Low prices and export ban rule drive macadamia farmers nuts
Price wars between local and foreign macadamia buyers in Meru and surrounding regions have exposed the unending struggle by farmers to have a say on their produce.
Growers want repeal of the law banning export of raw nuts, saying foreigners are better customers than local processors.
Recently, Chinese buyers who pay up to Sh170 a kilogramme were arrested by police and Agriculture and Food Authority (AFA) officials, sparking outcry from growers. They have since been deported.
According to AFA, the move was a crackdown on those buying immature nuts and breaking the law against smuggling of macadamia.
But farmers in Meru are reading mischief by local processors, who they accuse of suppressing prices by pushing them below Sh100 per kg of nut in shell.
Producers have also renewed calls for repeal of section 43 of the AFA Act, which prohibits export of raw nuts.
The regulation states: “A person shall not export raw cashewnuts, pyrethrum, bixa, macadamia or any other agricultural product as may be prescribed, except with the written authority of the Cabinet Secretary.”
The regulation was aimed at empowering local processors, creating jobs and improving farmers’ earnings.
But according to Mr Charles Ruita, a macadamia farmer in Nyeri, none of the buyers in Kenya are paying a fair price. Also, the local processors have been fighting attempts to repeal the law.
“Australian and South African producers get a basic price of Aus$5 per kilogramme, which translates to about Sh413.50. Middlemen lobbied Parliament to insert section 43 in the AFA Act yet Kenyan processed nuts have a limited market.
“Local firms are left with a glut in the market, hence taking our product at throw-away prices. The Chinese buyers were our saviours, not villains,” Mr Ruita said.
“If local buyers want our product, let them competitively pay the international price for it,” he added.
Tigania West MP Kanyuithia Mutunga, who is also a member of the parliamentary committee on agriculture, says traders are taking advantage of the law to harass top buyers.
“Following the rise in prices to Sh170, cartels are now using intimidation to an extent of attacking buyers. Why would Kenya look for investors and then attack them for buying farmers’ produce? There is a plot to force Chinese buyers out of the country,” Mr Mutunga said.
Speaking during a farmers’ meeting, the MP, who was accompanied by Nuts and Oils Crops directorate interim head Raymond Kahindi, said cartels were threatening to bring the sub-sector to its knees.
Mr Kahindi said AFA would do away with the practice of prohibiting sale of macadamia in January but warned farmers against selling immature nuts.
“All the issues raised by farmers will be ironed out. Those above me can be handled by Parliament,” Mr Kahindi said.
According to AFA, the prescribed macadamia season begins in mid-February and closes in November of each calendar year.
Meru Macadamia Farmers’ Association chairman Joshua Muriira said local buyers were taking advantage of the ban to offer Sh50 only per kilogramme.
“We have resolved that AFA should do away with the ban on sale of nuts. Our trees mature at different times. This is a scheme to mop up nuts at low prices before they raise it when the ban is lifted,” Mr Muriira claimed.
Mr Daniel Murungi, another farmer, said buyers and brokers were employing dirty tactics similar to those that afflicted the coffee subsector.
“When sale of macadamia is prohibited, buyers offer poor prices, arguing that the nuts are not mature. By the time the ban is lifted, they have 75 per cent of the nuts in their stores. The farmer earns peanuts while processors rake in millions,” Mr Murungi said.
Farmers have resolved to form a growers association and fix a market day when buyers can collect the nuts at agreed prices.
“The growers association will meet buyers and tell them of the acceptable price for macadamia. If one is not willing to pay more than Sh170 per kilogramme, they can go elsewhere. We will also have a macadamia advisory council to address issues affecting the sector,” Mr Muriira said.
But nut processors argue that macadamia prices have been fluctuating in the world market.
Kenyan growers produce more than 35,000 tonnes of macadamia nuts annually, earning close to Sh3 billion.
There are more than 20 licensed processors with a capacity of 80,000 tonnes.
In 2016, an attempt by MPs to review the AFA Act to allow export of raw nuts failed. Farmers blame this on intense lobbying by local processors.
Speaking to Sunday Nation, former Maragua MP Peter Kamande said his petition failed to go through after processors defended their interests at the parliamentary committee.
“When I took the petition to Parliament, I was fighting for top buyers to be allowed in. But the parliamentary committee was not ready to help farmers. Government agencies can prevent harvesting of raw nuts,” Mr Kamande said.
He said local processors were out to strangle farmers, hence the need for Parliament to remove punitive laws.
South Imenti MP Kathuri Murungi, who supported the petition by Mr Kamande, said the law must be rewritten to safeguard farmers.
“We want to look at the method that brings more money to farmers. If exporting unprocessed nuts earns the farmer more, then the market should be opened up,” he said.
Tigania East MP Josphat Gichunge said: “We want Chinese traders back in business, and the local traders to offer better prices.
All MPs from macadamia growing areas will meet the deputy president soon on the matter. Farmers who spoke to Sunday Nation said MPs have been outwitted by local processors.