October Issue 1 2012

AgCham for the agriculture sector? Is it desirable, valuable?

The United States Agency for International Development (USAID)/Kenya’s Office of Agriculture, Business and Environment organized a stakeholder consultation meeting on Thursday, October 12, 2012 at the Intercontinental Hotel to address the merits of establishing a Kenyan Agricultural Chamber of Commerce (AgCham) with county chapters.

USAID/Kenya is investigating a project that would seek to provide a unified advocacy voice representing Kenya’s broad-based agricultural private sector interests – ranging from small-holder farmers to large agribusinesses – for effective public-private sector dialogue.

The stakeholders engaged in an interactive dialogue where they aired their views on the proposed Agcham.

According to USAID, the AgCham project relates directly to USAID/Kenya Feed the Future (FTF) goals and will contribute to inclusive agriculture sector growth. It will bring effective representation of Kenya’s broad-based agricultural interests stimulating public-private Government’s agricultural business and trade-enabling policies and programs.

The Kenya National Chambers of Commerce and Industry (KNCCI) Chief Executive Lucy Wanja said the move will be a duplication of the KNCCI which has already expanded even to the county level. She added that the department for the agriculture sector exist and has been doing a commendable job.

Many participants felt that there is an already existing vacuum leading to the proposed project.  Mr. Raphael Mwangi of Ministry of Agriculture said there is need for more consultative meetings to even look at the value the two institutions can add if they were to work together.

A research will be conducted to make sure a final decision on the proposed project is reached.

 

Economic performance

According to the Kenya National Bureau of standards (KNBS), the economic slowdown that started in the first quarter of 2012, spilled into the second quarter when most of the sectors registered suppressed activities compared to their performance during the same quarter in 2011. The economy expanded by 3.3 per cent during the quarter under review compared to a growth of 3.5 per cent, in the second quarter of 2011.

Seasonally adjusted gross domestic product grew by 0.1 per cent in the second quarter of 2012 after increasing by 0.5 per cent in the first quarter.

Agriculture and forestry slowed substantially growing by 1.6 per cent compared to a growth of 4.2 per cent in the second quarter of 2011. The decline in performance of agriculture was mainly an outcome of a decrease in exports of cut flowers, fruits, vegetables and tea.

Production of coffee, however, increased significantly but did not wholly compensate for the impacts of the decline in production of tea and horticultural crops.

During the second quarter, inflationary pressures eased slightly mainly driven by lower food and fuel prices and the tightening the monetary policy stance. Overall inflation rate declined to 10.05 in June from 14.49 in June 2011. During the review period the Kenya Shilling remained relatively stable against major world currencies.

Agriculture and Forestry

In the first half of 2012, the sector’s performance was influenced by a combination of factors.

First, there was severe frost that impacted negatively on the production of tea and other vulnerable crops like potatoes. Secondly, the onset of long rains delayed leading to suppressed agricultural activities mainly in the food crops subsector during the first quarter.

Thirdly, exports of Kenyan horticultural products were negatively impacted on by the slowed demand in the European market. As a consequence, the sector’s growth decelerated to 1.6 percent in the second quarter of 2012 compared to a growth of 4.2 per cent in the same quarter of 2011.

Quantities of exports of cut flowers, fruits and vegetables declined by 15.5, 16.0 and 14.5 per cent respectively, in the second quarter 2012 compared to the same quarter 2011. The decline in the export of horticultural products was primarily due to suppressed external demand that resulted from the recession in the Euro zone.

FloraHolland’s FPC Community now online

All FloraHolland members can now have access to a special members’ Community via www.floraholland.com. The FPC Community is a platform where information can be shared and discussions can be held.

Photo caption (left to right): Marjan van Kester (FloraHolland FPC Support), Peter Otto (FloraHolland FPC Coordinator), Walter Straathof (chairman of FPC Potted Winter Bulbs and owner of the Gebroeders Straathof nursery in Noordwijkerhout) and Edwin van Steijn (owner of Van Steijn-Damen nursery in Noordwijkerhout) working with the FPC Community.

