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How brothers are making it big in mixed farming

AGRIBUSINESS

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Bizna Reporter
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13th July 2015
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In the outskirts of Chuka town in Igamba Ng’ombe Constituency, Tharaka-Nithi County, there’s an outstanding farm along Kangoro-Rubate Road. The 3.5 acre christened Kagumo-Hort farm belongs to Murithi Musa and his brother Edward Micheni.Their farm is a beehive of activity. On the ground, lay bits of cassava well spread as part of the chicken feed; the poultry house is well constructed such that the chicken are kept clean and warm.

A hatchery composing of an incubator and brooder are also in place to cater for the high demand for the kienyeji chicken. Right adjacent to the poultry house is a warren that is stocked with big healthy rabbits. How did they start this enviable project?

Musa explains that one day, he needed a Sh0.5 million loan.

“I took my piece of land as collateral, but upon evaluation, I discovered that the value of the piece of land was high as compared to the amount of money I needed.

This made me re-think. I shelved my plans of taking the loan and thought of investing in the farm to make it more valuable,” he says. Since it was a family farm, he consulted his brother.

He bought into the idea and using the savings they had, they started with 200 banana tissue plants. The bananas picked up well then they went into poultry and rabbit keeping. They have since ventured into fish farming. “The trick with fish is that they are fed at specific times of the day.

If it is cold the fish are not fed as tilapia fish don’t feed well when temperatures are low,” Musa who is a co-director of the farm with his brother shares. The pond’s water is rich in minerals and is often pumped to the other parts of the farm like the arrowroot farm, passion fruits farm, mangoes and the banana farm. The farm has four green houses, two that major purely on strawberries; the third one has garden peas while the last one has assorted crops that range from cucumbers, beetroots and courgettes.

Right beside each greenhouse are some weeds that are allowed to grow. These weeds are a way of enticing and attracting other insects that could otherwise find their way to the green houses.

Part of the farm is also inter-cropped with mangoes and cassava. Tree tomatoes also occupy part of the farm and it is one of the most beneficial farm produce as it yields throughout the year and requires little attention. “Its market is also good and the farm cannot even satisfy the demand which includes the two main supermarkets in Chuka town that is Jatomy and Maguna Andu Supermarkets,” says Musa.

The lower part of the farm is occupied by the sweet yellow passion fruit that was introduced to the farm by Techno-Serve Company under the sponsorship of Bill Gates Foundation and the Coca-Cola Company which trained them on how to tender for the fruit from the initial stage. On the far end of the farm, are the goats that are a main source of rich nutritional milk that is meant for their own consumption. At the edge of the farm are some well spaced beehives that help pollinate the farm and also generate honey for sale.

“Everything in the farm is of great value and nothing including the weeds is allowed to go to waste,” says Musa. The farm weeds that range from banana trunks are mixed together with wastes from the poultry, rabbits and goats’ farm and are all preserved in a pit to make compost manure.

The farm operates under a farm manager who is in charge of all the activities in the farm. The farm is the main source of income for the duo. Every garden has thorns, so what are the challenges they have faced? “First lack of a reliable source of water is a problem. So we have to incur huge expenses to meet that need.

The other challenge is the fact that our farm is near the road means that most of our produce is very dusty.

Another challenge is that sometimes we face setbacks when sourcing for fingerlings. The supplier tells us that we have to wait for several months. But we are working our way around that,” Musa says. Their advise to youth who want to join farming?

“Farming is rewarding. Instead of looking for white-collar jobs, youths should try farming,” Musa says. They also urge the young people to research widely before embarking on any income generating activity by attending forums, shows, workshops and also researching online.

Waceke Nduati-Omanga: my call to our banks

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Bizna Reporter
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13th July 2015
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Jane has been banking with a XYZ bank since she opened her business 6 years ago. She has borrowed before with the bank through an overdraft and has handled it quite well. Jane hires ten employees most of whom have also opened personal accounts with the same bank.

They have also done some personal borrowing as well with that bank and some have even used their investment products. For this reason, Jane assumed that the bank would be the first to support her when it was time to expand her business.

