Flower rescue plan as wilting market signals mass closures

The industry also wants the government to pay exporters some Ksh2 billion in VAT refunds, HCDA to expedite cess payments, and the Department of Industrial Training to release some Ksh60 million owed to the growers as training levy.

But the reduction in demand has, ironically, created another opportunity, according to KFC chairman Kabuya Mwito.

Growers are now targeting high-end consumers who want premium varieties and will spend on flowers irrespective of the crunch.

The industry is also negotiating with breeders to supply elite varieties at reduced rights.

This is likely to transform Kenya, which has a reputation for supplying high quality flowers, into a superior exporter, enhancing its chances at the markets now suffering a glut.

Plans are also at an advanced stage to set up an horticulture fund supported by the International Finance Corporation, Acacia Fund and DEG (the German investment bank), from which growers can borrow at reduced interest rates.

Local commercial banks, who were also represented at the meeting, have meanwhile agreed to negotiate with the exporters to tailor products that will work for them.

Current interest rates are said to be pegged at 17 per cent, which exporters say is too high.

A related meeting with the financial institutions under the stewardship of the Central Bank of Kenya is slated for this week.

According to KHC chairman Tiku Shah, Colombia is dumping its flowers in Europe following the collapse of its US markets, leading to a further fall in prices.

An abnormal winter in Europe that is attributed to climate change is keeping people indoors and this, coupled with the financial crisis, has led to a substantial drop in demand for flowers.

Mrs Ngige said the trend could be even more worrying should it be adopted long-term by consumers, who have a way of adopting a fad.

“If they get used to a life without flowers, they might as well do away with them forever,” she said, adding that flowers are not food, which people must have.

Ethiopia, which a few years ago gave Kenya a scare, has seen 25 flower farms close because of the crisis.

Kenya supplies an estimated 40 per cent of Europe’s flower imports.