I farm only after finding the market for my produce

Friday September 19 2014

Edward Muriu in his 1,000-acre Rubi Ranch Fresh Produce farm in Naivasha explains how an irrigation system works. PHOTO | JEFF ANGOTE

Edward Muriu in his 1,000-acre Rubi Ranch Fresh Produce farm in Naivasha explains how an irrigation system works. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

By JULIUS SIGEI
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The tall acacia trees lining the murram road off the Nairobi–Nakuru highway, just after Naivasha Town, form a thick canopy that sends a cool sensation to the body, refreshing beyond compare.

We drive on, occasionally running into an eland or a buffalo in this land that has remained idyllic and primeval despite decades of colonial plunder, rapid urbanisation and environmental degradation.

After some 20 minutes further north, we arrive at Lake Naivasha, a vast expanse of fresh water where men and pelicans are locked in a mortal combat for fish.

It is here on the shores of Kenya’s only fresh water lake on the floor of the Rift Valley that we meet Edward Muriu inspecting a water pump.

“This is our lifeline, we add value to water which is the heart of our farming venture. This pump enables us to get the 25,000 litres of water we need daily for our activities,” Muriu, the proprietor of Rubi Ranch Fresh Produce, tells us as we begin a tour of his more than 1,000-acre farm, 350 of which hosts cabbages, broccoli, chillies, baby corn, fine beans, snow peas, sugar snaps and other horticultural produce that he sells to exporters and the local market.

“Taming water is what will unlock agriculture in this country. If you get it right with water, you will be 80 per cent on your way to making it in farming.”

He chose the open field irrigation system, rather than greenhouses because of its flexibility. “If I choose to shift to wheat or hay farming, for example, I will do so without adding anything.”

The sprawling farm uses the central pivot irrigation system fitted with a General Packet Radio Service to ensure each plant gets the correct millilitre of water.

How did Muriu, a successful lawyer in his own right, decide that farming was the way to go? How does he manage the delicate business with his full time job as the lead partner at MMC Africa Law as well as chairing many boards? How does he secure the market for his massive produce and ensure profitability?

These are the questions we grappled with as we walked in between the lush green produce in various stages of ripening, a metaphor of the difference water makes in farming, seeing as the surrounding areas are a sea of dust after the skies refused to open over Naivasha.

“I went into large-scale commercial agriculture three years ago. I saw urbanisation was gobbling up all arable land as we built stone jungles in the name of real estate. I knew farming was the next big thing as someone had to feed all these people even as land gets smaller and smaller,” he tells Seeds of Gold, stopping at a shed where tens of women were sorting out snow peas in preparation for the market.

More than 200 others are spread over the farm on the foot of Eburu hills.

“Agriculture is the venture with the greatest multiplier effect from direct employment, manufacturing, transport and logistics, airline, not to mention it is the third largest foreign exchange earner. In the law firm, I employ only 100 people. Now look at all these people. We currently directly employ between 250 and 300 here.”

DID MARKET RESEARCH

To start, Muriu took Sh50 million from his savings and borrowed another Sh200 million from Equity Bank to buy the land “and put all this: electric fence, tractors, trucks and irrigation machinery”.
The farm now turns over between Sh150 million and Sh200 million a year.

But it was not before he did market research complete with orders and locked up prices that he embarked on this investment.

“I approached exporters and other big markets and I sold them my investment idea, expertise and readiness to produce the best. Only then did I go to the farm to till. I am not the kind of farmer who plants and prays that it rains. Then when the bumper crop comes, he prays for the market,” he says with measured confidence, adding that the difference between commercial farming and subsistence production is that the former goes about it with the mind while the latter farms with the heart.

Having locked up the prices with the buyers, Muriu has to manage costs to ensure he is in business, as he has only so much room within which to manoeuvre.

“Initially, labour costs were astronomical and were threatening our margins. It was then that we came up with paying per piece work where the land or work is subdivided into portions and paid for when sufficiently completed,” Charles Kamutu, the operations director chips in.

He currently maintains expenditure at 40 per cent inclusive of labour, power, water and inputs.

Margins, however, vary from crop to crop. “To produce a head of cabbage, for instance, we spend Sh4 and sell it at between Sh12 and Sh30 depending on the season. Actually we make money from the volumes. We currently do 80,000 heads of cabbage per month, which sellers come to pick their orders from the farm,” says Kamutu.

To further manage costs, Muriu has bought four Tuk Tuk-pulled haulers to transport produce around the farm, saving on the fuel that should have gone to tractors, which are now left for heavy duties.

“A Tuk Tuk consumes only 10 litres a week,” quips Phineas Kabaka, the production manager and the chief agronomist who ensures no crop leaves the farm without adherence to hygiene and safety standards.

“But the game changer really in agriculture is value addition. For instance, if we sell a kilo of French beans to an exporter at Sh100, he will sell it at Sh500 at the European Union market. And yet all he does is to sort it, grade it and pack it,” says Muriu.

He has now sought international certification and he is putting up a pack house so that he can begin packing and exporting directly.

The two managers, one an accomplished agronomist and the other a food scientist, run the farm.

'FARMING IS FUN'

But besides getting a daily brief, Muriu also regularly visits the farm where he has a weekend home perched atop a 300-metre hill from where he overlooks his empire.

It is also at this point that you can see breath-taking scenes of the lake and beyond, overlooking the Abardares to the North East and Mt Longonot to the South.

“Farming is fun and I wanted it to remain so. That is why I have this home where I also rest whenever I am not camping,” says the nature lover who regularly goes sight-seeing across the country.
Because the Pivot Irrigation System does not work where there are trees, Muriu has had to clear lots of them, a situation he is now mitigating by planting indigenous and avocado trees.

He is targeting 40,000 avocados of the fast maturing Hass variety, in the next one year.

“Combining farming and conservation can only work where farmers derive benefit from protecting wildlife. We have started lobbying the government to allow us breed wild animals like buffaloes and antelopes and sell them to generate revenue to support in their protection. This is the only way the government can support the private sector to combat poaching.”

Muriu supports the local Loldia Primary School to the tune of Sh2 million a year. The school houses 2,500 students, most of whose parents work at his farm.

“The money goes into employing 15 teachers and feeding pupils to keep them in class.”

The 45-year-old team leader and founding partner at MMC Africa Law, which specialises in Commercial Law, Real Estate and Banking, and Commercial Dispute Resolutions, made his first shilling selling Nairobi Law Monthly while in second year at the University of Nairobi.

“We were at the university when agitation for political pluralism was at its peak and students were hungry for information. So I went to Gitobu Imanyara, who was publishing Nairobi Law Monthly, and told him I can take the magazine to all the campuses, a proposal he agreed to and which gave me very good margins. I was selling up to 3,000 copies a month.”

Even though the Gatanga-born Muriu was employed immediately he cleared law school, he was a restless entrepreneur and soon left to start his law firm after a transaction he did earned him his first million at the age of 24.

“I rented a 250 square foot office at Town House, then a leading address in the (Nairobi) city centre, and started representing road accident victims. I did this so well for about five years when insurance companies bought me and I crossed over to represent them.”

Farming is one of his many interests that range from real estate to the hospitality industry.

He has now set his sights on the Nairobi Stock Exchange.

“But before that we need to do a private placement of shares to increase the current land under cultivation and construct a pack house for processing and packaging for export.

“At its full capacity, Rubi Ranch Fresh Produce will be exporting 30 tonnes of fresh produce every day.”