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How farmer broke into miraa export business – Business Daily

Mr Moses Lichoro explains how he does miraa farming during the interview at one of his farms in Igembe Central, Meru county. FILE PHOTO | NMG
Some 22 years ago, Moses Lichoro decided to leave his father’s home and establish himself in Igembe Central, Meru as a miraa farmer.
The area, located about 20 kilometres from the Maua-Meru road, is drier than the zones where miraa is traditionally grown and so when residents heard about his agribusiness plan, they outrightly dismissed him.
But Mr Lichoro had a plan. He started by leasing farms and later on bought small pieces of land in various parts of Igembe Central. To solve the water problem, he sunk boreholes.
“After leasing for several years, the owners opted to sell the farms. I invested part of my savings from my hardware business to acquire them. That was when I decided to run miraa farming as a business,” says Mr Lichoro who today owns 52 acres strewn across the constituency.
Unlike other farmers who rely on rain, his trees are productive throughout the year, thanks to the readily available water.
But the business has not been without risks.
“There are a lot of risks associated with its farming because when it overgrows it becomes a waste. The twigs must be harvested when they are at least eight inches long after three weeks or a maximum of one month. If they grow past 10 inches they cannot be exported,” he says.
He harvests at least two tonnes of the stimulant and sells it to the local and international markets, mainly to Somalia.
However, breaking into the miraa export business is not a walk in the park. It took him over a decade before he could airlift his first crop. Since the business is tightly controlled by middlemen, he had to do some serious lobbying among buyers.
Each month, Mr Lichoro spends about Sh20,000 per acre with labour being among the biggest cost factor since he employs 40 people who take care of his trees.
At optimum production, his 52 acres should earn him about Sh1.5 million with each contributing Sh30,000. But this is not usually the case.
Mr Moses Lichoro explains how he does miraa farming during the interview at one of his farms in Igembe Central, Meru county. FILE PHOTO | NMG
“At times the market is good but there are instances we incur huge losses due to market dynamics. For instance, when exports were banned we didn’t earn yet we had to spend money taking care of the trees,” Mr Lichoro says.
“There are falsehoods spread by some people about the crop, claiming that they sell produce worth up to Sh200 million per month. This is not possible because of the high costs and the market is very unpredictable,” he says.
The biggest market shock came when exports to Somalia were banned for two years from March 2020. Nyambene Miraa Traders Association (Nyamita) estimated that farmers were losing up to Sh16 million daily.
Compared to tea, the miraa business is however more lucrative since a tea farmer earns an average of Sh20,000 from one acre with about 3,500 bushes with the cost of production being higher because of costly fertiliser and labour.
He is however quick to add a rider that for a farmer to make good money, he or she should own several acres of trees. That way, he observes, he will be able to benefit from economies of scale.
Mr Lichoro, who is also the chairman of the Miraa Growers and Traders Cooperative Union says there are 250,000 miraa farmers in Meru county alone with only about 1,000 of them operating profitably. The rest are unable to break even due to funding challenges.
Mr Lichoro says miraa meant for export needs a lot of care since it should have more moisture content so that it does not wither during transportation.
Some of the challenges include pests that attack tree roots. Mr Lichoro uses traditional methods such as sprinkling ash on the base of the trees to contain it. He, however, points out the need to certify pesticides favourable for the crop.
Mr Lichoro says some regulations published by the Agriculture ministry with the view of streamlining the sector may also hurt farmers.
The regulations were published in June this year and faced opposition, forcing Cabinet Secretary Peter Munya to retract some of the provisions which included a levy of Sh30 per kilo of khat exported and Sh60 per kilo for imports. The levies were to be paid to Agriculture and Food Authority.
According to the rules, transporters and vendors were required to have permits although they will not attract any fees with the later issued with permits after satisfying authorities that their premises are in designated and properly marked points to be used exclusively for sale of the produce.
While trading areas should not be located within 100 metres of any learning institution, farmers are also required to adhere to basic hygiene measures while harvesting the crop.
On transportation, the rules state: “Miraa shall not be stored or transported together with other produce which may contaminate it or otherwise adversely affect its quality. A vessel used for transportation of miraa shall be built and equipped to ensure maintenance of optimal temperatures and hygiene to prevent damage, contamination, and spoilage of produce.”
“Some of the rules are good but there is a need to review the ones that are not favourable to the farmer. As the new government takes over there should be efforts in actualising proposed funding for farmers through cooperative societies,” he says.
There are also other markets in Uganda, Democratic Republic of Congo (DRC) and Djibouti that are yet to be explored which if realised would benefit farmers, he says.
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Author

Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.