VALUE CHAIN ROADMAP FOR PULSES - · PDF fileThis value chain roadmap was developed on the...

KENYAVALUE CHAIN ROADMAP FOR PULSES2016-2020

KENYA Value Chain Roadmap foR PulsEs

This value chain roadmap was developed on the basis of the process, methodology and technical assistance of the International Trade Centre ( ITC ) within the framework of its Trade Development Strategy programme.

ITC is the joint agency of the World Trade Organization and the United Nations. As part of the ITC mandate of fostering sustainable development through increased trade opportunities, the Trade Development Strategy programme offers a suite of trade-related strategy solutions to maximize the development payoffs from trade. ITC-facilitated trade development strategies and roadmaps are oriented to the trade objectives of a country or region and can be tailored to high-level economic goals, specific development targets or particular sectors, allowing policymakers to choose their preferred level of engagement.

The views expressed herein do not reflect the official opinion of ITC. Mention of firms, products and product brands does not imply the endorsement of ITC. This document has not been formally edited by ITC.

The International Trade Centre ( ITC )

Street address : ITC, 54-56, rue de Montbrillant, 1202 Geneva, SwitzerlandPostal address : ITC Palais des Nations 1211 Geneva, SwitzerlandTelephone : + 41- 22 730 0111Postal address : ITC, Palais des Nations, 1211 Geneva, SwitzerlandEmail : [email protected] : http :// www.intracen.org

Layout: Jesús Alés – www.sputnix.es

v

[ KENYA Value Chain Roadmap foR pulSeS ]

aCknowledgments

This value chain roadmap was elaborated as a component of the ITC Supporting Indian Trade and Investment in Africa ( SITA ) project, a south-south trade and in-vestment initiative that aims to improve the competitiveness of select value chains through the provision of partnerships by institutions and businesses from India. SITA is funded by the United Kingdom Department for International Development ( DFID ).

The formulation of the value chain roadmap was led by the Ministry of Industrialization and Enterprise Development and EAGC with the technical assistance of ITC. This document represents the ambitions of the private and public sector stakeholders for the development of the sector. Stakeholders’ commitment and comprehensive collaboration have helped build consensus around a common vision that reflects the realities and limitations of the private sector, as well as of policymakers and trade-related institutions.

The document benefited particularly from the inputs and guidance provided by the members of the sector team.

Name Organization Position

� Mr. Gerald MASILA EAGC Executive Director � Mr. Samwel RUTTO EAGC Regional Manager, Structured

Trading Systems � Mr. Peter GITHINJI EAGC Regional Programs Coordinator � Ms. Davine MINAYO EAGC Program Officer � Mr. Wainaina KUNG’U – Independent Consultant � Dr. Ganga RAO ICRISAT Senior Scientist � Mr. Oswald MIRITI CGA Project Officer

Technical support and guidance from ITC was rendered through Rahul Bhatnagar, Aman Goel, Bharat Kulkarni, Carlos Griffin. Nzuki Waita provided valuable support as National SITA coordinator.

vi

foRewoRds

Mr. Julius Korir pRinCipal seCRetaRy, industRialisation

ministRy of industRialisation & enteRpRise deVelopment

The Ministry of Industrialization and Enterprise Development ( MoIED ) takes particular pleasure in welcoming the SITA Pulses Sector Strategy Roadmap and its detailed Plan of Action.

Pulses are an important source of supplementary protein to daily diets based on cereals and starchy food for predominantly vegetarian populations like the Indian sub-continent. They provide energy, essential minerals, vitamins and several compounds consid-ered beneficial for good health. In Sub-Saharan Africa as well as India, pulses play a vital role by being a source of livelihood for millions of people; and offer tremendous potential to contribute to the alleviation of malnutrition among resource-poor farmers.

Kenya is the seventh largest world producer of com-mon beans and ranks fourth in terms of world produc-tion of pigeon pea after India, Myanmar and Malawi. Besides this, the country has recently popularized the production and consumption of green grams.

However, despite Kenya’s growing exports of pulses in recent years, it still remains a small player in the global market only ranking 26 th in world exports with a little under US $ 50 million worth of pulses exported in 2013-2014. Kenyan pulses exports have been char-acterized by high volatility over the past decade, with sharp variations observed over short periods of time.

The Pulses Sector Roadmap responds to these con-straints by providing Kenya with a detailed Plan of Action ( PoA ) that will facilitate growth in the sector within the next 5-year period. Through the steps out-lined in the PoA, pulses stakeholders in Kenya will improve their capability to offer competitive products. The roadmap also supports the implementation of Kenya’s Industrial Transformation Program ( KITP ) that has identified Agro-processing and respective

value chains as priority sectors for further develop-ment given the country’s comparative advantage.

The Pulses Sector Roadmap has exceeded our ex-pectations, not only in the successful mobilization of sector stakeholders, but also in facilitating extensive and fruitful discussions between public and private sectors. Some 35 representatives attended two suc-cessive consultations, allowing for a realistic evalu-ation of the challenges and opportunities the sector currently faces and extensive debates as to define the best way forward. This inclusive approach ensured that all stakeholders were committed to the process and left with a clear understanding of each actor’s role.

Market led strategic orientations prioritized by the pulses sector stakeholders and embedded into a detailed implementation plan, provide a clear road map that can be leveraged to address constraints to trade, maximise value addition and support regional integration.

This roadmap is articulated around three strategic objectives :1. Strengthen the production base of the pulses

sector in Kenya2. Promote FDI and develop processing capacity

in Kenya.3. Develop markets and improve access to market

side information and branding for the pulses sector.

In order to maintain the momentum sparked by the consultations, the Ministry is taking steps towards es-tablishing an Apex Body for the Kenya pulses sector which will support the implementation of the opera-tional objectives defined in this Plan of Action.

vii

foRewoRds

Mr. GErAld MAKAu MAsilA exeCutiVe diReCtoR

easteRn afRiCa gRain CounCil

The Eastern Africa Grain Council ( EAGC ) is proud of its role as the Implementing Partner for the pulses value chain sector in the Supporting Indian Trade and Investment for Africa ( SITA ) project in Kenya and Tanzania.

