With an ever-growing demand for the avocado, as well as other fruits, this horticultural firm partners with farmers to meet this demand by providing market guarantee, and comprehensive support throughout the entire value chain, from orchard development to production
By smart farmer writer firstname.lastname@example.org
Early in the morning, at the crack of dawn, large trucks unload freshly harvested avocados at the packhouse’s receiving bay.
These avocados have journeyed overnight in refrigerated trucks from farms scattered across the North and South Rift, the Mt. Kenya region, Meru, Nyeri, and finally to their destination at Biofarms Avocado Complex in Thika.
They hail from farmers under contract with Biofarms Limited, a company that not only supervises the harvesting process to ensure compliance with market standards but also takes the responsibility of transporting them to their final destination.
At the packhouse, these avocados undergo a meticulous and structured transformation process, which includes rigorous sorting, gentle brushing, thorough washing, and precise sizing.
Following these steps, the avocados are categorised based on their sizes and qualities. They are then carefully boxed, packed with precision, and sealed. Shipping information, including the destination address, and processing date, is labelled on the cartons.
They are then stored in temperature-controlled insulated chambers to maintain their freshness before they are finally loaded onto refrigerated containers for shipping to various destinations across the globe.
Welcome to this fresh produce company, a prominent commercial grower, packer, and exporter of premium organic and conventional fresh fruits from Kenya, based in Thika.
At only eight years old, Biofarms has already left a significant impact on the agricultural sector. It collaborates with over 5,000 avocado farmers across the country, along with 300 pineapple growers and others involved in coconut and mango value chains.
The company, which began its journey with only a handful of farmers and limited resources, now exports produce in thousands of metric tonnes.
At the heart of Biofarms are its farmers, who are considered as the key partners rather than mere suppliers. The company provides these farmers with a market guarantee and comprehensive support, from orchard development to production. It stands by the farmer’s side every step of the way.
Avocadoes being processed for export at the Biofarms Limited packhouse and headquarters situated in Avocado Complex, Thika. Photos/Peter Kiptoo.
Often referred to as the “green elixir” of the agricultural sector, the avocado has captured the dreams of countless Kenyan farmers, offering promises of prosperity and financial security. Some farmers have even replaced their traditional coffee crops with avocado orchards, while others have witnessed remarkable increases in their earnings.
However, beneath the surface of this green revolution, persistent challenges threaten to overshadow its potential. Issues like limited market access, the influence of brokers, insufficient financial resources, and premature harvesting practices cast shadows on the avocado industry’s promise.
It is precisely within these challenges that Biofarms Limited stands as an example of a company that not only acknowledges these hurdles but actively strives to overcome them.
“We have more demand for the avocado than we can meet, and do offer market guarantee,” says Mr Daniel Nzyuko, co-founder and managing director of the company, addressing one of the challenges during Smart Farmer Magazine’s visit to the company’s packhouse and headquarters, where we had the privilege of interviewing him, along with his fellow co-founder and Chief Technical officer, Dr Martha Musyoka.
Partnership with farmers
Mr Nzyuko shared insights into the company’s journey, its commitment to avocados, mangoes, and more recently, coconut value chains, all firmly rooted in a farmer-based production model.
“Our business thrives on partnerships with farmers, providing them with comprehensive support throughout the value chain, from orchard development to production. We also extend technical and extension support,” says Mr Nzyuko.
Ensuring quality is paramount to Biofarms, and it takes rigorous measures to ensure farmers comply with market standards. This includes providing protocols on orchard management and overseeing the entire harvesting process.
“Our dedicated team takes a hands-on approach when working with our farmers. We personally oversee harvesting operations, ensuring compliance with our rigorous standards. Whether it’s an established farmer in our network or a newcomer, our technical experts maintain a keen eye on orchard management, including factors like pesticide use.
To further optimise the process, we also provide training to labourers hired for harvesting, compensating them fairly. This helps us uphold our commitment to our obligations, promoting transparency and farmer confidence,” he says.
The firm’s vision is to become the leading provider of organic certified products in both fresh and value-added categories. Currently, about 50 per cent of its exports are organic certified, with the remainder adhering to conventional standards.
“We also provide inputs to ensure that farmers comply with the standards, including seedling and biocontrol products like traps for false codling moths and fruit flies.
We do not spray our avocadoes with chemicals. Farmers pay for the traps but at reduced costs because we negotiate with the suppliers for cheaper rates. In some cases, we have partnerships with development partners to have the prices further subsided up to 50 per cent or as per arrangement. We deduct this money from their supplies. This contributes to sustainable farming practices,” he says.
The company pays based on farmgate prices; a produce collection note bears quantities collected, unit price and amount, ensuring that farmers have certainty about what they will receive.