The FPC Community supports the 35 restructured and newly-formed FPCs and the three RACs (Regional Advisory Committees) in their communications with each other and with members, as well as the communications between members individually. The FPC Community will help FloraHolland to increase the interaction and commitment between the cooperative and the members via the product line.

“Through the FPC Community, it will become easier and the bar will be lowered for communicating with the FPC members and our fellow suppliers,” says Edwin van Steijn, owner of the Van Steijn-Damen nursery in Noordwijkerhout.

The Community will offer various features.

According to Walter Straathof, chairman of FPC Potted Winter Bulbs and owner of the Gebroeders Straathof nursery in Noordwijkerhout, “For me, the FPC Community is a useful instrument to easily contact, among others, suppliers of potted winter bulbs who are not yet FPC members. Through the Community, we can get a good idea of the issues of the day and we can take them into account during the FPC meetings. We, the FPC members, are there for the suppliers. It is my hope that we also receive a good amount of feedback from the Community and that we can use it to get things done.”

 

An innovative online platform

FloraHolland will be improving its online services and communications. As of the start of September, all online services and communications have been issued from the restructured www.floraholland.com. On this site, growers, traders, transporters, import agents and FloraHolland employees can meet, share information, and – of course – do business. The FPC Community, which is part of the restructured www.floraholland.com, is the first online meeting point to be delivered that is specifically for members.

 Source: FloraHolland

FloraHolland wants more customization and flexibility

So far, FloraHolland’s turnover for 2012 has shown growth of approx. 4%. This growth is primarily being driven by a positive price trend, and while there are large differences between product groups, sales markets and members, the overall picture of the developments in turnover can be called positive.

This is true of the Dutch floriculture cluster as a whole, as well as of FloraHolland. Under this stable development in turnover, large and rapid changes are taking place, such as the trend among their members to increasingly take the initiative in the sale of their products. Additionally, they are more rapidly making new demands of their cooperative.

In 2012, a change took place in the trend in the development of the clock and the move to direct sales. There were also unique events in 2012, such as the weather conditions in Kenya and the relatively narrow market for plants that influenced these developments. However, the underlying trends are significant and they make changes to business operations necessary.

FloraHolland’s ambition – to improve the market position of its members with its services – remains unchanged and the existing spearheads continue to be of major importance. They are building on an international service network and are looking to provide their members with more value and distinguishing capacities. They are also working on strengthening the central position of the Dutch floriculture cluster in the international market.

However, in the changing market, this must all take place more rapidly and with more customization, greater flexibility and more simplicity. This market development demands a more efficient, decisive and blossoming organization in which the role of its individual parts is smaller than in the past. For 2013, they  are developing the following concrete measures:

  • Innovative initiatives for the auction clock, and increasingly customized Connect services that ‘help sales’ and are based on product specialization.
  • Developing the Virtual Marketplace (VMP) to optimally and electronically bring together supply and demand. A VMP as the central point of access to auctioning and direct sales, as well as for the exchange of supply, inventory and orders in the chain.
  • Changes to improve the deployability of employees and to increase the effectiveness of the company. These changes will make it possible to absorb the reduction of the workload with natural shrinkage.
  • Changes within Flower Handling Services to make the handling of import flowers competitive again.
  • Changes to the rate structures for both growers and buyers. Buyers, for instance, will receive a harmonized, strongly simplified structure of clock rates (service levy, transaction levy and Remote Buying).
  • Investigate the effects of the changing market situation on spatial development. As they wait for the results of this investigation, they will temporarily halt the development of new accommodations.

In the changing market, FloraHolland will continue to position itself as the international trade platform for flowers and plants, and as the access portal to the European market for the unique Dutch assortment and global supply, with services that provide their members with all the support, either physical or virtual, they need to do business in the market, and that cater to the needs of our customers.

Source: FloraHolland

 

 

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