One on One with Gary Hannam on How to improve Kenya Avocado Exports

By Steven Mulanda

Kenya avocado acreages continue to increase day by day as Hass avocado farming is trending, with many hoping to make a kill from this green gold that has made the country rank 6th in production globally. It is estimated that Ksh 16 billion worthy of revenue is earned annually from avocado export. But there are emerging setbacks that if they are not well addressed will lead to the detriment of the industry. Gary Hannam the Chief Executive Officer (CEO) of Olivado, the world’s inventor of and largest producer of extra virgin avocado oil, producing 80% of the world organic oil, had an exclusive chat with Hortfresh Journal on what he sees as a ticking bomb.

Q
Why the huge interest in Kenya avocado industry?

My interest in Kenya avocado dates back to 2006 when I first visited Kenya and saw the huge potential the country has in organic avocado farming especially in Central Kenya. Organic avocado trees are difficult to grow in plantations, but the small scale farmers were cultivating the crop, which made us set up a production site and a pack house for exporting the fruits.
Q

What would you say is ailing the avocado industry in Kenya?

Handling of avocados in this country is a problem. To export fresh avocados, from the farm they are handled 3 times before exportation; when being harvested, during collection and packaging in crates and when being transported. The fruits should be handled correctly to minimize their chances of being bruised, also they should be handled by people who have the requisite skills and knowledge on food safety. There is a photograph in one of the documentaries of a person who has a cigarette in his mouth while sorting avocados in heaps on the ground, this is absolutely sending wrong message to our European buyers.

According to The Crops Act of 2013, Article 16 and Horticultural Crops Regulations of 2020, avocado produce is to be harvested at the right stage of maturity. Everything is not rosy; export of immature avocados will inevitably collapse the sector unless much is done. The market perception of the Kenyan avocado is so poor, I was at a company in Rotterdam where they were receiving avocados from Kenya and other areas. Kenyan quality was wanting because they did not ripen properly, in fact the rejection rate stands at over 20%. In 2020 we exported only 3 containers of fresh avocados to avoid imputing a bad reputation to our company and the country. This year only 16 containers, but each had a rejection rate of 1%-3% like the best Peruvian avocados.

A study was done that looked at the prices of the world’s avocados and for Kenya’s they were much less up to about 40% of those other prices because of the poor quality perception.

The purchasing method of the fruit is the problem because some exporting companies buy through middlemen who do not account for traceability. This is what has led to massive exportation of immature fruits that has led to destruction of Kenyan reputation. Most avocados going for the export market are traded by dealers who want to make a short term profit. The Act specifies that a horticultural produce dealer shall not deal with marketing agents who are not registered with HCD, should put in place a traceability system and a grower supplying produce to a dealer should sign a contract. When a dealer harvests from a farm, the farmer signs the contract which has the Global GAP number of the farmer, the identity number and the quantity purchased. For the agent to be licensed, they should have a tax certificate and annual marketing production return for the previous avocado season with record to show traceability.

If Kenya exported quality avocado the current KES16 billion would be worth KES32 billion, which is a huge gap. The danger is every country has seen an increase in the number of avocados being planted, so the supply will increase, demand will increase as well but probably not as much as the supply. What will happen is that with larger supply importers will only accept quality avocados which may well reduce our exports to may be 8 billion.

At the moment there is no scientific method to know or evaluate the dry matter contents. Olivado together with a New Zealand research program spent about 200,000USD developing a program to test avocado dry matter content, to tell when a fruit is mature for harvesting or dry matter is above 21%. The hope is this model we shared with HCD, 2 years ago will be rolled out in the coming season and exporters will adhere.

There is a growing problem here in Kenya and also in Tanzania where we have people not known to engage in avocado business buying containers of avocados and paying high prices to farmers, which we suspect is money laundering.

Not planting the right Hass avocado seedlings is also a challenge. We have farmers who are buying seedlings and after a few years they discover they are not Hass but fuertes, or the seedlings die because of Phytophthora, a root rot, after planting. Olivado has a high health avocado nursery. An organization that bought seedlings from us and bought others from a several nurseries for due diligence of their planting trials in Western Kenya, our seedlings flourished while 60 – 80% from other nursery died.

Transfer of the soil fungal diseases, through seedlings is also a problem. At nursery level the soil used should be virgin or sterilized to avoid the disease being transferred to farms, whereby it is difficult to treat and the farmer’s crop is wiped out.

The management of a seedling for the first 5 years determines the longevity of the tree, one thing with farmers venturing into this green gold is that they plant seedling and not tend to the trees and still have high expectations of making a boom, it doesn’t happen that way.

Stealing is another big threat to the industry; we have thieves roaming at farmers’ orchards at night, picking every type of fruit whether mature or not. This fruits most probably ends up with being packed at the various independent pack houses. Last year, we estimated that 25 percent to 30 percent of our farmers’ fruits were stolen. The reason we know this, we have a data management system where our teams goes out to locate and estimate the avocados in each tree of our farmers’ farms, we are able to know what has been harvested and what has not been harvested. This is really dampening the spirit of farmers and they are refusing to receive advance money of their crop for fear they might lose their produce to thieves. If our estimates are correct, industrywide some KES2bn of the KES16bn exports may be coming from stolen avocado, many people in the value chain may be dealing with stolen goods.

Climate change is also a factor affecting avocados, this season and of late, most trees flowers inconsistently sometimes late and sometimes early. Trees start flowering because they are activated by climate and rainfall. This season 50% of the trees flowered late and the number was less, which made it more interesting for thieves to steal and also farmers would sell immature fruits in order to sustain themselves.

Q
What are some of the remedies to these?

The issue of immature fruits has gone on now for two years. We are already told by the people we supply in Europe that the prices this year will be lower than the last season. Kenya has to prove that the quality of our avocados is same as those imported from other parts of the world.

The role of a good exporter who is concerned about quality is to work very closely with farmers; by having a contract with them, looking at how they grow their trees and be willing to have their own picking teams. The team has to be trained not just to pick everything from the tree but to know whether the fruits are mature or not.

In New Zealand, they have an authority that tests the dry matter content of avocados in the regions where they are grown, and the avocados of each exporter are sampled to ensure a dry matter of 24%. If 1%of fruits being exported tests less than 24% dry matter their license is revoked, because the government know they cannot have a horticulture lasting market and good price without quality produce.

To export good quality avocados, there should be enforcement of the regulations so that it is a level playing field. To get quality requires cost and effort, contracting and training farmers costs money. For instance, in the Act, there is a regulation that spell out that avocados should be sold in kilograms and not per piece.

Every farmer has an obligation to protect their livelihoods by ensuring they sell their produce to licensed exporters because brokers engaging in avocado business have no license. Every transporter who is engaging in avocado business and does not have proper documentation, and this is what we are drafting in Tanzania’s regulation; their vehicles should be impounded. It takes goodwill for this to be implemented.

When you go down the whole value chain; financial institutions should not also be funding people who don’t have licenses to deal with export because they may well be funding illegal activities in the country.

This country has excellent regulations but there is no enforcement of the regulations by the relevant government enforcing agencies. If enforcement is carried out and exporters adhere to exporting mature quality avocados, there is a bright future.