Diaspora Stories: Why The Beef Industry In Kenya Collapsed

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Diaspora Stories: Why The Beef Industry In Kenya Collapsed

Diaspora Stories: Why The Beef Industry In Kenya CollapsedAfter independence, the Kenya Government established “The Agricultural Finance Corporation” (AFC),  as a statutory body to assist in the development of agriculture by making loans to individual farmers, co-operative societies or agricultural industry companies.  AFC loans were generally secured over land. One of the large-scale lending programs, Group Farms Rehabilitation Project, initiated in 1975, partly financed by the World Bank Group was designed to provide large-scale loans to finance infrastructural development of rangelands to include water supplies, range lands development including fencing and paddocking, purchase of premature stocks for fattening, vehicle and equipment purchases, radio communication systems and ranches’ operational expenses.

On the marketing side was Kenya Meat Commission (KMC) which would absorb all beef cattle production in Kenya. KMC was formed in 1950 (during the colonial days) through an act of parliament with an objective of providing a ready market for livestock farmers and providing high quality meat and meat products to consumers locally and overseas. At one time, KMC exported live cattle to countries like Saudi Arabia. In the 1970s, KMC, as a public institution, was by far the oldest and the most experienced meat processor in Kenya and the larger East African region. Its headquarters was in Athi River, on the outskirts of Nairobi with a branch in Mombasa to provide a market for the coastal livestock.

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In the 1970’s beef production in Coastal Kenya, geared to increase, was concentrated in Taita Ranches. The larger seven ranches were: Taita Ranchers Limited, Rukinga Ranching, Mgeno Ranching, Maungu Ranchers, Kasigau Ranching, Lualenyi Ranching and Sagalla Ranchers Limited. Other private ranches existed but these seven were the largest and were owned by groups of the local Taita community. From an operation view point, these ranches procured immature steers for fattening from some northern ranching areas especially from the Kulalu area. AFC provided loans to these ranches for infrastructure development (including water systems, fencing and paddocking), vehicles and equipment purchase, and the purchase of immature steers for fattening. Included in the loan package were the ranches’ operational expenses. On average these immature steers would be fattened over a period of between 18 and 24 months and be sold to KMC or private butchers. AFC loans on the other side, were badly designed as loan payments were required from the ranchers from the 18th month after the ranchers’ credit drawdown.

Consequently, loan arrears began to build up very fast because of the loan package design and other ranch management problems. Additionally, KMC got into financial problems rendering it incapable of paying the ranchers on time. Private butchers sprang up and started exploiting the ranchers who had no other outlet for their fattened steers. What could be done to save these ranchers? Join the author of “Life Lessons of an Immigrant” as he narrates how the recommendations which he and other experts made to the ranchers,  AFC and Government were thrown out of the window,  precipitating the collapse of the beef industry at the Coast and Kenya as a whole. Buy your copy of “Life Lessons of an Immigrant” by John Makilya from www.Amazon.com. Visit also: https://johnmakilya.com for more information. For those who want an autographed copy of the book please text or phone the author at 6176538386.

 

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