Fourth South-South Cooperation Workshop on Rural Development and Poverty Reduction - Muia Muindi
MINISTRY OF AGRICULTURE PRESENTATION ON:MARKET ACCESS BY SMALL SCALEFARMERS IN KENYA PAPER PRESENTED AT THE 4TH WORKSHOP ON S-S COOPERATION BETWEEN CHINA AND IFAD AT BEINJING 5TH-12TH JULY 2012 BY: MUIA MUINDI MOA
BACKGROUND OF AGRICULTURE SECTOR IN KENYA Kenya’s economic growth built on Vision 2030 policy blue print Aims at transforming the country into an industrialized middle income country providing high quality of life to its citizens by 2030 As we achieve the vision, we will meet broader development inspirations including Millennium Development Goals. MDG 1 Agriculture identified as a key contributor to the economic pillar Agriculture 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, trade 60% 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 arid Irrigation potential is only 20 % exploited There 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 smallholders They comprise about 80 % of our farmer Continuous land fragmentation boosts SSF Low 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 SSF Inadequate access to credit ,ie difficult to meet financier requirements Inadequate 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 action In 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 enterpriseinterest groups cont..Access to profitable markets . Gk policies recognizes the role of coops /group in marketing Bulk their produce in a collection centre and hence make it easier for the traders to pick thus reducing transaction cost Bargain for a fairer price Enhance product quality by implementing quality control systems Participate in Fair Trade and other pro-producer programs with the attendant benefits Sign contracts with buyers and hence reduce the price uncertainty Transport their produce to more profitable markets and thus get a better price
Benefits of Farmer associationscont..Access to credit and other financial services Group 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 services Some farmer associations engage extension service providers More 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 marketingin Kenya About 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 marketingin 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 marketing Kenya’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.