Transcript Document 7547637

AGRODEV
Agricultural Growers Resource Organization
Developing Economic Viability
Founded in March 2005
We are a Kenyan Based NGO
working hand on with farmers to
build strong and sustainable
agribusinesses
MISSION
To promote development and innovation in
Kenya’s agriculture sector by creating niche
markets, encouraging sustainable practices,
creating employment in and out of the
agriculture sector, building infrastructure,
linking growers directly to global markets, and
creating education and awareness on value
added initiatives.
Our Board of Directors
• Lawrence Njeru holds a BSc. in Agriculture from Western
Michigan University. He has worked with the United States
Department of Agriculture. Lawrence and the Njeru family have
a long standing history of innovation in the Meru and Embu
region of Kenya. Lawrence is a Kenyan citizen.
• Blake Hanacek holds a BSc. in Global Resource Systems from
the Faculty of Agricultural Science at the University of British
Columbia. He also holds a Masters of Watershed Management
from the Resource Management and Environmental Sciences
Faculty at UBC. Blake holds dual citizenship in Canada and the
USA.
• Richard Damianopoulos holds a BA(hons.) in Political Studies
from Queen’s University in Kingston, Ontario. He also holds a
MA in Political Science from the University of British Columbia.
His thesis focuses on the political economy of the coffee
industries in Kenya and Uganda. Rich is a Canadian citizen.
CURRENT PROJECT GOALS
•To alleviate rural poverty by provide an avenue for
rural coffee farmers to access “sustainable” export
markets.
•Our first target area is the Meru region around the
slopes of Mt. Kenya. This region is unique as one of
the top coffee growing regions in the world.
WHY COFFEE?
• Coffee is the second most widely traded
commodity in the world (petroleum is the first)
• It is produced in more than 50 nations. Of the
7.5 million tons of coffee produced worldwide,
only 25% is consumed by the producing
countries themselves.
• It is one of the largest employers in the
agricultural sector of developing countries.
• It is relied upon as a major source of revenue
in producing countries.
THE GLOBAL RURAL
COFFEE SITUATION
• Post International Coffee Agreement (1962-1989),
liberalized international coffee market
• Elaborate value-chain structure
• Old control structures no longer relevant in new
liberalized market
• Coffee farmers have been faced with plummeting
world market prices over the past 20years.
• Trading is dominated by spot markets, lack of trust,
and opportunism.
• After fall of ICA producer percentage of total coffee
income fell from 20% to 13% to now an all time low of
7% and lower.
350000
300000
250000
Kenya Coffee Area
Harvested Ha
200000
Uganda Coffee Area
Harvested Ha
150000
100000
50000
2004
2001
1998
1995
1992
1989
1986
1983
0
1980
Area Harvested in Hectares
(Ha)
Coffee Area Harvested in Kenya and Uganda
Year
•Coffee area harvested in Kenya has increased by 66%
•Coffee area harvested in Uganda has increased by 18%
•Data appears to suggest that coffee yields and production should have
increased as well; however, this is not the case
12000
10000
Kenya Coffee Yield
Hg/Ha
8000
6000
Uganda Coffee Yield
Hg/Ha
4000
2000
2004
2001
1998
1995
1992
1989
1986
1983
0
1980
Coffee Yield in
Hectograms/Hectare (Hg/Ha)
Coffee Yields in Kenya and Uganda
Year
•Since 1980 coffee yields have decreased by 57% in Kenya
•During same period, coffee yields in Uganda increased by 17%
350000
300000
250000
Kenya Coffee, Green
Production Mt
200000
150000
Uganda Coffee, Green
Production Mt
100000
50000
0
19
80
19
84
19
88
19
92
19
96
20
00
20
04
Coffee Production in Metric
Tons (Mt)
Green Coffee Production in Kenya and Uganda
Year
•Kenyan coffee production has decreased by 30% since 1980, and by
38% since 1990
•Ugandan coffee production has increased by 38% since 1980, and 44%
since 1990
SPECIALTY COFFEE VALUE CHAIN
7%
2% 1%1% 2%
33%
54%
Cooperative
Exporter
Roaster
Grower
Marketing Agent/Miller/Levies
Importer
Retailer
• Growers are
receiving only 7% of
the coffee revenue
• Over 80% of the
value added is
made in the
consumption
country not the
production country
Kenya European Commission
Task Force Recommendations
Existing
Recommended
Dealers
Dealers
KCDA (CDU)
NCE
NCE
Marketing
Agents
Marketing
Agents
Millers
Millers
Small
Estates
Small
Estates
Estates
Cooperative
Estates
Cooperative
Physical flow of coffee
Financial flow
Kenyan Coffee Trends
• Coffee was the number one export for Kenya,
earning 45billion Ksh but now it is fourth
earning only 5billion Ksh per year
• The number one export receives 40billion
Ksh per year (Tea) which is liberalized
• Coffee production has dropped by over 50%
in the last ten years
• Kenya produced a peak of 128,941.00 tons of
coffee in the 82/83 growing season
• The 2005/2006 season is projected to yield
55,000.00 tons
Why the Decline?
• All green coffee for export must be sold
at the Kenyan Coffee Board’s auction
house (heavily controlled by politics)
• Farmers must wait 9-12 months before
they receive complete payment from
their crop forcing them to borrow their
own money and pay interest on it
• Unstable market prices force farmers to
chase global commodity markets
Need for Change
• Falling prices require immediate action on a
grass roots level
• Value added initiatives have been introduced,
to help with the coffee crisis, in other
producing countries but not Kenya
• Organic, Fair Trade, Shade Grown, Bird
Friendly, i.e. “sustainable coffees” have seen
large market share growth globally and have
been attributed for saving many communities
dependant on coffee production
How Do Sustainable Coffee’s Help?
• Direct purchasing
• Guaranteed price minimum
• Transparency and communication down the
production chain
• Community stewardship
• No dependence on synthetic additives
(fertilizers, pesticides, herbicides)
• Ecologically friendly growing practices
How Does AGRODEV Help?
We will work towards our goals by developing
a network of skilled advocates and
professionals and through collaboration with
international donors, governments, and the
private sector. As a team we will work
together to develop long-term guidelines to
enhance development and create value added
initiatives in the Kenyan agricultural sector.