The Most Efficient Agricultural Industry On The Planet
I’m sure many of you who read this title will probably be thinking the following…..”oh gee…is KE going to talk about some American farmer using science and technology and ask us why Kenyans are starving again’? sigh.
Oh no my dear Kenyan people. No mas. Not today.
Today, I am here to inform you that the most efficient agricultural industry in the world is located in the dusty town of Meru, Kenya. Yup. Those Miraa farmes in Meru have linked up with a bunch of Somali middlemen and together, they have developed one of the most efficient agricultural export systems in the world — delivering their product across America, Europe and the Middle East.
This is a quote from the article:
“This is a business which has always operated informally, in which accounts are kept on the back of cigarette packets, yet it’s the most efficient agricultural industry on the planet,” says Paul Goldsmith, a Meru-based development expert. “The commodity has a 48-hour shelf life, but it goes all over the world.“
The article also goes on to mention that crime in Meru is very low because, well….everyone has cash!
I always figured it was because no one was foolish enough to attack those hot-tempered Meru’s. Then of course, add in the hot-temepred Somali’s {who are running around all over that town} and you’d have to be a fool to cause trouble up in that joint.
Anyone from Meru here? what do you think? Can you ever go wrong selling drugs?
I’m begining to develop a fascination with illegal forms of making money because quite frankly…… “me no likey workey”.
Full article here: Green Gold
Miraa is not illegal in Kenya. It is just like coffee..
The Somalis do (allegedly) bring in a touch of illegality in the distribution process by creating cartels associated with warlords…
Such cartels allegedly attract underworld crooks who then mix Miraa sales with other shady dealings (smuggling / drugs etc).
You are right – with the right incentives, farming processes can damatically improve. In the case of Miraa it’s supernormal profits. I am not sure what incentives can be appllied to Corn and cabbage industries – but the classic demand vs supply concepts greatly influence the end result.
Keep up the good work. Merry Christmas and happy 2009!
I know miraa is not illegal in kenya and that was not the point of the article. sigh.
Merry X-mas to you too, nonetheless.
If you try and stop the Merus from growing or selling Miraa… watch out!!!
Why do Merus have such short tempers?
KE’s point is keep the effing government out of BUSINESS…
Seriously, I advocate for LESS government interference… and all will be much better!!!
Tea and Coffee are showing signs of life after the ‘second window’ (aka private sales) was allowed…
KE, you concluded:
“I’m beginning to develop a fascination with illegal forms of making money…”
What exactly was your point? Unregulated is not synonymous with illegal….
If its about regulation or gov participation (e.g. in Sugar), then my questions to you are:
1. Are you saying that there should be no trade laws or regulations? What are you proposing?
2. What is the Gov interference and how can it be eliminated?
3. How would you apply the miraa concept to other commodities?
CT
I thought lack of regulation is what brought the current financial chaos in the US & UK.
More closely regulated countries have not suffered as much as the loosely regulated countries.
Infact, I understand one of the solutions being proposed in teh US & UK is MORE regulation.
I think regulation is not bad as long as it does not stifle genuine growth and innovation
KeiO:
Sigh… regulation & government are NOT always the same thing…
OK… I will be brief…
1) Fannie Mae & Freddie Mac were quasi-government bodies which curried favour with GOVERNMENT OFFICIALS to by-pass various Fed rules & regulations. Luminaries such as Warren Buffet (private sector) warned of the excesses of the FMacs.
2) It was NOT lack of regulation but selective regulation that screwed up the US financial markets.
3) The US government (idiotic legislators blocked attempts to rein in the FMacs) provided the FMacs with an IMPLICIT guarantee thus investors in FMac products were ‘guaranteed’ by the full faith & credit of the US govt. Many level-headed folks asked (but were rebuffed) the US govt to EXPLICITLY deny US govt bailout for the FMacs.
So… the FMacs beefed up on the notion that any investment with them is like T-Bills & Bonds. When the FMacs collapsed the US govt stepped in.
If the US Govt had not provided implicit guarantees… the situation would be less severe.
