David Maina — transcript

Kenya Is About to Run Out of Milk. He Is Building the System to Stop It. David Maina, Performeter

This transcript is generated automatically by YouTube and has not been checked by a person. It misspells names and mishears words, particularly around Kenyan English and company names, so read it as a guide to the conversation rather than a quotable record. Each timestamp opens the video at that moment.

0:01 [Music] Greetings ladies and gentlemen and welcome to episode 25 of the African do podcast. Uh we've had quite um good feedback from you on u the two podcasts we have had on an agric with an agricultural bias. And today I'd like to introduce you to my good friend David Miner MD of MD and founder of uh performometer and perform is um a one-stop shop for everything dairy and uh David welcome to the African do podcast. Thank you. Yeah, as you said, my name is David Miner and uh I make a living through advisory and consultancy in livestock and um Leonard, you mentioned dairy, but we are also doing uh beef. So basically focusing on um large ruminants, livestock and um also putting a lot of effort on the what they feed on. Uh so basically livestock, feed and foder. So people who interact with perform a lot will be mentioning words like uh dairy, beef, feed and foder. That basically

1:12 what we're doing. Excellent. Yeah. Excellent. David, once again, welcome to the African Do podcast. Thank you. Thank you very much. So David, I I met you a couple of years ago, but when I was reading up on Performer, I see you have been around as an entity for 13 years. Yes. Yeah. Yes. Since 2013. So maybe you can just walk us through the early days of Perform to open us out. Yes. um what is your background and what brings you into dairy beef and fer advisory where we've ended up today? Yeah, before we met Leonard and before I founded perform I worked for the for international development agency uh for the Dutch. Yes, you probably know SNV Netherlands. Yes, we do. in Kenya and um that's when really I began my work in livestock. Previously general agriculture my training is largely in economics at undergraduate then um international business development at mast's level and

2:10 later on master of agri business um at Strathmore where I also uh where I'm also adjunct faculty. Yes. So they call me to teach certain areas when they are doing agricultural programs. Yes. So really you can see that my life after school has been agriculture but coming from a business um background. So I do not approach agriculture initially as a technical person like a vet or an aronomist. Yes. But we looking at the economic angle of agriculture how to make the money. So if you see me walking on a fer field, I may not be focusing on that worm that is eating the maze but asking myself is this farmer going to make money based on the yield I project for this harvest. Yes. And will it transform his um will it return to his investment? Exactly. So I approach agri business from a investment angle and that's really what we have been doing. And u how we got

3:09 here is that um I sat on a desk when I was uh employed. Yes. In my what I can say the last structured employment and I could see that um the Dutch embassy was very instrumental in um collaborating Africa or generally every country where SNV was to to be able to borrow a lot from what the Dutch were doing in Dair. And you could see especially people who are able to travel yes would visit uh the Netherlands and come back and write an email to the embassy and saying I have just come from your country and I'd like to see what can you how can you support me stock 100 cows yes or to develop a structure for this number of animals but government had only established knowledge around small holding okay so it was very difficult to go to your local uh you agricultural office and ask help me with a structure for 100 animals. The agriculture officer will tell you I know for two and three

4:11 animals because basically the design was for small holder. So I saw a lot of emails dying on my desk of people who would potentially do big business. Yes. not getting help and I had a very understanding uh team of my supervisors and I said look I think these people out there are not having someone supporting them on how they can begin large scale investments in livestock business and that was the thought of how about leaving the job and starting an outfit where these people can come and be supported and they can pay a fee for it so that's how we have been um you know David what you say is Very interesting because episode 23 we had um Bernard Wagu and Bernard Wagu runs Amagod. Yes. And he is uh in the small ruminant side focused on the duper but what you're saying mirrors almost like for like exactly what he said cuz he says that our policy is designed for the

5:15 small holder. Yes. And what he has learned on his duper journey is that scale is what will make the transformation. Scale is the difference. So where is the disconnect? Why do we find our find ourselves at a national level dealing with small holder without I would understand if you're saying we're dealing with small holder and there's another office you could go to to talk about scale. Yes. But what you're saying is you saw a gap. It was small holder only and there's nothing here to talk about today. Exactly. And and this what's the disconnect? This is a guy we can call the the offund um level of investor of fund in the sense that the small holder is focused on by government right from their designs right from their plans their budgets 75% of government support Yes. 75% of NGO focus in agriculture goes to small holders. Mhm. because the they are perceived to be the farmer who is in

6:16 need. So you don't hear somebody designing a project to support somebody who is currently a CEO and wanting to do an investment on the side to have 100 animals in their village and processing a bit of yogurt and doing some good business in their area employing 100 people. So that person is perceived to be able to support themselves. Yes. And therefore the focus of government was designed around the small holder. If you remember that um the understanding of government right from the days of the 80s '90s when we were being born some of us and growing up is that they wanted everybody every family to be farming. Yes. And feeding themselves. Yes. Which was good that time because really people are just getting land learning about good practices soil erosion control you know all those nice things that a family can do for themselves so that they can

7:06 feed themselves. M but I think that we didn't realize when that shift came. Yes. Because now coming to the early 2000 when we have all these young children who who grew up in that context now coming to the cities and beginning to work we have huge swelling populations in the city and those are the people you need to feed. Yes. So it is no longer about that small family in Kal or in feeding themselves. It is now feeding the cities. Yes. where people are going and now um if even if we have not achieved the objective of a family feeding themselves how do we now feed the people who are in the cities look at the peraban part of Nairobi you can't believe go to the evening and find how many young people are walking around there they are attending a college around there they live in that small town those people must be fed and every evening they are coming with a few shillings but they are looking for eggs

