E-Malt.com News article: Kenya: East African Breweries Limited reduces barley and sorghum orders due to Covid-19 pandemic

The Covid-19 pandemic economic shocks is the reason East African Breweries Limited (EABL) has reduced orders for barley and sorghum from contracted farmers, The Standard reported on August 21.

In a statement to media houses on August 20, the brewer said the closure of on-trade outlets like bars, night clubs and restaurants, where beer made from barley and sorghum are consumed, has forced them to reduce the supplies they take from farmers this season.

"Our field extension officers contacted our registered farmers to notify them of this development," read the statement.

The company was quick to point out that though the coronavirus pandemic has affected business, it has taken measures to mitigate its impact on the contracted farmers.

"We have honoured all the contracts with the farmers in the financial year 2019-20, purchasing approximately 45,000 tonnes of barley and 32,000 tonnes of sorghum. We paid all farmers. In addition we will honour all barley and sorghum contracts issued in the current financial year (2020/2021) and pay all farmers once they harvest."

A section of farmers in Nakuru and Narok counties had expressed concerns that the company had declined to receive their harvest.

The company has, however, pledged to review its grain demand upwards once the economy picks up and demand for the produce rises.

A text message from the company sent to contracted farmers stated that they will not be receiving the produce this time around because of the huge stocks in their stores.

Daniel Kariuki, who signed a one-year contract with the company in April this year to produce 360 bags of barley is at a loss.

"In mid-April, I received a phone call from the contractor directing me not to grow the crop. The caller said they had enough stock and that alcohol was losing market due to the Covid-19 pandemic," he recalled.

Barley growing had taken root in Narok and Nakuru counties due to the ready market offered by the alcohol brewing company.

Last year, farmers in Mau Narok alone supplied the company with more than 40,000 tonnes of barley, which earned over Sh1 billion. They sold the produce at Sh37 per kilo.

Production of the crop, that is a key ingredient in the making of beer, was boosted a few years ago with the introduction of new grain varieties namely Grace and Aliciana, with the latter offering up to 2,200kg per acre.

Annually, EABL sources 50,000 metric tonnes of barley from close to 1,000 farmers in Narok, Nakuru, Usain Gishu and Meru counties. Narok County, however, produces the highest percentage of barley accounting for more than 60 per cent of total barley.

Yesterday, farmers drawn mainly from the highland parts of Kisiriri, Tipis, Olokurto and Eneng’etia in Narok County told The Standard that they started receiving text messages from the company regretting that it would not be buying the produce.

Due to the adequate rainfall the farmers were expecting a bumper harvest and tidy income, but the pandemic has now thrown them into massive losses.

“We had only a few weeks to harvest and as compared to last year, this year the crop did amazingly well. A few days ago we received the bad news that EABL was not going to buy our produce,” said David Kilesi, chairman Barley Growers Association of Kenya (BAGAK).

Kilesi said majority of the farmers in Mau region depend on barley for their livelihoods, hence the ban by EABL was a big blow.

Barley alongside sorghum are processed and brewed to produce the Senator Keg for local and international markets.

David Koina, a farmer contracted to grow barley, said he was expecting to fetch at least Sh2 million from the sale of barley harvested from his 200-acre farm.

“Barley unlike wheat cannot be sold in the free market since we were contracted by EABL, which had guaranteed us the market. We are now at a loss,” said Koina.

The farmers are now appealing to the Agriculture ministry through the National Cereals and Produce Board (NCPB) to intervene and save the situation.

“Most of the barley crop is ready. We cannot harvest it since we do not have storage facilities. We also do not have money to harvest and to transport to NCPB. Agriculture CS Peter Munya should come to our rescue,” said James Karino, another farmer.


22 August, 2020