The same bank that not only has a business account with XYZ, but also now benefits from personal banking from her colleagues. Jane approached the bank for this expansion loan. Jane was not given any specific person to deal with and kept being thrown back and forth. Jane had all the required documents in order such as audited accounts, business plans etc.

At one point the bank asked for additional security i.e. a property. Even though Jane had wanted to get this loan without that security (because she was buying equipment that would be the security), she was prepared to give it to them. However no one got back to her and gave her a response.

She could not even get a meeting to discuss the issue properly. It so happened that at that particular time a friend of hers introduced her to another smaller bank. Let’s call this bank EFG Ltd. EFG had never dealt with Jane before. Neither her nor any of her colleagues had done any banking with EFG Ltd. After one phone conversation a relationship manager was dispatched to her office and they collected all her documents.

In about two days they got back to her requesting for more information on the equipment she was buying and the suppliers. In two weeks Jane had an offer from this bank. Was it a perfect offer?

Absolutely not and she still ended up having to give additional security especially because she was a first time client. But in exchange she was able to negotiate for a lower interest rate and her overdraft limit was increased. But most of all, Jane liked the fact that they responded to her call and treated her like she was important.

As an experiment, Jane went and asked her old bank (XYZ) for a car loan for a similar amount to what she wanted to borrow for her business. They were more than willing to lend her the money and use the car as security. The loan would be processed in 48 hours.

Do you see the problem here? Firstly, XYZ is willing to lend to Jane’s employees but not to Jane to grow the business. They entrust that she will continue being able to regularly pay her employees the kind of salaries they need to service personal loans, but were obviously not interested in lending her money to grow the business, that will lead to her paying them more or employing more people. They see the business as risky, and want all sorts of security) but do not see risk in the salaries that the business generates.

They will process personal loans in 48 hours but take forever with a business loan. Banks – how can a salary be more secure to you than the enterprise that generates that salary? I have spoken to several business owner who say that the collective personal unsecured loans banks are willing to issue to their employees for consumption purposes is higher than the loan they are willing to give the same business for growth. Banks, my challenge to you is to evaluate what business you are in? Funding growth or just helping people consume? Growth to you is risky, consumption is not.

Aligned to that is that fact that Jane could get that same amount for a car but to use it on expansion was just not interesting enough. She could not even get someone to respond to her business needs but they were ready to respond to the car loan. So this bank was willing to fund a depreciating asset but not to fund the appreciating entity. No one asks you for additional security to fund a car, which is losing value over time.

My second challenge is not realising who your future big customer is. XYZ to date have not yet realised that most of Jane’s banking transactions have gone elsewhere. She just keeps enough money there to fund salaries simply because that is where her employees bank at the moment. I can guarantee you if Jane’s business keeps growing, XYZ will come back to chase her but she will not open the door again.

EFG did not provide a perfect solution but at least they came to the table. They recognise the potential and have started treating their future big customer well now. In return for the not so perfect solution they gave her something – a lower interest rate and a larger overdraft. At least she feels like EFG are on her side. Many times it’s just a response that people need.

Jane’s story is not made up. This situation is common amongst business owners and mimics an experience I have just had recently. As I talk to more entrepreneurs many seem to have faced similar challenges. Many banks say that SME’s are key target market for them but I think very few are listening to the needs of those SME’s and responding to them.

They talk but they don’t walk. We keep saying entrepreneurship is the solution to a lot of economic challenges, but banks are not willing to enable the solution. Now the decision makers in banks may not read this article. But maybe some people reading this can take it to someone who knows someone who can reach a decision maker. My call to banks is simple. Rethink your lending model when it comes to businesses.

Evaluate why you are willing to lend to their employees for consumption but not the business. Take care of your future big client now. And like in Jane’s case remember your competition may be just right round the corner.

Kenya is a model investment destination for Africa – Richard Branson

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Tonnie Mello
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13th July 2015
0

Virgin Group founder and CEO Sir Richard Branson has said that Kenya is a model investment destination for the rest of Africa.

Speaking after he led a group of investors in talks with President Uhuru Kenyatta at Harambee House, Sir Branson said the proposed renewables project to be set up in Kenya would benefit the 50% Kenyans who are yet to access electricity.