7:58 they are queuing on the milk bus to buy milk some of them who can afford are buying some small pieces of meat I call them that because it could be less than a than a quarter. But they are buying animal products. So that person that meat was not brought there by a small holder family somewhere in a ruler village who produced meat, milk and eggs for themselves. Yes. It is it is brought there by somebody who produced excess. Somebody who produced 100 units of milk, consumed one and took to the city 99 99. Those are the guys now who really we should be focusing on. And I'm not saying that we forget small holder. It is still important because our economy is still at take off. Yes, that we ensure that every family can feed themselves. But we have to have a strategy around aggregation to ensure that all these produce brought together. Farmer A has about five liters left

8:48 after their children took their milk. Farmer B has a few eggs left after they took the family. The farmer C has a few goats that they can sell after they have eaten one at home somewhere in Northeastern. So all these can be aggregated to be brought to the market. But that's a more expensive process. Yes. But if a commercial farmer who has 200 animals and whose idea is not to consume any of this milk is to bring it to the city, that is a farmer who we should focus on because that is a farmer who can feed the city. But the design of agricultural support. Yes. And the planning at government level, the training of graduates. Yes. And how they supposed to go to the world of work and support agriculture. They were trained for the small holder farmer. Really? So this guy is actually orphaned and that is a guy who keeps us going because he knocks at performer and says, "Hi guys,

9:37 I want to start a dairy farm of 100 animals." Yeah, this is the support I want. I want you to train for me a manager. I want you to construct a structure for me. Metallic, good design, high cow comfort. I want you to tell me where I can buy a muking machine or a mingling pala. I also want you to give me a data system, how I can be able to see my data when I'm in my office because I'm spending my time in an office, but I want to see how my farm is running on a digital interaction. I also want you to to show me how to grow foder so I can be able to do a good job. So you can see this guy is about to put a lot of money. Yes. In this firm he's supposed he's about to employ a graduate. He can afford a graduate because he wants a good job. He want a CEO look alike who can be his eyes when he's absent. Yes. So this person puts a lot of money but can I surprise you?

10:29 There's hardly any um not just government sometimes you put our hands on government a lot there's hardly any systems that have singled out this investor as a person who needs support and those are the guys who are dropping off very quickly. They shut their farms quickly because they can see it either shuts on them Yes. or um they they they just shut it because some of them are able to see this thing is not going anywhere. But while he's shutting nobody is noticing first of all because there are not many yes they are few and there's no deliberate effort to make them more. So what do we begin to see? We begin to see external investors. Mhm. A guy comes from UAE and sets up a serious enterprise in Kenya because he's coming from a country where he can be supported if he can be able to give a pitch about what he's doing in Kenya. A country with a growing market for meat,

11:26 for eggs, for milk. Yeah. And for poultry meat. So it's basically just the best place that a financing institution would be able to support you. But here the we we haven't seen that opportunity to support this guy because we think he has a salary and he can run his enterprise on his good uh pay slip. But by the time these guys are retiring um I can tell you which is really shocking by the time they're retiring maybe they started having this interest at 50 they have 10 years to go they are still struggling with that business and most likely after retiring because the money they used to do to use for the banking support is over that enterprise goes down and we don't realize that that has gone and we have lost a big opportunity to employ graduates and we have a huge unemployment problem you know that yes those are the guys we can employ the

12:17 issue of quality mm M you have heard about quality issues on meat, quality issues on milk. Very sensitive discussions going on in mainstream media but you know it is much easier to work on quality if you're dealing with large scale investment in milk than than small holders. True. Small holders don't spoil milk. But the the the aggregation and the amount of logistic very sophisticated routes to get to the market things can get wrong. Yeah. And we end up saying hey milk do we are we matching our quality with Zimbabwe? But who dominates the production in Zimbabwe? It is big farmers and therefore working on quality reducing those bacteria levels in their milk is very easy because you're dealing with farms that are doing large scale. The Dutch one farmer delivering uh 1,500 lit every day compared to a farmer somewhere in Neri who is delivering 10 lit. How many farmers do you need to get to the

13:10 one Dutch farmer? So when they working on quality we can't compare their cheese and our cheese because it had to go a lot of roots a lot of issues there before it get so in as much as we try our best to ensure that we get the best quality to the market and I think uh Dboard and other people are working hard to ensure we get good quality but our systems already we start at a negative okay because we have to aggregate hundreds and thousands of farmers so this big farmer is the future yes but I think in the next um we could also look at then where are the struggles for this farmer And how are they getting into business without support? Yeah. So let's talk about your 13 year 13 year journey because you you clearly have had some experiences with this farmer that we have now defined. Yeah. Uh let's for just purpose of this uh podcast call him the telephone farmer. You know he has

14:00 capital you know he has the resources he has the land he's bankable and he can understand an investment in intellect. Yes. you know, so the service of what he doesn't know he's willing to buy. So these have been your bread and butter, you know, because when you look at the when I look at the performer website, I see you have an architect. Yes. There are not many people who would expect to find an architect in a dairy or dairy beef and fer you know advisory farm. Yes. A website but you have an architect because you assist your clients with design of their bands. You're a 360 organization all in one room. So what have you learned and what have you seen? You clearly have seen and and um where are the opportunities and maybe a bit of the success stories so that we can contextualize because you like you rightly say this is the future. We have two kinds of uh walk-ins. Um of course

