Pyrethrum farmers plead for disbanding of board

Pyrethrum farmers have called on the government to liberalise an industry that just a decade ago accounted for three quarters of global production, earning the country some Sh1bn a year, but which has been brought to its knees through late payments rooted in management issues at the Pyrethrum Board of Kenya. The board is the sole body authorised to license, buy and process flowers from farmers and carry out research, but it has been financial crisis for now many years.

The magnet for pyrethrum farmers during the sector's heydey was the huge payment they got based on the pyrethrin content of harvested flowerheads, with Sh200 being the lower limit for a kilo delivered.

Pyrethrins are naturally occurring chemicals with active insecticidal components. The many insecticide making companies who were looking for the natural ingredient formed the bulk of the PBK customers.

But from 2000, gross mismanagement and bad debts at the Pyrethrum Board of Kenya saw more than 200,000 pyrethrum farmers miss their payments for three years. The majority uprooted their crops to grow alternatives, and, although the arrears were eventually cleared, the erratic payments since then has seen farmers fight shy of recommitting themselves to the crop.

Since 2008, the board has moved into an ongoing cycle of late payments and is now suffering a fresh financial crisis and staff and management unpaid for at least two months. But it still owes the government funds it was allocated in the 2006/2007 and 2007/2008 financial years, says PBK Managing Director, Isaac Mulagholi, hence the government's reluctance to bail it out a third time.

The government has, however, allowed it to sell some assets to offset its more urgent debts, such as paying farmers.

Nonetheless, the board currently owes some 20,000 farmers about $541,000 for pyrethrum deliveries made between August 2011 and July 2012.

Farmers deliver harvested and sun-dried pyrethrum flower heads via rural co-operatives to the centrally located PBK factory and are paid according to the weight and content of the harvests. But those who have depended on pyrethrum farming for their livelihood have now suffered long-term financial hardship as a result.

"I did not only uproot the pyrethrum because it was earning me no income, but also because it gave me bad memories; memories of when I had a comfortable earning for my family," said Benard Bii, who was a pyrethrum farmer for 20 years.

Bii said pyrethrum farming formerly earned him an average of Sh12,000 a month, and farmers additionally enjoyed bonus payments based on the level of surplus funds generated by PBK from the world markets.

But since PBK stopped making regular payments in 2008, the situation changed. "I had taken a loan from a local micro-finance institutions, which I was servicing using earnings from PBK, but I could not continue after payments failed," said Bii, adding that his two dairy cows, four goats and furniture were auctioned at a local market to cover the loan balance.

"PBK owes me Sh60,000, which I would have spent on educating my grandchildren, whose single mother is jobless," said Isaac Kariuki, another pyrethrum farmer from Rift Valley province. Kariuki is growing the plant on just 0.2ha of land from an initial 2.4ha but is hoping to revert to pyrethrum farming when the situation improves.

The breakdown of the country's pyrethrum industry has also affected other sub sectors. Some of the country’s leading manufacturers of insecticides brands are now importing finished products from Australia, Belgium, Indonesia, Malaysia, Netherlands and South Africa, spending millions more than they did.

“We have heavily downsized and been forced to even reduce our workforce because our cost of importing has shot up prohibitively over the last three years. Now, every month, we spend between Sh5m and Sh10m more than we did when we were buying pyrethrins from farmers,” said Dorothy Ansten of Picket Company that sells insecticides in Kenya, adding that it has become cheaper to import finished product than buy raw material and process it themselves.

This has led to loses of jobs locally as some of the manufacturers closed shop and relocated.

Pyrethrum farmers have now appealed to the government to form two new bodies to handle the regulatory and commercial functions of the pyrethrum board.

Samuel Kihiu, patron of the Pyrethrum Growers' Association, which represents some 50,000 farmers, also believes liberalization may be the solution. "If there were a competitor to PBK, then there would be better pricing and better payment, but we cannot re-invest in pyrethrum farming while we have not been paid our dues. How will we tell if another debt will not accumulate?"

Written by Bob Koigi for African Laughter

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