EAGC is a regional, not-for-profit, membership-based organisation for the grain sector in Eastern and Southern Africa. The Council objective is to facili-tate efficient, structured and profitable trade in grain commodities and products for optimal benefits for all stakeholders – from producers to consumers.

In pursuit of our mandate, we provide a range of service and interventions aimed at developing and promoting structure grain trade including policy ad-vocacy to create and enabling environment for the grain sector to thrive, provision of market information through the regional agricultural trade intelligence network www.ratin.net, training and capacity build-ing of stakeholders on structured trading systems through our specialized training and capacity build-ing division the Eastern Africa Grain Institute ( EAGI ), grains post-harvest management, quality and safety assurance, warehousing, warehouse receipt systems and trade facilitation through the recently launched EAGC GSoko grain trading system.

As such, we are delighted by the SITA project which is bringing in the increased attention being afforded to the pulses sector in East Africa. Indeed, we see the pulses sector as a sleeping giant that once awoken, will play a significant role in socioeconomic develop-ment in Kenya, particularly in the context of Vision 2030. The facts truly speak for themselves ; global demand for pulses has been growing rapidly over the years and is forecasted to remain strong for the fore-seeable future, driven by growing populations, rising incomes and increased awareness of the nutritional value of pulses amongst consumers.

India which accounts for a quarter of all global im-ports of pulses, the European Union, the Middle East and North Africa region and China represent lucra-tive markets for pulses. Despite these opportunities in the global pulses market, Kenya accounts for just 0.5 % of global exports as recently as 2014, notwith-standing the increased domestic production. Limited awareness of the potential value of pulses in global markets, relatively weak domestic market linkages, low adoption of good agricultural practices and lim-ited value addition are just some of the stumbling blocks that will need to be addressed henceforth.

Given the need for clear strategic orientation for the pulses value chain in Kenya, the Kenya Value Chain Roadmap for Pulses has therefore been developed at an opportune moment. This Roadmap is the prod-uct of extensive consultations with public and private sector stakeholders, leading to unprecedented levels of cooperation among sector operators. Key private sector stakeholders and leading institutions facilitat-ed an exhaustive analysis of the sector. Market-led strategic interventions that have been prioritized by stakeholders are embedded into a detailed imple-mentation plan, ensuring that this Roadmap can be leveraged to address constraints to trade, maximize value addition and support regional integration, and eventually transform Kenya into a major player in the global pulses market.

EAGC has been privileged to participate in the devel-opment of this Roadmap and reaffirms its full com-mitment to spearhead its implementation in close collaboration with the Government of Kenya, ITC and other strategic partners. With the Roadmap in place, we urge all stakeholders to join forces and revamp the Pulses Sector in Kenya.

viii

Contents

acknowledgments v

ExEcutivE suMMArY xii

GlobAl PulsEs vAluE chAiN 17grown in many areas but dominated by a few large supply countries 17

larger number of exporters dominated by a small number of leading suppliers 19

dry peas, kidney beans and lentils dominate the trade of pulses 21

switch of import markets from the west to the east 22

strong indian demand keeps prices remunerative 25

AN EvolviNG vAluE chAiN iN NEEd of suPPort 27

CompetitiVe ConstRaints affeCting the Value Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

supply-side issues 43

Business environment issues 46

market entry issues 47

development issues 47

thE wAY forwArd 49

stRategiC oBjeCtiVes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

leVeRaging pRoduCt diVeRsifiCation and maRket oppoRtunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

leVeRaging inVestment to sCale up opeRations and ClimB the Value addition laddeR . . . . . . . . 55

pulse trading and processing 56

agribusiness inputs and services 56

identified oppoRtunities foR inVestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

MoviNG to ActioN 61

pRioRity aCtions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

roAdMAP PlAN of ActioN 65

appendix: kenya’s policies and trade agreements in a nutshell 74

References 81

annex 1: list of invited participants 83

ix


figuRes

figure 1 : strategic objectives of the roadmap and related impact xvi

figure 2 : global pulses production and area harvested, 2003–2013 17

figure 3 : pulses production by region, average 2009–2013 18

figure 4 : share of pulse varieties in global production ( % ) – 2004 and present 18

figure 5 : exports of pulses, 2004–2014 ( us $ billions ) 19

figure 6 : exports of pulses by region or regional group, 2004–2014 ( us $ billions ) 20

figure 8 : kenyan production of pulses, 1961–2013 27

figure 9 : production of pulses in kenya, 2000–2013 29

figure 10 : production of pulses in kenya by subsector, 2000–2013 ( thousands of tons ) 29

figure 11 : kenyan production of dry beans, 2000–2013 30

figure 12 : kenyan production of cowpeas, 2000–2013 31

figure 13 : kenyan production of pigeon peas, 2000–2013 32

figure 14 : Current value chain 34

figure 15 : trade support network 35

figure 18 : kenyan exports of pulses to selected markets, 2004–2014 ( us $ millions ) 38

figure 19 : kenya’s export basket of pulses, 2004–2014 ( us $ thousands ) 39

figure 20 : pulse production, ethiopia, kenya and the united Republic of tanzania, 2005–2013 ( tons ) 40

figure 21 : pulses exports, ethiopia, kenya and the united Republic of tanzania, 2001–2013 ( tons ) 41

figure 22 : export to production, ethiopia, kenya and the united Republic of tanzania, 2003–2013 ( % ) 41

figure 23 : future value chain 60

x

taBles

table 1 : top 10 exporters of pulses ( harmonized system ( hs ) 0713 ), 2014 20

table 2 : pulse varieties with international supply >us $ 1 billion, 2014 21

table 3 : world-leading importers of pulses ( hs 0713 ) 22

table 4 : pulse production, trade and consumption of india, 2013–2014 to january 2015 ( tons ) 23

table 5 24

table 6 : production of pulses by varieties, ethiopia, kenya and the united Republic of tanzania, 2013 ( tons ) 40

table 7 : the investment climate in kenya and possible competitors for pulse investment 42

table 8 : product diversification and market opportunities 52

table 9 : Value chain segments needing fdi and likely sources 57

table 10 : the priority actions to kick-start implementation 61

xi


aCRonyms

The following abbreviations are used :