14:57 we are we are putting our name out out there in the market. So right now I could see we also getting some good footprint outside of Kenya because of the videos and so on and I'm happy about that. But Kenya is remarkably growing on commercial farming interest. Yes. And we have two kinds of uh farmers. But very interestingly, we also have an age um trend. Mhm. We have very few cases of commercial farmers coming to us in their 30s. Mhm. They may come and pay something we call a master plan or pre premaster plan like testing the waters. They pay fully and then they disappear. Others will go up to a level of master plan. They see the cost of the works and then they say hey this cost like more like the cost of building my own house so let me wait. But the people who come to us at late 40s to about mid60s m those are the guys that um are driving

15:52 our business they are paying our bills because they come there knowing I want to do this investment probably they have also achieved a few other uh they have also made other investments so they're ready for this one because it's not working. You don't do I mean it's not easy for a guy who is in their 30s to decide to do a 10 million investment. Most likely the young family is still looking for when shall we build a house? Are we comfortable with our school fees? So these other guys in that age are the ones who really come and give us business. But when they come we have two we have two types. One person will come when they have done nothing. They they want you to tell them from the start is it right for me to do this from day one. By then those are the best clients because we have a blank check. Mhm. We have a we can tell them this is a no-go

16:39 or this is a go business. And uh out of about 10 uh on the side of daily because you're just coming up out of about 10 we have uh we we probably shoot down about six. Mhm. If you want to know that our terrain for commercial farming is not easy. Yes. We shoot down about six. Tell this by shoot down you mean that you tell this guy don't go this way don't put your money here don't put your money here you lose everything don't put your money and those people will get discouraged yeah actually some insist I have a few who just say okay I have they have told me that but I'm going for it they'll come later say I'm struggling can you help me here and there and uh you know it's difficult because if someone set a farm in a place where the the market is a bit far and they're on what we call high input high output model. You are milking your cows in the machine, so there's power usage. You

17:34 have a few vehicles to transport your milk to the to the points where you want it sold. You have a graduate manager who is earning more than 60,000 shillings per month. You are giving, you're feeding cows properly and you have pedigrees on the farm. That is high input. The small holder farmer, the typical case of my mother is not buying a pedigree. They have a fian in the looks but not in the live weight. Mhm. This fian is about 350 kgs. When the real fian out here with a commercial farmer are past 600 kgs adult weight they don't feed this animal properly. The small holder they feed what they can get. Right now it's raining. Nobody can pick your business card if you're selling foder. Nobody remembers that there was a drought in 2021 2022. They will feed weeds that are growing on the farms naturally. They give some gapia and they tell the cow by I'm going today

18:24 for a wedding. Let's meet in the evening. And if you feel like uh you're hungry, be sure I'll be back. That's how they feed the animal more like pets. Meal comes out because maybe you can get some 10 liters or so. But this is a cow that genetically can be able to give three times that. But the commercial farmer because they they have got a loan which is being serviced by their pace or it was appraised based on their earning mechanisms. They cannot play those games of giving the cows some green material with low dry matter. Yes. They go for a food ration. So they come to the office and say you have a nutritionist in the house. You have an architect come and make my cow comfortable. Tell me how it should look like. I want a high roof. I want a steel band. I want mat for comfort. Also bring a ration person who can make a ration. Balanced it for me.

19:05 Are they eating the right thing? Measure the live weight. You can see us in a farm there with apperons. We are measuring cow's life weight so that we know how much is the dry matter intake for this animal and what is balanced feed for this farm. What can they afford? Can they be able to grow? What do they need to buy? We do the math and say this farm can work. You buy component A. You plant component B and C then you have a food ration and you sell your milk at this price you're good and if you're not good then you say hey this may not work because the car must feed right these guys don't play games so eventually they discover yes I'm doing the cows are looking good but I'm not in the money so those are the people two people who we receive the person who is already started and they're coming to get their problem sorted they think is going down and they think an advisory

19:46 intervention could help or somebody who is now starting Mhm. where we have a chance to say go or don't go. But then we have a in terms of the typology of the walkin. There is this guy who we like uh it's good to say that the professionals are very good professionals. Uh even if they are politicians but they professionals you know we also have politicians who began their life as professionals. Yes. Then they went into politics because we are also supporting quite a bit of people in government. Those people they wait for your word and if you say it is not working they pay you money and they tell you get someone who can ad get someone else who can tell me about hotic culture or small ruminance like the amagodopas then I see whether I can go for it but we have to them for this particular one that you came for it's not going to work and we can't give tell you to do so that

20:35 we have work to do a a cow band design or to buy for you hers we are also here we are doing ethical business I always want people Don't ask a vet when you're starting a farm because vets are trained to keep animals healthy. Yes. And to keep them reproducing. They don't have a very strong angle of economics. Mhm. So if you used a vet to start a farm, that farm will have to start as per your request. There's a very low likelihood that he will tell you not to do it. Yes. Because you're not doing an economic analysis. They are checking whether the ecological zone is suitable for your animals. They give you very good advice on which animal can survive here. you give you a good indication of what you need to be care but I'm not making money for a vet you need to get somebody who has a business angle to your business and check whether it works so I see a number of people may

21:28 have started with a vet because as a person they know and vets have very many around us then they start the palm then later on it gets into problems I was about the professions the guys who are in professions are very good because they obey our word mh but there's also another crop that we struggle with yes the guys who have been doing very successful business on their own, self-made wealthy people, they find it very difficult to take advice. Okay. And that's one of the people who I see closing business um of course they have lost money but you may understand that they have come from a background where they have on their own um they have grown by their own without consultants. Yeah. When they now decide to come to agriculture they employ the same method. Yes. So they may not really be very smooth to adise like whatever you tell me I will do. I mean I have been doing

