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State woos investors to sisal industry to restore its place as top forex earner

The government is planning to improve sisal varieties, build capacity and link small-scale farmers to markets in a bid to get the private sector to invest in the sisal industry.

Agriculture CS Willy Bett said sisal farming is dominated by large-scale farmers and currently, they are not expanding.

“We need to revive the industry to its glorious days like in 1972, when it was the second-highest foreign exchange earner after coffee,” Bett says.

He was opening a Sh100 million sisal processing factory in Migori county, Naqueel Factory, owned by Al Nagel Holdings Limited.

Elisha Okoth, a farmer representative from Karungu, Migori county, says they have been planting sisal in small portions to fence or subdivide their land. But thanks to the new sisal processing factory, he can now plant sisal in two acres and earn some good money.

“Many farmers have not been farming the crop for any economic gain. But even the little we planted, middlemen still exploited farmers and could buy a kilo at Sh35,” says the chairman of Otaiti Fibre Crop Growers and Sisal Owners Group.

Okoth says many farmers abandoned the crop as a result, but now the sisal factory will rekindle their interest.

He says the group has about 28 members, each with two to 20 acres, which they can now utilise.

“The sisal factory has created awareness on the economic benefits of sisal farming in the community. Farmers will now be able to grow sisal and inter-crop with other crops to ensure food security,” Okoth says.

PROBLEMS FACED

He says the climate is good for sisal farming but there are some challenges, including poor road infrastructure, lack of a farmers’ society that can address their cause, and lack of access to loans, quality seeds and extension services to assist farmers.

“If these issues are addressed, then farmers can take up sisal farming and get value for their work. This place is going to be vibrant once again in sisal farming,” he states.

Adoyo Okoyo recalls how she started dealing with sisal.

“In 1979 when I got married, I found people making ropes from sisal using some handmade machines. We used to sell the ropes in the local market at Sh5, and we have continued with this business until the factory was established. This has opened our eyes and we now know we can get so much from sisal and make money,” she says.

She explains that many farmers planted sisal on the boundaries, but they have now signed an agreement to increase production, as there is ready market.

“Through the agreement, the company will provide us with quality seeds once we have prepared our land. Our lives are bound to change and we will be able to take care of our families. I intend to plant sisal in about 10 acres of my land,” Okoyo says.

Naqueel Factory director Eric Ouma says the management established the sisal factory in Migori county due to its climatic conditions.

“The area does not get too much rainfall, and this makes it suitable for growing sisal. Our main goal is value addition to the sisal plant because the current market deals purely in production and less in value addition,” he says.

Ouma says sisal production only covers four per cent, and the company wants to exploit the remaining 96 per cent, which is normally waste that can be converted into more useful products.

“Sisal by-products include juice, which can be used to make acids, and sugar, which can be used in alcohol production. We can also generate biogas, animal feeds, organic fertiliser and charcoal briquettes to produce energy and give to our farmers as an incentive,” he adds.

Ouma says they have entered into contract farming with about 700 farmers, and they will be buying a kilo of sisal at about Sh70, which is twice the price in the local market.

“We are contracting groups of farmers to form large estates of sisal and add economic value to the people. We have 28 groups, each with a minimum of 25 members. Our long-term goal is to establish a fully fledged factory as part of enhancing value addition,” he says.

The director says there is not enough sisal in the area, and they want to give proper incentives to the farmers to produce beyond the local and national consumption.

“The sisal industry will start growing and employing many people, both at the farm level and in the market. We want to encourage farmers so they can move from earning Sh35 for sisal leaf to earning Sh70 to Sh80 from the sale of fibre. We want to go further and exploit the emerging fibre markets. We not only want to make baskets but also produce biogas, organic fertiliser and other peripheral production used in the industry,” Ouma says.

WORLD’S BEST SISAL

Bett says the quality of the country’s sisal is number one in the world, and it is mainly used to manufacture high quality and premium products, including carpets, specialty paper and gypsum blocks.

“The government will introduce a model of contracting small-scale farmers to bring more farmers into sisal production. We want to shift from the estate-type model and make sisal production one of the key revenue generators for our people. We are also encouraging small cottage industry in sisal production to utilise the waste into useful by-products, such as biogas,” the CS says.

He says Kenya can only utilise four per cent of its sisal, while 96 per cent goes to waste. He calls for 100 per cent utilisation, which will trickle down to the farmers in the long run.

Bett adds: “The government will support the new factory to get more land for expansion and accommodate more farmers, and also convert the 96 per cent waste into useful products.”

In 2013, sisal production reached 28,000 metric tonnes, making Kenya position three after Brazil, which produced 150,600 metric tonnes and Tanzania at 34,900 metric tonnes.

According to the 2015 Economic Review of Agriculture, sisal production decreased to 23,233.48 metric tonnes in 2015, returning Sh2 billion, and later to 21,459.61 metric tons, valued at Sh4.177 billion last year.

The Fibre Crops Directorate interim head Anthony Mureithi says the current area under sisal in Kenya stands at 44,000ha, with smallholder farmers controlling 22.7 per cent, and the rest largely under the control of 10 sisal estates in the Coast, Eastern and Rift Valley regions.

More than 80 per cent of the sisal fibre produced in Kenya is exported to 30 destinations worldwide, with the major export destinations being Saudi Arabia, Nigeria, China and Morroco. The average export price of the fibre last year reached Sh195 per kilogramme.

Mureithi says sisal farming was started in 1907, when the first sisal plantation was established at Punda Milia near Thika. By 1914, the sisal industry had been firmly established in Kenya as a cash crop, and the first 42 tonnes of sisal fibre was exported to Europe the same year.

Beside the export of fibre, Kenya has three factories that manufacture bags and cordage for local and export in the EAC markets.

One factory based at the EPZ Nodor Kenya is the sole manufacturer of 75 per cent of dart boards worldwide and the dartboards stuffing material, which are 100 per cent sisal fibre.

Unfortunately, most of the factories do not operate to capacity due to lack of raw materials, since their main source of raw materials is sisal fibre from the smallholder farmers.

“But our focus is to woo smallholder farmers into sisal farming with a view to increasing national production by 30 per cent in the next five years and boosting incomes both to the government and to farmers,” Murethi says.

SISAL VARIETIES

There four varieties of sisal: Agave Sisalana, Hildana, Hybrid 11648 and H1300. Hybrid 11648 has potential leaf yield of 20 tonnes per year per hectar, while and H1300’s is 15 tonnes per year per hectare, both with a production cycle of 10 to 15 years.

Mureithi says Kenya has eight grades that draw different prices in global markets. “Grade 1&2, which are of high quality, fetch premium prices in the global market over other grades. Also, Kenya has favourable weather conditions. For example, some regions have annual rainfall averaging 600 to 1500mm,” he says.

Agriculture and Food Authority interim director general Alfred Busolo says farmers abandoned sisal farming due to price manipulation and other unethical business practices by middlemen.

“Due to the various problems facing the sisal industry, there has been lack of reinvestment, promotion, products and market development, contributing to the industry’s decline,” says Busolo.

He adds that farmers can combine sisal production with other food crops, which can easily be planted in between the rows of sisal. This creates an additional revenue stream for the farmer.

“The government together with county governments and other actors are determined to promote increase in market and product diversification, including composite products, and to provide trade promotions services such as trade fairs,” Busolo says.

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