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Monday, 10 July 2017

Islamic finance provides Kenyans with cushion against drought

By Zoe Tabary
WAJIR, Kenya - Hamara Hujale tries to keep an eye on two squirming children and a pot of simmering ugali – a white doughy dish – as she reaches for her buzzing phone.
After speaking a few words, she hangs up and scribbles in a wrinkled notebook.
"My driver has found another customer so won't be back for another 30 minutes," she says with a satisfied smile.
Hujale, who lives in the northeast Kenyan town of Wajir, used to make and sell kitchen utensils, "mostly to pastoralists who would use them as dowry for their daughters' weddings".

Hamara Hujale standing infront of her tuk-tuk in Wajir. TRF/Zoe Tabary
"But as they lost their animals to drought, they had no money left to buy my products. So I had to find an alternative," she said.
Last year she secured a loan of 370,000 Kenyan shillings (about $3,560) through Crescent Takaful Sacco, an Islamic finance institution, and used the money to buy a tuk-tuk and set up a taxi business in Wajir.
Access to credit is critical to help communities prepare for and cope with increasingly frequent climate shocks like droughts and floods, experts say.
However, in this Kenyan region bordering Somalia, where over 90 percent of the population is Muslim, few banks or institutions offer financial services that comply with Islamic law, which bans gambling and speculation, including interest-bearing loans, said Diyad Hujale, a programme coordinator at Mercy Corps, a charity, and no relation to Hamara.
To remedy this, in 2016 a project helped set up the county's first private cooperative offering financial products in accordance with Islamic principles – such as interest-free loans, with no fees for late payment.
The initiative, which is part of the Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED) programme, is funded by the UK Department for International Development (DFID) and led by Mercy Corps.
Gladys Mutisya, manager of the Wajir sacco, said it targets "the unbanked: pastoralists – who make up half of our clients – farmers, and poorer communities in general."
"We're trying to fill a gap that banks and traditional institutions are not able or willing to fill."
Diyad Hujale explained that while Sharia-compliant financial services already exist in Nairobi, the capital, and elsewhere in the country, they are too far away and expensive for local residents to access – so the BRACED programme supported the sacco to hire and train staff in Wajir.
PREPARING FOR SHOCKS
The toughest challenge in this largely Pastoralist County is prolonged drought, which Hamara Hujale said, "affects everyone.”
In addition to her kitchen utensil business, she used to herd over 100 goats - but drought has claimed many of them.
"I can't even remember how many have died," she said, bending to smell her pot of ugali.
Catherine Simonet of the Overseas Development Institute (ODI), a London-based think tank, said that families with little or no disposable income are most affected when drought hits.
Repeated droughts create "a vicious circle where they not only have no alternative income if they have lost their harvest, for example, (but) they are also made more vulnerable to the next shock", she said.
To avoid this situation, Mutisya said the sacco's clients tend to take out loans in "good times", such as the harvesting season, when they can most easily qualify for loans.
They then hold the cash as easily accessible savings, so that in dry periods they can buy food and fodder for their animals to survive.
BUSINESSES FOR RESILIENCE
While many clients use the sacco as a way to boost their cash on hand, others like Hamara Hujale take out larger loans to set up their own businesses.
That fills a key gap in the market that is not met by other banks or institutions, Diyad Hujale said.
"Wajir is vast and its residents earn very little, so to most investors they don't make 'business sense,'" he said.
Simonet concurred that the potential for pastoralists to launch businesses is often underestimated.
"We tend to only look at pastoralists for example as households, when they're also producers, businesses, and a hugely untapped source of investment," she said.
Key to the sacco's model is trust, said Mutisya. "We don't just blindly give out loans. We assess the viability of our clients' business ideas and we train them on issues like accounting."
To minimise risk, the financial institution often lends money to groups rather than individuals. "The group's cohesion and reputation acts as a guarantee for us," Mutisya said.
Hamara Hujale, who took out a loan on her own, now makes up to 2,000 shillings ($20) per day from her two businesses – nearly twice as much as when she only sold utensils.
"But I need the money to repay over 30,000 shillings per month to the sacco," she said. Her dream, once she has repaid the loan in full, is to "buy a bigger car to serve as a taxi in rural areas".
REACHING REMOTE AREAS
Since the sacco opened, about 500 accounts have been created, Diyad Hujale said.
But "we're only present in a 20km radius around the town, when the entire county needs us," he said.
He hopes mobile phone technology will allow the initiative to expand and reach more people through an online platform, without the need to physically meet with an agent.
"Currently the only way to get a loan outside of Wajir town is for our agents to travel to outside villages, so the operation is currently very costly," he explained.
Simonet said a mobile service would make particular sense for pastoralists.
"Pastoralists not only live in rural areas, they are also constantly on the move. So to them a physical branch or agents don't make sense," she said.