22:17 business for the last 40 years. Why why is someone telling me to not to do it? But those guys then they will come back when uh things are tough and they are shy to close down because they feel a bit you know men you know something the ego kicks in that you're closing it down you know feels very bad. So then we and we are very gracious. We also go there to check is there any chance for survival and we can say why don't you do this start a shop in Kyola or somewhere take your milk there if it makes economic sense this business will survive or just shift to beef dair is complicated for you so those are the kind of people that we we deal but somehow they keeping us they keeping us going and we also get a lot of knowledge by serving them. It's it's very interesting the analogy used of the vet you know because in my in my day job so to speak I'm a hospitality person and we

23:11 give the same advice where we say listen don't go to an architect to ask him whether you should build a hotel perfect because the architect will build the hotel if you want it his job his job is to build but if the hotel will be commercially viable that's another conversation question and that conversion a conversation is not so I meet a lot of investors in hotels who they they come to have a chat when the hotel is built and you're like ah maybe we should have talked after the fact before you know but interesting so maybe without mentioning any specific names maybe to contextualize for the viewer maybe walk us through in your 13 years a a journey of one success story you know someone who these people that you have described you know someone who came to you and is now running a thriving and and and high performing dairy outlet. We have yes we have actually many examples of uh

24:11 of that um we have many examples of such farmers and some of them not necessarily because we we give advice some of them just place at the right time. Yes. For example, any commercial farmers in the per urban areas, FAO has predicted that the enterprises that are going to grow in agriculture are the enterprises that are not too far from the urban populations. So what does not too far mean? Just to contextualize from a distance, what you typically call peran would be about 50 to 60 km from a big city. Yes. Okay. Because then um you can be able to get your products consumed at a high price. Mhm. When you when I say high price in daily, forget about the prices paid in Mandera in those milk deficient areas or or Dubai. Yes. In Kenya, if someone pays you at farmgate 60 shillings a liter or 70 shillings a liter what they are selling now in the

25:07 parts of Roy Kangura road. Yes. You can be able to treat your car right and be in business. If someone pays you 40 shillings for a long time, they are driving you out of business. Okay. So some of those farmers who are not too far from the city and they are doing the right things. We have seen farmers growing and dairy is viable. Actually the farmers we prevent from starting business is a farmer who is lucky to get that 40 ball of you know like now there's a glut you may not have noticed but we have had five successful rainfall seasons. Mhm. And now we are moving from a rainy season. If you looked at today morning we are getting to the July weather. Yes. Still wet. Yes. People have forgotten about problems of fodder. So now milk has been cows are producing milk. Even a cow that does is not fed well. They are healthy. They got something something to

25:58 eat and they not facing a lot of starvation. Yes. So there's a lot of milk. There's a glut. So there's a farmer right now who is being paid 40 40 shillings and they can get an SMS at midnight to say tomorrow from tomorrow morning we are paying 37 and there's nothing you can do about it because the car will have to produce milk and you have to take it somewhere. You can't pour it. Yes. So we have farmers who have succeeded and there are many cases of such farmers and those farmers it is because first of all they have the right cow. Mhm. They have the right comfort level. They have the right management and most importantly because this is where the economic rubber meets the road point. They also have a good market. Mhm. We have a case of a farmer who mirrors exactly that kind of a best practice culture but who is in a place where the market is paying them 40 bob

26:43 and if they make an effort to bring the milk to the city it will cost them another 40 shillings for that milk to get to the city. So whatever they do it don't make sense. They're in trouble. So you don't fault this farmer on account of best practice that they're not doing the right thing. Yes. When you go to do something we call the data farmer benchmark there something we call a DFB is the most popular product in perform. M it's called a DFB daily farm benchmark where we go and spend a whole day in fact this afternoon I'm going to present one yes in in an institutional farm on how they basically it's a turnar around it's a diagnosis of a daily farm what you should do and how we get this to to viable sometimes you also say this is not going anywhere through a that diagnostic more like a lab thing for for in health yes and um we when we go there

27:27 you find that the guy has done all the chapters are green but then the economics is not good because the price. So the farmers who are doing fine are there and I'm really looking forward that we could actually have such conversations with such farmers to see how they got to do it. But there's a huge factor of their market context which is really an economic issue as opposed to what they do on a day-to-day in their farms. There are also farmers who are still in that advantageous uh economic context. Yes. but they're not doing well because we are not farming optimally or there's a much less support at the sector in terms of uh I don't know whether you're aware that Kenya is essentially a feed deficient country when we now come to foder when you come now to even feed we we import feed is feed basically encompasses all of them but we like to single out foder yes so

28:17 that we don't we don't we don't subsume the entire issue of the forages so when you say is feed so we suffer both Okay. The feeds that you see the maze jams the grain itself the cotton seed cakes the the soya they imported from other countries from Uganda from Uganda from Tanzania from Zambia we don't produce them here so we are on borrowed time when it comes to that we are trying to do local production but it's still very small then also on foder all these fod you see around if we suffer a drought if we we suffer one failed rain season like for example if the shorting in September does not happen. Anybody who sells foder and right now we have a subsidiary called cowish which which basically distributing foder to the peraban farmers. We finished our our all our stocks in three feed centers is wiped out in four months and in the fifth month you're saying hakuna don't call us

29:14 but nobody was talking to you when there was foder. So you can see that the deficiency is not because we didn't grow it is that we don't have the resources to pile or to stack enough amounts to cover us for about 2 years. So that's the basically the situation for the country as well. M there's too much green everything is greenish but the moment we suffer 3 4 months of drought everything goes dry and a farmer in Mandera is coming to look a commercial farmer in Moal is calling Nakuru to check whe there is hay and that's how our entire system of livestock farming goes down because then we have animals dying we have body condition laws we have no milk in the market even Kenya has to go to the cabinet and seek an approval for importation within a We just two failed rainfall seasons. We are done because we don't have enduring systems of feed and fer and we don't have a sub a way of having substituting

