Improving prices through pest management
James Kanyi is a franchisee with TruTrade and the managing director of Ruralnet Trading Services. He outlines Ruralnet’s work with mango farmers in Kenya, to improve the quality of their fruit and link them to reliable buyers through the TSS business model.
Ruralnet employs fair trade principles and seeks to eliminate market inefficiencies in the value chain. In the region of Embu in Kenya, Ruralnet has been focusing on mango.
For mango smallholder farmers, it is difficult to obtain a fair price for their harvest. In many cases, buyers exploit these farmers because of the short time frame to sell ripe mangoes. If farmers do not locate buyers in time, their harvest will be wasted. In 2014, Ruralnet explored the mango value chain and tested the market. Ruralnet purchased 20 tons of mangoes from farmers around Embu and discovered that the fruit had major pest and disease issues after the mangoes were harvested.
Ruralnet decided to partner with Real IPM, a company involved in biological pest control, to help solve the problems faced in product quality. TruTrade trade finance enabled the purchase of specialized kits from Real IPM for each farmer, to be recovered from their income at harvest time. Real IPM trained the farmers in the proper use of the kits to treat fruit flies and helped farmers integrate a pest management system in their orchards and fields. For the farmers who used the kits properly, the first harvest produced an increase in production, although there were still issues with quality due to heavy rainfall leading to anthracnose.
Links were made with buyers including Burton & Bamber, an agro-processing company specializing in preservation and dehydration of fruit and vegetables, to purchase mangoes from the farmers linked to Ruralnet. In the end only four tons of mangoes were bought by Burton & Bamber, but Ruralnet also provided links to BOP vendors in both Kampala and Nairobi.
After the results from the first harvest, Ruralnet recognized the need for additional early training on integrated pest management to ensure that farmers fully understand the IPM system. Furthermore, Ruralnet has faced some challenges after registering farmers with TruTrade for M-Pesa payments. Farmers are given a down payment as Cash-On-the-Bag (COB) and if the quality of mangoes is good the farmers will be paid a bonus. The issue with this system is that if there is any delay with the bonus, farmers get frustrated, and if there is no bonus at all then the farmers become upset and angry. Currently farmers are not receiving bonuses because of quality issues.
Ruralnet plans to acquire investors to expand its operations from working with 300 farmers to 3,000 in five years’ time, while continuing to improve quality control through pest management; to supply both home and export markets; and decrease waste by setting up a pulping unit in Karuru. For Ruralnet, the end goal is to work closely with TruTrade to access greater quantities of product, move these to market and improve prices for farmers.