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Daily Nation : February 23rd 2014
38 | Business Lessons from the quail farming boom and bust SUNNY DAY | Sunny Bindra Q Strange traits: A peculiar blend of naivety and greed, which foments belief in curealls and overnight riches uail eggs were praised as the answer to all ailments; prices began rising fast; nterprising Kenyans rushed in or the kill; supply surged and rices fell back sharply; many were left nursing wounds and ursing their luck. In that sequence lies many a esson for peculiar Kenyans. Let’s unpick a few this Sunday. First lesson: 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 not even considered. Last lesson: It is perfectly okay 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 FILE | NATION Many have been left cursing because they didn’t carry out business research before venturing into the quail business 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 pat- ently 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. Third lesson: 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 It is perfectly okay to be a speculator, but it is pretty dumb to borrow to speculate” 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 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 behav- iour? 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 be- fore, 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. www.sunwords.com Why a picture could be worth a thousand lies TECHNOLOGY | Sam Wambugu Photoshop: In the digital age, anyone can use inexpensive software to touch up photos, and their handiwork is becoming increasingly difficult to detect accompanying photos. Even when we tell friends about a trip, the story is better with photographic evidence. Photos enhance the story, but photos can also lead to false beliefs and memories. We are living in the age of in- W formation. I would not be wrong if I say that we all are surrounded by photos everywhere in our daily life, thanks to ubiquitous smart phones and tablet computers. However, there is one thing people need to take notice − a photo is not necessarily equal to truth because there is such a thing as image tampering. Thanks to technology, we have software like “Photoshop” which enables one to easily modify an image in any way ones wishes. Photoshop is the art of image photo-editing in order to create an illusion or deception. The most obvious use of Pho- toshop manipulation is just for fun. However, this pleasure has seen the rise in spoof images delivered daily into e-mail in-boxes and carried by the social media around the world. Manipulating images or photoshoping has become a global past-time: visual jokes that draw on the credible e love to add pictures to our stories. Newspapers are bland without to create the improbable. Depending on the amount of modification, the original message or the impact of an image can be changed completely. As a result, we may be easily misled by a photo if we trust it entirely. Therefore, we should not always regard a photo as physical evidence; instead we should use it as a reference or visual aid. Be aware that much of what we see in fashion magazines has gone through photo manipulation or what we used to call “airbrushing.” To look stunningly beautiful, some models want to portray themselves as having flat stomachs, generous breasts, and long legs in magazines as this seems to have become the global standard. Luckily, image editors use their image manipulating prowess to create such images. Some people however, may be- ‘‘ lieve the images. In the digital age, anyone can use inexpensive software to touch up photos, and their handiwork is becoming increasingly difficult to detect. Some of the fakes are, admit- tedly, hilarious. In Kenya for instance, social media is awash with photoshopped images of top politicians and celebrities doing the funniest and oddest of the jobs just to generate humour. This is not peculiar to Kenya. In the US for example, former US President Bush had been portrayed in some altered images reading upside-down books, just to drive a certain point home. But how do you tell a fake from a real one? Before the digital age, photo-verification experts sought to examine the negative − the single source of all existing prints. Today’s equivalent of a negative is the RAW file. RAWs are output from a camera before any automatic adjustments have corrected hue and tone. They fix the image in its unaltered state. But RAW files are unwieldy − they don’t look very good and are memory hogs − hence only professional photographers tend to use them. Nor are they utterly trustworthy: Hackers have shown themselves capable of making a fake RAW file based on an existing photo, creating an apparent original. But digital technology does Photos enhance the story, but they can also lead to false beliefs and memories... we cannot trust them entirely” provide clues that experts can exploit to identify the fakery. In most cameras, each cell registers just one colour − red, green or blue − so the camera’s microprocessor has to estimate the proper colour based on the colours of neighbouring cells, filling in the blanks through a process called interpolation. Interpolation creates a predictable pattern, a correlation among data points that is potentially recognisably pattern-recognition software. It is not in contention that a picture is worth a thousand words. But do the thousand words reflect the truth? Sam Wambugu is a monitoring and evaluation specialist. Samwambugu@gmail.com SUNDAY NATION February 23, 2014 Refinery staff paid despite not working FILE | NATION Mr Martin Heya, Commissioner for Petroleum Energy. CONTINUED FROM PAGE 37 powerful individuals in the energy sector, and 12 per cent by some other powerful individuals who served in the last government,” Mr Duale claimed. According to the shareholder agreement between the government and the Indian firm, the latter was to invest in upgrading the refinery by installing new refining technology to make it competitive, and help reduce the price of fuel products. “Essar Energy failed to meet their obligations to us. We had to terminate our agreement with them,” Mr Heya said. Owing to the old state of the refining technology, the Energy Regulatory Commission last year estimated that consumers paid Sh3 more for every litre of fuel originating from refinery, compared to the price of imported refined products. In addition, a 2012 Deloitte Consulting report revealed that oil marketing companies were demanding a collective Sh7 billion from the refinery in losses incurred through poor refining Sh7 bn Compensation demanded by oil marketers for losses incurred through poor refining technology technology. The shareholder agreement contains a “put option”, which allows the government to buy out Essar’s stake. It is understood that Essar had placed a demand of $5 million to give up its 50 per cent shareholding, an amount that is $3 million more than what the government received when the company acquired its stake. Conclusion of the termina- tion of Essar’s shareholding at the refinery will determine the company’s fate, as well as guide future government’s investment decisions in the refinery. There have been talks in the En- ergy Ministry to use the refinery for oil storage as the government looks to setting up another one at Lamu and investing in another to be built in Uganda.
February 22nd 2014
February 24th 2014