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Clement Tulezi, Kenya Flower Council, on the major challenges in Kenyan floriculture

“Kenyan flower growers are still throwing away 25% of daily harvest”

Freight, the taxation regime, and the EU plant health regulation were predicted to be the biggest challenges for the Kenyan floriculture in 2021, according to Kenya Flower Council’s (KFC) CEO Clement Tulezi. “When I was predicting that earlier in the year, I was not wrong. These three have remained the major challenges, and not much has changed since, unfortunately.” In this article, Tulezi goes over the current state of these challenges, as well as a new challenge the Kenyan flower industry is having to deal with and how Tulezi’s association is helping to find solutions and improvements.

Clement Tulezi at the IFTEX 2019 in Nairobi, Kenya 

20-25% of daily harvest thrown away
According to Tulezi, their top priority at the moment is freight. “In 2020, we temporarily lost demand for our industry, and the airlines found better business elsewhere because of Covid. As a result, the freight costs have gone up, and this situation has persisted. We are still short on capacity. There are still many cancellations. Almost every two days a flight to Nairobi is canceled, meaning that the capacity has not improved. Currently, we are short of 1500 tons per week. As a result, the majority of growers and exporters are throwing away 20-25% of their daily harvest. Meanwhile, the demand for Kenyan flowers is good. These growers have invested a lot into their production, for which there is actually enough demand, but there is no space to transport it.”

In addition, the costs of transporting the Kenyan flowers have remained very high. “Moving produce from Nairobi costs $2,60 per kilo, whereas this only costs $1,50 for the Ethiopian market. When all other factors are held constant, how can the Kenyan market compete in the same market?”

So how can we overcome the freight challenges? The KFC is working closely with airlines and freight forwarders, in order to find short-term solutions. So far, they have provided several suggestions to the government. “First of all, the government could allow to bring in more capacity into Kenya. However, this is quite difficult as this is dependent on the airlines as well. Our second suggestion is to allow direct flights from Nairobi to the point of destination, which would reduce costs. Our last suggestion is for the government to waver some of the extra costs related to airlines operating in Nairobi, so we attract more.”

According to Tulezi, something needs to happen soon. “We already have a freight shortage of 1500 tons currently, so what will happen around Valentine’s Day, for example? Farms cannot keep destroying flowers. This will have a serious ripple effect as it will affect the way businesses are run. Drastic measures may need to be taken, such as reducing the staff or inputs, for example, to reduce the costs, which will in turn be compromising the quality of the produce.”

“A highly taxed industry”
Tulezi explains that floriculture is a highly taxed industry in Kenya. “The government finds it easier to target us, as we are a well-organized industry, since a lot of other sectors are more small scale or informal. Both at county and national level, floriculture companies are imposed with over 40 taxes. Recently, we went to court against cess fees, which is a form of tax charged on goods when they move across country borders, and we won all the cases in Nakuru and Meru, and also the one on the Minimum Tax. The court ruled that counties do not have the jurisdiction to levy these cess taxes on our export industry. However, a new tax has now been introduced, the Flower Service Tax, by a county where we grow most of the cut-flowers, charging 1% of the turnover on all exporters. We have already put in our objection, and hopefully, they will listen. We also have an ongoing court case against the Horticulture Crops Directorate, which increased cess tenfold at the beginning of 2021. Overall, there is a new tax introduced almost every 3 months. Of course, it is costly for KFC to keep hiring lawyers and going to court on behalf of our members, but it seems like it’s the only way to work with the government and reduce the unnecessary costs for Kenyan companies.”

EU plant health regulations
Another challenge the Kenyan growers have had to deal with is the plant health regulations imposed by the EU. “False Codling Moth is a pest that often occurs in roses, but also on capsicum and many other crops. At the moment, it looks like there are improvements concerning the interceptions. While there were still 9 in June, there were none in September. However, we need to steady this over time in order to avert more sanctions from the market. We are working closely with the Kenya Plant Health Inspectorate Service to look at the post-harvest processing, and how we can manage the pest in a better way. Soon, we will also be starting a project where we will start using cameras and drones to detect and destroy the moths, as we do not want this to adversely affect our business.”

A new challenge: fertilizer checks
Recently, the government has also decided that it is necessary for all water-soluble fertilizers to be checked when they come into the country. In 2018, KFC had to fight against it, and the shipments were able to come in again without much delay. Yet a few weeks ago, the government decided that they should go back to checking all shipments. “This is not necessarily a problem, but there is simply not enough capacity to check every single shipment. At the moment, 6000 tons of fertilizers are stuck at the port, which is causing fears of shortages and increased prices. These products are used on a daily basis by the farms, so this delay will have a major impact on the quality of the flowers. Especially after a difficult 2020, we want our industry to recover with the right quality, and this move is not helping us.”

For more information:
Kenya Flower Council