KENYA · GUIDE 0004 · EDITION 4.2
Terere Farming Profit: Price per Accepted Bunch
Cost the bunch that earns a sale
A retailer’s preferred bunch may contain terere alone or an agreed mixture. State the composition, unit, delivery time and returns arrangement before quoting. Count picking, weeding, sorting, ties and the route; a bunch delivered to a stall is not necessarily sold or paid for.
Hypothetical example: an unsold remainder
Every figure below is invented for arithmetic practice. It is not a Kenyan market price, supplier quotation, harvest prediction or actual farm result.
| Fictional delivery | Amount |
|---|---|
| Bunches delivered | 80 |
| Bunches returned unsold | 20 |
| Bunches sold and paid for | 60 |
| Assumed price per paid bunch | KSh 25 |
| Revenue | KSh 1,500 |
| Attributable crop, sorting, ties and route costs | KSh 1,200 |
| Contribution before separately allocated overhead | KSh 300 |
The attributable cost per paid bunch is KSh 1,200 ÷ 60 = KSh 20. Dividing by all 80 delivered bunches gives KSh 15 and hides the cost of the unsold remainder. The KSh 300 contribution is not final profit; fixed overhead and other applicable costs still require consistent treatment.
Account for the return arrangement
If the grower collects unsold bunches, record that journey and the time spent at the stall. Check whether the retailer pays for accepted delivery or only for stock sold to customers. A later payment date can make the cash situation worse even when the paper contribution is positive.
If only KSh 900 of the fictional KSh 1,500 has been collected, KSh 600 remains outstanding. It is not cash available to buy the next input. Track refunds, customer advances and balances separately; confirm the relevant invoicing treatment with KRA.
Test a different arrival time or order size
Record picking session, arrival time and paid sales. If the bunches arrive after the stall’s regular buyers, try an agreed change and measure the result; do not assume a larger harvest will fix the route. Compare the same sale unit and period when calculating contribution.
For a simple break-even estimate, divide fixed overhead for the same period by positive contribution per accepted bunch and round up. If contribution is zero or negative, there is no meaningful positive break-even quantity in that model. Replace the fictional values with actual trial records and quotes before investing.