How Kenyan farmers quailed at quail farming
Quail eggs were hailed as the answer to all ailments; prices began rising fast; enterprising Kenyans rushed in to make money; supply surged and prices fell back sharply; many were left nursing wounds and cursing their luck.
In that sequence of events lies many a lesson for peculiar Kenyans. Let’s unpick a few this Sunday.
First: there are no cure-alls. I don’t doubt that quail eggs have some good health benefits. I’m pretty sure they have some nutritional value as part of a balanced diet. But a super-food that cures everything from cancer to hypertension, just by eating a few eggs (or anything else)? Give it a break. In fact the craze seems to have started when someone somewhere touted the eggs as the answer to, ahem, male impotence. That sort of connection is usually enough to start a stampede. Clinical evidence, documented studies? Not so much. A few rumours and tall tales suffice.
Second lesson: why should one get into a particular business? For most of those involved in the Kenyan quail-egg rush, the answer is simplicity itself: because prices are high. That’s it. People are willing to pay big for the damn things, so let’s produce them.
Now wait. Prices can be high for all sorts of reasons. Because of internet-fuelled propaganda, for example. Or because of seasonal factors in supply and demand. Or because supply is tightly controlled. None of those reasons in themselves give you a reason to go plunging into the market having sold your bedsheets.
A business is not attractive just because demand is rising. It is attractive if that demand can be met uniquely and distinctively by you. In other words, you have some particular advantages as a producer, and can corral a good part of the market. That was patently not true in rearing quails. How could it be, if everyone and their great-aunt was rushing in? How could it be, if all it takes to be successful is to mate a few birds and sell the eggs? I’m sorry, but fortunes were not waiting to be made by all and sundry.
Thirdly: if a business can be entered by you and all your relatives simultaneously, that price will not stay high. Before you plunge in with both feet, take a moment to consider the forces of supply and demand. What caused the price surge? How much demand is true consumption demand, and how much is created by hype? It is amazing that those questions are not even considered.
Last lesson: it’s perfectly OK to be a speculator, but it is pretty dumb to borrow to speculate. Many of the Kenyans left in the dust of the price fall were not just left rueing a misadventure; they were left holding a heavy bank loan. Which still has to be paid, whatever the price of the eggs. You could predict that there would be calls for government intervention of the ‘tunaomba serikali’ type; Kenyan farmers duly obliged.
None of this is really news. The same thing happened some years back when Kenyans stampeded in hordes to buy Safaricom shares, again fuelled by bank loans. The same cycle played out. Safaricom shares are not quail eggs, and do have plenty of value. But the expectation that prices would treble overnight was absurd.
How to explain this behaviour? A peculiar combination of naivety and greed, which foments belief in cure-alls and overnight riches without the necessary hard work. As I have written here before, money is not made in the crowd. There are no doubt proper farmers with proper rearing and marketing structures who will continue to make proper money from quails; but the newly gathered crowd will not. Stay away from crowds, unless you are the one leading or assembling them.
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