During the last decade, Kenya has turned into a successful cut flower exporter, and has become a strong competitor on the European cut flower market. However, the country seems to be heavily dependent on knowledge and technology from the North.

On the African continent, Kenya is leading in both the production and export of cut flowers, followed by Zimbabwe. In countries such as Tanzania, Uganda, Ethiopia, Malawi, Zambia, and Namibia, existing farms are being expanded and new ones created. Furthermore, established flower producers from African countries are increasingly spreading their risks by creating businesses in more than one African country.
The comparative advantage of many of these countries is mainly based on traditional advantages: cheap labour and a favourable climate. Capital investment in production and handling facilities and technological development, often decisive for the market position in the long run, is generally lacking.

Export orientation 
Kenya produces cut flowers almost exclusively for export, supplying 98 per cent of its 40 types of flowers to European countries. As a result of the Lomé Convention, Kenya does not suffer from import quotas or levies in Europe.
Horticulture products (of which 35 per cent are cut flowers) occupy a third position in Kenya's exports, after coffee and tea. The fact that 1 ha. of flowers can yield as much income as 30 ha. of tea, shows that the flower business can be very profitable. Flowers constitute an industry that earns about US$ 30­40 million a year.
However, a large part of the profit does not stay in the country. The Horticultural Crops Development Authority (HCDA), a Kenyan parastatal established in 1967 to promote and develop the horticultural industry, has been trying to check the leakage of foreign exchange, but this has proven to be very difficult. A reason for this is that many of the banking transactions take place outside Kenya. One branch of the Dutch Rabobank alone has 15 Kenyan flower growers using its payment system. Additionally, it seems that the trade does not make any substantial contribution via taxes. There is only some indirect taxation on inputs brought to the country.

Production
The area under production of cut flowers is around 700 ha.. Carnation, statice, alstromeria and roses are the most important flowers grown. In 1989, the total production was around 13,433 tonnes. The land used for flower cultivation is among the best agricultural areas in Kenya, such as the irrigated land surrounding Lake Naivasha. This has led people to argue that the production of flowers is extracting land that was or should be used for food production.
Production takes place at 22 large and semi­large companies, while an additional 80 small­scale producers are active. The seven largest companies are cultivating above 10 ha. each, of which Sulmac (Unilever, The Netherlands) alone grows 250 ha.. Since only the three largest ones, Sulmac, Oserian and Shalimar, have their own transport and storage facilities, such as cold storage warehouses, the other producers are dependent on them.
Sulmac employs around 4,500 people, of which 1,500 are seasonal labourers. The total number of labourers working in the cut flower business is estimated at around 30,000, partly seasonal workers.
The distribution systems differ from company to company and country to country. Sulmac sends most of its products through the distributor, Kenya Flowers, to Germany, while Oserian makes use of the Dutch auction system. For a part of the flowers the first country of arrival is not its final destination.

Morocco Morocco seems to combine many factors that make the cut flower business interesting. It has, just as the rest of Africa, a good climate and cheap labour, but it is also located near the European market, which makes transportation cheaper (about US$ 1.10 per kilo) compared to the major producers such as Kenya, Colombia and Israel. 80 million stems are produced annually on 427 ha. 90 per cent of its production is for export, of which 90 per cent are roses. However, Morocco is currently confronted with a very stringent quota for Europe. When imports exceed 800 tonnes per season, they are taxed with a duty of 15 per cent. Source: B. Haines (1993), "Morocco Fights for Supply Position". Floraculture International, October 1993, pp.6­8.

International aid
The cut flower sector has also attracted the interest of international development agencies, such as the United States Agency for International Development (USAID). The organization funds the Kenya Export Development Support (KEDS) project. The aim of the project is to increase employment and foreign exchange earnings in Kenya through non­traditional export. In order to achieve this, KEDS offers short­ and long­term technical assistance, commodities, training and analytical research to both the Kenyan public and private sector.

Challenges ahead
Despite the favourable climate and cheap labour, Kenya faces many difficulties:
Just as in many other flower exporting developing countries, Kenya has inadequate air cargo capacity and high airfreight rates. Kenyan producers pay around US$ 2 per kilo from Nairobi to Amsterdam (around 50 per cent of the wholesale price). Kenya's high transportation costs are likely to increase in the long term, since the demand for airfreight capacity out of Kenya exceeds the airfreight capacity into Kenya. Many smaller companies are dependent on the large companies for air transport. They are the first to lose in a situation with a lack of air transport space.

• Prices of inputs such as fertilizer and chemicals, and means of production are often higher than in developed countries.
• The high quality of the fresh flowers can not always be sustained due to transportation problems.
• Kenya is burdened with bad infrastructure, which means that only companies capable of making large private investments are able to transport the flowers the whole year around. Small­scale farmers involved in the flower production are
• often unreachable in the rainy season.
• Many farms lack technical knowledge, since there is no experience with production of flowers. Additionally, small­scale producers may miss the connection with the international market,  and have to trust their middle men to give them the right price information.
• The Kenyan weather forecasting is highly unpredictable, since extreme changes of temperature can take place within an hour. Drought and high winds are reccurring problems.
• The foreign exchange income is limited, since some exporters make earnings that are not brought back to Kenya.

Lack of investments
Flower cultivation in Kenya is highly dependent on the supply of breeding material from foreign sources. For example, in 1989 Dutch breeders exported planting material to Kenya worth about US$ 255,000. It is, however, a risky business to invest in breeding local varieties, since knowledge about consumer preferences is essential and these preferences can change rapidly. Moreover, breeding knowledge is often concentrated in the hands of a few, who are mainly located in Israel or The Netherlands.
Although Kenya has not signed the UPOV yet, most Kenyan large­scale flower farmers buy planting materials in small quantities from breeders abroad and multiply them locally. Small­scale farmers (1/4 to 3 ha.) often use old varieties for which no royalties have to be paid, and which are of lesser value.

In Kenya, tissue culture for flowers has been developed by the public Kenya Agricultural Research Institute (KARI), in collaboration with Oserian. KARI produces the plantlets for Oserian.
For two years, Oserian has been the only Kenyan company with its own tissue culture laboratory. Employing 54 people (including  a former KARI researcher), this lab selects Statice lemonium varieties on the basis of productivity and disease resistance. Although still in its infant stage, the aim is to become a supplier for other farms and to export the plantlets.

Despite some of the mentioned exceptions, African flower production, including Kenya's, is characterized by a low level of investments, which hampers innovation. It has been suggested that the African climate for investment is improving. Increasing investment in cut flowers seems to be crucial for African producers, since many competitors, from both developed and developing countries, have the technological development or the high amount of investments that enables them to improve their production methods and to develop new varieties continuously, and in this way improve the quality of their production.
Gerda van Roozendaal

Sources
Aalsmeer Markt Verkenningen, March 8 1994.

M. Hack and A.M.A. Heybroek (1992), Visie op de Internationale Concurrentiekracht in de Bloemisterij. Eindhoven: Rabobank Nederland.

N. Maharaj and G. Dorren (1994), The Game of the Rose: The Third World in the global flower trade. Forthcoming at International Books [Alexander Numankade 17, 3572 KP Utrecht, The Netherlands] 100 p. ISBN 0­9062­2498­1. Price: US$ 12.00.

P. van Seeters (1994), "Importbloem Krijgt Last van Milieukeur". Volkskrant, July 27 1994.

C. van Vliet (1994), Several articles in Vakblad voor de Bloemisterij.

Personal communication with P. Zwager and F. Zwager (Oserian, Kenya), and C. van Vliet (Vakblad voor de Bloemisterij, The Netherlands).