PAPER PRESENTED AT THE 4TH WORKSHOP ON S-S COOPERATION BETWEEN CHINA AND IFAD AT BEINJING 5TH-12TH JULY 2012

BY:MUIA MUINDI MOA

MINISTRY OF AGRICULTURE PRESENTATION ON:

MARKET ACCESS BY SMALL SCALE FARMERS IN KENYA

BACKGROUND OF AGRICULTURE SECTOR IN KENYA

Kenya’s economic growth built on Vision 2030 policy blue printAims at transforming the country into an industrialized middle

income country providing high quality of life to its citizens by 2030As we achieve the vision, we will meet broader development

inspirations including Millennium Development Goals. MDG 1Agriculture identified as a key contributor to the economic pillarAgriculture targets to maintain a sustained growth rate of 10% per

annum from 2012 for 25 years.Agriculture contributes directly 23% to the country’s GDP and 27%

indirectly through other service sectors e.g. manufacturing, trade60% of country’s total export revenue is from agriculture,75% of rural workforce is in agriculture.Hence critical tool for employment creation and poverty reduction.

Our staple food is maize.Our country is 80% arid and semi aridIrrigation potential is only 20 % exploitedThere is over dependence on rain fed

agriculture. Agriculture sector development is done through Public-Private partnerships involving multiple stakeholders in the public and private sectors.

Characteristics of the smallholdersThey comprise about 80 % of our farmerContinuous land fragmentation boosts SSFLow levels of production. due low level use of

appropriate technologies e.g. fertilizers, seeds.

Low returns to investment due to low levels of operation. Seasonal Production

Most agriculture products sold in raw form with minimal value addition .

Marginal beneficiaries in value chains

Challenges of SSFInadequate access to credit ,ie difficult to

meet financier requirementsInadequate access to markets Highly fluctuating and generally low prices

esp where farmers are not organised to groups .

Inadequate access to services (eg. Extension, financial, research, market information etc)

Inadequate access to appropriate technology

Collective actionIn order to address above agriculture

characteristics and challenges, the ministry of agriculture promotes enterprise development through enterprise Interest Groups (CIGs). The ultimate aim is to have these producer organizations transformed into cooperatives.

Most groups are enterprise based.

Benefits of Farmer enterprise interest groups cont..Access to profitable markets . Gk policies recognizes the role of coops

/group in marketingBulk their produce in a collection centre and hence

make it easier for the traders to pick thus reducing transaction cost

Bargain for a fairer priceEnhance product quality by implementing quality

control systemsParticipate in Fair Trade and other pro-producer

programs with the attendant benefitsSign contracts with buyers and hence reduce the

price uncertaintyTransport their produce to more profitable markets

and thus get a better price

Benefits of Farmer associations cont..Access to credit and other financial

servicesGroup guarantee Through Savings and Credit Cooperatives

(SACCOs),members can access credit even for agric production .

Some GK related loans have been channeled through coops e.g. coffee dev fund and stabex fund.

Benefits of farmer groups cont..Increased access to extension and other

servicesSome farmer associations engage extension

service providersMore cost effective for service providers to

reach the producers when they are organised into groups

Better articulation of needs

Benefits of farmer groups cont..Ensure traceability and other quality assurance

measures are export market requirements.Acquire the relevant certification for both local

super markets(Kenya GAPS) and export market(global GAPS). It is easy in groups such . E.g. of farmer association processors are New Kcc, Githunguri dairy, Meru DCU for milk.

Certification for markets is done by Government related bodies namely Kenya Bureau of Standards, Kenya Plant Health Inspectorate Service and Horticultural Crops Development Authority.

Value addition as part of marketing in KenyaAbout 80% of our agricultural products are

marketed in raw form.Policies and incentives however have been

put in place to promote value addition.Value addition levels for some crops include:

tea at 8%, mangos 10%, passion fruits 20% and Irish potatoes at 40% which are fried to chips in urban areas.

Value addition as part of marketing in Kenya cont..Most horticultural produce (vegetables and

fruits) goes to domestic market in fresh form about 95% and the other 5% goes to the export market.

Trade as means of marketingKenya’s export crops are tea, coffee and

horticulture(fruits, vegetables and flowers).Kenya belongs to two main regional trading

arrangements i.e. COMESA and EAC.The above two regional blocks offer a market

for the products which we have a competitive advantage.

The above RTA have customs union which allow for common external tariffs (0,10,25%) and a common market.

Thank you.

May God bless you