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Week 16: ending 24th April 2011

Hort Weekly readers, and welcome to easter-week 2011. This basically means we have max one month to low season (after May mother’s day), but some low seasons turn out to be quite stable trading time, though at low volumes compared to high season.

The week is starting on a tough note…airfreight charges have hit high’s of 2.3-2.4 US$/kg, on account of upward movement on barrel prices (Libya, middle east political crisis). That said, we are awaiting an ongoing independent investigation by KCAA on whether airfreight pricing mechanism is reflective of international barrel price fluctuations or is opportunistic. This will assist us in seeking how best to address this component of our cost of doing business, now approaching 55% in some commodities. Maybe ask for some formula…

Methyl Bromide Conference- No ALTERNATIVE Yet

It was quite a week, experts on methyl bromide from 11 countries met to take stock on progress made towards the 2015 total ban of methyl bromide in soil fumigation, and grain storage use. The summary of observations is as follows:

1.     Kenya: banned since 2010, only used for QPS(quarantine and wood treatment), farmers having a real challenge in treating spent pumice, weeds and bacterial infestation. Serious problem in new green house tomato technologies.

2.     Ghana- had phased out in 2008, had to request critical use exemptions after soil-diseases challenges in cucurbites. Malawi having similar challenges in tobacco.

3.     Metham sodium, Benzamide taking longer to fumigate soil, and not as effective.

4.     On grain storage – phospine only alternative, and showing resistance to larger grain-borer (LGB), tenebrio. Australia phasing out phosine use due to resistance, and also residue /flammability issue. New pests emerging as a result of phase out.

5.     USA asking for more critical use exemption, Japan, USA and Australia refusing any QPS treatment unless its methyl bromide.

6.     EU – strict on not importing any material where MB has been used, and supporting the 2015 ban.

7.     All Methyl bromide chemical alternatives are class 1 chemicals, and therefore will eventually be phased out.

8.     Non chemical alternatives: steaming (effective-but expensive), solarization – (costs a challenge), and for grain storage –modified atmosphere storage. Methyl bromide is a colorless, odorless, tasteless gas that’s highly toxic, and ozone depleting, hence the need to ban. It’s very effective against weeds, pests and diseases in soil.

9.     African countries definitely rushed to phase out well before 2015 deadline without full work on alternatives, but that’s history – we have to forget MB. For EU market, and several of the standards that we use- the message is clear- no MB.

In brief…several alternatives have been tried, none so far meets the 4 criteria- cost, practicality, effectiveness and sustainability. We have to get a solution so we have to keep trying, and more practical work is needed. We are considering a practical unit on this issue at the PTC thika.

Next steps- UNEP will compile and report on the African meeting, and table it at a decision making forum prior to 2015. In the meantime, if a farmer has a crisis, and the market allows/demands use of MB, Kenya can apply for critical use exemption. That would be through NEMA and PCPB, and would take about one year to process through UNEP.

HCDA Field Stores – Industry Discussions- Progress

Industry, represented by FPEAK and KFC, are discussing the operation of the 7 HCDA stores around the country. In brief – they were constructed to assist smallholder farmers with field cold storage infrastructure before transportation to Nairobi for further handling/airfreight. HCDA stopped doing business, and the stores plus trucks have been making huge losses, attracting audit queries from government. Options were to sell them for schools, hospitals, whatever, but that would mean smallholders lose out on original purpose. At the moment they are leased out to some private sector/NGOs on non cost-recovery basis (unsustainable).

To make progress, HCDA has been in discussion with FPEAK on best way of operationalising them. So far, the Board of HCDA, and Ministry of Agriculture has approved a public private partnership in getting them operational, and final word is awaited from Ministry of Finance on leasing/other arrangements. Obviously the private sector is keen to conduct a Business Plan/Assessment of their operationalization, and the sector definitely does not support that the original purpose, that of supporting smallholder production, is disregarded.

The idea is to build on current realities of use of the facilities by out-grower groups of several exporters operating in a region, expanding on those currently using them, and then create a local private sector management structure with involvement of the companies. This will also involve domestic/supermarket supply systems. As the discussions progress, industry members wishing to participate in this arrangement are requested to contact FPEAK secretariat so that their views can be part of the thought/planning process. We expect to conclude this latest June 2011.

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Hort News is aimed at providing a quick-read summary of the week’s happenings in horticulture of relevance to Kenya. Readers are encouraged to send comments or even contributions to:

Fresh Produce Exporters Association of Kenya (FPEAK). Rhapta Road, Westlands (Nairobi), New Rehema House (4th Floor). P.O. Box 40312-00100 Nairobi, KENYA
Tel +254 (0)20 4451488, Tel/Fax +254(0)20 4451489. Gsm +254 (0)722 716956. Email: info@fpeak.org or chiefexecutive@fpeak.org Website: www.fpeak.org

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