30:10 our import culture to have local production instead. So we are too exposed but we are we are a bit um blinded by the good weather that we see. I have started with a with a with a joke that if today you say I sell order Yeah. nobody picks your business card. Yes. So some of those farmers they are not going down because they didn't do the right thing is because they they are in per urban they have no farm to produce foder they rely on some on foder they can buy but then the sector has run out of foder and therefore either they have to sell their animals or they just have to stop that business. So who failed them? It is not a mistake to start a farm in in Camulu or in or in Ray. That farm can feed the city. Yes. But they needed a backs stop a back stopping of foder availability all year round by somebody who produces foder. That person

31:02 who produces needed uh funding to be able to produce a lot or long enough to ensure that these paraban farmers which are growing in numbers can be supported through the time when there's no rain. So now imagine a situation whereby these farmers are becoming more and more they are more viable because of the market advantage. But on the on the back side, there is no foder reserves in the country. And by the way, there's no county that has done a foder storage. If today there's some farmer who has a grown hair and this is the weather we see this morning, that hair is not going to be cut. The grass will have to grow again another season to hope there will be a sunshine to have it cut. We call that posth harvest loss. You can't believe how much hair is going to be lost because the rain didn't allow us to harvest. We've come from Meni to a wet

31:53 season. Narok Nakuru is full of grass on the farm waiting to be cut. It won't be cut. Nobody talks about it that we probably needed an intervention to ensure that this grass is not lost. But 2 years down the line here, we might have a whole two loss of two seasons of rain and all these grass that we lost would now be needed but we won't be having it. So what's the fix? You have clearly defined the problem very clearly. So in that case like using that example of the grass. Yes. Yeah. The rains are still here with us. Yeah. So there's grass in the field. Yes. So to avoid that posth harvest loss what would we need to do both at a national level and at a farming level at a farmer level. I like the fact that you begin also at a country level. Yes. Um let me give you this analogy and you might understand very well because you drive. Yes. Before 1960s, cars were very difficult to drive. Yes. If someone

32:51 someone was driving a truck, they probably developed muscles just because of just turning the steering. Yes. It used energy, time, and a lot of muscle work. Yes. To get it to turn from, you know, from a straight road to a turn. Over time, they began to introduce hydraulic where now you have it easier. But it was also sophisticated. M now late in the '90s 98 thereabout we had the power steering. Mhm. Today you can turn your car leisurely with a with a finger. Yes. On a ton. I'm not saying you do that. It's not safe. But basically so light you can't even imagine that you're living a truck and it feels very light. M so our our agriculture support especially in terms of feed the issue of feed is that we have and we have we are more between the mechanical driving that was there before the the 50s where there's no there's completely no intervention to make the steering lighter or smoother we are now

33:45 around the hydraulic where we begin to talk about subsidies but they all directed to the small holder farmers not the commercial farmer. Yes. The guy who goes for fertilizer is not the big farmer. the guy who goes to there's a lot of support really that is because of the numbers because it's a political decision and therefore numbers matter. So it's a it's a it's a bit of a difficult steering but some countries have moved to the power steering. Uh for us we probably are in the early stages of hydraulic where there's a bit of intervention but still feels mechanical. Yes. So this issue of FOD is that nobody really has invested in in um in in the in the R&D around FOD and there has not been any investment around risk of losses. There's no fund right now that you can talk about that is moving around looking at which grasses are we about to lose. Let us let us just cut and dried.

34:41 The Dutch would have that. If you had your grass that you're making silage and it is raining, there's a place you can go which is government subsidized and you make it all into pellets. They dry it for you at a cost. Then you go and keep it. They don't let it to be lost because this is really the lifeline of the country. Here, a farmer is on their own. They planted 1,000 acres of hay and now a season has passed. They were waiting that between the time the rain stopped and before July checks in, there'll be sunshine. Unfortunately, it doesn't look like that. So, they can't cut. And if they cut it or rot, but that county does not realize that if we lose this 1,000 acres 2 years down the line, the county will be looking for money from the treasury to buy grass for farmers because their cows are dying and it'll be like an offic or begin the

35:27 government will be buying animals that are almost dead to come and trying to to miss their meat for relief. Some some very difficult interventions that are going to cost billions. But you can actually spend that billion by ensuring that for is not lost. The issue of storage, yeah, grass that you mentioned, can you imagine how much storage will be required for 100 acres of hay? It would be the size of the primary school in your village. Yes. The storage. Yes. So a producer should not store. If they attempt to store, they can only store maybe a tenth of their harvest. So if they can't store, they just forget about it because they can't sell now. Nobody's buying. So that logistics of getting it to the from the production zone to where it is consumed and building the stores around the cooperatives should be an intervention that is national level

36:16 strategy. A cooperative may not be able to build a store that can host 1 million bills of but they may consume that during a drought season. No bank will fund you to build a store because for them it's not a business. A store will not it's not a a profit center. A store the banks are very clever. They you you are taking money to build a store to put unless you're putting you're storing for people to pay you per bail for the period you store for them now that's already a profit center but just to keep there until you need it a bank will struggle with that idea and then fund you something else so most of these cooperatives don't have a store next week I'm having a meeting with about 10 cooperatives and we are now discussing about how do we ensure that we can do this game on our own because we see like we are abandoned no bank will give us