GOVERNMENT SHOULD NOT BE IN THE BUSINESS OF BUSINESS.
CT
Ok then I get it – or hopefully I get it.
What you are saying is that the government should play a regulatory role. However, it should not be an investor. Is that correct?
If that is your position, then how do you explain the successful businesses run by some governments e.g. Malaysia, Singapore, South Korea, Saudi Arabia etc. The governments I have mentioned, I believe, own shares in many businesses in the UK (and the US).
Enlighten me on this.
Exactly, the issue could be more to do with governance and corruption rather than “government running business”.
KeiO & M:
1) Kenya is NOT Singapore. crooked wa ngengi (aka jomo the landgrabber), moi or kibz are NOT Lee Kuan Yew (& successors). Temasek may be a major investor in Singapore & abroad BUT Singapore encourages entrepreneurship. Singapore has very few barriers to setting up businesses & corruption is almost nil. An exception does not make the rule.
2) Malaysia is a hotbed of corruption due to the government owned firms as well as a poor human rights record. It has oil… that is what saved malaysia! Without oil… it would be like any other E.Asian 3rd world country. BTW, petronas is very powerful & politically connected i.e. it hires family members of whoever is in power.
3) Saudi Arabia… you are joking, no? Puhleeze… without oil (the world’s largest oil exporter) it would remain a backwater. Aramco was set-up by the Americans & is run by them for the most part. Most other saudi govt owned firms are subsidized. The ‘princes’ work in these firms coz they are princes NOT coz they are qualified!
4) S.Korea… Actually, its not the gov’t that owns many businesses (as a % of the GDP) but the chaebols. The chaebols may have government support (loans, subsidies, monopolies, etc).
Generally… governments running businesses means there are other non-economic factors involved which leads to CORRUPTION, NEPOTISM & INEFFICIENCIES.
In Kenya, the government has too much of a stake in ‘businesses’. Most gov’t businesses compare poorly vs their peers:
KCB+NBK vs BBK: (BBK has consistently outperformed KCB & NBK. KCB is showing growth AFTER GoK stopped interfering with/in KCB’s business).
NOCK vs Kenol+Total: Kenol & Total has grown considerably while NOCK has struggled.
Old KQ vs New KQ: Even with all the recent hiccups… the new KQ is far better.
KTDC vs TPS (Serena): Serena is now a premier brand but started out much smaller than KTDC.
There are so many examples but I hope you get my drift/solution…
CT:
I think Malaysia has a more diversified economy and is not totally dependent just on oil and by the way, the former president, Mahatir Mohammed, did a very good job of steering the country out of the Asian economic crisis when he rejected the draconian recommendations that the world bank was trying to force down their throats. The Malaysians and many of the South East Asians are independent thinkers who have learnt to come up with their own economic solutions. Africa has never achieved this same level of intellectual confidence and independence for itself.
On Saudi Arabia:
You can’t say…”without oil” because they have plenty of it and it’s made them rich. And so what if the saudi arabians rely on Americans to run their companies? if that is what is needed to ensure efficiency and profitability, what is wrong with that? Maybe Africans should do the same thing. i.e. hand over the management of their countries economies to “smarter” people since we have shown that we clearly can’t do it.
I am not against all forms of government regulation. I believe at many levels you need government, especially when it comes to issues like the rule of law and that’s where the focus of African governments should be: on developing a culture based on the RULE OF LAW.
KE: African governments (incl Kenya) have shifted from their core competencies…
1. Rule (& implementation) of just laws
2. Defence
3. Provision of ‘common’ goods and services.
Malaysia could have been far more successful IF they had ‘clean’ institutions. Mahatir started off (sort of) OK but became a dictator. His family became the ‘go-to’ people if you wanted government support. Malaysia did better than Indonesia but oil is what ‘saved’ them.
The irony is that Malaysia kicked out pre-dominantly ‘poor’ Chinese Singapore… and Singapore showed real mettle.
