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    Kenyan cereal farmers long buffeted by post harvest losses and poor farm gate prices have found relief in a new scheme that allows them to store produce until a market shortage while using it as collateral to access financing.

    Traditionally most of the cereals harvested were susceptible to post harvest losses especially attack by weevils. And then there was the risk of a market glut due to farmers harvesting and selling at the same time.  The end result was poor pay. Middlemen would also cash in on farmers desperation to buy it at a rock bottom prices.

    But a new model is now allowing small farmers to store their produce in certified warehouses and use it to obtain credit from banks, avoiding middlemen who paid them and enable them buy good seeds and fertilizer and raise their yields.

    “Brokers have always been a thorn in the flesh of  poor farmers because they take advantage of the harvesting season to purchase farm produce very cheaply, then sell (inputs) to the farmers very expensively when such commodities are scarce in the market,” said Paddy Likhayo, a Kenyan-based grain storage expert.


    Joseph Karanja, a smallholder farmer in Rift Valley, said prices of farm produce, especially cereals, are always very low at harvest time and very high during the planting season, making it impossible for poor farmers to buy farm inputs at the right time.

    “Sometimes we end up planting without fertilisers because we cannot afford it, or at times we plant when it is too late because we did not get the finances in good time,” Karanja said.

    Experts say that a one-week delay in planting can reduce a crop’s yield by more than 50 percent, and Peter Njau, a research scientist at the Kenya Agricultural Research Institute (KARI) , says late planting because of financial problems is one of the main reasons for poor yields among small farmers.

    To bridge this gap, the Eastern Africa Grain Council (EAGC), in collaboration with theAlliance for Green Revolution in Africa (AGRA) and selected commercial banks, is supporting farmers by letting them store their cereals in certified warehouses and use the warehouse receipts as collateral for loans to finance their farming activities.

    The process is known as a ‘Structured Grain Trading System,’ said EAGC Executive Director Gerald Masila, “This is a business venture for smallholder farmers. Those who tried it at first two years ago have already become self sustaining and can obtain loans without our support.”

    Many Kenyan smallholders do not produce enough to make up a consignment of 100 tonnes, the minimum required by standard EAGC warehouses, so they form groups and deliver their cereal together. In exchange, they receive a warehouse receipt which they can present to a bank as collateral for a loan.

    “In January 2011, we stored 113 (90kg) bags of maize at Lesiolo Grain Handlers and used the warehouse receipt to acquire a bank loan of Sh200,000  ($2,500). This enabled us to prepare our pieces of land in good time, buy the required farm inputs in advance, and plant on time without having sold our produce to brokers,” said Lydia Njoroge Gichuma, chairwoman of the 25-member Mwihoko Self Help Group in Nakuru, in the Rift Valley.

    “That was the first bank loan of my life,” said Gichuma, a mother of four.

    Lesiolo Grain Handlers Ltd is a private company that has joined the warehouse receipting system.

    Lending money to smallholders, particularly farmers, has always been a challenge because shifting climatic conditions and emergencies in the form of pests and disease mean there is no guarantee the crops will perform as expected, says Nixon Bugo, the Programme Officer, Innovative Finance, Policy and Partnership Programme at AGRA.

    Gichuma’s self-help group sold their grain in April, when the price had risen to Sh3,600 per bag from Sh2,200 in December. “This enabled us to pay off the bank loan at once, pay the warehouse charges and divide the remaining amount among ourselves depending on the amount of cereal stored by each individual,” she said.

    They now have another crop growing, which they expect to harvest soon, and take to the warehouse. Another group, the Kirima Self Help Group, deposited 111 bags of maize at Lesiolo in 2012, and withdrew it after the price appreciated.

    “The warehouse system reduces many risks because once the grain is stored, we do not worry about it being attacked by pests or aflatoxins, or being stolen. There is always a guarantee that we will get back our grain as indicated on the receipt whenever we need it,” said David Kamau Thuo, of Kirima SHG in Menengai, Nakuru.

    So far the EAGC has certified 10 warehouses with a capacity of 30,000 tonnes each in different parts of the country.

    Masila says that banks and related financial institutions are crucial to the scheme. “Their willingness to accept warehouse receipts as collateral is an important achievement for smallholder farmers,” he said, as it enables them to plant in good time and get better yields.

     The UN Food and Agriculture Organization (FAO)’s Gender and Development Plan of Action underscores the importance of financial capital for farmers to improve production. “Buying seeds, fertilisers and other agricultural inputs often requires short-term loans, which are repaid when the crops are harvested,” the report reads.

    “With innovative financing, many banks are already changing their perception about giving credit to smallholder farmers. And that is the way to go, if we are to achieve a green revolution in Africa,” said Bugo of AGRA.

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    A rare Aloe vera variety is enjoying impressive uptake among households in Western Kenya thanks to its superior medicinal value with the company behind its introduction now targeting commercialization to allow farmers reap from its growing demand. The bitter-less plant which has been neglected and considered wild grew on its own in forested areas in the region. However, the trend has now shifted with many farmers creating space in their backyard for this medicinal plant thanks to the awareness campaigns about its’ medicinal value.

    The awareness campaign was initiated four years ago by Bio Gardening Innovations BIOGI,a not for profit  community  based organization ,implementing sustainable livelihoods  projects in Western Kenya, and is counting success with demand for the plant’s seeds rising. “Nature is generous and has always favoured us because this plant has been in our surrounding for quite a long time save for our ignorance about the medicinal value in it. After empowering farmers with knowledge about its’ attributes, we can only blame ourselves if we don’t drive the masses into its adoption hence the launch of its campaign in the area.” explained Ferdinand Wafula the head of the organization.

