Tropical Farm comes to aid of farmers

By Dancun Mboyah

DURING the just concluded international coffee conference in Nairobi Kenya, it clearly emerged that debt is one of the common problems affecting coffee production all over the world.
The international coffee organization (ICO) said coffee farmers owe their societies and banks huge sums of money, adding that it was only fair when various governments could come out to help solve the problem by clearing outstanding amounts on behalf of farmers.
Debt is just but one of the myriad challenges that has dogged the coffee sector.
These range from rising overheads occasioned by high input and energy costs, oversupply of coffee at the world markets among others.
Despite the debt challenge in the coffee and agricultural sector in Kenya, Tropical Farm Management (TFM) is credited with having assisted in arranging tripartite agreement between banks, borrowers and themselves.
The company is credited with having assisted in convincing Standard Chartered, Barclays Bank and Brooke Bond establish a division to oversee lending to agricultural sector.
It has also assisted in facilitating the transfer of many coffee plantations from expatriates to Kenyan ownership.
“At the time we started, many prospective coffee estate owners had little knowledge of large scale coffee farming and therefore, the banks were reluctant to advance funds for acquisition”, the Managing Director Gunther Herhaus says.
The company is responsible for ensuring proper end use of funds advanced by banks and the appropriation of crop sale proceeds to achieve recovery of the debt.
At the end of every trading year, TFM forwards the operating surplus to the clients account. The company so far manages 5,000 hectares under coffee and 600 hectares of tea in Kenya, 2,100 hectares of tea in Ethiopia, 2,000 hectares of coffee in Uganda and 1,000 hectares of coffee in Tanzania. According to Gunther, the company provides market information to its clients on what quality and quantity to offer for sale on the market to ensure maximum returns.
It also ensures timely payment of produce sold and forewords the proceeds, less all legal deductions, to the grower.
Both tea and coffee acreage under the company is expanding, which shows the need for management support in the industry, particularly now when the world market is going through difficult periods.
TFM is currently managing upto 70 farms most of which are coffee plantations ranging from 100-800 acres in size, totaling 12,500 acres in coffee growing regions of Kenya.
Coffee production from TFM managed farms constitute 12- 15 per cent of Kenya’s annual production. The company’s production per hectare is over four times the national average. It has maintained the highest yields- an average of 1,850 kg\ha. Of coffee and 3,500kg\ha of tea, compared to the national average of 450kg\ha of coffee and 200 kg\ha of tea.
The company has established a well equipped liquoring department for the purpose of improving the coffee quality within the farms it manages. Coffee samples are forwarded to this department where they are analyzed to establish any defects. This liquoring department helps maintain good coffee quality through the various coffee processing stages in the factory.
‘The department is also responsible for monitoring world coffee marketing reports and analyzing the price trends’, Herhaus says. TFM is also among the companies that have applied for a coffee marketing agency license.
TFM’s involvement in agriculture has not been restricted to just coffee and tea. Expertise in other enterprises include floriculture, sisal, horticulture, cereals. Dairy, ranching and mixed farming.