The investors met President Kenyatta to discuss ways of exploring utilizing the most of Kenya’s abundant potential for green energy.

bransonkenya

“Investors in this initiative have chosen Kenya because the Government is ready to listen to ideas and help implement them”, he said.

He pointed out that the project would cover Kenya and Rwanda, before being rolled out to other parts of the African continent. Both countries would serve as models.

Sir Branson thanked the President for supporting the new venture, saying Kenyans were diligent, and that it was only good sense to invest here.

The initiative comes in the wake of recent reports identifying a significant role for green mini-grids in rural electrification.

The proposed investment in renewable energy aims at displacing a percentage of diesel generation in off-grid stations.

Investment in renewables is set to raise the supply of clean energy for productive use, in support of Vision 2030 and is expected to open up job opportunities and revenue.

The meeting comes just a week after President Kenyatta launched the Lake Turkana Wind Power Project, expected to be the largest such project Africa generating 310 megawatts of electricity, 14 per cent of Kenya’s current generation capacity.

Other investors in the delegation included Jacqueline Novogratz (founder and CEO, Acumen), Chris Anderson (curator, TED Conference) Dipender Saluja (Capricorn Investments), Steve Jurvetson (Draper Fisher Jurvetson), Strive Masiyiwa (founder and chair, Econet Wireless), Jean Oelwang (CEO, Virgin Unite) and Zia Khan of the Rockefeller Foundation.

Also present at today’s meeting were Safaricom CEO Bob Collymore, Kenya Private Sector Alliance CEO Carole Kariuki, KEPSA chairman Dennis Awori, Athi River Mining Company CEO Pradeep Paunrana, Transport and Infrastructure acting CS Henry Rotich and Industrialization counterpart Adan Mohamed.

Jane Murage: I sustain my family and meet my energy needs from dairy feeds

AGRIBUSINESS

Dairy

FEATURED

Bizna Reporter
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13th July 2015
0

She has not regretted venturing into rearing dairy cows since 1989 when she received her first earnings from the sale of milk to the now defunct Kenya Cooperative Creameries (KCC).

Today, says Mrs Jane Murage earns Sh2,100 every day from selling 60 litres from her three cows.

The 51-year-old mother-of-five says she started with one Friesian cow her father gave her in 1988 when she was 27 years old.

She asked her husband, was working with the then Ministry of Works, Transport and Communication, to take early retirement in 1992 and join her on their farm at Ihururu in Nyeri County.

Combined production

“He also had a cow and I thought the combined milk production coupled with the earnings from our tea farm were enough to see us live comfortably,” says Mrs Murage.

In a month, Mrs Murage finds Sh63,000 deposited in her bank account, courtesy of the milk which she takes to Ihururu Dairy, where her husband has been the chairman since 1997. A litre of milk fetches Sh35.

The farmer says rearing dairy cows is not a difficult task if fodder is available.

Mrs Murage says that she spends about Sh4,000 to buy two 90-kilogramme bags of dairy meal, which she supplements with napier grass. She mixes this with other kinds of hay to provide her cows with a balanced diet.

“Cows, just like human beings, need to eat a balanced diet and for those reared for milk production, you have to provide them with food that is rich in protein to increase production,” she said.

The farmer invested Sh35,000 in a small biogas project that provides the family with a clean source of energy. She uses the waste produced by the cows to generate energy which she uses for cooking.

On the increased cost of milk, Mrs Murage says the October-December short rains that extended to part of January saw an in increase in pasture and therefore the price of milk should not go up.

The farmer has managed to pay fees for two of her children in boarding school while her third will sit for her Kenya Certificate of Secondary Education examination this year.

Mrs Murage says she is also paying fees for her fourth born in a private medical college through earnings from her cows while the last born just is waiting to join secondary school.

“Rearing cows for milk production was the greatest thing I did in my life and I do not know how I would have managed if I was not selling milk,” says the farmer.

She says she finds rearing cows an easy task as she does not need to take care of them throughout the day.

Mrs Murage makes sure that the cows have enough fodder and water for the day in the morning and only comes back in the afternoon to milk them.