37:00 money to build a store can we now begin to generate a fund that can do what banks don't want to do and has to be done by us because grass is being lost in the producers area. It should come to us because we shall need it anyway. So the intervention is actually to be able to build a lot of facilities to store the grass that we are losing but also to be able to to have products that allow producers of foder to produce more and for longer. If they not funded they have cash flow problems and therefore they can't plant again. How do you expect somebody who is now on the fifth rain for season to plant another crop of maze when the other one is still in the banker and was not bought because it was raining? Where will they get the money? Sometimes I hear private processors of milk asking that we took so much milk it's in the store as as powder. Then we take again

37:49 it's in the store. We are not selling. So unless we get a funding to cover that so that we have cash flow otherwise our cash flow is going to be the store. So we are going to ignore we can't take the milk because we have taken enough and our cash flow is all tied in the store. That's the same case for for foder farmers. All their cash flow is in the banker. Where will they get the money to plant and harvest and store another season and there's no intervention. So that's why I said we are still on that hydraulic or mechanical steering. You on your own. Yes. Instead of going to the power steering by putting serious and well targeted interventions to ensure that we don't lose fer. How do we lose foder? A thousand and many thousands acres of grass because it didn't shine. And two years ago, the PS announced that we lost 2.5 million animals to death

38:34 because there was no grass. Cows were eating curtains and anything they can find just to be alive. They still died anyway. But all they needed was grass, but we had all that grass. We had no mechanism to ensure that it is stored waiting for a period that will surely come because drought is an externality. It's not really a crisis. We know it comes. So David, where's the disconnect? Because this seems to be a conversation that needs to take place between the national government, the county government, and cooperatives or commercial and farmers. Let's not even break them down. Yeah. This it's not a question of one or the other. It's a collective collaborative. It's a collaborative conversation. Exactly. So where are we failing? I think also the at farm level you know if today you having a a farm and you don't have a store and you're pointing figures at the

39:28 government for not initiating mechanisms to have storage facilities around the fer consumption areas then there's a problem probably more figures are pointing at you see a farmer he has a cowban or a beef lot of say 500 animals but there's no bunker for storage. So where will F be stored? They have exhausted the entire space with the area where cows will be feeding but feeding on what? M. So we also need to mainstream the thinking that fer comes before animals. When you come to perform we don't allow you to to have animals before foder. If you see any animal if you see any investor who has cows who who has landed cows before foder that person has not come from us. M because most people they feel so demoralized that are you telling me I can't start my cows tomorrow I already had somebody who is selling them to me I said no no I'm sorry this is not how it goes we are

40:26 going to plant fer for one season put in the bunker another for season put in the banker once that once we have the bankers full it is time to bring the cows when we are filling the bankers the construction is ongoing as long as we had a a go verdict on the master plan then we can bring the cow cows come to a place where feed is already stored M you don't bring a cow then you buy start buying feed from the market you are not sure that you get that tomorrow it will run out because we actually go through draw serious drought so if any farmer because you ask at enterprise level and at government level national level I'm now answering the question of enterprise level yes anybody who has a livestock enterprise whether it is most dominance or large dominance when they are constructing the ban part of our design is that we put a store and we have a

41:14 scientific way of arriving at how much to you need. We make a ration and say your ration will consist of me silage. It will have hay. It will have nipple grass. It will have compound feeds. And therefore, if we want to have feeds for a year, I can be able to calculate you have 100 animals and each of them is taking 7 kgs of silage. Therefore, you need bankers this much. Then the architect comes in. She gets those dimensions from us from the technical side and she now gives you bankers enough to ensure that you can store your feed for a year. Yes, but most people will be able to put money on the cows, but might be very reluctant to build the banker. So to make sure they do that, we start with fer production and say now we need bans for for us to store this fer. So eventually they actually end up with bankers before the daily and then we give them an assurance in the event that

42:06 you lose the psych or the momentum of having this d farm. keep this foder in the bankers we can take it later we can buy it from you because you can't go wrong with foder drought will come and you have to sell it so you see it's actually safer than to have cows and then drought comes and you have no reserve it's actually safer to have foder than without cows yes most of them will then say let's now move on and they have a very good start if you want to have a bad start and become a motivational speaker on how bad is bring the animals first yes animals cows beasts. They are taking in a huge biomass of more than 80 kgs a day in in in biomass value, not in dry matter. And they are taking about 100 liters of water. Every cow, those are like five mutongis, the one that people in the village used to fetch water from a river. Five of them, one animal. And that is that is just one day. So

43:02 imagine how much you need. And then you bring them as you wait to grow further. By the time you're halfway, you are on negative cash flow and you don't want to hear anybody mentioning cows. People have developed those kind of attitudes towards animals because they started the wrong step. That's what we face. It's not because it is bad because you know the way you start a dance with the wrong step. Yes. And the other people are still dancing and you don't know how to catch up. It is wrong to bring animals before fer. We always start with foder. And I think everybody who wants to set up an enterprise in livestock, the storage must feature first and the investment in bankers and histo come first. So that when you're talking about the post-h harvest laws, we know that all the stores for the farmer level are full. What we are now left with is what

43:42 the country should now care about that after if a farmer has stored up to their capacity, how much is still going to be lost. Then we can begin to think about a county level, the stoages. is a county like say like um some of the counties that livestock are kaji narok if you walk along the way you should be seeing stores in the streets of on the highways of Punjab in India you'll find stores these are stores for keeping animal feed so that when the bad day comes they have feed that the county can say we are giving you a subsidy you can pick the feed from our store at cost because we stored it for you already on what would on to post harvest lost yes but if farmers are not having their own stores in the first place then we are failing on both sides. It is a serious intervention both at national level but also at farm enterprise level. But I'm basically and

