AGRODEV Agricultural Growers Resource Organization Developing Economic Viability

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AGRODEVAgricultural Growers Resource
Organization Developing Economic Viability

• Founded in March 2005
• We are a Kenyan Based NGO working hand on with
  farmers to build strong and sustainable
  agribusinesses

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MISSION

• To promote development and innovation in Kenyas
  agriculture sector by creating niche markets,
  encouraging sustainable practices, creating
  employment in and out of the agriculture sector,
  building infrastructure, linking growers directly
  to global markets, and creating education and
  awareness on value added initiatives.

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Our Board of Directors

• Lawrence Njeru holds a BSc. in Agriculture from
  Western Michigan University. He has worked with
  the United States Department of Agriculture.
  Lawrence and the Njeru family have a long
  standing history of innovation in the Meru and
  Embu region of Kenya. Lawrence is a Kenyan
  citizen.
• Blake Hanacek holds a BSc. in Global Resource
  Systems from the Faculty of Agricultural Science
  at the University of British Columbia. He also
  holds a Masters of Watershed Management from the
  Resource Management and Environmental Sciences
  Faculty at UBC. Blake holds dual citizenship in
  Canada and the USA.
• Richard Damianopoulos holds a BA(hons.) in
  Political Studies from Queens University in
  Kingston, Ontario. He also holds a MA in
  Political Science from the University of British
  Columbia. His thesis focuses on the political
  economy of the coffee industries in Kenya and
  Uganda. Rich is a Canadian citizen.

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CURRENT PROJECT GOALS

• To alleviate rural poverty by provide an avenue
  for rural coffee farmers to access sustainable
  export markets.
• Our first target area is the Meru region around
  the slopes of Mt. Kenya. This region is unique
  as one of the top coffee growing regions in the
  world.

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WHY COFFEE?

• Coffee is the second most widely traded commodity
  in the world (petroleum is the first)
• It is produced in more than 50 nations. Of the
  7.5 million tons of coffee produced worldwide,
  only 25 is consumed by the producing countries
  themselves.
• It is one of the largest employers in the
  agricultural sector of developing countries.
• It is relied upon as a major source of revenue in
  producing countries.

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THE GLOBAL RURAL COFFEE SITUATION

• Post International Coffee Agreement (1962-1989),
  liberalized international coffee market
• Elaborate value-chain structure
• Old control structures no longer relevant in new
  liberalized market
• Coffee farmers have been faced with plummeting
  world market prices over the past 20years.
• Trading is dominated by spot markets, lack of
  trust, and opportunism.
• After fall of ICA producer percentage of total
  coffee income fell from 20 to 13 to now an all
  time low of 7 and lower.

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• Coffee area harvested in Kenya has increased by
  66
• Coffee area harvested in Uganda has increased by
  18
• Data appears to suggest that coffee yields and
  production should have increased as well
  however, this is not the case

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• Since 1980 coffee yields have decreased by 57 in
  Kenya
• During same period, coffee yields in Uganda
  increased by 17

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• Kenyan coffee production has decreased by 30
  since 1980, and by 38 since 1990
• Ugandan coffee production has increased by 38
  since 1980, and 44 since 1990

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SPECIALTY COFFEE VALUE CHAIN

• Growers are receiving only 7 of the coffee
  revenue
• Over 80 of the value added is made in the
  consumption country not the production country

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Kenya European CommissionTask Force
RecommendationsExisting Recommended
Dealers
Dealers
KCDA (CDU)
NCE
NCE
Marketing Agents
Marketing Agents
Millers
Millers
Small Estates
Small Estates
Estates
Estates
Cooperative
Cooperative
Physical flow of coffee
Financial flow
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Kenyan Coffee Trends

• Coffee was the number one export for Kenya,
  earning 45billion Ksh but now it is fourth
  earning only 5billion Ksh per year
• The number one export receives 40billion Ksh per
  year (Tea) which is liberalized
• Coffee production has dropped by over 50 in the
  last ten years
• Kenya produced a peak of 128,941.00 tons of
  coffee in the 82/83 growing season
• The 2005/2006 season is projected to yield
  55,000.00 tons

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Why the Decline?

• All green coffee for export must be sold at the
  Kenyan Coffee Boards auction house (heavily
  controlled by politics)
• Farmers must wait 9-12 months before they receive
  complete payment from their crop forcing them to
  borrow their own money and pay interest on it
• Unstable market prices force farmers to chase
  global commodity markets

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Need for Change

• Falling prices require immediate action on a
  grass roots level
• Value added initiatives have been introduced, to
  help with the coffee crisis, in other producing
  countries but not Kenya
• Organic, Fair Trade, Shade Grown, Bird Friendly,
  i.e. sustainable coffees have seen large market
  share growth globally and have been attributed
  for saving many communities dependant on coffee
  production

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How Do Sustainable Coffees Help?

• Direct purchasing
• Guaranteed price minimum
• Transparency and communication down the
  production chain
• Community stewardship
• No dependence on synthetic additives
  (fertilizers, pesticides, herbicides)
• Ecologically friendly growing practices

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How Does AGRODEV Help?

• We will work towards our goals by developing a
  network of skilled advocates and professionals
  and through collaboration with international
  donors, governments, and the private sector. As
  a team we will work together to develop long-term
  guidelines to enhance development and create
  value added initiatives in the Kenyan
  agricultural sector.