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RSS By: Jeanne Bernick, Top Producer

Jeanne, Top Producer Editor, grew up on a beef cattle operation in Southwest Missouri and now writes from the heart of corn country in Eastern Iowa.

A Finalist, But Not The Winner

Dec 07, 2012

 

In farming (and award programs), we salute people who succeed. We praise those who work hard to grow their business. We often root for them on the climb up, then analyze and criticize them when they get there.
 
For over a decade, the Top Producer of the Year (TPOY) award program has searched for and celebrated the best and brightest in agriculture. So it is with sadness and dismay when we see one of our finalists fall down.
 
Top Producer learned this week that Stamp Farms, L.L.C., filed for Chapter 11 bankruptcy on Friday, Nov. 30, along with affiliate companies Stamp Farms Custom AG, L.L.C., and Stamp Farms Trucking, L.L.C. Estimated liabilities exceeded $50 million, with more than 200 total creditors cited in the bankruptcy filings. Monsanto was the largest creditor listed with a $3.9 million claim.
 
Mike Stamp was one of the Top Producer of the Year finalists, and Stamp Farms and Northstar Grain were featured on the cover of Top Producer’s November issue. Our staff learned Nov. 9 – at least a week after the issue hit your mailboxes - that audits revealed irregularities and big changes were occurring at Stamp’s operations.
 
I have received many emails from readers suggesting we dig into Stamp’s farming situation and determine what happened. Our staff is committed to analyzing this situation and passing any valuable information we learn. To that end, look for reporting online and in the January 2013 issue.
 
I have also received emails asking how Top Producer could include Mike Stamp as a finalist for Top Producer of the Year? I would like to remind our readers that he was a finalist….but not the final winner. Our 2012 Top Producer of the Year was Gregg Halverson of Black Gold Farms.
 
I took time this week to read over last year’s judging comments. Our panel takes the job of choosing Top Producer of the Year very seriously. One of the judges requested an additional two weeks to make the final decision about the winner last year. All of the 2012 finalists brought talents and business skills to the table that made them worthy of being named a finalist.
 
Regarding Mike Stamp, every judge was impressed by how much he had accomplished in his farming career. Nothing in the financials that our judging panel reviewed looked irregular. As the information was presented to us, we saw a debt to equity ratio that while was high, but still acceptable. There was concern among the panel about how much Stamp was leveraged, but sometimes the more you’re leveraged, the more exponentially good life is when things work out. The flip side is it’s exponentially bad when things don’t work out.
 
As we all know, things can change very quickly in agriculture. Failure is part of the natural cycle of any business, and we can learn from it. I promise that Top Producer will run more follow up stories as to "why that didn’t work" and write balanced articles that ask deeper questions. Keep reading, and we’ll keep learning together.
 
 

 


 

New Kenyan Constitution Gives Women Land Rights for First Time

Nov 19, 2012

Women play a critical and potentially transformative role in agricultural growth in Kenya. The country is home to more than 38 million people, the majority of whom live in rural areas and rely almost entirely on agriculture. It is estimated by the World Bank that women are responsible for 80% of paid and unpaid labor in food production.

women farmers

Yet across Kenya, where 67% of people live on less than 170 shillings ($2) a day, women own only about 5% of the land and produce most of the food. Around the developing world, women are 43% of the agricultural labor force, United Nations statistics show. Women worldwide hold about 15% of the land, the UN says. Women in all developing countries need land rights to achieve any equality.

Under the new Kenyan constitution adopted in 2010, women won rights to own the land they till and farm. In the past, women have had the right to cultivate land but not own it.

This change is significant, given that more than three-quarters of Kenyans live outside cities, most of them on subsistence farms owned by men -- and, by tradition, worked by wives and daughters. The constitution prohibits discrimination based on marital status, allows mothers to pass citizenship to children and even sets gender quotas for elected posts.

"We all work hard in Kenya, but the women are working harder in the fields," says Esther Waithira Chege, chairlady of a vegetable marketing commission in central Kenya. "We are so happy the government is very much about the woman."

What women need. Many female Kenyan farmers participated in a gender-disaggregated agricultural survey targeting 2,500 households and 5,000 individuals in eight regions of Kenya. The survey was conducted by Egerton University's Tegemeo Institute between April and June 2011, and sponsored by the World Bank and the Kenya Ministry of Agriculture.

The survey found the three areas where women face extreme burden and challenges are: access to water, energy and finance. For example, women are typically responsible for collecting water and fuel. In addition, since few women own property they cannot use it as collateral for loans.


Transportation was targeted as another key challenge for women in agriculture. Even in agriculturally productive regions, farmers have problems getting their produce to relatively nearby markets, let alone to areas of the country with food shortages. Most don't own a truck, car, or even a bicycle. Female farmers, by custom, mainly walk or use public transportation when available. As a result, brokers and hawkers with trucks, motorcycles and bicycles commonly transport produce to market, reaping most of the trading benefits. But the brokers won't travel dirt roads that are washed out by rain, and produce often rots in the fields, farmers say.

One development providing hope for Kenya’s rural women farmers is new technology. New mobile phone applications, for example, allowin farmers to cut out the middleman, leading to an increase in incomes for farmers themselves.

There are signs that the ag sector is waking up to the importance of training more female leaders and pioneers in agricultural science and innovation. The African Women in Agricultural Research and Development Programme (AWARD), for instance, now provides a two-year fellowship for African women that offers training in crucial areas of agriculture and agricultural science, such as water and irrigation, crop science and horticulture.

