Kenyan rural farmers who opted to invest all their savings into growing oil seeds now fear they might have chosen the wrong venture as prices of bio-fuels continues its nosedive trend.
The Kenyan government, NGOs and industry had encouraged the production of bio-diesel- which is environmentally sustainable because it emits fewer toxic air pollutants and greenhouse gasses than petroleum-based fuels, and many small-scale farmers had placed their hopes into oil seeds as a new avenue to earn money.
In the beginning, the bio-fuel project seemed to be a success since it combined with green politics and facilitated poverty reduction, with farmers comfortably doubling their usual income.
In Ngurumani, a small Maasai town in Kenya for example, farmers started to sell the seeds of the jatropha tree for bio-diesel production, which had an immediate, positive impact on reducing poverty and hunger in the region.
Farmers who previously used to plant food crops for household consumption only, started selling seeds for as much as $10 per kilo. But recent drops in bio-fuel prices have caused concern about the sustainability of the alternative fuel production.
Just a few years after the collaboration between NGO ‘Help Self Help,’ the Jomo Kenyatta University of Agriculture and Technology in Nairobi and Dutch bio-diesel manufacturer Solarix launched Kenya Eco-Energy, a project that encourages rural farmers to use two other types of seeds, castor and croton, for environmentally friendly bio-diesel production, the small-scale farmers who ravenously entered into the project seem to have run out of luck.
In April of 2008, bio-fuel prices suddenly dropped from an average of $10 per kilo to less than $0.5 per kilo. Bio-fuel research companies, producers and NGOs supporting the production of environmentally friendly diesel had created an artificially high demand for the seeds, which resulted a high pricing structure that could not be maintained in an open market in the long-term.
In addition, the development of regulatory policy frameworks and local infrastructure needed to manufacture bio-diesel took longer than expected. As a result, Kenya has only few bio-fuel processing plants that struggle to keep up production with seed supply, and many rural farmers cannot afford the costs of transporting their seeds to the nearest factory.
Although the production of bio-fuels creates environmental sustainability, farmers will not be able to continue investing in them if they don’t have a market to sell their produce. Numerous Kenyan farmers who have put their little savings into the planting of oil seed producing trees have now lost their initial investments.