The Practice of the Development of Africa’s Agro-

industry Chain

Dr Stephen MbithiCEO: FPEAK- Kenya

Fresh Produce Exporters Association of KenyaCoordinating CEO: Hort Council for Africa (HCA)

Chiefexecutive@fpeak.org +254722716956

28-July: Dar: 2012 China-Africa Poverty Reduction and Development Forum

...a Viable Option:High value Agric for Poverty alleviation• Example: Kenyan Hort:– Total value – 3.7 billion US$

• Exports 2011: 1.2 billion US$– Vegetables/Fruits: 650 million US$– Flowers – 550 mil US$

• Domestic: – 2.5 mil US$ (2008 estimates)

– 1.5 million farmers on hort, total 4.5 mil direct/indirect dependent (11% of total population)

– The Players:• Smallholders-70% by value of fruits and vege exports, and

about 10% flowers• Large scale growers- mainly in flowers (10% flowers are

smallholder produced)

How it happens…

• A market-led production….STRICTLY– Production synchronized with supply contracts secured

with EU supermarkets (82% total hort exports)• Exporter – Led Smallholder production

– Standardization, therefore bulking at smallholder level– 24 hours from farm to supermarkets in the market

• Limited or no cold storage facilities in fields• Cold storage/packaging/processing facilities at Nairobi

– About 1,000MT fresh produce air-freighted daily during peak selling season

what about…Standards?

• Standards compliance KEY to marketing– Enhancing Consumer confidence- standards are a

passport to trade– Small-scale farmers comply to standards• Official Control Systems• Market Standards- Compliance is Private sector driven

– KenyaGAP…benchmarked to GLOBALGAP– Certification system

What we have learnt…• Smallholder production is Profitable:

– Either small or large is OK..not medium size• 1 acre to 10 Ha or above 40 HA

– Economies of scale Vs return on investment for mechanization

– CORRECTION- smallholder- commercial NOT subsistence farming• Uniform practices, and standards compliance

– Key to bulking, hence key to smallholder participation in the global value chain

• Training- horticulture is knowledge intensive• Facilitative Govt Policy

– Strong Government standards enforcement Institutions– Phytosanitary and Sanitary standards institutions

• Private sector leadership is key,– Need for strong private sector organizations

• Role of FPEAK (since 1976)• Public- private Partnerships:

• Practical Training Centre (PTC)

…Future Perspectives• Market diversification is a MUST

– China market for African agriculture is KEY to future contribution of farming to poverty alleviation in Africa

• Reducing Cost of production and logistics– Chinese Technology is key.

• Water distribution, transport, greenhouses• Needed

– More cost-effective sea and air connectivity between east Africa and China

• Smallholder production is the future:– Land pressure (high population) in high potential areas– Better wealth distribution for agric revenue– Large-smallscale linkages, and efficient value chains- remain key

Thank YouDr Stephen Mbithi

chiefexecutive@fpeak.org +254722716956