Seizing the moment: Agribusiness holds the key to economic transformation

  • 4 Nov 2022
  • 5 Mins Read
  • 〜 by The Vellum Team

By Chris Flowers

Agriculture does indeed hold the key to economic transformation for Kenya and the East African region.

The challenge, however, lies in practising agriculture sustainably in a manner that unlocks its true value from food production to agro-processing.  

Ahead of the 27th United Nations Climate Change conference, (COP27), to be held from 6th to 18th November 2022 in Sharm El Sheikh, Egypt, as a region and human race, we have many challenges ahead. Some brought on by climate change, population pressure and political or financial instability within our economic and geo-political space. Still, as a country and region, we have many unique advantages including political goodwill which, if used wisely, will allow us to build a robust agricultural economy.

Let me start by dealing with a favourite topic of mine: irrigation and water security. At Kakuzi PLC in Makuyu, Murang’a County, Kenya, we have 19 earth dams which capture rainwater from our catchments allowing us to use the water for irrigation during the dry season.  

The critical part of our water security is not just the dam but the catchment itself. If we don’t preserve the water catchment fields, our dams won’t fill with water, or they could silt up.

In short, sustainable and secure irrigation requires that we sacrifice something, in this case, acres and acres of land, which act as water catchment areas. These fields are exclusively preserved with natural habitat and strictly managed to avoid soil erosion, bush clearance or overgrazing. In these fields, we have to overcome the temptation to dig up the land and plant some crops.

See, irrigation is not a leisurely pursuit in agribusiness. Using the right technology to apply the right amount of water and time requires a considerable investment. But again, nothing comes for free. If capital has been spent on constructing a dam, then it is only prudent that we make every drop of water count.  

Farming, after all, is a science and irrigation is very much not an activity one can leave to chance. At Kakuzi, we irrigate approximately 1,500 ha of our orchards using precise micro jets placed in the root zone of each avocado or macadamia tree. The amount of water applied is managed by a dedicated technical team using various technologies.

The next key challenge for agriculture after water is energy and not just the cost but also availability. In Kenya, our key export crop of tea requires enormous energy to turn it from lush green leaves to dry tea; bear in mind that 4.5 kilos of green leaf converts to 1 kilo of black tea as the rest is water.  

As we encourage farmers to grow more green tea leaves, we must also consider where to derive the energy to dry the leaves. In every tea-growing country, the energy for drying tea is a significant issue, whether it’s coal in India, gas in Bangladesh or fuel  wood for us in East and Central Africa. Engineers have calculated the energy required, and it’s staggering. We must find sustainable solutions for this, as it’s not an easy or quick fix.

We all know the impact of energy prices on fertiliser, which is just another reason why we need to minimise our use wherever we can. Composting and mulching at Kakuzi to improve soil health and enhance soil fertility is a crucial component of our agricultural practices. Given that only 10% of a macadamia nut is the edible kernel, a lot of biomass is available for conversion to energy or compost. 

Teaching farmers sustainable agricultural techniques and when to apply different nutrients and in what quantities is part of what we do. Our online avocado academy ‘Kakuzi Avocademy’ is designed as an e-learning portal for farmers. Through the e-learning platform, we strive to advance shared prosperity values allowing smallholder farmers to learn and make the best crop husbandry decisions.

I will come onto traceability in a bit. Still, growing fruit with the correct inputs, applied at the right time and demonstrating that to your customers is a critical part of unlocking value for farmers.

For many years now, I have been saying that we must explain how farmers can sell their fruit for the best value before we can tell them to plant an avocado tree.  

Unfortunately, the fact is that the supply-demand equation for a perishable product such as avocados is a reality. Produce a product with limited marketability in a period of oversupply at your peril. This is precisely what happened in the avocado market earlier this year.  

An oversupply of fruit in Europe through large Peruvian shipments and late European and North African production meant minimal marketing options for Kenyan smallholder fruit.    

As I mentioned above, discerning customers choosing to eat a superfood such as a macadamia or avocado want to know what they are eating and how it was produced. This is not because good Kenyan fruit is of substandard quality but simply because a lot of fruit from the country doesn’t have traceability credentials. If we as producers cannot demonstrate these traceability credentials, then high-value markets are limited and becoming more so. 

We should also avoid the trap of thinking that emerging markets in the far east are less stringent than our traditional European markets. Sending substandard fruit to an emerging market can only depress demand, not enhance it.

Encouragingly, as we approach the rainy season, the farming fields are getting cleared and prepared for planting in the plains and valleys that dot Makuyu in Murang’a County. The rains may not be doing us any justice at the moment, but the palpable excitement of getting dirty by tilling the soil is unmissable.

At the Kakuzi Farmers centre along the Nairobi-Nyeri route, the number of visitors popping in to make enquiries and buy avocado seedlings has more than tripled in the last two months.

Further up in the Rift Valley in the tea fields of Nandi and beyond, agricultural interest, mainly crop diversification, is also rising. The number of people seeking advice on avocado and macadamia potential in the region predominantly known for tea is growing.

Undoubtedly, this is the best time to get on the agribusiness side of things. As the name suggests, agribusiness means agricultural production for consumption and sale to raise much-needed financial resources. Like any other business, agri-preneurs must carefully consider profit and loss fundamentals.

Considering profit and loss means engaging the investing community in the agricultural space to appreciate the role of credit access, mechanisation, technology and human resource management for efficiency.

Having been on the agricultural front my entire life, I can attest to this field-based industry’s value and potential to power rapid economic transformation. Kakuzi is an example of a leading agribusiness firm involved in commercial agricultural endeavours, including livestock rearing and agroforestry beyond our renowned avocado and macadamia production.

In Kenya, the Bottom-Up Economic Transformation Agenda 2022 – 2027 rightly notes that the agricultural sector has the highest growth multiplier effect on other economic sectors due to strong backward and forward linkages. There can be no denying that agriculture is our most globally competitive sector but getting it right is complex. Patience, long-term thinking and getting the fundamentals of sustainability, quality and traceability correct is the key.

Sometimes numbers tell the value of an agricultural enterprise better. For example, last year, notwithstanding the challenges of an “OFF” year cycle, Kakuzi PLC exported Kshs 94 million worth of HASS avocados for our smallholder farmers. The previous ON-year cycle had seen us ship HASS Avocado cartons worth Kshs 152. 2 million for smallholder farmers.

In this venture geared at supporting smallholder farmers access quality international markets, we made payouts amounting to more than Kshs 31.4 million for the smallholder farmers from Kakuzi’s local community in Murang’a, Kirinyaga, Nyeri, Meru and Trans-Nzoia counties.

This is but one of the proof points that agribusiness is a viable economic avenue that can empower our farmers if we do it correctly.  

However, we must remain alive to the vagaries of climate change as a risk factor to agricultural production and work towards building resilience.

Chris Flowers is the Managing Director at Kakuzi PLC | | Email: