Smallholder farmers grow profits as hotels compete for their produce

Kenya's smallholder farmers are reaping from a growing appetite for their produce from hotels as customers keen on their health dictate the kind of menu the hotels prepare.

As hotels chase smallholder farmers due to their consistency in quality and supply, farmers are equally insulating themselves from market vagaries by getting guaranteed markets and higher farm gate prices with returns of as high as Sh250,000 to Sh350,000 a month. This coming at a time when over supply has affected produce prices in most Kenyan markets.

According to the Kenya National Bureau of Statistics, the hotels and restaurants sector has expanded over the years, growing by 2.6 percent in 2012, 4.9 percent in 2011 and 4.2 percent in 2010. With an average growth rate of 5.9 per cent in the past three years, the sector had a total value of Sh20.79 billion in 2011, from Sh18.99 billion in 2009, as per the Economic Survey data.

However, it is the sectors' continued contribution to the growth and empowerment of small scale farmers that has recently been an attraction to many now seeing hundreds of youths quit white collar jobs for agribusiness.

Mr. Kamande Njenga, who owns Mlango Farm in Limuru. His fresh produce are sought after by leading hotels in major towns in the country." I organically grow the rarest vegetables and herbs including Chives, Italian Spinach, Kohlrabi (a German tulip), Pakchoi (an Asian Cabbage) among others. This is because i was looking for variety, to introduce customers to a whole new range of high value vegetables and shift their minds from the traditional vegetables they are used to seeing,” said Njenga.

None of his crops are grown with any synthetic fertilizer. But it has been a labour of love maintaining high growing standards. He only grows them using Maasai goat manure which he gets from Rongai and other Maasai areas. Every month, he buys a truck load of the goat manure at Sh20,000, which fertilizes the entire farm.

Kamande supplies over 30kilos of lettuce to ArtCaffe alone, one of the leading hotels in the country, with many other kilos of Italy spinach, parsleys and onions. In a month, this earns him between Sh250,000 and Sh300,000. The rising demand for the vegetables has also meant planting every day of the week on a rotational basis for according to Kamande.

Daniel Muiruri, another small scale farmer, has acquired a ten acre farm in Isinya Kitengela all dedicated to horticultural farming as over ten major hotels chase after his produce.

Since 2009, Muiruri has been supplying among other produce, lettuce, herbs, cabbage, red onions, green pepper and potatoes to Artcaffe. On average, he supplies around 80kgs of tomatoes,70kgs of tomatoes, 200 pieces of lettuce and other produce daily, depending on demand earning him about Sh200,000. “Sometimes I cannot even meet the demand because the restaurant needs these produces frequently. The market has really expanded for me. I attribute it to the long standing mutually satisfactory way of doing business. While I make every effort to deliver the produce in time knowing how important this is, I also love the way they are very prompt in paying me,” said Muiruri. Having a ready market has insulated him from market vagaries, where gluts see farmers selling produce at throw away prices.

Uhuru Kenya, a project that works with the internally displaced persons in Naivasha has built a school, created employment and set up a scholarship fund from proceeds to hotels. Uhuru farm one of its flagship project grows lettuce which are supplied to customers across the country. It has employed sixteen staff, all IDPs, as it sets to maintain high farming standards.

“One day, while delivering to Zucchini grocery store in Village Market, ArtCaffe, one of Nairobi's upmarket restaurants, spotted the supplier and approached him with a view to having the farm supply the restaurant. We sent a few samples for test and after a few days the head chef recommended our lettuce and our relationship with ArtCaffe was thus born,”said Joseph Griffith-Heritage the co founder.

Uhuru Gardens also supplies other major restaurants, like Tribe, Windsor and Java, but ArtCaffe is its biggest customer, with 40 per cent of its revenue coming from sales to the restaurant group. It has since built a secondary school and offered over 80 scholarships since 2009.

The rise in demand for small scale farmers produce locally comes as disturbances in European markets are making significant disruptions on Kenyan horticultural exports resulting in significant losses of up to 18.7 per cent between January and September 2012 for exporters. In February this year intensified EU controls of Kenyan exports of beans and pods were leading to delivery delays of up to 72 hours, which impacted on the shelf life of products delivered to retailers according to reports by Fresh Produce Exporters Association of Kenya (FPEAK).

Local demand for fresh horticultural produce is expected to rise by 80 per cent in the next 25 years for domestic consumptions retail outlets and fast food chains have turned to small scale farmers as alternative sources of the much needed products.