Article originally published at Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED).

Thursday, 8 June 2017

Kenya's parched farmers stop ploughing but harvest more food and jobs

By Isaiah Esipisu
IMENTI, Kenya - On a five-acre piece of land being prepared for planting, James Mwenda shouts at his two oxen, commanding them to move in a straight line as they pull a ripper that cuts a long slit into the unploughed ground.
The "low-till" farming system – in which land is no longer ploughed and seeds are slotted into largely undisturbed soil – is gaining fans in drought-hit Kenya because it helps preserve moisture in the soil.
But Mwenda likes it for another reason: it has given him a job.
The 31-year-old is one of more than 1,500 people trained in Kenya to handle the special equipment needed to prepare land and plant crops under the new "low-till" system.
Now he makes money hiring out his services to other farmers in Imenti Central, a sub-county of Meru County, who may not have the funds to buy the specialised equipment themselves.
James Mwenda preparing his land
"This is a new farming technique that has shown very positive results for the past two seasons, and many small-scale farmers in this area are now getting hooked to it," said Mwenda, from Kimate village.
"Low-till" or "zero-till" farming is nothing particularly new. It has been increasingly popular around the world since after World War II – and similar no-plough systems were the basis for much ancient agriculture, before the modern plough was invented.
But the system – part of a suite of farming techniques known as "conservation agriculture" – is now gaining popularity in Kenya among small-scale farmers trying to beat worsening drought.
Introduced to farmers in dry areas in 2015 by the U.N. Food and Agriculture Organization (FAO), it is increasingly popular both for its ability to protect harvests and for the job possibilities it offers young farmers able to use the specialised equipment needed.
NEW JOBS
In Imenti Central, a total of 44 young men and women have been trained on how to handle the zero-till farming equipment, said Patrick Ng'ang'a, a former trainer now working as a desk officer in charge of conservation agriculture for Meru County.
Mwenda, one of those trained, said income from his low-till planting business now has surpassed his income from farming his own land.
"This has become my main source of income," said Mwenda, who now can operate all the hand-held and ox-driven equipment, from rippers and jab planters to oxen-driven planters and shallow weeders.
So far, much of the low-till equipment used in the area has been purchased by the FAO and is made available free of charge at government offices to groups of farmers trained to use it.
But some farmers who have started low-till planting services also are beginning to buy locally fabricated equipment.
"The idea that farmers are willing to purchase some of this equipment on their own is an indication that they are willing to move forward with the zero- or low-till farming techniques," said Mercy Mulevu, the FAO's county programme officer in Meru County.
According to Ng'ang'a, the government has set a standard fee for every activity conducted using the specialised equipment.
"We had to intervene because, given that only a few people understand how to handle the equipment, they were likely going to take advantage and overcharge their clients," he said.
Hiring someone to do traditional ploughing of an acre of land in Meru costs about 1,200 Kenyan shillings ($12), farmers say. But slitting lines using a ripper costs as low as $6 per acre because it consumes less energy, those doing the work say.
MORE DROUGHT, MORE GRAIN
Farmers who adopted the new farming techniques in recent years have been able to boost their harvests, which has attracted more farmers and created more jobs providing services to them, Ng'ang'a said.
In many dry areas of Kenya, crops planted last season failed as drought swept across much of East Africa. But Margaret Gacheke, one farmer who hires Mwenda's low-till services, said she harvested 15 90-kilo bags of maize per acre from her land in February – higher than the usual 13 bags she gets from the land when rainfall is normal.
"This was far beyond average because my immediate neighbor who used the normal conventional farming method did not harvest anything, despite of having used fertilisers and certified seed," Gacheke said.
Using conservation agriculture techniques such as low-till farming over time helps improve harvests as the amount of water-holding organic matter in the soil increases, studies have shown.
"The main reason for introducing this technique was to enable communities, particularly in dry-land areas, to build resilience to climate stresses, increase food productivity and engage in agribusiness for income generation," Mulevu said.
In Tharaka West, a Meru sub-county, members of Maweni Farmer Field School have grown sorghum for the past two seasons using low-till farming techniques.
With consistent harvests, they were able to secure a contract to supply their crop to the Kenya Breweries Company, which uses the grain to make alcohol, said Stephen Simba Njagi, a member of the field school.
Low-till farming works best alongside other smart farming techniques, such as rotating crops, adopting drought-tolerant varieties and using certified seed, said Cyprian Mariene, who trains farmers in the techniques in Imenti Central.
According to FAO, over 10,000 small-scale farmers in Kenya's eight semi-arid counties are already practicing low-till farming. Mariene said many farmers are adopting the techniques after seeing them used by neighbours and relatives.
The techniques also have been promoted on popular television shows such as Shamba Shape-Up on Kenya's Citizen TV – a practical documentary programme that teaches viewers about good agricultural practices.
Article originally published at Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED).

