As we see an upsurge in farmers planting avocado trees in the desire to improve their incomes, the key question which needs to be asked is; are we as Kenya and Kenyan farmers exploiting our true market potential for avocados?
Avocado production is not new to Kenya.
Various large-scale players have been involved in the market for over 20 years – predominantly in Fuerte avocado.
However, it is in the last 5 years that an increase in production of Hass avocados from small holder farmers has seen Kenya’s volumes grow significantly. We are now the second largest producer on the continent after South Africa.
But what does that mean in the global avocado market? It is estimated that last year the world consumed in excess of 6,000,000 tons of fruit with the majority being produced and consumed by Central and North America.
To pick a few statistics, the USA alone consumed 1,126,000 tons whilst Europe consumed 650,000 tons. Consumption in China is growing at a fast rate but currently only approximately 120,000 tons. The World Avocado Association estimates that global consumption is predicted to rise by 15 per cent annually.
On the production side, the big players of Mexico, Dominican Republic and Peru dominate and with buoyant domestic markets a considerable volume is not exported. It is estimated that Mexico produces 2,000,000 metric tons, Dominican Republic 640,000 tons and Peru 460,000 tons. Within Africa Kenya exported around 64,000 tons with South Africa roughly 90,000 tons.
There appears to be a lot of growth potential out there, with plenty of demand for Hass, perhaps less so for Fuerte and emerging markets such as China and maybe in turn India could boost this further. Conversely, there are also a lot of countries increasing their production, so what makes someone want to buy our fruit?
This is the key question. If we are going to compete globally how do we provide more or at least the same as other producers. This is where our story of Quality, Traceability and Sustainability begins.
Customer requirements for quality seem easy enough? No one wants to buy fruit which never ripens or cut into one and find it rotten inside. So how do we as Kenya play our part in delivering top quality fruit to the market? In simplistic terms the basics to producing quality are harvesting the fruit at its correct maturity level, balanced fertilizer inputs when growing the fruit and the correct postharvest and cold chain management.
Simple right? Well like all things, it never is and if we are to do this better, we as a Country must invest further in our extension services, training, technology transfer and strengthening our regulatory authorities.
The markets also don’t help us. A shortage of avocados in Europe will send agents clamoring for their phones demanding “any available” fruit. In the hope of making a quick buck brokers dash to farmer’s fields to harvest anything that looks like an avocado, regardless of whether it is mature or not. Some money may be made but at what cost? The answer is our Nations reputation.
It is unfortunate that the reputation of Kenya for avocados is not good. If demand for our fruit is going to grow to match the increasing production levels then we have to improve our reputation as a quality producer. Failing to do that could mean that Kenya remains as the cheap ‘last resort’ when nothing else is available. A market space that others will easily take from us.
The second part is traceability. What does this mean? In a nutshell the ability to trace the fruit from ‘field to fork’. We must be able to trace a carton of fruit back to the grower who produced it and more importantly have confidence that the grower produced it, in the agreed and prescribed manner. This not only covers food safety but also covers the contentious area of phytosanitary requirements.
Traceability is not new to us, our export horticultural industry (flowers and vegetables) has been complying with traceability standards for some time but we have had our challenges.
One could also argue that we have very little traceability in our avocado production at the moment, but we seem to sell more and more fruit. This would be a fair argument but as the latest trade discussions with China have revealed, we cannot sell to them, unless we have it.
The supermarket chains in Northern Europe are another key element to our markets, and not having these, and potentially the Chinese on board in the future, limits our potential customer base. If we don’t have competition for our fruit, then how do we get the best price?
So how do we achieve traceability? To understand how complex this could be let us look at some numbers. One container of fruit exported to Europe will contain 5,400 cartons of 4 kg each.
Using some approximations this works out to be about 135,000 fruits delivered to the Packhouse in 10 to 15 different pickups from 30 – 40 farmers who have planted anywhere between 10 to 1,000 trees. How do you know which fruit was grown by who?
Simply, you can’t tell at the moment, but technology could provide an answer to this in the future if developments such as individual micro bar codes become affordable?
One answer is the development of organized and well managed farmer groups comprising of all avocado farmers within a specific and reasonably localized area. We should however ensure that whilst farmers are provided with skills to grow the crop correctly through these groups the payments made should be to each farmer directly from the exporter, not through an intermediary.
There are already such groups in practice today, but we need to develop these to achieve traceability standards, not an easy task as sometimes other pressures and very practical issues can stand in the way.
Such examples include farmers being able to access the correct agro chemicals for avocados, are there sufficient products licensed and do farmers have enough training on how to use them and more importantly what not to use?
This is where we come back to China. The Chinese import fresh fruit from other countries such as Chile, Peru and Mexico but they demand a high level of phytosanitary compliance. We as Kenya need to engage on this basis and match the standards of other origins. It’s a simple fact which we cannot move away from if we wish to progress our industry forward.
Creating and strengthening farmer groups is key, as are access to the correct agro chemicals, training of our farmers on how to use these and compliance with sensible, strict and uniformly applied standards. Who is going to do this?
Exporters must play their part in this journey along with our development partners as ultimately building the quality reputation of Kenya is good for the Nation and good for business. We can’t just be advising framers to grow more fruit if we don’t have a clear strategy for where and to whom we are going to sell the product and without traceability the markets become limited.
The final part of the story but by no means the least is sustainability. We as a Country are acutely aware of climate change, we live with its effects daily not just in our agricultural sector but also the havoc it plays on our homes, roads and sanitation. But is sustainability all about climate change? Perhaps ultimately it all comes down to the same thing, protecting our planet for future generations and thus, indirectly, how we grow our fruit is important.
The world’s consumers are demanding more of us as farmers, perhaps without necessarily respecting that commodity prices must also be sustainable. That perhaps is a different argument but at the end of the day we need to sell our fruit.
We are being measured by the market on pesticide residues, water sustainability, soil preservation, ‘food miles’ and numerous other indices. We have to be able to demonstrate compliance for arguably two reasons.
Firstly, simple economics. There are markets who will not put so much emphasis on this but then we are limiting competition for our fruit, does that make sense? Secondly and perhaps more importantly.
It’s the right thing to do, we do have a responsibility to our future generations. This responsibility is not only to leave them the soil, water and environment in better shape than we found it but also to have developed their economic sustainability through a thriving avocado industry built on Quality, Traceability and Sustainability.
The writer is the Managing Director of Kakuzi Plc a listed company trading on both the Nairobi and the London Stock Exchange. Views expressed here are his own and not necessarily those of Kakuzi Plc