It’s not a pink valentine for flower farms
Ahead of Valentine’s Day on Monday the 14th, Naivasha flower growers are busy on their farms hoping to cash in on the highly marketed Valentine’s Day season after a tough season. Indeed, it has been a difficult season for the flower sector, which has been hit hard by the closures and curfews put in place by countries to slow the spread of the Covid virus.
The pandemic situation has resulted in a shortage of cargo planes and high freight costs which have doubled over the past year. To further compound the problem, soaring fertilizer prices, but flower prices in the EU market have remained the same for the past two years.
But with the economy opening up, the good news is that the flower sector is on the verge of a full recovery after the harsh effects of the Covid-19 pandemic which saw flowers worth millions of dollars go to waste. .
At the height of the pandemic, the situation was so bad that almost all flower farms were forced to send some of their staff home while others had to get rid of their flowers.
The Smart Harvest visited a number of flower farms in Naivasha to assess the situation ahead of Valentine’s Day. At Van Den Berg Roses and Maridadi Flower Farms, which are the country’s leading rose growers, there was enthusiasm and optimism on the farms as workers got on with their work.
Van den Berg Roses’ human resources manager, George Onyango, says they are looking forward to the peak season, but also admits that the high costs of exporting their flowers were affecting their profit margins.
Mr Onyango says the farm, which produces more than 350,000 stems of roses a day for the Dutch auction, faces major challenges in securing freight flights.
Few cargo planes
“Currently the biggest challenge facing flower growers is the lack of cargo planes and space. The few products available are very expensive and this is affecting our profit margins,” he says.
Onyango says the farm which has more than 1,000 workers had fully recovered from the pandemic, but now the high cost of production threatened to erase the gains they had made. To avoid this scenario, Onyango asks for state support.
“The president has promised a 1.5 billion shilling stimulus package to protect farmers from economic hardship, but we haven’t received a dime yet because fertilizer prices are still very high,” he said. .
Onyango also raises the issue of double taxation by national and county governments which he says is eroding investor confidence.
“We don’t get enough support from the national government like our competitors in Ethiopia. In addition to the many taxes on our side, we also have new taxes like unloading fees in Nairobi,” he says.
For his part, MD Maridadi MD Jack Kneppers says they were producing over 200,000 stems of roses per day for export, although they had the capacity to produce more.
“All our flowers are for the Dutch market. We have fully recovered from the pandemic and are shipping daily production despite flight difficulties,” he says.
He says the lack of freight has forced them to hire charter planes to meet their daily orders.
“The biggest challenge we have now is the lack of space in cargo planes and the costs have doubled,” he says.
Kneppers says the cost of flowers exported by charter plane has also risen from two and a half dollars to six dollars per kilogram.
“In particular, flower prices have remained stagnant in the European Union market for a few years despite the fact that fertilizer prices have doubled over the past year,” he says.
The farm’s production manager, Esther Waithera, reveals that she had to limit her production due to problems caused by cargo space.
“Despite the challenges, we are on the path to full recovery from the impact of Covid-19 and our entire workforce is back to work,” she said.
Waithera says they hope to cash in on the Valentine’s Day season.
“It is time for us to bounce back. We are always following health regulations like wearing masks, social distancing and washing hands in accordance with Ministry of Health guidelines,” she says.
Skyrocketing cost of agricultural inputs
The Kenya Flower Council (KFC) admits it has been a difficult season for the sector, but now things are looking up.
KFC CEO Clement Tulezi notes that the country’s flower exports have fallen 10% over the past year due to the pandemic, high transport costs and soaring agricultural input costs.
As Valentine’s Day approached, the council predicted growth in the floriculture sector if the government stepped in to support farmers.
Tulezi observes that the country produced 160,000 tons of flowers last year compared to 173,000 tons in 2020. Tulezi attributes the decline to the effects of the pandemic and new health regulations that left countries in Europe in lockdown.
“We saw a slight drop in flower exports last year, but hopefully that will change once we get government support,” he says.
The CEO notes that the floriculture sector was second only to tea in terms of foreign exchange earned from export, but there was little government support. He says the president, in his address to the nation last year, promised farmers a 1.5 billion shillings economic stimulus package to deal with the high cost of freight, but nothing concrete has been forthcoming. present.
“Months after the pledge, we still haven’t heard from the Treasury. High transport and fertilizer costs continue to be the biggest challenges for the sector and we need state intervention,” he says.
Ahead of Valentine’s Day, Tulezi observes that the demand for flowers has increased although farmers cannot meet their daily targets due to lack of cargo planes and high transport costs.
He says the demand for flowers was 5,000 tonnes per week, but farmers can only export 3,000 tonnes due to lack of cargo planes.
“We are facing a major challenge in flower exports due to the lack of cargo planes and this has increased the cost of freight from $1.9 to $5.8 per kilo,” he said. To chart the way forward, Tulezi said fresh produce export stakeholders held a meeting where several recommendations including direct flights from the country to the market were discussed.
“The country has observed all the Covid-19 regulations which means Kenya is safe and the government should release the 1.5 billion shilling stimulus package to protect farmers,” he says.
According to Tulezi, flower growers pay a record 45 different taxes to national and county governments each year. The CEO accuses national and county governments of unfairly targeting flower growers despite the losses they were suffering. Thanks to the many taxes imposed on them, their profits are considerably low.
“The government should extend its tax margins to the informal sector instead of unfairly targeting flower growers. There is a misconception that flower growers make millions in profits from exports,” he says. Despite these hurdles facing the sector, experts agree that the sector is lucrative and has huge potential.
In 2020, the horticultural sector brought in the country 151.29 billion shillings against 144.58 shillings in 2019 despite the Covid-19 pandemic which left the floriculture sector on its knees.
According to KFC, the country’s flower exports fell by around 10% in 2021 due to the Covid-19 pandemic, high transport costs and soaring agricultural input costs.
According to the council, the country produced 160,000 tonnes of flowers last year compared to 173,000 tonnes in 2020.
Currently, according to KFC, the cut flower industry in Kenya directly employs 200,000 people and has over one million people supplying the industry.
The majority of cut flowers from Kenya are shipped to Europe and in recent years farmers have spread their wings to Japan, the Far East and there are plans to explore the US market.