So… I still stand by my argument that GOVERNMENT RUN BUSINESSES are generally inefficient & should be privatized. I agree that it’s better to have competent ‘foreign’ management than incompetent local management. I wish Kenya would hand over KPA to the Singaporeans!
A single example should suffice for now. The ‘old KQ’ was an inefficient & unprofitable entity that required state subsidies. After KLM came in, KQ turned around & is now one of the world’s few airlines that made profits in 2007-8. No more subsidies & it has paid dividends every year since 2004.
CT:
So, if you agree that government run businesses are inefficient, which is generally true, you would support the recent moves by the government to privatize many of it’s parastatals through the IPO process at the NSE.
I have a post coming up on that because I’m not sure what they’re doing.
Yes…
BUT a complete & transparent privatization… not 10% or 20% or 30%… more like 75% thus reducing/eliminating govt ‘control’.
Sell to the public as an IPO (or open public tendering/bidding which is open to all bidders) not private deals like the Grand Regency sale…
KenGen is 70% gov’t owned thus kibz & friends still call the shots…
KPLC is 51%+ owned/controlled by NSSF (controlled in large part by GoK) & Treasury (GoK)…
Ownership of +/- 25% safeguards GoK interests while allowing for a strong challenge from ‘private’ investors… KQ is 23% Treasury & 26% KLM… The rest is owned by the public (most of whom vote with KLM). Thus ‘private’ interests can neutralize GoK’s ‘lethargy’ & inefficiencies & corruption.
Another example is Mumias where it is for all practical purposes… a ‘private’ firm since GoK (incl NSSF ownership) has reduced significantly.
What about national security?
There is inherent insecurity if a country’s economic lifeline is controlled by foreigners.
I guess this is why the government maintains an interest in some businesses.
And again FOREIGN ownership is not synonymous with EFFICIENCY.
Remember that corruption in Africa is not a one way street. All the PROCEEDS of corruption are banked in Western banks and South East Asian banks recently.
The issue is DISCIPLINE among the local enterpreneurs.
@KE
Your coments continue to amaze me. You wrote:
“Maybe Africans should do the same thing. i.e. hand over the management of their countries economies to “smarter” people since we have shown that we clearly can’t do it.”
Are you an African? Shame on you for insulting yourself and your people. You are long overdue for:
1. Mental decolonization
2. Mental decolonization
3. Mental decolonization
Hurry! Before you get a leadership role in Africa and continue to destroy like these old colonially brainwashed men currently in power.
Lest you forget, the “smarter” people are so incompetent taht they have caused the worst economic and security mess in the entire global history – and they dont have a clue how to get out of it!
Nowadays there’s a fine line between politics and economics – hence 100% lack of Government involvement in business is a BLUNDER (ask US Fed Reserve).
Further more Government has broader agenda than pure politics. The tradeoff for creating jobs is lower efficiency. Corruption is inherent in all governments and increased bureaucracy is one side effect of countermeasures.
Strategic operations should remain in the hands of Gov. We should address the ROOT CAUSE rather than the SYMPTOMS. In this case, we should be asking:
1. How can we bring about good governance and pro-society laws?
2. How can we protect ourself from destructive foreign influence – disguised as well meaning assistance (e.g. More AID instead of interest free repayment holidays)
3. How can corruption be fought in Government? Regime change does not remove institutionalized corruption. You only change the “eaters”.
4. How can we block negative propaganda about Africa and Africans to gain ultimate MENTAL FREEDOM from NEO-COLONIALISTS?
5. How can we increase research and innovation in Africa? Do we need to blindly copy Western technology?
6. How can we unite Africa to give us more clout in international politics?
7. How can we learn from the western incompetence and failures to improve our position?
8. Why are we not seeing the opportunities that are currently presenting themeselves to us – to stand up and be proud and take charge of our own affairs – with the looming downflall of imperialist nations?
Maishanki:
It’s not about my mind being mentally colonized. At some point, Africans like you need to become very honest about your continent. If it cannot be grown in the soil with a seed or if it cannot be extracted from the ground, we won’t produce it.