Wednesday, 3 May 2017

Agriculture reality show launched in Kenya

By Bob Aston
The creators of Kenya’s first makeover television series Shamba Shape Up have introduced the first agriculture reality TV show in East Africa. Robert Godec, the United States Ambassador to Kenya launched Don’t Lose the Plot (DLTP) TV show at PAWA 254 in Nairobi, Kenya on May 2, 2017.
The show features four young farmers from Kenya and Tanzania who battle it out for an agricultural investment worth USD 10,000. The show sets out to change the perception of farming among Kenyan and Tanzanian youth as a “cool” and viable career venture.
Don't Lose the Plot presenters.Photo/DLTP
Speaking during the launch, Ambassador Godec said that agriculture presents a real opportunity for youth employment and development. He said that the show would help to change the negative perception that agriculture is only for old people.
“Agriculture presents a real business opportunity for youth in Kenya. Such kind of investment will help spur innovation and give rise to a new generation of agripreneurs,” said Ambassador Godec.
He thanked the Don’t Lose the Plot producers and partners for the inspiring show and their resolve in improving the image of agriculture.
He said that youth involvement in agriculture would reduce rural-urban migration. He said that there is a lot of money available in agriculture and it is worth investing in.
Patricia Gichinga, a Producer at Mediae Company and Co-Director of DLTP said that they selected the four contestants from a pool of 200 applicants. The four chose their own crops. They had to pitch a budget of their expenses to the judges before getting funding for farm inputs.
She said that they want to educate youth on the myriad opportunities at their disposal to enter into and to grow agricultural economic activity, and to improve their food production and livelihoods. She said that youth would have an opportunity to learn and emulate the four contestants.
“We cannot build tomorrow agriculture using yesterday's methods. We need to change the profile of farming," said Ms. Gichinga.
She noted that the average age of farmers in Kenya is 61 years hence the need to change youth perception of farming.
The launch also featured presentations from the show’s Producer Mediae Company, Africa Lead and Mercy Corps’ Agrifin Accelerate program.  Two Feed the Future Kenya Innovation Engine (KIE) agribusiness entrepreneurs and a digital financial consultant participated in a panel discussion titled “Youth and Agribusiness: The Future of Food Security in East Africa.” 
The agriculture reality show is set on a rural farm with multiple plots. The four contestants compete against each other while living together on the farm. Each contestant has 9 months to turn an acre piece of land into a successful agribusiness.
The show has a call centre, a budgeting tool and an interactive SMS platform. The platform enables viewers to send questions or request for information on agribusiness.
The youth farmers receive guidance and practical insights from agriculture experts. The support includes financial planning, planting strategies, agricultural inputs and marketing. In the end, the farmer with the most profitable and sustainable farm will win the USD 10,000 prize.
Citizen Television in Kenya aired the first episode of Don’t Lose the Plot on Sunday at 1:30 pm. Subsequent episodes will air on Thursday’s at 1:30 pm in English and Sunday’s at 1:30 pm in Kiswahili. Episodes in Swahili will be airing in Tanzania on ITV on Fridays at 6:30 pm starting on May 5, 2017.
The reality show is supported by Feed the Future, the U.S Government’s global hunger and food security initiative, and USAID Kenya/East Africa Mission through Feed the Future’s continent wide capacity building program, Africa Lead. The support focuses on increasing media content on the agriculture sector and opportunities for youth employment and development.
Mercy Corps AgriFin Accelerate Program also supports the program. The accelerate program provides the contestants with financial management and access to finances.
We wish the best of luck to Kenneth, Leah, Issah and Winrose as they battle it out to win USD 10,000. We hope that more youth will adopt agribusiness after learning from their peers how to turn farming into a profitable business.