AffA Agriculture, Fisheries and Food Authority

AGMArKNEt Agricultural Marketing Information Network

cAGr Compound Annual Growth RatecGA Cereal Growers AssociationEAc East African CommunityEAGc Eastern Africa Grain CouncilEPc Export Promotion CouncilEPZ Export Processing ZoneEPZA Export Processing Zones AuthorityEu European UnionfAo Food and Agriculture Organization

of the United Nationsfdi Foreign Direct Investmentha HectareshaNPv Helicoverpa armigera

Nucleopolyhedrosis virushg Hectogramshs Harmonized SystemicAr Indian Council of Agricultural ResearchicrisAt International Crops Research Institute

for the Semi-Arid TropicsiPGA India Pulses and Grains Associationitc International Trade Centre

KAlro Kenya Agricultural & Livestock Research Organization

KEbs Kenya Bureau of StandardsKENAff Kenya National Farmers’ FederationKeninvest Kenya Investment AuthorityKEPhis Kenya Plant Health Inspectorate ServiceKEPsA Kenya Private Sector AllianceKNcci Kenya National Chamber of Commerce

and IndustryKrA Kenya Revenue AuthorityMAlf Ministry of Agriculture, Livestock

and FisheriesMENA Middle East and North AfricaMoiEd Ministry of Industrialization and

Enterprise DevelopmentPoA Plan of ActionPPP Public–Private PartnershiprAtiN Regional Agricultural Trade Intelligence

NetworksitA Supporting Indian Trade and Investment

in AfricasMs Short Message ServicestAK Seed Trade Association of KenyauAE United Arab Emirates

Photo: (CC BY-SA 2.0) CIAT (CC BY-SA 2.0), A climbing bean Aarmer.Ap

g

xii

exeCutiVe summaRy

the goal of Kenya’s Pulses value chain roadmap

the goal of Kenya’s Pulses value chain roadmap is to set the sector on the course of strategic develop-ment by addressing constraints in a comprehensive manner and defining concrete opportunities that can be realized through the specific steps detailed in its Plan of Action ( PoA ). Kenya’s pulses sector has recently shown signs of development, with booming exports in recent years as well as promising signs of diversification. While they were traditionally grown for sustenance, pulses have now become an important source of income for small Kenyan farmers. Nonetheless, the sector is still largely underdeveloped and exports are currently characterized by high volatility and a low level of survivability of trade relationships.

Efforts to address persistent constraints along the value chain must be made if the country is to compete on the international stage. The industry must build stronger linkages across the value chain, develop its knowledge base and attract investment in order to reach a higher – and sus-tainable – growth path and value addition. This will require addressing gaps in input supply, skills, market structure and institutional support. The PoA responds to these require-ments by setting three strategic objectives.

1. Strengthen the production base of the sector.a. Develop a baseline for the sector and encourage

information sharing among sector stakeholders.b. Ensure a reliable and consistent supply of certified

seeds.c. Enhance the availability and adoption of quality

( non-seed ) inputs.d. Improve adoption of best practices in the sector.

2. Promote foreign direct investment ( FDI ) and develop processing capacity in Kenya for processing and export of value added pulses.a. Promote investment in the pulses processing sector.b. Facilitate technology transfer and equipment upgrade

in the sector.c. Improve essential infrastructure in the sector.d. Improve access to finance in the sector.

3. Develop markets and improve access to market-side information and branding for the sector.a. Support market development efforts, both domestic

and international.b. Develop new tools for provision of timely and rel-

evant market intelligence.c. Build and promote the Kenyan pulses brand.

Usually intercropped with maize, sugar cane and coffee, and grown entirely by smallholder farmers, pulses have historically received little attention from support institutions in Kenya, which tended to focus more on cash crops such as maize.

Due to their hardiness and resistance to drought, which makes them ideal for Kenya’s often sporadic rainfall, and also being an important food source due to their high protein content and relatively low cost when compared with meat, pulses have gained in popularity among farmers. In 2013, Kenyan farmers were cultivating pulses on 1.47 million hectares ( ha ) of land, involving roughly 1.8 million households and producing 1 million tons of pulses. Domestic production is largely dominated by the production of dry beans ( 715,000 tons ), followed by pigeon peas ( 166,000 tons ), and cowpeas ( 134,000 tons ). Despite periods of fluctuation the volume produced, as

Photo: (CC BY-SA 2.0) CIAT (CC BY-SA 2.0), A climbing bean Aarmer.Ap

g

xiii


well as the area harvested and yields, has progressed over the past decade, making Kenya the fourth top producer of pulses in Africa

after Nigeria, the United Republic of Tanzania and Ethiopia, and number 17 in the world ( Food and Agriculture

Organization of the United Nations ( FAO ) ).

Despite these recent positive developments, the sector remains largely underdeveloped, in

particular compared with other African produc-ers such as the United Republic of Tanzania and Ethiopia, and vertical and horizontal business linkages tend to be undeveloped and informal because trade is based on temporary relationships with limited use of contracts. More generally, the indus-try appears to be relatively unstructured and poorly organized, partly resulting from low levels of cooperation among the different actors and a lack of trust among the different stakeholders op-erating in the sector. Farmers’ groups and cooperatives in the pulses sector also appear to be weak or non-existent, in turn contributing to the overall lack knowledge of the potential of pulses in

Kenya.

