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How farmers are minting millions from eucalyptus

Friday June 30 2017

Manish Shah in his Ndeiya Eucalytus Farm.

Manish Shah in his Ndeiya Eucalytus Farm when the trees were just two years old. Africa Greenlands strives to assist the growing population of commercial tree farmers with land and seed capital that can be invested in a commercial afforestation project. PHOTO | WANDERA OJANJI | NATION MEDIA GROUP  

WANDERA OJANJI
By WANDERA OJANJI
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For Manish Shah, buying the 12-acre farm in Redhill, Kiambu County was the simplest investment decision he has had to make in the recent past.

For one, Redhill is a prime agricultural area with a flourishing horticultural farming industry. Two, he had the resources to purchase it. And three, land will always appreciate in value.

However, what to use it for or the kind of development to undertake became his biggest headache. Already in a business that requires close and hands on supervision, Manish wanted an investment that required low inputs, less supervision, less maintenance and self-sustaining.

"Leaving it idle just to appreciate in value was not an option for I had not purchased it for speculative purposes. Being remote did not make it ideal for real estate development.

Setting up greenhouses for horticultural production looked a good choice for this is the main agricultural activity and what the area is famous for. However, this also requires hands on running.

After researching and sieving through many investment ideas, tree farming was my best option,” states Manish.

Fully aware of his limited knowledge in forestry, he needed experts who could assist on plantation establishment.

After visiting several institutions like the Kenya Forest Services, he was finally directed to the Tree Biotechnology Programme Trust (TBTP) – a public and private sector partnership that provides knowledge transfer to farmers and entrepreneurs who desire to venture into commercial tree planting.

As luck would have it, they had just initiated a project that would not just advise on what species to grow where or provide you seedlings like many other institutions with tree nurseries do, but one that would actually provide wholesome package on the plantation establishment – the Africa Greenlands.

COMMERCIAL TREE FARMING

According to Dr Benson Kanyi, Executive Director, TBTP, they conceived the idea after realizing how individuals and institutions were struggling with establishing commercial tree farms.

“In most cases, they did not have the knowledge on the most suited species for their regions. Getting quality seedlings was an even bigger challenge. Worse, most lacked the technical expertise to establish and manage the plantations. The failure rate was very high.”

The Africa Greenlands is specially designed to assist this growing population of commercial tree farmers with land and seed capital that can be invested in a commercial afforestation project.

AG undertakes the following crucial activities: site or farm appraisals to determine suitability of the commercial tree species; preparation of a bill of quantities to guide on budgeting; land preparation; supply of high quality suitable seedlings; planting; and maintaining the farm through provision of professional silvicultural services such as weeding, thinning, pest and disease monitoring and management, plantation measurement until the plantation is fully established.
It is this kind of hands off investments and the amazingly high returns on investment that indeed have excited Manish and many other Kenyans into converting their farms into tree plantations.

“The performance of the Redhill eucalyptus plantation was amazing just after 4 years. I couldn’t help turning my other 8.8-acre farm in Ndeiya, Kiambu County, into another eucalyptus plantation. And after just three years, the plantation is fully established. The trees will be ready for harvesting in the next 3 years,” says a proud Manish.

“If I was to sell the trees aged seven years on my Redhill farm now as electricity poles, the minimum I would get is Sh16 million. The good news is that I am not under any pressure to sell for in the next three years, they will be bigger and mature enough for timber.”

Manish is so impressed with the service and the investment that is now planning, with help of AG, to establish a plantation of indigenous trees for timber on another 10-acre farm in Ndeiya.

INDEGINEOUS SPECIES

After Manish many other Kenyans and institutions have taken advantage of the service. AG has helped farmers establish about 150 acres of tree plantations across the country on farms ranging from 4 acres like the Nyansiongo Farm in Kisii County to the 30-acre Eclipse Group Farm in Shimba Hills, Kwale County.

While the majority of the plantations are of Eucalyptus grandis, AG also helps commercial tree farmers to set up plantations of indigenous species.

For instance, Gavi Gadhu has established a 20-acre plantation of the first growing Melia Volkensii at Maanzoni, in Machakos County.

Tree Biotechnology

The major trees being promoted by TBTP are Improved Eucalyptus and Eucalyptus hybrids for commercial purposes, Casuarina and Grevillea for wind-break and Acacias for fuel wood and charcoal.

These plants are drought resistant, fast growing and can be sold as all major wood products – charcoal, poles and posts, and sawn timber.

Kanyi attributes the growing demand of the service to the expected high returns. The economics are strong: the cost of establishing a eucalyptus tree from seedling to maturity is about 100 shilling. After five to 10 years you sell the tree for about Sh3,000 for large poles of over 300mm diameter subject to weather and best forestry practices adoption”.

However, Manish advises that this is a long term investment for people with at least an alternative source of income, one to cater for their daily needs.

“It takes about seven years before your start earning from the trees. You cannot commit all your land to trees if you rely on farming for subsistence.