Dealing with gender imbalances in Kenyan agriculture remains a monumental problem, particularly due to the fact that underlying gender inequalities in Africa is a cultural norm. Empowering women as agriculturalists will take time, but with the challenge ahead of feeding a growing population, there is no other option but to press forward.

 

Read more about  my travels and check out some photos I took.
 


 

Enormous Market Potential for Kenyan Vegetables

Nov 13, 2012

We left Nairobi on Friday morning for Lake Naivasha region and a stop off at the a beautiful viewpoint in the Rift Valley.

Rift Valley

After that, we continue southeast to a vegetable farming project near Naivasha. The project is helping smallholder farmers by strengthening them in training and Extensions, linking them to private sector markets, such as supermarket chains, and offering access to new lending vehicles. The project grows 13 different crops, with the top being potatoes, carrots and cabbage. In Kenya, vegetables can be grown year round.


Smallholders grow 80% of the produce for Kenyan consumers, and with 1 million new mouths to feed each year, vegetable demand is on the uptick. By forming larger groups of small farmers, these farmers can command better prices and negotiate for seed and other inputs. The group brings samples of their vegetables to the supermarket. If there is a contract, the supermarket then works with the group on a planting schedule around demand needs.


The project is also teaching better agronomic skills. For instance, agronomists introduced crop rotation to the farmers, and they increased their potato production from 8 tons per hectare to 35 tons per hectare. The farmers also have problems with potato blight, and are now spraying by hand. Fertilizer is a combination of manure, lime or gypsum and DAP or NPK. Inputs cost about $282 for a quarter of an acre. Vegetable farmers can sell their product for about $585 per quarter acre. Farmers get 65c per pound of potato they sell.

egetable farmer photo


"We used to have problems with marketing, and we would plant our crops not knowing where to sell," says Esther Waithira Chege, Marketing Chairlady of the vegetable group. "By pooling together, we have pushed out the middle man and can talk directly to the supermarkets."


"We are now doing business farming, not farming to plant a crop and feed the waste to animals because we have no market," Waithira Chege says.


Most of the increased profits from the vegetable group will be used for school fees and some for savings.


Learn more about my trip to AFrica. Read my travellogue.>>

Banking in Kenya

Nov 12, 2012

This morning we visited banking and banking cooperatives for farmers in Kenya. The most common money lending group in Kenya is called a Sacco (Savings And Credit Cooperative). In Kenya there are 30,000 Saccos, who work with banks such as the Cooperative Bank to offer lower interest rate loans to farmers. The Sacco movement in Kenya is billed as the largest in Africa and among the top 10 globally.

Saccos can provide farmers with loans for land, inputs and expenses, including school expenses, at a lower interest rate of about 6%. Bankers see farming in agriculture as high risk, and loan at a rate of up to 24% interest (more typical is 19%). Also, to encourage savings for farmers, savings rates through Saccos are often low, even zero percent. Today, Saccos hold 20% of the nation's savings.

We also visited the offices of the Kenyan Federation of Agricultural Producers (KENFAP) and talked to those who represent the smallholders in Kenya. They view the top challenges for Kenyan agriculture as:

  1. Most products sold are in raw form. The country needs more value-added processing.
  2. National ag potential is not realized. There are 540,000 hectares and only using 115,000 hectares of products.
  3. Cost of inputs is too high and quality is low.
  4. Market access. Kenyan farmers need a clear and organized market system.


In the evening we visited the Dutch Embassy to learn more about development in agriculture from other countries. Stay tuned for more about the possibilities in Africa!

women farmers

 

View a photo gallery of my travels.


 

Cash Crops and Cartels

Nov 08, 2012

This morning we visited the Githonga Tea Factory in Githongo, Kenya, and after that one of their tea growers. Kenya's top export crop is tea, and mostly it is known for its fine black tea, which it sells to Egypt, Pakistan and the UK.


The leaf processing facility was fascinating, with quality a major concern and the drying process vary thorough and logical.

tea farm

Tea farmers pick their crops in the morning and deliver them daily to the local factory. Farmers get paid once a month and receive an initial payment of about $15 per kg. After six months they receive and interim paymet and at the end of the year all members of the factory receive a bonus, depending on world price for tea. Right now, world prices are strong and tea is a leading cash crop for Kenyan farmers. Tea contributes about 2.4% to the Kenyan GDP. Pickers are paid about $3.50 for a days work picking.

Next we visited the Mukune Farmers Co-operative Society Limited , which is a factory and drying facility. Coffee prices are surprising low, as the "coffee cartel" controls the market price by monopolizing buying. Farmers in Kenya cannot store their crops, and the need for money is so great they sell to the first, and not always, highest bidders.

A bank will loan a farmer money for inputs at 24%; a farmer co-op will loan a farmer money at around 6%.

in the afternoon, we visited a tobacco farmer and the Leaf Centre of British American Tobacco (BAT) in Mitunguu, Kenya. BAT is the world's second largest tobacco company in market share, and has a strong presence in Kenya. Tobacco has seen a 12% growth in domestic volume so far over 2010, driven largely by distribution, price repositioning and the end of anti-illicit trade initiatives.

Kenya farmers who sell to BAT collectively earn over $700 million in 2011. Tobacco is a productive crop, and works well for small shareholders in a rotation of maize, sorghum and peas. Tobacco farmers can also buy crop insurance through BAT to protect their crop. Farmers are paid $150 per KG produced, and pocket 70% of profit. The remaining goes to BAT to pay for inputs, insurance, etc.

 

Keep reading this blog for more on Kenya. Tomorrow we visit with local banks and then heads of state at the Kenya Embassy.

By the way.....Kenyans are very excited about President Barack Obama's win! They continue to consider him a "hometown boy".


 

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