffee production, so they have been trying to look for alternative means of (raising) revenue," Nyambari said.
Farmers have been calling on the government to waive their huge debts, help lower fertilizer prices, and enable them to access cheaper credit through a coffee fund.
Many find themselves borrowing against the prices their crops will pay, getting deeper and deeper into debt to banks who charge stiff interest rates.
Macadamia nuts, eaten as a snack or used for their oils and in sweets or ice cream, can be sold for 70 Kenyan shillings a kilo compared to the 20-25 shillings a kilo for coffee. And while farmers have to wait a long time for payment for coffee, macadamia traders pay cash on delivery.
In the Othaya division of Nyeri, the home town of President Mwai Kibaki, a group of coffee farmers has decided to experiment with growing vanilla, used mostly as a flavouring.
The farmers purchased vanilla from neighbouring Uganda and hope to have their first harvest by 2007.
Vanilla is a tropical orchid with sweet-smelling flowers largely grown on the Indian Ocean island of Madagascar, in Uganda and Mexico.
A recent improvement in global coffee prices, especially for Arabica coffee, which is the main type grown in Kenya, has not yet benefited local farmers, analysts say.
Much of the selling price is swallowed up by debt repayments and the high fees charged by middlemen who move the crop from farmer to market.
Like coffee, the macadamia trees have suffered due to a severe drought that has hit most of Kenya and raised fears of a total coffee crop failure if the main rains fail between now and May.
However, a freak downpour lately in the highlands raised hopes of good rains next month.
World coffee prices, especially for Arabica coffee which Kenya produces, have risen sharply in the last two years on fears of reduced supply from top producers.
But for farmers in Kenya's coffee-growing heartland on the slopes of Mount Kenya, dreams of beautiful homes, better schools for their children and generally higher living standards have remained just that.
Analysts say farmers' earnings are swallowed up by the repayment of huge loans taken out to buy machinery or vehicles for coffee factories, often at inflated prices.
Farmers also grapple with high fees charged by middlemen who move the coffee from the cooperative societies to auction. Many farms are also very small, making it difficult to increase yields and cut costs through economies of scale.
Some farmers are diversifying into higher-paying crops like macadamia nuts and even vanilla to boost their incomes.
The Coffee Board of Kenya predicts the drought, which has killed dozens of people and animals, could slash the domestic harvest in 2005/06 (Oct-Sept) by between 15-20 percent from an earlier estimate of 65,000 tons.
Farmers in central Kenya, where 80 percent of the nation's crop is grown, say they fear crop failure if the rains during the March-May wet season fail.
The coffee bushes are vulnerable because many farmers cannot afford to buy expensive fertilizers, pesticides, herbicides and insecticides to develop their crops.
In the last days of February, heavy rains fell on the area, raising hopes that the crop could recover if rains continued.
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Many farmers are now pinning their hopes on the so-called "second window" which will allow them to bypass a central coffee auction and negotiate higher prices directly with buyers abroad.
Supporters of the plan say this will mean higher prices.
Kenya has used the weekly auction system for decades, creating business for many including exporters, warehouse owners and transporters.
In a bill passed last year, the government set in motion a process that will see farmers sidestepping a long chain of middlemen they blame for eating into their earnings. The rules and regulations to govern the system are still being drafted.
"With the opening of the second window, it means now that international roasters outside the country can actually come directly and buy coffee as opposed to going through a broker," Nderitu Gachagua, a member of parliament in Nyeri told.
Some traders argue that the auction does deliver attractive prices but that there are delays in handing over the money.
"I think the farmer should have the ability to sell coffee outside the auction, but I don't think this is the panacea that is going to resolve all the problems in the industry," Charles Cardoso, managing director of coffee exporters CETCO said.
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