By Atharva Deshmukh
The International Flower Trade Expo (IFTEX) 2017 held from 7-9th June at the Oshwal Center in Nairobi showcased the rising prominence of Kenya’s floriculture industry. The event was attended by stakeholders from various levels of the industry’s value chain. IFTEX 2017 provided a forum for dialogue and interaction between breeders, growers, buyers, and suppliers of cold storage systems and greenhouses. The event begs the question: why has floriculture emerged as a prominent avenue of export-driven growth for Kenya? Moreover, where is it headed next?
What drives Kenya’s floral advantage?
Economists like Harvard professor N. Gregory Mankiw have argued that trade policies must embrace a sector where a nation enjoys a comparative advantage in order to thrive. For Kenya, floriculture is one such pocket of economic promise. This advantage is driven by factors characterised by Turkish economist Dani Rodrik’s determinants of growth: both deeper and proximate. According to Rodrik, proximate determinants include physical capital deepening, human capital accumulation, and productivity growth. Deeper determinants include geography, trade, and institutions. In regards to it floriculture industry, Kenya has both.
Deeper drivers include Kenya’s geographical positioning (close to the equator) and the availability of cultivable lands at high altitudes, which provide optimal conditions for its thriving floriculture industry. Another deeper determinant of particular note in this context is trade. In 2015, the Kenya Flower Council (KFC) reported that Kenya’s floriculture exports are directed to nearly 60 countries across the globe. In the EU alone, the supply of cut roses from the floriculture industry in Kenya accounted for nearly 38% of the market share.
The proximate determinants also contribute significantly to the tale. The floriculture industry’s productivity is driven by its productive workforce comprising of nearly 100,000 farm employees. The KFC estimates that the industry impacts over 2 million households, with future increases anticipated. In addition, medium and large scale enterprises that dominate the market have showcased a willingness to invest in automation and efficient technology. Capital deepening through investments in areas such as irrigation technology, grading systems, cold storage, and greenhouses has contributed to the growing productivity and hence the comparative advantage of the sector.
A visionary strategy
A growth in productivity also has policy relevance. Launched in 2008, Kenya Vision 2030 is a development strategy designed to transform Kenya into a middle-income nation with a thriving industrial base. With relatively lower reserves of primary commodities, the Kenyan growth narrative can be expected to rest on its capacity to strengthen its agricultural base. As a sub-sector, horticulture presents itself as a prominent component of this growth. With respect to horticulture exports, Kenya Vision lays out a blueprint that calls for both the expansion of existing markets and the establishment of new ones.
Such a strategy rests on the assumption that the competitiveness of products from this sector will be enhanced over time. It is envisioned that the private sector will step up to fulfil this expectation. Consequentially, Vision 2030 hints toward government policies that entail a land use policy favourable to private sector expansion. What the strategy calls its ‘Agricultural Land Use Master Plan’ will become a key policy tool in the achievement of its goals.
Sustainability through flowers and carrots
However, while Vision 2030 calls for increasing productivity and the expansion of private sector stakeholders, the theme of sustainability cannot be ignored. If the goal was to achieve Millennium Development Goals (MDGs) by 2015, the target of meeting the Sustainable Development Goals (SDGs) by 2030 should be held in high regard. Achieving shared prosperity through value chain sustainability and ensuring that the private sector growth does not have devastating environmental impacts must then be key policy objectives.
Although difficult, this can be done through carrots and sticks—incentives and regulations. Regulations and audits such as those implemented by the National Environment Management Authority (NEMA) will play a crucial role in addressing private sector behaviour. This will particularly be the case in key areas such as waste disposal management and energy consumption. In the latter, incentives (or carrots) that are otherwise absent shall be crucial. A shift to renewable sources of energy consumption requires will require the interplay of government policies and private sector willingness due to the large monetary commitment the switch will require.
A rosy future?
The Kenyan floriculture industry appears poised to expand its presence in the global market. As true and promising as that may be, the space to create and implement policies such as land use master plans must be acknowledged and addressed by the regime that will soon take power. With the nation headed toward Presidential elections this year, the political future appears to be deeply intertwined with the ability of the state to continue fueling the economic potential of the agricultural sector at large; in particular, the blossoming flower industry.
Atharva Keshmukh is a student of international affairs at Jindal School of International Affairs, Sonipat, currently working in Kenya.
Featured Image Source: Pexels
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