The most significant challenge at the mo-ment is achieving adequate dissemination

of improved seed varieties because most farms use their own beans for seed or buy from

local markets. Lack of such dissemination has severely limited productivity gains and has greatly

hindered the development of the supply chain, further complicated by farmers’ reluctance to pay the high cost of

certified seeds. Improved bean varieties could, for example, yield from 1,500 to 2,500 kg / ha, whereas the majority of farmers

use seeds that yield approximately 400 kg / ha. In addition to the low quality of seeds, other inputs such as fertilizers, insecticides and pesticides

appear to be used by only a small proportion of the sector’s farmers.

The low adoption of improved agricultural practices also significantly hinders the performance of the sector. In particular, postharvest practices suffer from a number of problems including inappropriate handling, inadequate storage methods and facilities, and common pest infestation, resulting in a higher than necessary inci-dence of spoilage. These factors are further complicated by slow transport caused by an inadequate road system. International buyers have also highlighted the uneven quality of Kenyan products – which is a major limiting factor for the export of pulses from Kenya – due to a lack of quality certification and standardization mechanisms as well as a lack of knowledge about specific markets’ requirements in terms of quality standards.

xiv

Another key issue affecting the capacity of the industry is the limited knowledge base of pulse producers and exporters. Market information appears to be a major constraint for Kenyan producers and exporters because very little information is available on issues such as pulse varieties and types, the calendar of different pulses globally, market requirements, and price fluctuation and movements, among others. This lack of knowledge impacts the development of pulse exports in Kenya. Building capacity on these issues will allow the industry to identify international business op-portunities while mitigating some of the costs and risks for new market development, ultimately resulting in greater competitiveness.

The current stage of maturity of the sector is hindering Kenya’s ability to fully capitalize on the industry’s strong global growth. Driven by rising incomes and population, and greater awareness of the health properties of pulses, the global pulses sector is projected to see stable demand and consumption trends in the long term. In line with the upward trend in global production, the growth path of pulse exports globally has been significant : pulse exports doubled in 2003 in comparison with the previous 20 years.1 The major importers of this commodity are concentrated in South Asia, China, Europe, and the Middle East and North Africa ( MENA ) region, India alone capturing nearly a quarter of the world imports.

In such favourable circumstances, and despite Kenyan’s booming exports of pulses in recent years, the country remains a small player in the global market, only ranking 26 in world exports, with US $ 49.8 million worth of pulses exported in 2013–2014. Kenyan exports have been characterized by high volatility over the past decade, with sharp variations observed within short periods of time, also reflecting the low level of survivability of export relationships. Besides, the sector is extremely vulnerable to imports from India and Pakistan, which together account for 82 % of the pulses exported by Kenya. This also highlights the fact that Kenyan firms are not taking advantage of the preferential market access Kenya benefits from in many countries2 as these markets remain largely untapped. Although South Asia, China, Europe and the MENA region offer the maximum potential for pulse exports, market characteristics and sensitivities vary from one region to another, forcing exporters to be fully aware of market requirements while exploring these opportunities.

Although signs of product diversification have recently been observed, it ap-pears to be difficult, at this stage of maturity of the sector, to add value to pulse products in Kenya. More than half of Kenya’s pulse exports are comprised of kidney beans and white pea beans, with most exports of pulses consisting of raw products with extremely limited value added by processors. Kenya’s product diversification is nevertheless promising, providing that concerted actions are taken to expand further and promote long survival rates. Extra efforts also need to be made to penetrate new markets and to unlock the production of more pulse varieties.

Kenya has to catch up with its competitors to become a major player in the global pulses market. In order to achieve a greater level of competitiveness, the sector must build stronger linkages across the value chain with the view to structuring the

1.– Food and Agriculture Organization of the United Nations ( 2005 ). Pulses : Past Trends and Future Prospects. Summary of paper con-tributed by FAO to the 4th International Food Legumes Research Conference, New Delhi, 18–22 October. Available from http : // www.fao.org / fileadmin / templates / est / COMM_MARKETS_MONITORING / Pulses / Documents / PulsesStudy.pdf.2.– Kenya is a signatory state of the Common Market for Eastern and Southern Africa Free Trade Area, a Member State of the East African Community ( EAC ), and has recently signed the EU–EAC Economic Partnership Agreement.

xv


sector and alleviating difficulties in production, promoting FDI in the pulse process-ing sector, and ensuring structured export development and promotion efforts.

The roadmap responds to these needs by providing Kenya with a detailed PoA that will facilitate growth in the sector within the next five-year period. Through the steps outlined in the PoA, stakeholders will improve their ability to offer competitive products. To this end, improved competitiveness must be tied to further penetration of current markets in the short term, expansion into new markets in the medium term, and the development of new products in the longer term. Particularly promising prospects for sectoral development may lie within the following market opportunities and products.

Target market Product Distribution channel

India and Pakistan

� Pigeon peas � Chickpeas ( yellow gram ) � Kidney beans � Green gram ( green mung ) � Processed dhal

� Wholesalers � Processors

China � Dry peas � Green gram ( green mung )

� Wholesalers � Processors

Europe ( including the United Kingdom of Great Britain and Northern Ireland )

� Dry beans, processed dhal, pigeon peas, chickpeas ( yellow gram ) kidney beans & green gram ( green mung )

� Processed dhal

� Wholesalers � Processors � Distributors

North Africa ( Algeria, Morocco, Egypt ) and MENA region ( United Arab Emirates ( UAE ), Qatar, Israel )

� Pigeon peas � Chickpeas ( yellow gram ) � Green gram ( green mung ) � Processed dhal

� Wholesalers � Distributors

United States of America and Canada � Processed dhal � Wholesalers � Distributors

Regional markets

� Mixed beans � Sugar beans � Processed dhal

� Wholesalers � Distributors

The roadmap was the result of extensive consultations with public and private sector stakeholders, leading to unprecedented levels of cooperation among sector operators. Key private sector stakeholders and leading institutions facilitated an exhaustive analysis of the sector. Market-led strategic orientations, prioritized by stakeholders and embedded into a detailed implementation plan, provide a clear roadmap that can be leveraged to address constraints to trade, maximize value addi-tion and support regional integration. In addition, the inclusive approach ensured that all stakeholders were committed to the process and left with a clear understanding of each actor’s role.

xvi

The roadmap is articulated around three strategic objectives.