High cost of production

The farmer, though, finds challenges especially during the rainy season when the animals suffer from mastitis due to sleeping on a wet floor and during the dry season when the cost of production increases due to scarcity of fodder.

She has, however, managed to survive the dry season by planting her own fodder. Availability of piped water has helped reduce the cost of production.

Mrs Murage encourages the youth to try cattle farming and not wait for white-collar jobs, adding that farming has proved to her that it is lucrative.

“It’s not a difficult task at all. The only heavy work is cleaning the cow sheds and carrying grass, but I do not see how youths cannot do this if I can do it at my age,” she says.

Deal on Greece finally reached

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NEWS

Bizna Reporter
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13th July 2015
0

Nearly six months after the election of the radical Syriza coalition, after bank closures and July 5’s bailout referendum, Greece seems to finally have a deal.

Belgium’s Prime Minister simply tweeted the word “agreement.”

The Prime Minister of Malta followed up, tweeting “deal.”

We don’t have full details of what’s been discussed yet, but given the deterioration of the Greek economy and banking system, it seems likely that the deal signed off now will be more austere than the one Prime Minister Alexis Tsipras asked voters to reject in the recent referendum.

Germany and other eurozone states were pushing for a “time out” from the currency union, which quickly became referred to as temporary Grexit. On Saturday, when the Eurogroup of finance ministers was meeting, it seemed like a sudden exit was very much possible.

The marathon session of EU leaders lasted more than 19 hours, according to Politico’s Ryan Heath. That breaks records for the bloc.

Kenya Power monopoly at risk as firm vies for ‘last-mile’ customers

FEATURED

Bizna Reporter
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13th July 2015
0

Kenya’s renewable energy sector is set for a boost in September when a solar microgrid company plans to become the country’s first licensed private utility to sell power to the public, ending a half-century monopoly by the State electricity firm.

Earlier this year, the Government granted Powerhive East Africa, an energy technology venture with its roots in the United States, a permit to supply electricity to rural homes in competition with 53-year-old grid giant Kenya Power.

For over two years, Powerhive has been running pilot schemes in four villages in Kisii, providing around 1,500 people with solar power. “Our goal… is line with that of the Government – we want to connect and provide reliable service to as many rural communities as possible,” Powerhive’s co-founder and vice president for business development, Rik Wuts, said. Under the deal, the company will produce solar power and distribute it to rural off-grid communities, providing a clean, stable electricity supply on a “viable commercial basis”.

Powerhive will begin generating and distributing electricity under its new licence to homes in the west Kenyan counties of Kisii and Nyamira from September. The area has a high population density and concentration of homes, making it ideal for microgrid models that rely on short distances between the power source and target premises. The microgrids connect around 150 to 300 clients per locality, as well as serving public buildings like schools. Leveraging the falling prices of solar photovoltaic panels and power storage equipment globally, Powerhive says it has succeeded in bringing the cost of microgrid power closer to that of mains electricity.

“In many places in the developing world, the cost of (main) grid extensions is simply too high to be feasible,” said Wuts. distribution cost “The cost decline in solar and (power) storage will continue bringing off-grid generation costs ever closer to grid levels, and we have developed innovative technology to optimise the cost of distribution and the design of the distribution systems,” he told the Thomson Reuters Foundation.

Kenya is trying to speed up expansion of electricity penetration across the country, particularly in rural areas, under the Last Mile Connectivity Project launched by the Government in March. This scheme aims to connect some 310,000 people living close to 35,000 Kenya Power transformers to the grid.

The model used by Powerhive will help bring power to over 50,000 primary schools that are set to benefit from a Government-sponsored project to equip them with laptops, according to Director of renewable energy at the Energy Regulatory Commission, Pavel Oimeke.

The Powerhive utility concession is “a win-win development for Kenya that will allow more people to access electricity and make the industry more competitive”, he said. huge market Kenya has a huge market for power that firms like Powerhive could exploit, he added.

“If they make a good business case, we can expect more players to come on board and help connect more people,” Oimeke said. Powerhive may not pose a major threat to a well-funded, established entity like Kenya Power, but the role of smaller companies in energy-sector development should not be underestimated, he noted.

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