Small-Farm Access to High-Value Horticultural Markets in Kenya
Case Study #6-5 of the Program: ''Food Policy For Developing Countries: The Role Of Government In The Global Food System''
The goals of poverty alleviation and rural agricultural development have long been elusive among poor Sub-Saharan Africa countries. Rural areas still lag behind urban ones in economic growth, and formerly lucrative export cash crops such as coffee and tea are no longer as profitable to the average small farm. Rural population growth and environmental degradation have made the challenge of developing the agricultural sector even more difficult. It is in the context of these challenges that many have championed the expansion of the export horticultural sector to provide a significant boost to the rural economy and permit the participation of the small farm sector. In Kenya the development of the export fresh fruit and vegetable (FFV) and flower industries has been a clear success in private sector–led industry development, with significant gains accruing to participants at all levels along the FFV value chain. As the sector has grown over the past 20 years, changes in the industry have resulted in significant consolidation at all levels and in the exclusion of small farms from the industry, threatening the sector's ability to deliver poverty alleviation to its most vulnerable participants. Many factors led to the consolidation of the export FFV industry in Kenya, including (1) the increased involvement of European Union (EU) supermarket chains in procuring FFVs directly from farms in Kenya, (2) competitive pressures to cut costs and increase supply chain efficiency among exporters and importers, (3) increased consumer and regulatory demands for more stringent production and food safety standards, and (4) the inability of small farms to gain access to credit, market information, cost-effective transportation, and drip irrigation technology necessary for highvalue market participation. As small farms, traders, and exporters have been forced out of the export sector, the supermarket importers, commercial exporters, and large commercial farms that remain have strengthened value chain governance. There may still be a role to play for smaller, less well capitalized, and less management- and technologyintensive farmers, but barriers to successful participation by these entities remain high. Many in the international development and humanitarian fields are concerned about the exclusion of poor, small farm households from high-value market opportunities and are seeking ways to increase participation of small farms and to encourage more broad-based dispersal of the benefits and successes of this industry. Recent studies have shown that the rural poor, particularly landless families and young women, can benefit greatly from participation as labor on farms or in processing sheds (McCulloch and Ota 2002). In the interest of maintaining competitive participation of small farms in the sector, others have promoted the benefits of contract farming practices and the organization of small farms into farmer marketing associations or cooperatives (Masakure and Henson 2005). Thus far, the Kenyan government has not been heavily involved in regulating or promoting the export FFV sector. It could play a greater policy role in order to strengthen the global competitiveness of the industry and to enable greater participation of the rural poor in this sector, with the ultimate goal of increasing the broad-based benefits of the export FFV sector for economic growth and poverty alleviation. Your assignment is to make recommendations to the Kenyan government on what policies should be pursued to enable the FFV export industry to make a greater contribution to the alleviation of rural poverty in Kenya.
12 pp.©Cornell University, Ithaca, New York. All rights reserved. This case study may be reproduced for educational purposes without express permission but must include acknowledgment to Cornell University. No commercial use is permitted without permission.
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Previously Published As
Joseph Dever (2007). Case Study #6-5, ''Small-Farm Access to High-Value Horticultural Markets in Kenya''. In: Per Pinstrup-Andersen and Fuzhi Cheng (editors), ''Food Policy for Developing Countries: Case Studies.''12 pp.