Tuesday, 2 May 2017

App helps Kenya’s small farmers tackle pests, map crops

By Caroline Wambui
KATHERI, Kenya - Sitting under a cypress tree on his farm to escape the scorching heat, Michael Mwenda is deeply engrossed in his phone.
"I am getting the latest info on diseases attacking French beans," he said. "My neighbours' beans were attacked by a pest and I don't want the same thing to happen to mine."
Farmers in Katheri village in central Kenya - and in many other parts in the country - regularly battle pests that attack their crops, a problem made worse by recurring drought.
Countries with confirmed outbreaks can face import bans on their agricultural products.

Farmer weighing his produce in Meru County, Kenya. TRF/Caroline Wambui
However, a mobile app called Farmforce is helping farmers and exporters access information to contain pest outbreaks, track harvests in real time, and monitor pesticide residues to comply with global food standards.
Developed by the Syngenta Foundation and the Swiss government in 2013 in Kenya and other countries in Africa and Asia, the initiative employs field workers who record information about farmers such as their address, land acreage, the crops grown and pesticide records, among other things.
This enables real-time monitoring of products from cultivation to harvesting "as farmers receive progress reports regularly – telling them for example whether or when to spray pesticides", said Gideon Aliero, an agronomist at Interveg Exports, a company that exports fresh fruit and vegetables and has been using the app for four years.
To receive the information on their phones, farmers need to be registered with a food exporter.
Less Paper, More Money
Faith Kamenchu, project manager at Farmforce, said the app allows farmers, food processors and exporters to cut down on cumbersome paperwork.
"Most smallholder farmers use pen and paper methods to record their activities whereas exporting markets demand a range of highly detailed information on the produce," she said.
"Collecting that information by paper is time-consuming, difficult to aggregate and inconsistent, which makes it hard for farmers to meet global standards and export their produce."
A Farmforce field agent is allocated to a group of farmers depending on their location, and advises them based on the information they receive from the app – for example, on when they should harvest their crops. 
Kamenchu believes this simplifies export companies' management.
"The app informs field staff when farmers' actions might threaten compliance – like overuse of chemicals – and ensures that the agents actually go in the field, as they have to activate their location on their phone when they report."
Fraud used to be a significant problem among field agents, he added. "They would pretend to be on a farmer's field and send inaccurate information, with no way for the export company to detect any lies. But that is no longer an issue, as field officers need to turn the location mode on to access the app on their phone."
So far, the technology counts about 100,000 users – both farmers and exporters – across the country, Kamenchu said. 
However, Gabriel Ayoki, a farming consultant, said the technology's impact may be limited in remote areas where farmers experience frequent power failures and cannot charge their phones to access the app.
Mwenda, who grows maize, tomatoes and beans, says he used to struggle to sell his produce to export companies "as it was of poor quality and often affected by bacterial wilt disease, which I had no information about."
Now that he has been using the app for three years, he manages to harvest more food and of better quality, and makes over 50,000 Kenyan shillings  ($484) in one harvesting season (three months), compared to 20,000 Kenyan shillings ($193.61) previously.   
"My income is now steady, so I can make plans for the future like pay for my children's education," he said.
Article originally published at Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED).