It’s no secret that the Kenyan coffee industry faces a number of challenges – including a steady decline in annual production volumes. Between 2018 and 2020, information from the International Coffee Organisation shows that the country’s coffee production figures dropped by 8.1% year-on-year, falling from 930,000 to 775,000 60kg bags.
Among other factors, this can be partially attributed to the ever-growing urbanisation and development in Kenya. This has caused the amount of land used for coffee production to fall, as much of it is sold or abandoned.
As a response to this, some Kenyan coffee farmers are choosing to lease land in order to increase the available amount of acreage for coffee cultivation. But how does this process work?
I spoke to three local coffee professionals to find out more. Read on to learn what they had to say about land leasing in the Kenyan coffee industry.
You may also like our article explaining coffee & direct trade in East Africa.
Why are some producers leasing land?
Land abandonment is a serious issue in Kenya’s coffee sector. The reasons behind it are complex, but it’s generally a result of low prices for green coffee and rising costs of production, as well as growing demand for housing near big cities.
This has led some of the country’s coffee producers to lease parcels of land to other farmers.
Land leasing, as a general concept, is where one party pays an agreed amount of money for a parcel of land for a predetermined period of time. However, land leasing in coffee production is somewhat different.
In many cases, coffee plants are already growing on the parcels of land which are to be leased. The owner will either lease out the land after ceasing coffee production for a short period of time, or if they no longer want to continue growing coffee.
In cases where the leased land is growing coffee plants, the lessee is usually required to continue with or revive coffee production.
Unfortunately, however, many of these farms are in bad condition, with abandoned coffee plants growing among other cash crops. Moreover, some of the coffee plants are often inaccessible – and require extensive investment and maintenance.
Paul Mburu has been growing coffee for over ten years and has witnessed firsthand the increasing abandonment of coffee farms in Kenya.
“It’s hard to understand why people leave coffee trees to rot on farms,” he says. “People say growing coffee isn’t easy work – but what type of [farming isn’t labour-intensive]?”
Over the years, Paul has leased three farms that had previously been abandoned. He tells me that he has never owned a coffee farm, but he plans on starting one in the near future.
“I was very lucky to lease a farm next to my home,” he says. “The owners stopped growing coffee, but like many people, they didn’t uproot or cut down the coffee trees.
“This made it easier for me to continue with coffee farming,” he adds.
How do lease agreements work?
Coffee harvest seasons are biannual in Kenya, and run from March to July and September to December. These periods are often used for lease agreements, but some lessors who consider January to December to be the standard duration. Ultimately, the terms largely depend on the agreement in question.
There are various land leasing models for coffee production which are used in Kenya. The most common model is when the farmer leases the entire parcel of land, including the coffee plants. This means that the lessee can use the land with very few restrictions – granting them more control over the farm.
Another model involves leasing only the plants, but not the land itself. Because of this, the lessor is legally allowed to have significant input into how the land is used, but they generally do not interfere with farm management.
Jayne Karani is a coffee farmer in Kenya. She owns one coffee farm as well as leasing another. She says the most important thing when leasing is to establish a clear agreement between both parties.
“The agreement should be based on the number of years you will cultivate coffee for, and it should be signed by a lawyer or a chief,” she says. “It should also be stamped to avoid the nullification of the contract.”
She adds that if the lessor requests to take back ownership of the farm, they should pay the farmers the amount stated in the contract, which is based on a number of conditions.
Jayne also explains that some land owners will impose certain requirements when the lease agreement is signed. For example, they may stipulate that farmers don’t interfere with coffee plants already growing on the land. As well as this, they may also require lessees to graft new trees, plant more seedlings, or carry out pruning.
“Some owners will allow you to plant new coffee seedlings, or even carry out grafting and top-working,” Paul says. “In these instances, the leases are long-term; usually six or more years.”
“But some land owners don’t [want farmers to modify coffee trees already growing],” Jayne says. “This is usually because they want to regain control of the land after the lease period ends.”
This can be advantageous for lessees because the coffee trees are usually kept in good condition – meaning less manual labour is necessary.
Inevitably, when a lease ends, some issues can arise if farmers have replanted coffee trees. This is because the farm still belongs to the owner, but the new seedlings may belong to the lessee. This can naturally cause confusion and disagreements over what is owed to whom.
“Before planting any new coffee trees on leased land, consider how long you want to lease the farm for,” Jayne suggests. “After the lease has ended, no trees will be uprooted, so it is worth taking the time to understand if planting new trees is worthwhile.”
Paul agrees, saying that for leases which are six years or more, planting new coffee trees makes sense.
“[If you plant more trees], you will have harvested coffee at least eight times [over longer time periods],” he explains. “However, for shorter leases, it is better to rehabilitate the trees already growing.
“Top-working is an effective technique in these cases,” he adds. This practice is prominent in Kenya, when coffee farmers use stumps of older trees to establish the production of new varieties.
Costs involved with land leasing
The cost of leasing land to grow coffee varies greatly for a number of reasons. These include the owner’s preferences, the region where the farm is located, the size of the farm, the number of coffee trees on the farm, and the length of the lease agreement.
For the most part, many coffee farmers in Kenya see land leasing as an investment that will replenish overhead costs over longer periods of time. However, this mainly depends on the size of the land and the time in which the land will be leased.
Paul says that in his experience, negotiations with lessors can sometimes be difficult.
“It is important to have good negotiation skills,” he explains. “Some owners can be difficult to negotiate with and will demand more money. Some may ask for this money before you start working on the farm.”
Steve Nganga is a Kenyan coffee producer who owns one farm and leases two others.
He tells me that in areas where coffee production is widespread, the land available for leasing is usually reduced, which increases the prices for a contract.
“In these areas, it is not easy to lease a farm,” he adds. “Even if one is available, it is sometimes leased privately, with no availability to the public.”
However, not all leased farms are established, which reduces contract prices. In some areas in Kenya, owners lease “virgin” land and plant only new coffee trees.
Steve adds that lessees need to also consider additional costs, such as fertilisers, pesticides, manure, and paying labourers.
Looking to the future
According to Steve, land leasing is already helping to bolster coffee production in Kenya.
“The farms that were being revived used to be counted in the national coffee production statistics, which meant that overall production figures were low,” he says. “These farms are now producing almost five times more than what they used to, so production figures are increasing.”
Jayne agrees, but she believes that owners should not be abandoning coffee production in the first place.
“If growing coffee is profitable for lessees, then surely it must be for farmers, too,” she says. “It’s a tricky situation because we need more land, yet we want more farmers to take up coffee farming.”
Steve explains that land leasing is an attractive prospect for many coffee producers in Kenya.
“The farms are there for leasing, while the price of cherry is rising,” he says.
However, he warns that farmers should be “level-headed and be aware of what they are getting into” when leasing land – particularly with abandoned farms.
“A lot of labour is required to revive these farms,” he says. “You should be aware that you are making a long-term investment.
“It helps to have more experience with coffee farming and more awareness of the associated costs,” he adds.
Ultimately, any initiatives that can help Kenyan coffee production to grow will be welcomed by much of the country’s farming population. And while land succession is a key issue in the country’s coffee industry, land leasing is one way that farmers can move forward.
However, while many farmers are reaping the rewards of leasing coffee farms, that doesn’t mean the practice is not without its challenges.
In conclusion, any coffee farmers interested in leasing land should be careful. Although there are benefits, the process can be difficult, the contract terms are not universal, and some owners are expressing interest in taking back their land after successful harvests.
Enjoyed this? Then read our article on the initiative rejuvenating coffee production in Kenya.
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