The East African (Nairobi)

24 August 2009

Kenya: Kapchorwa Sprouts as New Barley Growing Field

Nairobi — Kapchorwa, a tiny district on the Kenya-Uganda border is becoming famous -- this time for a good reasons. The once sleepy area, infamous for cattle rustling and female genital mutilation is set to become one of the major producers of barley in the region.

Among the leading investors eyeing the district's high quality barley are companies from Kenya, Tanzania, Denmark and South Africa.

Beer brewers are leading the scramble, especially at a time when erratic rainfalls has affected barley production in other countries.

Currently, Jinja-based Nile Breweries is planning to invest in barley farming in the area. According to corporate affairs director Onapito Ekomoloit, the decision to invest in local sourcing will help boost production, and ultimately make beer cheap in the country.

"We expect a significant reduction in pricing of our products since we will no longer be importing barley from other countries," he said.

For some years now , Nile Breweries has been importing barley for beer production from South Africa and Tanzania where its sister companies, SabMiller and Tanzania Breweries, are based, respectively.

"Our investment in local barley farming by provision of inputs will eventually lead to low expenditure in the long run," Mr Ekomoloit said. So far the company has distributed free seeds and farm maintenance capital to farmers.

The move by leading brewers to invest in barley farming follows the government of Uganda's decision to lower excise duties on locally produced goods.

Also in the scramble for Kapchorwa's barley is Uganda Breweries, whose sister company, East African Maltings Ltd, invested more than Ksh1.2 billion ($15.3 million) in 2006 in promoting the growing of barley by farmers.

"With the support of the East African Breweries Ltd Foundation, Uganda Breweries has provided interest-free loans, fertiliser, barley seeds and pesticides to the Kapchorwa commercial farmers' association to enable them to plant equatorial barley. This barley is used to brew Senator Lager, a very affordable and popular brand in Uganda," says an investor report by Diageo Africa.

It is estimated that EABL spends more than Ksh10 million ($128, 000) a year on research and equipping barley farmers with agricultural skills to enhance the quality of production.

Indeed, EABL is already reaping the fruits of the barley farming project. Today, the brewer uses local barley to produce its new beer, Senator Lager, whose market reception in the region has grown significantly.

According to statistics, Kapchorwa district currently produces yields twice as those produced by Denmark. It is projected that the country could soon join the world's chief exporters of the product -- the European Union, Australia and Canada.

In what seems to be a move to dominate barley farming in East Africa, Uganda Breweries Ltd recently began an ambitious plan with maize-growing farmers around Mt Elgon area to help them cultivate barley. The agriculturally rich strip of Mt Elgon is projected to double the country's crop production.

According to a barley farmer in Cheminy, Musa Kasis, production of barley in the region has been on the rise even as neighbouring countries record a drop in production due to erratic rains.

Uganda now stands to be the biggest beneficiary of the second scramble for East Africa's "tropical barley," with demand projected to appreciate as beer consumption increases.

Statistics show that world beer and barley industry is growing rapidly especially in the developed countries. Analysts say the growth has been driven by technology advancement, improved quality and globalisation of markets.

The growth, however, has been hit by economic recession and health concerns. High taxes and competition from alternative beverages are also said to be key in determining the rate of growth of the sector.

Sources familiar with the sector told The EastAfrican that the growth in population, improved and efficient distribution beer systems and the rising popularity of beer especially among more affluent consumers still propel beer consumption.

Analysts say the creation of a Common Market for the East African Community before the end of the year will improve the business climate in the region. This, they say, will attract other beer players.

"Investor friendly policies in East Africa and the liberalisation of marketing and processing of cereals, removal of duties on importation of farm inputs and free repatriation of capital and profits will impact positively on barley farming," said Moses Masaba, a member of Kapchorwa commercial farmers' association.

But Kenya has not been left behind in the race. Some two years ago, Kenya Maltings Ltd, a subsidiary of East African Breweries Ltd, launched a new barley variety.

This new variety, Nguzo, is touted as a high-yielding variety compared with the traditional Sabini and Karen varieties.

Analysts say the new breed has a 27 per cent higher yield than Sabini and 17 per cent higher than Karen at high barley growing altitudes. Researchers say the new variety yields over 6 tonnes per hectare.

"Results from micro-malting tests and large scale brewing tests of variety Nguzo showed that it has superior malting and brewing qualities," says Dominic Chebet, a barley researcher in Mbale.

Kenya's barley growing area is estimated to be 85,000 hectares. However only 20,000 hectares is under barley production, leaving 65,000 hectares untilised.

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