Why coconut farming is a sleeping giant

The coconut sector is perceived as a “sleeping giant” with government’s estimate indicating that if awakened it could inject over Sh25 billion into the economy annually.

Over the years, coconut farming has faced myriad challenges including serious pests and diseases, poor crop husbandry practices as a result of inadequate extension services to growers leading to a drop in the tree’s productivity.

The collapse of the sub-sector’s cooperative societies in early 1980s denied farmers bargaining power and opportunity to exploit potential markets as well as neighbouring countries of Tanzania, Uganda, Rwanda and Burundi where coconut products are either lacking or still under restrictive government policies.

This created an opportunity for middlemen to pay farmers uncompetitive prices for their produce. Farmers at the Coast say during the high season which is July to December they sell a nut for Sh3 or Sh5.

New life

In 2006, the crop was attacked by the Lethal Yellowing (LY) disease which spilled over from neighbouring Tanzania killing many trees. The disease has however been contained.

The establishment of Kenya Coconut Development Authority (KCDA) in July 2008 and government’s move to classify the coconut tree as a “special crop” giving it the same status like coffee and tea, has breathed new life to the sector.

KCDA has since been transformed to Nuts and Oil Crops Directorate (NOCD) under the agricultural regulator, Agriculture, Fisheries and Food Authority.

The Ministry of Trade estimates that country would cut its oil import and save over Sh8 billion annually if it increases oil production from the coconut. Figures from Ministry of Trade indicate that the country imports approximately 400,000 metric tonnes of oil annually at a value of Sh14 billion of which, 120,000 metric tonnes or 30 per cent is used in soap manufacture.

Value addition

According to the Institute of Development Services (IDS) lead research in Mombasa, Gachanja Githende, prior to the establishment of KCDA, many farmers had abandoned the crop.

NOCD says of over 7.4 million trees that farmers have, 2.1 million are over 60 years old, a move that explains the drop in the crop’s yields.

“The sector was largely ignored because many did not know its potential. Averagely, many farmers still produce 21 nuts per tree which is very low compared to optimal productivity levels of over 100 nuts expected in high yield varieties,” says Githende.

KCDA in 2010 announced a partnership with the Indian’s leading agribusiness company, Deejay Group, in a Sh1.584 billion ($16.5 million) project to introduce a hybridisation project. The project is expected to produce 1.7 million hybrid seedling year-on-year to be supplied to farmers.

NOCD has also unveiled national coconut standards for 14 raw and value added products.

“The beauty of coconut is that when you produce one product, whatever comes in as a byproduct becomes a primary product for another chain,” says NOCD Interim Head Raymond Kahindi.

For instance the shell of a nut (husk), which is usually wasted, can be processed into coco dust which is used in horticulture as a growing medium and can also produce activated carbon charcoal which could be used as an efficient fuel alternative.

Similarly, the coconut meat produces a variety of edible oils as well as desiccated coconut while the fibre, which also largely goes to waste, can be processed into premium house material products or used to manufacture nets for use in greenhouses. The list is long.

According to Kahindi, apart from financial constraints experienced by SMEs to expand their ventures, the biggest challenge posed by industrialisation of the sector is low productivity of nuts.

“The way forward is to improve our agronomical practices. These trees have been neglected. There is no weeding, no adding of manure, the trees just grow,” he says.

Multi-billion-shilling

NOCD says if local investors establishes value addition firms and produce the oil locally, the country would save up to Sh8 billion annually.

Currently, the crop’s main product is wine which NOCD says constitutes 60 per cent, nuts, 24 per cent, fronds (for roofing) 12 per cent while brooms and coco wood constitute 24 and 0.3 percent respectively.

NOCD says the crop produces over 100 byproducts with the potential to generate over Sh13 billion annually, which represents 0.4 per cent to the country’s Gross Domestic Product (GDP). According to Kahindi, these are the issues that informed the agency’s move to upgrade the initially NOCD only standards to national industrial benchmarks to give locally manufactured products an edge in the market.

“Value addition is the answer to all these problems. But all these products have to meet the international standards to compete with others in the market,” he says.

Products whose quality expectations have been standardised include coco peat, coir ropes and mats, coconut milk and cream, toddy (mnazi), coco wood sawn timber, makuti brooms, copra, vinegar, coco syrup, mature nut grading guidelines and tender coconut water.

This means manufacturers of these products will have to comply with the requirements of standards which emphasise on quality and efficiency.

Virgin oil

With only two major producers in the country who have been exporting coconut and virgin oil to foreign markets, the sub sector has in recent times been showing signs of rising from its slumber.

Currently the country imports value added coconut products to the tune of Sh800 million annually.

“We are happy that people at the Coast are embracing this form of farming and they are aware of the potential. If the locals take this project seriously, it will create employment and boost quality of life for many especially at the coast,” he explains.

Stakeholders are now upbeat that returns will improve as business has always been hindered by a lack of uniformity in quality levels which eventually affects pricing.

“The sad thing is that we have been making very little profits but now the business approach will have to change and also it means whatever we produce locally can compete with the imported coconut products from Indonesia, India, Malaysia and other countries,” says Hussein Taib, an entrepreneur.

The country produces 240 million nuts per year from a population of 9.9 million coconut trees compared to a country like India, one of the giants in the coconut community, which produces 17 billion nuts annually with a population of over 300 million trees.

The agency has embarked on an ambitious campaign to increase the tree population by distributing free seedlings to farmers across the coastal region.

The agency is also involved in research to advise farmers on the varieties to grow for specific quality products.