44:31 correct me if I'm wrong wrong but what I'm hearing from you is that the opportunity is massive if well thought out you know this whole ecosystem that you're talking about yeah of both dairy production and beef. Yeah. if well thought out strategically like you say not just throwing money at it but built on a plan that we it is it is actually as a nation very very fixable it's actually we have a huge opportunity can I surprise you for the last about 10 years dairy production has been growing at about 2 to 3%. Sometimes 1 to 2% the growth but consumption has been growing between 8 and 9%. What if you can think from an economics level yes you can see how the graphs are going the graph of consumption versus the graph of production they are parting ways and when they produce that gap you know they're coming from the same point yes through time t if you if you can you cannot see one graph going up the other

45:31 one I'm being a bit gentle that gap is potentially going to be filled by imports look at which country is importing yes look at which country is talking about importing a food where we are the biggest consumer at some point we were the biggest consumer of milk in the world among developing countries. Remove the countries that are affluent uh developed nations and focus on the countries that are developing in Africa, Latin America, Asia, Southern Europe, put them aside. We were among the highest consuming in milk hitting about 110 lit a year per person right now. The data is not very consistent. We probably could be hitting more than that because of the urban population. Urban generally consume more per day than the rural people. Yes. And we talked about the urbanization. So we have more people in the urban side. So we are probably hitting the 120s per highs of past 120

46:25 liters. Uganda our neighbor is doing about half of that per year. Ethiopia you don't talk about it. Our black coffee probably about 30 liters per year per person. Rwanda the same. Tanzania the same 40. So you our per capita consumption of milk is very high and is not reducing. It's actually increasing because we are now going to the solid milk. Our kids may not take yogurt. Yeah. Your son who is probably adolescent will cannot ask for tea here. The tea that we we know of but we'll be doing pizza which has cheese. We'll be doing yogurt and they might be more familiar with their processed meal products than ourselves. When people begin to take solid milk products, our consumption goes much higher because a liter of a kilo of cheese is produced by 10 liters of fluid milk. So a guy who takes a cheese bar has taken several liters of milk when you are taking a pint in in tea. So our consumption is

47:18 going high on meat. There was there were reports saying that we are hardly doing even a third of what the potential demand is for meat. Yes. And now we have a new problem. We have so much export of live animals going to UAE. Yes. So when we didn't have enough meat, we are now letting our animals go and the gestation period of an animal or a cow to give birth to a young one is 2 9 months. We can't do anything about that. We have to wait for that to happen. So we have challenges with the deficiency in production of eggs, of poultry meat, of beef and of milk. Those are all critical products that determine how our population grows. The moment it becomes expensive. If it's 100 more for a kilo of meat, maybe for me I can afford it. But let me tell you the number of people who will quit eating meat or eating eggs when you increase the price are so many.

48:12 I work in six countries right now. Yes. Nigeria the milk the cost of their feed went four by four times and there was a like half the population could not even access eggs they could not afford them what happens when when kids can't access proteins they become stunted stunted growth yeah stunted growth you begin to see kids who cannot grow and that's our future workforce kids who cannot have their mental faculties developing because they lacked proteins why because we couldn't produce locally and we had to export because the demand for export cannot ignored and we end up in a very uh strange place where we don't know how we ended up here. Kids who are not growing have the population of kids in the areas are poor not accessing eggs, milk, meat and forget meat but if they can't access eggs and milk which are really affordable in the in the rural

49:00 areas we have a major problem and then you discover that what you could have done is actually investing. You say that there's a business opportunity. It's a huge opportunity. When I talk about increasing demand for all these products, it means that anybody who is doing poultry, anybody who's doing small stock, ruminant, beef or dairy, I are supposed to be in business. But it also means that if there are all these people doing livestock farming, they also need a lot of reserves. But if there's no investment at upstream, which is basically feeding, these enterprises won't survive. They will shut down. Some of them may not realize because it takes a bit of process thinking to understand where why is why am I shutting down? You are shutting down because your cost were at 50 and your price of selling was 51 and you couldn't imagine manage your overhead with that

49:45 margin. But somebody would have thought at macro level that for this enterprise to thrive for us to have milk, meat, poultry, beef, we have to have serious investments in foder. Foder cannot be funded by a commercial bank. It is a lucrative business but nobody sells during rainbow season. So it's a seasonality issue and banks don't like those things that you're telling them that I can sell millions but please allow me not to sell for the next 2 years because there's a lot of rain. No bank will fund you if you have such inconsistencies. So it means that the kind of funding that needs to activate feed production must be a different way of funding patient capital blended in financing some subsidized uh funding from government to target the upstream to have massive feed production so that these enterprises can survive. If you don't do that that investment which would have

50:36 been done upstream to produce feed will be used for importing food the animal products and do you think government will afford to import those eggs to feed our children? Yeah. Don't you think government has priorities in health? True. They struggling with the school funding and you think government will have to import milk to feed that poor child. Those kids will be standard as we watch. Wow. So as we come to as we draw to the end uh I know you're working on something around for Yes. and uh a for investment conference. Maybe we can discuss that a bit because I think you have done a brilliant job in contextualizing both the opportunity and the need on a national level now and going into the future. So maybe you can walk us through what you're doing about it as as as performance fix. Yeah, we have um well, of course, this is really a sector level intervention. So, I'm I'm