Figure 1 : Strategic objectives of the roadmap and related impact

[ GLOBAL PULSES VALUE CHAIN ]

17

gloBal pulses Value Chain

Pulses play an important role in farming systems worldwide. They have proved to be ideal crops for achieving improve-ments in nutrition and health conditions, reducing poverty through higher food security and enhancing ecosystem re-silience, particularly in developing countries.

Trade trends for this crop are determined by importing countries’ local production and by production in exporting countries, both of which are affected by weather conditions, disease management, price increases of other crops ( as farmers can be compelled to move towards a higher rent crop ) and countries’ trade policies ( such as export incen-tives ). The following trends characterize the sector.

gRown in many aReas But dominated By a few laRge supply CountRies

Fuelled notably by increasing demand from India and other developing countries, annual global production of pulses has seen unprecedented growth over the past decade with an average of 70 million tons produced yearly since 2009. Production grew at a sustainable average annual growth rate of 2.1 % over the period 2003–2013, from 59.5 million

tons in 2003 to 73.2 million tons in 2013 ( FAO ), indicating the excellent health of the sector ( see figure 2 ). According to the FAO Statistics Division, about 74 % of pulses are used for hu-man consumption and 20 % for feed use, with the remainder being used as seed.

increasing cultivated area but weak productivity growthThe progression of global production goes hand in hand with a significant increase in the area cultivated over the past five years. The average area under cultivation has gone up to 80 million ha since 2010, an encouraging sign considering that the area under cultivation stagnated at approximately 70 million ha between 1990 and 2003 ( see figure 2 ). Yields also continuously increased globally over the past decade, from 0.82 tons / ha in 2003 to 0.9 tons / ha in 2013, but significant discrepancies between developed and developing countries have been observed. For example, Canada reported yields well above 1.5 tons / ha, whereas the largest producer, India, is producing less than 1 ton / ha. This gap can be explained by differences in input use, technology and infrastructure. Owing to low and stagnant yields in developing countries, pulse production did not grow as rapidly as that of cereals and oilseeds.

Figure 2 : Global pulses production and area harvested, 2003–2013

50

60

70

80

90

50

60

70

80

90

2003

20

04 20

05 20

06 20

07 20

08 20

09 20

10 20

11 20

12 20

13

Hect

ares

, mill

ions

US$,

mill

ions

Area cultivated Production

Source : Food and Agriculture Organization of the United Nations ( 2015 ).

18


Figure 3 : Pulses production by region, average 2009–2013

Africa 22%

Americas 20%

Asia 45%

Europe 9%

Oceania 4%


Figure 4 : Share of pulse varieties in global production ( % ) – 2004 and present

31

20

14

7 6 6 5

13

17

24

16

9 9 6 6

11

0

5

10

15

20

25

30

35

Dry beans Dry peas Chickpeas Dry broad beans

Cow peas Lentils Pigeon peas

Others

2004 Present

Source : FAOSTAT ( 2015 ).

In spite of their relatively low yields, developing countries are the largest producers of pulses, accounting for around 70 % of global production, with India leading the way. With its large vegetarian population that is largely dependent on pulses, wheat and milk as its major sources of protein, India remains by far the largest producing country, alone account-ing for 25 % ( or 18.3 million tons ) of world production in 2013 ( FAO ). It is followed by Canada ( 8.3 % ), Myanmar ( 7.1 % ),

China ( 6.1 % ) and Nigeria ( 4.1 % ), which together account for more than half of global output. Pulses of African origin have gained significant importance in recent years, from 12.2 million tons produced over the period 2004–2008, or 20 % of global production, to 15.4 million tons between 2009 and 2013, or 22 % of total production ( see figure 3 ).


19

the medium-to-long term outlook is promising

Supported by an anticipated growth in yields to reach an av-erage of 1.6 tons / ha by 2050 ( Alexandratos and Bruinsma, 2012, p. 121 ), pulse production is expected to grow in the long term and is forecast to reach 100 million tons by 2050. Driven by rising incomes and population, and greater aware-ness of the health properties of pulses, the sector is pro-jected to see stable demand and consumption trends in the long term. The FAO ( Alexandratos and Bruinsma, 2012, p. 47 ) further anticipates that ‘for the future, no major chang-es are foreseen in per capita consumption of pulses, with the average of the developing countries remaining at 7-8 kg’.

shift in consumption patterns

Significant changes have been observed in global con-sumption, and therefore production, of pulses over the past decade. Dry beans, which include Phaseolus species ( kid-ney beans, lima beans and tepary beans ) and Vigna spe-cies ( adzuki beans, mung beans and black gram ) used to be the largest category of pulses grown globally until 2004, contributing about 31 % of total pulse production. The share of dry beans has gone down significantly and now repre-sents 17 % of global pulse production. This variety has pro-gressively been replaced by dry peas as the leading variety over the past decade, going up from 20 % to 24 % of global production. One major reason that can be identified is the significant reduction of production of black beans in China. Chickpeas, representing 16 % of global production, stand as the third-largest grown variety, followed by cowpeas ( 9 % ) and broad beans ( 9 % ) ( see figure 4 ).

laRgeR numBeR of expoRteRs dominated By a small numBeR of leading supplieRs

In line with the upward trend in global production, the growth path of global pulse exports has been impressive over the past three decades. As early as 2004, an FAO study ob-served that exports of these crops doubled in 2003 in com-parison with the previous 20 years.3 The trend continued along the same path in subsequent years with exports grow-ing at a sustained Compound Annual Growth Rate ( CAGR ) of 22.5 % between 2004 and 2008. Pulse exports reached a record high of US $ 10.1 billion in 2014. Such trends can be explained by increased yields ( notably in developed coun-tries ), the surge in cultivated areas ( chiefly led by developing countries ) and, from the demand side, by the increasing world population and by greater importance being given to pulses’ nutritional value across the globe.

Looking specifically at the supply side, trade data show that the sector has seen a larger number of exporters over the past five years : from 63 in 2001, the number of countries with export values above US $ 1 million reached 85 in 2014.

Despite this dynamism of the pulses market and the multiplication of suppliers, the supply side remains con-centrated in a limited number of exporters. Five countries were responsible for 65 % of global exports over the period 2013–2014, with Canada taking the lion’s share, alone ac-counting for 28.9 % of global exports. Myanmar approaches double-digit market share ( 9.7 % ), followed by the United States and China, each of whom supplied 9.2 % of the mar-ket that year.

3.– Food and Agriculture Organization of the United Nations ( 2005 ). Pulses : Past Trends and Future Prospects Summary of paper contributed by FAO to the 4th International Food Legumes Research Conference, New Delhi, 18–22 October. Available from http : // www.fao.org / fileadmin / templates / est / COMM_MARKETS_MONITORING / Pulses / Documents / PulsesStudy.pdf.

Figure 5 : Exports of pulses, 2004–2014 ( US $ billions )

0

2

4

6

8

10

12

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US$,

bill

ions

Exports

Source : ITC calculations based on United Nations Comtrade statistics ; International Trade Centre ( 2015 ).

20


Table 1 : Top 10 exporters of pulses ( Harmonized System ( HS ) 0713 ), 2014

HS 0713 – Dried vegetables, shelled

ExportersExports

2013–2014( US $ millions )

CAGR Share in world exports

CAGR2010–2014 ( % )

Average2011–2012 ( % )

Average2013–2014 ( % )

World 9 776 6.8 100 100

1 Canada 2 789 8.7 23.4 28.6

2 Myanmar 943 4.2 9.4 9.7

3 United States 894 5.8 8.4 9.2

4 China 892 -1.8 11.1 9.2

5 Australia 796 8.9 10.9 8.2

6 India 283 1.9 2.4 3.0

7 Argentina 274 4.0 5.2 2.8

8 Ethiopia 263 20.4 1.9 2.7

9 Turkey 227 -3.1 2.6 2.3

10 Egypt 220 33.0 1.2 2.2

15 United Republic of Tanzania 132 17.8 1.0 1.4

23 Kenya 50 6.8 0.2 0.5

Source : International Trade Centre ( ITC ) calculations based on United Nations Comtrade statistics ; International Trade Centre ( 2015 ).

Figure 6 : Exports of pulses by region or regional group, 2004–2014 ( US $ billions )

0

2

4

6

8

10

12

2004

20

05

2006

20

07

2008

20

09

2010

20

11

2012

20

13

2014

US$,

bill

ions

America Asia Europe Africa Oceania

Source : International Trade Centre ( 2015 ).

pulses of african origin are gaining market share

The African continent produces several varieties of puls-es that are in high demand in consuming countries, chief among which is India. Pulses like mung beans, chickpeas ( yellow gram variety ), pigeon peas and kidney beans are already being exported to India from Africa, with

major exporters including Ethiopia, the United Republic of Tanzania, Malawi, Kenya, Mozambique, Madagascar, Uganda and, more recently, Sudan. African origin pulses were first introduced by the State Trading Corporation of India. Subsequently, some private players have entered the market and are exporting to the South Asia region. Further, Indian buyers and processors are increasingly looking at


21

African origin due to logistical convenience, availability of raw materials for processing and low processing costs. Indian importers have also been trying to look for alterna-tive origins to diversify the import from Myanmar.

Pulses of African origin are gaining market share. Among the top 20 exporters of pulses, Ethiopia and the United Republic of Tanzania achieved significant growth rates in exports between 2010 and 2014, with a CAGR of exports in value of 20.4 % and 17.8 %, respectively. With US $ 50 mil-lion worth of pulses exported over the period 2013–2014, Kenya’s share in world exports is roughly 0.5 %, a significant progression compared with the 0.2 % share the country re-ported for the period 2011–2012.

The major African origin pulse category imported in South Asia is Tanzanian pigeon peas, imported to the level of 22 % of the total imports of pigeon peas in India. In addi-tion to pigeon peas, the United Republic of Tanzania also exports chickpeas to India. To a lesser extent, Mozambique, Malawi and Sudan are also supplying the Indian market with this variety of pulse. Mung beans of African origin are also being exported to India from the United Republic of

Tanzania, Kenya and Mozambique. Finally, Ethiopia appears to be a major supplier of kidney beans to the Indian market. These imports are expected to continue growing in the long term given shortfalls in domestic production.

dRy peas, kidney Beans and lentils dominate the tRade of pulsesWhile all varieties experienced strong growth over the past five years, the expansion of dry peas and kidney beans & white pea beans exports is especially notable, with a CAGR of 10 % over the period 2010–2014. Canada is by far the top exporter of dry peas and lentils, whereas Myanmar and Australia are the most important exporters of urd, mung, black / green gram beans and chickpeas, respectively. China still largely dominates exports of kidney beans & white pea beans but its market share is declining.

Table 2 provides information on pulse varieties whose international supply, on average for 2013–2014, was above US $ 1 billion.

Table 2 : Pulse varieties with international supply >US $ 1 billion, 2014

Dry peas ( HS 071310 ) Kidney beans & white pea beans ( HS 071333 ) Lentils ( HS 071340 )

Exporter

Average 2013-2014

( US $ millions )CAGR

2010–2014 Exporter

Average 2013-2014


2010–2014 Exporter

Average 2013-2014


2010–2014

World 2 134 10 % World 1 991 10 % World 1 907 3 %

Leading and growing Leading and growing Leading and growing

Canada 1 194 12 % Argentina 195 2 % Canada 1 220 7 %

United States 265 9 % United States 181 20 % Australia 197 16 %

Russian Federation 103 29 % Ethiopia 166 42 %

United States 147 1 %

Australia 73 3 % Egypt 164 51 % Sri Lanka 15 8 %

Ukraine 46 7 % Canada 146 4 % Egypt 12 16 %

Leading but declining Leading but declining

China 577 -5 % Turkey 181 -3 %

UAE 34 -17 %

Urd, mung, black / green gram beans ( HS 071331 ) Chickpeas ( HS 071320 )

ExporterAverage 2013-2014


2010–2014 ExporterAverage 2013-2014


2010–2014

World 1 006 0 % World 1 093 6 %

Leading and growing Leading and growing

China 196 6 % Australia 298 8 %

Indonesia 26 28 % Mexico 157 16 %

Egypt 20 27 % Russian Federation 88 103 %

United States 9 6 % United States 48 3 %

Malawi 8 134 % Argentina 38 20 %


Myanmar 588 -3 % India 264 -1 %

Australia 48 -22 % Canada 44 -10 %

Ethiopia 34 -3 %

22


Table 3 : World-leading importers of pulses ( HS 0713 )

0713 – Dried vegetables, shelled

ImportersImports

2013–2014( US $ millions )

CAGR Share in world imports

CAGR2010–2014 ( % )

Average2011–2012 ( % )

Average2013–2014 ( % )

World 10 255 6.6 100 100

1 India 2 488 9.5 22.0 24.2

2 China 554 11.8 5.2 5.5

3 Egypt 437 8.4 4.6 4.3

4 Bangladesh 403 3.5 2.9 3.9

5 United States 400 14.0 4.5 3.9

6 Turkey 323 10.5 2.7 3.2

7 Pakistan 320 -0.5 4.3 3.2

8 Italy 314 10.6 2.8 3.1

9 Spain 271 3.0 3.0 2.7

10 Algeria 270 2.4 2.7 2.7

Source : ITC calculations based on United Nations Comtrade statistics ; International Trade Centre ( 2015 ).

switCh of impoRt maRkets fRom the west to the eastThe dynamic of pulse imports has dramatically changed over the past 10 years. The major importers of this com-modity are now concentrated in South Asia, China, Europe and the MENA region. Europe, once the major importer of pulses, has reported a significant decline in its imports over the years, while China, Central Asian countries, and most importantly India, are gaining importance in world mar-kets. The South Asia region, which includes India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan, accounts for the largest consumption and is the fastest-growing pulse-consuming region, with an increase in imports of than more than 250 % growth in the past 10 years.

The market for pulses appears to be a vibrant one, with an annual growth of imports of 6.6 % between 2010 and 2014, driven by booming Indian demand that reported an impressive CAGR for imports of 9.5 % over the period. In 2014, the global market for the commodity was valued at ap-proximately US $ 10.3 billion of imports, India alone capturing nearly a quarter of world imports. Other important markets, but far behind India, include China, Egypt, Bangladesh and the United States, each accounting for approximately 4 % to 5 %. With double-digit CAGRs for imports of pulses be-tween 2010 and 2014, it is to be noted that China, the United States, Turkey and Italy have experienced strong expansions as target markets.

despite being the world’s largest producer of pulses, india has emerged as the largest importer of pulses in the worldIndian imports increased dramatically over the past decade, from US $ 446 million in value in 2004 to US $ 2,685 million in 2014. Domestic production of pulses has proven insufficient to supply booming demand fuelled by an increasing popu-lation, sustained economic growth and rapid urbanization. The situation has forced the country to import increasing quantities of pulses from the rest of world to bridge this wid-ening gap ( see table 4 ). India imported more than 4 million tons of pulses in 2014, including chickpeas, pigeon peas, mung beans, lentils and dry peas, with major imports com-ing from Canada ( accounting for 37.4 % of India’s imports of pulses in 2014 ), Myanmar ( 29.8 % ), Australia ( 7.1 % ) and the United States ( 6.3 % ) ( ITC Trade Map Database, 2015 ).

India’s high import dependency led the Government of India to ban the export of pulses ( except kabuli chana ( chick-peas ) ), including processed pulses, in 2006. This has led to some structural changes, and processing plants are being relocated to places such as Dubai and Singapore, mostly to ensure supply to the large South Asian diaspora that had been importing processed dhal from India. Indian au-thorities have also permitted duty-free import of pulses into the country, contributing to the sharp increase in imports.

With a growing population expected to reach 1.7 billion by 2030 – from the current 1.2 billion – the Indian pulse re-quirement for the year 2030 is estimated at 32 million tons, implying that India would have to increase its production by an unlikely 80 % in order to meet domestic demand. Indian import dependency for pulses is consequently expected to rise significantly, offering a long-term opportunity for inter-national suppliers.


23

Table 4 : Pulse production, trade and consumption of India, 2013–2014 to January 2015 ( tons )

2013–2014 2014–2015 January 2015

Production 19.78 18.4 18.43

Import 3.04 3.41 4.1

Total availability 22.82 21.81 22.53

Export 0.34 0.23 0.19

Domestic availability 22.48 21.58 22.34

Source : Indian Directorate of Economics and Statistics.

significant contraction of european demand

Once the most important market for pulses with about 45 % of the world’s pulse imports handled in 2004, Europe has now slipped to second position, standing at approximately 22 % of total imports with an average import of about 2.2 million tons every year ( FAO ).

Several factors can explain this fall in imports, includ-ing an inadequate level of product innovation adapted to modern life, a small home supply of pulses and competition from cheaper low-quality imports. An important factor when it comes to the European market for pulses is that pulses are consumed in many different ways in the various European Union ( EU ) countries, due to different regional food habits and traditions, and to differences in the supplies of grain legumes. Although dry beans are the most consumed pulse in the EU, it is important to keep in mind that preferences between varieties vary from one country to another.