Yes, bankers in America have created a mess, but don’t forget that America is still the country that invented the internet, cars, aeroplanes, etc, etc…..
@the fake “kenyanenterpreneur” (possibly an amateur Identity thief?).
First – only a HANDFUL of people made those inventions MANY YEARS AGO – and many were not even american. It’s crazy how AN ENTIRE SOCIETY of people who can’t even do BASIC MATH to manage their personal finances would want to take credit for the work of a few brilliant good people. Such logic is fallacious – but you are probably too dumb to know it.
What have you personally (and about 300 million fellow americans) invented lately? N.O.T.H.I.N.G.
Yet you gleefully extrapolate on a few serendipitious discoveries by OTHERS and claim them to be proof of YOUR intelligence… hmmm…. thats not smart.. you just exposed your ignorance and narrow mindedness…
Who made technology and materials the universal yardstick? Think about it… I know its hard for you to see beyond your own materialistic culture – but just try for moment.
Third its not just the bankers. The it’s entire “system”: founded on FALSEHOODS and INCOMPETENCE. The world is LESS SAFE – thanks to western foreign policy. On average american people are poorer than the poorest Africans (-ve net worth). Western Families are mostly disfunctional with highest divorce rates in the world. Children go to school to murder other children. Mothers humiliate their kids by putting them on leashes like dogs (its a fact – google it).. etc etc I could go on and on.
Like a typical “redneck”, you look at other cultures using the narrow telescopic vision of your own culture. You measure human value by looking at things – rather than the essense of humanity: the INTANGIBLES that define our HUMANITY (compassion, love, social norms, ethics, family values, generousity, respect, ethics, empathy, openness to learning etc).
So what’s wrong with Agriculture? What’s wrong with harnessing nature? We don’t have a hoarding instinct. Amassing wealth for selfish use is still a new concept for us.
The colonialists destroyed a lot of African knowledge and history. They re-wrote “african history” and “science” using their language and books and forced African kids to read manufactured propaganda as part of their brainwashing campaign to get on top of the food chain. Essentially erasing our ancestors knowledge, inventions and achievements!
We had medicine before colonialism. We had education. We had an economy and trading system. We had currency (e.g. cowrie shells). We had international trade with Arabs and the Portuguese. We had laws, political systems that worked, armies, strategists, humane weapons (compare to real WMDs like Nuclear bombs) etc etc African systems WORKED. Africa was ALRIGHT before colonialism.
Look at the challenges facing western cultures:
1. Children go to school to murder other children
2. People snap and become serial killers
3. Marriage is not honored – divorce rate is phenomenal
4. Consumerism and materialism is the foundation of western culture. Not values; not ethics, not love; not respect.
5. Immorarity and defficiency in ethics
6. Failed economy
7. Failed leaders
8. Insecurity
9. The entire world despises your arrogance and insensitive behaviour
10. An unhealthy, ignorant population – clueless about the rest of the world
etc etc.. the list is huge! Anyway, I challenge you to give me an intelligent answer to any of the above 10 issues.
It is western racists like you who need to be honest about your society and the massive DAMAGE it has done to this world. Time to eat the humble pie and embrace reality – you have FAILED in your quest for global dominance.
Finally, you probably stole KE’s identity… I’ll wait for KE to *log in* and comment but just in case you did it… I bet you don’t feel so smart at this moment – do you? What happened to your smart genes – did they go dormant for a while?
Josh: Have I advocated ‘full’ foreign ownership? In any case, most sectors will benefit from the BEST managers be they local or foreign.
Furthermore, please don’t confuse ‘ownership’ with ‘management’.
(2) Corruption… Corruption in Africa by Africans is to deprive AFRICA. When the Brits bribed some Saudis to buy arms from the Brits, the benefits flowed to the Brits.
(P.S. I am not advocating corruption by the giver… I am saying that the ‘givers’ are doing it to benefit their countries whereas Africans engage in corruption it to deprive their countries)
U guys must be as stupid as darn.
Everyone is hot tempered … Just take away just a days food and you’ll know what i mean..