India and Ethiopia could overtake Kenya as the leading horticulture exporters in the world as rising cost of production in the east Africa’s economy makes its produce expensive, Business Standard quoted the State of East African Report Series saying.

Kenya is has been known to  be the world’s largest horticultural exporter, but increased cost of production in terms of  high energy costs, increasing taxes, compliance bottlenecks and uncertainty over trade talks between the UN Economic Commission for Africa (UNECA) and the European Union (EU), could see it toppled from the top position.

“Ethiopia could become more competitive than Kenya, while India could overtake Kenya in floriculture, if the challenges are not addressed in Kenya,” Mosses Ikiara, managing director of the Kenya Investment Authority (KenInvest) told Business Standard.

Currently India’s flower exports are about a tenth of Kenya’s. India exported flowers worth $59 million in 2011-12, a growth of 23.3 percent from the previous year, with projections showing revenues to double by 2015.

Ethiopia’s horticulture industry earned $265.71 million in 2011-12, up from $224 million the previous year, a 19 percent increase.

In Kenya, however, the trend shows that in 2012 flower exports dropped 4 percent to $503 million, from $523 million in 2011. Output increased marginally to 123,000 tons in 2012, from 121,000 tons the previous year, data from the Horticultural Crops Development Authority (HCDA) showed.

There are concerns that flower importers are shifting focus to Ethiopia and India, which have cheaper flowers than Kenya.

Flowers constituted nearly half of horticultural revenue in Kenya, earning $212.56 million in 2012, up from $178.3 million in 2010-11.

During the last decade, the area involved in production of horticultural crops in India has increased by 32 percent – from 16,592 thousand hectares in 2001-02 to 21,825 thousand hectares in 2009-10 – whereas production increased by 65 percent from 145,785 thousand tons to 240,532 thousand tons.

Increase in production is more than twice the increase in area. This is indicative of improved productivity, which still has considerable scope for improvement.

Indian government further launched a centrally sponsored scheme called the National Horticulture Mission (NHM) in 2005-06, that sought to enhance horticulture production and improve nutritional security and income support to farm households and others through area-based regionally differentiated strategies.

With the implementation of NHM and other schemes, the production of horticultural crops has increased from 170.8 million tons in 2004-05 to 214.7 million tons in 2008-09.

The per capita availability of fruits and vegetables has increased from 391 grams per day in 2004-05 to 466 grams per day in 2008-09.

In Kenya, production costs have gone up by more than 30 percent over the past year, mainly due to labour, power, fuel, chemicals, fertilisers and other inputs. The sector currently pays 41 different taxes and levies to various government bodies including the Kenya Revenue Authority and the Horticultural Crops Development Authority (HCDA).