51:35 walking into this as a consultant. Yes. Um leading a process of um organizing, coordinating the sector to to rethink investments in feed and foder. We have sidelined the issue of um compound feeds because there's an organization that deals with that the the association of Kenya feed manufacturers. Okay. So they can deal with the compound feeds and all the issues around the the grain based feeds and the legume based feeds. We now focus on the forages uh which is really the leafy part of feed animal feed and which is why animals die. Yes. When animals were dying in Kenya they didn't die because they lacked dairy mill and aruminant would survive on compound feeds. They have to chew fiber very much. So it is the side of um f that you're talking about. So as it is now there is no bank in Kenya that you can go to and say do you have a a for a product that can f me

52:34 and I pay you when Fer is ready. Our banks will probably have very standard products that require you to pay money every month. So if you got money and planted your hair and you have to harvest it after 4 months and then it rains and you can't harvest, the bank does not like a person like that. They would rather give money to somebody who is so sure they can be able to pay and if they have to to pay every month but if they have to give you that money they'll tell you our cost of capital the cost of money we give you because we are giving you depositor as funds is u is is this level so we can't we can't give you patient capital the bank is not the source of that kind of funding so what we are doing in the Kenya's first uh fer contracting and investment action keia one which is going to be the first ever investment uh event for FOD we are we are showcasing two things first is

53:27 contracting contracting is not very mainstreamed in Kenya and and really in their in countries that I'm now working on contracting is not a very familiar word between firms somebody will tell you bring me this amount of feed and on gentleman agreement you deliver they pay but if you tell them sign here they don't understand are you not trusting me Contracting is not really something that we we we have as an African culture that we have uh really documentation of stuff is not something that we have mainstreamed. So we want to show that contracting would put us in a better place as a forer economy in the face of banks and investors because every investor will ask you you want me to put money in your enterprise which is a forer production enterprise who buys from you so show me the contract or the commitment. If you don't have that, investors are running away and they

54:18 would rather put their money in hotels and manufacturing and other areas because you're not really to show. You are saying that you have all this production but you can't show me a paper evidence of somebody who has committed that they'll be buying from you this tonnage every so often. So that catch is not there. We need to show case that contracting works. And we begin on that event to show who is contracting who who needs how much of feed and is putting out a pitch out there on somebody who can be able to supply them based on a contract. Number two, you also need to demonstrate to people this is how enterprises in feed and fer work fer basically that's how they work. This is how they produce money. So if you can put money in a foder would you be ready to have this kind of return within this time? Is it interesting for you? Some people are saying that just just educate

55:02 me on how it works. So we are also putting out information on the typology of Foder investments for FOD enterprises. You can produce hair this will be the buyer. You can produce corn, you can do so. All these have market and this is how the market looks like. This is how the returns look like. You may not get money in a period of rain but when the rain is over we can sell and you can get your money back. This is the kind of mechanization we require. So we give all that information and we have investors sitting and say I think I like that I'm going to put money. Then we can begin to report that we have this amount of commitments and deals that have been created by matching um the need for FOD and basically the the demand side of FOD and the supply side of FOD and the supply now has more money because a few investors have decided to put their money on FOD production then also to showcase that

55:53 contracting can work. You see cooperatives are very successful in Kenya. People come here to actually we actually do international missions. Yes, right now I'm Ethiopia I think 2 weeks from now I'm organizing Nigeria in August coming to see how they work in Kenya but go and ask the cooperatives where there's any cooperative that has a contract with a fer producer who will supply their farmers foder when drought comes there's hardly any and that's the discussion we're going to have next week in Aasha the reason is they have um they would be thinking that farmers will find a way to bring their milk to the market but two years ago 22 out of 69 registered milk processors closed shop not because they didn't do business right not because the CEO was incompetent but because no milk came to the factory and why did no milk come to the factory cows didn't produce milk because cows had no feed so if we trace

56:44 back our problem the entire investment which now people are using to import food or to try and do offtake for beef and help farmers here and there when there are problems that money then should go to feed production Wow, David. Uh, ladies and gentlemen, I think you've had it for yourself. Uh, David for me is my go-to person uh to discuss anything to do with livestock, feed, farming, and I think it he speaks to what I really like about the direction we're taking as a country where we have this talent and this expertise and we're using it. Yeah. So, check out performer. I think I'll give him a chance to tell him to tell you where you can find him and his organization because I can vouch for them very strongly. They do phenomenal work in the areas that and I think he has spoken to the expertise. It could have been a much longer conversation and maybe we'll have him back to discuss

57:42 this. So David, maybe I give you an opportunity. Thank you very much for having me today and uh we are in business. We are out here and uh we want to support investors to invest and do it right. I know there are some investors we have said don't do it it's not working we do it because we have done analysis and we know it's not good for you but where it works we are very happy to support and we do all round support right from the beginning to the end because you want people to be able to see money in agriculture by the way recently we actually began to talk to schools where they allow us to talk to their children tell them there's future in agriculture which is really a new program called the funon farm where we take kids out and tell them look this person makes money pays their school fees buys good clothes because they are doing dairy look dairy

58:30 makes money and if they milk nicely they get good food to the supermarket which is clean for you to eat so we we are talking to the entire demographic that we are available as performer you can find us on YouTube you can find us on um we also do quite a bit of content on LinkedIn and uh Facebook we are basically kimmani you can do a walk in uh we talk to you and we are here for business and we want to ensure that investors in for in let's talk can succeed and that way we are able to make an impact and also make a life for ourselves. So welcome to for better we going to serve you. Excellent. So ladies and gentlemen, thank you very much for joining us. That was episode 25. I hope you enjoyed um the episode. Please do comment, give us your feedback, tell us who you'd like to see, what you'd like to hear and uh let's continue showcasing Africans executing excellently. Thank

59:21 you very much ladies and gentlemen. [Music]