“Our arrangement is based on contract, which we negotiate and agree with the farmers with competitive farmgate prices, witnessed by the Horticultural Export Authority and in some cases the County government,” he adds.
Besides training and technical assistance, Biofarms also provides financial support, directly or in partnership with financial institutions. Farmers can access loans to meet their needs while waiting for their crops to mature. This ensures that they can cover expenses like school fees and personal expenses without the pressure of immediate repayment.
“Last year, farmers accessed about Ksh2.9 million, borrowing between Ksh10,000 to Ksh40,000 or more depending on their needs. Several farmers have benefitted from this arrangement and the money is paid over a period of six months,” says the entrepreneur.
The company also collaborates with financial institutions, facilitating farmers’ access to loans through tripartite agreements, making it easier for them to secure financing.
Its impact extends widely, offering contracts to both large-scale farmers and smaller groups. The produce aggregator’s network includes 5,000 avocado farmers, 300 pineapple growers, coconut and mango farmers across different regions.
“We have two contracting models that accommodate both large-scale individual farmers, often with holdings exceeding 10 acres, and smaller-scale groups, which can include those with as little as a quarter-acre,” Mr Nzyuko adds.
However, in instances of limited volumes, the company consolidates produce from multiple sources to enhance logistical efficiency. “We acknowledge situations where volume constraints may arise. In such cases, we may engage with aggregators or individual farmers to deliver their produce to our packhouse.
But, before any farmer can be categorised under our farmgate model, an essential farm survey is conducted, which is an absolute prerequisite. Those who bring their harvests to our facility, payments are made post-packing, following a meticulous quality analysis,” he says.
Meeting Market Demands
As for the market, Biofarms assures farmers that they have more demand than they can currently meet. With diversification into Central Europe, Eastern Europe, Russia, the Middle East, and the Far East, they maintain a strong presence in their main market, Europe.
“I can tell you this and it’s something that you can validate. We do have the market. There are seasons where the markets are depressed like in May because of competitors like Peru, when not much is being taken but even then, we do take because we have programmes with customers,” says the farmer-cum-exporter.
This is evident with the increasing export volumes. During the avocado season, the company exports around 110 metric tonnes per week, equivalent to about five 40-feet reefer containers. Last year the company exported 2.3 million kilos of avocadoes, with a target of 8 million by 2025.
Challenges and opportunities in mango and pineapple
While avocados dominate their portfolio, mangoes and pineapples contribute around 10 per cent of their operations. Mangoes find their main market in the Middle East. However, the Middle East market is delicate and needs a lot of precaution and due diligence. Biofarms sees great potential with the ongoing government intervention to open markets for mango in European markets among other regions.
Mango seasonal window
For mangoes, Biofarms recognises the importance of timing and quality. The irrigated mangoes from Makueni hold great appeal in the market, which typically opens from September to December. Varieties like Kent and Keit are highly favoured in Europe, while Kenyan mangoes primarily consist of the apple variety.
- Partnership-Based Model: Biofarms operates on a partnership model with farmers. They provide comprehensive support throughout the entire value chain, from orchard development to production.
- Market Guarantee: The company offers a market guarantee to farmers, ensuring they have a consistent and reliable market for their produce.
- Quality Assurance: It ensures farmers comply with market standards by providing protocols and overseeing the harvesting process. They maintain a hands-on approach, overseeing operations and even providing training to laborers hired for harvesting.
- Financial Support: Farmers can access loans to meet their needs while waiting for their crops to mature. This financial support them cover expenses without immediate repayment pressure.
- Access to Finance: Biofarms facilitates access to finance for farmers through tripartite agreements with financial institutions, making it easier for them to secure loans.
- Diverse Contracting Models: The company offers contracts to both large-scale individual farmers and smaller groups, accommodating those with holdings ranging from large acreages to as little as a quarter-acre.
- Consolidation for Efficiency: In cases of limited volume, Biofarms consolidates produce from multiple sources to enhance logistical efficiency, engaging with aggregators or individual farmers. Quality analysis is conducted post-packing.
- Commitment to Payment: Biofarms pays for everything collected from farmers, ensuring farmers have certainty about what they will receive. Farmgate prices are negotiated and agreed upon with the farmers, often witnessed by relevant authorities.
- Support Beyond Avocado: While avocado is their primary focus, Biofarms also deals with other fruits like mangoes, pineapples, and coconuts. They provide similar support and market access to farmers in these value chains.
- Vision for Organic Certification: The company aspires to become a leading provider of organic certified products, with a significant portion of their exports already organic certified.
- Input Provision: Biofarms provides inputs to help farmers comply with standards, including seedlings and biocontrol products, contributing to sustainable farming practices.
- Global Market Presence: Biofarms exports to various destinations globally, with a strong presence in Europe, Central Europe, Eastern Europe, Russia, the Middle East, and the Far East.