Nuts may knock coffee off the high table

A photograph of the Macademia tree. Improved prices of the nuts have rekindled the interest of many farmers. PHOTO/ Muchiri Gitonga

What you need to know:

  • Farmers turn to macadamia production due to lower costs and higher demand

The rising global demand for nuts is finally seeing macadamia farming emerge from the shadows of coffee to position itself as a serious cash crop.

Mostly grown by small-scale farmers to provide shade to coffee plantations, macadamia trees yield nuts with high oil content that are sold mainly to middlemen at throw away prices.

A scramble for the nuts by local processors has, however, pushed the prices up — triggering an unprecedented interest among producers.

Agricultural extension officers say an increasing number of farmers are planting the nut tree, which is a positive sign for the sub-sector. Many of the existing trees were planted almost 50 years ago. Growers are paying Sh60 for a grafted seedling.

“Farmers in my sub-location have this year alone planted more than 10,000 grafted macadamia seedlings because, unlike the old type, they flower twice in a year,” said the chairman of Mung’aria Coffee Farmers’ Society in Tetu, Mr Ngunju Kimondo.

With a kilogramme of the nuts fetching between Sh85 and Sh100, which is a significant increase from an average of Sh20 in 2008, Mr Kimondo is upbeat.

His 80 trees produced 1,500kg this year.

Demand for the nuts has grown in China, US and Australia. The domestic market has also recorded some growth.

A forecast of better times is now the reason for increased demand for grafted seedlings, which have higher yields.

Mr Kimondo attributes the changing fortunes to Chinese dealers who have been buying the nuts at a higher price than the local processors.

“The Chinese have helped us a lot since they offer better prices,” he said.

The government banned the export of unprocessed nuts two years ago mainly to protect local processors from some Chinese dealers who were acting as price-setters.

“We wanted to discourage the export of raw nuts because these dealers were making a kill at the expense of farmers. We also realised that by exporting unprocessed nuts, we were exporting jobs for our unemployed youths,” says Central provincial horticultural officer Kenneth Njagi.

To regulate the industry, players came together at a meeting organised by the Ministry of Agriculture at Embu Agricultural Staff Training College early this year. It culminated in the signing of a memorandum of understanding between producers and processors.

During the event, processors were blamed for using brokers, hence the throw-away prices offered then.

Exporting raw nuts is believed to cost the country millions of shillings in revenue that would have been derived from value addition.

Among the issues agreed on by the stakeholders was the pegging of the minimum farm-gate price of macadamia at Sh50 per kilogramme.

Processors are also trying to professionalise the trade and have formed the Nut Processors Association of Kenya (Nut Pak).

Apart from helping restore eroded confidence among growers, the association will also seek to ensure local processors fend off stiff competition from Chinese dealers.

In a model copied from the coffee sub-sector, some processors are already piloting contract farming by supplying growers with seedlings and chemicals.

The main challenge is that some unscrupulous dealers are still engaged in illegal export of unshelled nuts. This, according to processors, threatens their operations.

Processors have been lobbying for the enactment of legislation, similar to the one for coffee, tea and sugar, to govern the sub-sector.

Mr Njagi says farmers, too, have come up with an association that will protect them from exploitation by middlemen and processors.

“It was agreed that whoever buys the nuts is not an issue; but they should not buy them at a price that is below the agreed minimum,” he said.

But pessimistic farmers like Mr Kimondo say there is nothing new with the setting up of a minimum farm-gate price for nuts.

“We have had similar agreements with processors in the past but they always unleash their brokers who ignore the agreed price,” said Mr Kimondo.

He says farmers should be helped to set up nut processing plants and to venture into the export markets. Despite supporting multi-billion dollar industries in China, Japan and India, macadamia — which is regarded in agricultural circles as a political crop, together with coffee — is locally a victim of poor crop husbandry.

Majority of the crops that are harvested were planted in the 60s and 70s. This, coupled with neglect, has seen the trees achieve an average 55 per cent flowering, leading to poor harvests.

The crop is mainly grown in Central Kenya and Eastern provinces, but Mr Njagi says its farming is now spreading to other areas such as Coast Province.