    This type of Aloe-vera known as ‘True Aloe’ is green with white markings and takes about seven months to mature. Wafula’s team is breeding the seeds for the farmers and also encouraging the farmers to exchange seeds among themselves in order to foster the deepening of the plant in the area. “The seeds are not available in the market and therefore the few farmers who already have the plant help us in seed multiplication. We also have our own farms that are helping in seed multiplication and exchange among the members of the various groups that are already affiliated to our organization.”

    To ensure its quick growth, farmers are advised to prepare the land and also use organic manure while planting the seed. The planting season is best done during the rainy season around March and April a fact that Wafula explained will help increase the germination rate. “The only challenge with this plant is the initial planting time where one must give it proper care but after sprouting after three weeks, the plant has over 99 percent chances of survival to maturity.

    It’s resistant to many shocks like poor climate and is hardly infested by any pest and diseases and therefore the only requirement from the farmer is to ensure that the garden is weeded and timely pruning is adhered to.” Depending on the soil and the existing climatic conditions the plant may take even less time to mature. “The beauty about it is that it’s not a one season plant as it may even last for over five years.”

    Although Aloe-Vera is widely known for its’ medicinal properties, this unique type is exciting farmers due to its’ bitter-less properties. According to Wafula, many people in the area eat the fresh raw Aloe-Vera without any difficulties. The plant is very soft and has near salty taste as opposed to what many people associate with other varieties which are bitter and difficult to even taste leave alone chewing it.  The plant is now known by the locals as a cure for many ailments like Malaria, ulcers and even wounds. “Anyone with wounds or even skin diseases like ring worms which are common among children just smear the gel and healing process starts taking shape although the time frame depends with the intensity of the disease.”

    Although the plant has a huge economic power, Wafula noted that their main priority now is to ensure that every household in the region adopts it and uses it to improve on their health and nutrition. “The locals have to first adopt and benefit socially from the plant before we scale it to the commercialization stage. You can only commercialize something after its’ acceptance in the society.

    According to Dr. T. Ombrello from University College Cork Ireland, in the past, True Aloe vera leaves were sliced and laid on the skin to relieve itching and to heal burns.  Today it is claimed to work effectively on sunburns, minor burns, wrinkles, insect bites, skin irritations, cuts and scratches.  “A “tea” made from the dried sap of this species is said to make a good wash for wounds and the eyes.”  Interest in Aloe vera healing properties has revived in recent decades in respect to its use as a treatment for radioactive burns.

    The major source of the raw sap today is the Netherlands Antilles, the true aloe having been introduced there several hundred years ago.  Historically, physicians commonly prescribed aloe sap for “cleansing the body” of a variety of “toxins”. Applied to an infant’s thumb, it was a sure way to stop thumb sucking.

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    A ten year cattle rearing hobby of rearing cattle has transformed into a fully ventured award winning commercial dairy farming, with Kalia Farm becoming a milk powerhouse in the semi arid Ukambani region, and creating dozen jobs in an area buffeted by vagaries of weather.

    Dr. Nelson Nyamu the man behind Kalia Farm which was recently voted overall winner in Smallholder Fully Commercialized Farms Category of the National Farmers Awards which were organized by Elgon Kenya Limited and the Ministry of Agriculture dared to invest where hope never existed. His zeal and passion to move agriculture in Machakos County from an agonizing venture to smart farming has earned him international recognition. “Farming is my passion, keeping cows is my forte. I have seen lives transformed. That’s why I am in this to stay,” added an excited Nyamu.

    Dr. Nyamu, a physiotherapist by training and the managing director for Physical Therapy Services Limited  which runs a private practice that deals with both clinical work and sales of rehabilitation equipment through out the EA region, also doubles up as the Managing Director for Kalia Farm, which he visits on weekends at least twice a month. “Sometimes the work schedule at my clinic is very tight, but I have never failed to go check on the progress of my farm at least two times a month.

    This farm is not just a side business, it’s a labour of love, its what gives me purpose in life. I have always had a passion for dairy farming and I am glad I have actualized it. There is no turning back,” Dr. Nyamu added. Kalia Farm which started in 1998 and with just one cow, then moving to six which Dr. Nyamu says by then was just hobby, went fully commercial in 2002. The farm stands on 2.5 acre land with the diary taking about half an acre, a one acre house compound and the rest of land on lucerne bananas and other fruit trees.

    For Dr. Nyamu the Lucerne, categorized under wonder shrubs, has been his saving grace at a time when the cost of commercial feeds has been at unprecedented highs. The shrubs are mixed with other feeds and are known to increase milk yields due to their unparalleled nutritional value. “I have saved a lot with these bushes that’s why I tend to them with zeal. Since learning about them and adopting them I have learnt the wonders of upping milk yields,” he added.

    Little wonder then that the 105 Holstein Friesian cows that he has managed to produce over 600 liters of milk on average per day which is supplied to various institutions in the county and beyond. His target by next year is to up the yields to1000 a day, which will enable him to start adding value to the milk in order to reap the untapped benefits of value addition. “t is very motivating to mentor and see other farmers come up to diary systems that work very well for them,” said Dr. Nyamu who has now employed 10 employees including a manager, a maintenance guy and a house help.

    But the long distance from Nairobi which means getting some inputs has been costly, coupled some of the suppliers for feed concentrates interfering with the quality of the feeds affecting his animal’s production capacity have been his biggest challenge.

    Elated about the National Farmers Awards which he hails as a step in the right direction in motivating farmers, Dr. Nyamu says he is in dairy farming to stay and thanks his wife for being the force behind his success.  “Success and my love for dairy cows and my family have been my motivation plus striving to prove that in semi-arid areas diary can do very well since the milk price is always better. Hard work pays and excellence comes from doing the same thing right many times,” he concluded.

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    Farmbiz wins 2019 BAKE Awards’ Agriculture Blog of the Year

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