A significant amount of pulse imports were for animal feed because the production of meat and dairy products in most EU countries is to a large degree dependent on pro-tein feed imports. However, a shift from pulses to soybeans, mainly imported from Latin America, has been observed during the past several years.

Despite the recent loss of market share, pulse demand could rebound in Europe with recent increases in preferenc-es for vegan and gluten-free diets, offering exciting export opportunities. As discussed above, pulses have significant nutritional and health advantages for consumers and their cultivation has a positive impact on agriculture and the en-vironment. If Europe is a slow market, trends in consump-tion of pulses could change, especially if awareness-raising campaigns about the benefits of pulses are improved and if the food industry and professional organizations take up the challenge to incorporate grain legumes in novel, convenient and healthy food products.

pulses are seeing an increase in demand from the non-traditional processed food sector, namely with an increasing drive towards gluten-free diets

The pulses industry is estimated to be worth over US $ 100 billion at the retail level. With greater awareness of coeliac disease and gluten sensitivity, the demand for gluten-free products is on the rise, resulting in a significant change in dietary patterns in the past few years. Benefiting from these developments, pulses such as yellow peas, lentils and chickpeas are gaining recognition as the ‘new and im-proved’ heart of healthy foods and new processed products made from lentils and chickpeas – such as pasta, noodles and chips – have been developed.

Change in consumption patterns in China

With a growing population of 1.35 billion, China has recently shown an impressive rise in demand for pulses to become the second major importer in Asia and the third-largest mar-ket in the world.

China reported a CAGR of imports of 11.8 % between 2010 and 2014, its share in world imports rising from less than 1 % ( average for the years 2003–2004 ) to 5.5 % ( aver-age for 2013–2014 ) over the past decade. Once a net ex-porter of cheap, low quality pulses such as black beans, China, with its economic resurgence and growing middle class, is now importing some of those very same commodi-ties, the result of shifting demands and a rapidly changing society. Increasing production costs in local agriculture have led to a loss of competitiveness of the pulses sector, result-ing in a contraction of production and exports. The 2013 flooding that partially destroyed crops has also contributed to the drop in black bean exports from China.

The country is importing significant quantities of dry peas, consumed in various forms including starch, vermicelli and snack food. The increasing influence of Western culture and food habits in China has contributed to this change in consumption patterns with a new demand for processed pulses that were not traditionally consumed. Recent invest-ments in processing factories confirm this trend, resulting in

24


a sharp increase in imports of dry peas by China in recent years. Although the carry-over stock kept imports to a level of 700,000–800,000 tons in 2014, imports are expected to rebound to an average of 1 million tons every year.

the mena region is a traditional importer of pulses, which feature prominently in regional cuisine

The MENA region has high population growth rates and many countries are seeing sustainable growth in food ser-vice and retail sales. Consumers in the MENA region are increasingly using supermarkets for food purchases, which has in turn led to an increase in demand for processed puls-es such as canned pulses and pulse flours. The extraordi-nary growth in the hospitality industry in countries such as Morocco, Egypt and Israel, and the city of Dubai ( UAE ), cou-pled with the introduction of new cuisines, is also pushing

demand for pulses such as chickpeas, lentils, peas and beans to new levels. Demand for pulses is on the rise among both traditional consumers and new markets in this region.

demand and consumption growth driven by the indian marketAs noted above, the Indian market is key in terms of driving consumption. Table 5 provides information on pulse varie-ties whose international demand, on average for 2013–2014, was above US $ 1 billion, namely, ‘dry peas’ ( HS 071310 ), ‘kidney beans & white pea beans’ ( HS 071333 ), ‘lentils’ ( HS 071340 ), ‘urd, mung, black / green beans’ ( HS 071331 ) and ‘chickpeas’ ( HS 071320 ).

All but one of the five categories are largely dominated by Indian demand, kidney beans & white pea beans being the exception. European countries, including Italy, the United Kingdom, Spain and France, constitute the top importers of this specific category of pulses.

Table 5

Dry peas ( HS 071310 )Kidney beans & white pea beans( HS 071333 )

Lentils ( HS 071340 )

ImporterAverage

2013–2014CAGR

2010–2014 ImporterAverage

2013–2014CAGR

2010–2014 ImporterAverage

2013–2014CAGR

2010–2014

World 2 284 12 % World 2 074 9 % World 1 900 2 %

Leading and growing Leading and growing Leading and growing

India 692 13 % Italy 200 19 % India 458 23 %

China 375 15 %United Kingdom 116 3 % Turkey 167 1 %

Bangladesh 179 12 % India 110 12 % UAE 120 6 %

Pakistan 109 21 % Venezuela 103 11 % Spain 67 0 %

United States 90 32 % Leading but declining Pakistan 59 4 %

Brazil 200 -2 %

Mexico 113 -6 % Leading but declining

Sri Lanka 113 -2 %

Bangladesh 112 -12 %

Urd, mung, black / green gram beans( HS 071331 )

Chickpeas ( HS 071320 )

Importer Average 2013–2014 CAGR 2010–2014 Importer Average 2013–2014 CAGR 2010–2014

World 1 040 1 % World 1 108 4 %

Leading and growing Leading and growing

Japan 91 4 % India 262 24 %

Indonesia 84 21 % Bangladesh 111 7 %

Viet Nam 53 40 % Algeria 101 3 %

United States 31 2 % Spain 80 1 %


India 528 -1 % Pakistan 38 -30 %

Malaysia 21 -2 % Saudi Arabia 27 -8 %

Photo: (CC BY-SA 2.0) CC0 Public Domain, beans-228870.Apg


25

stRong indian demand keeps pRiCes RemuneRatiVeThe increasing international demand for pulses has driven up the price of the commodity. Average prices have been rising, suggesting a shortfall of supply. India being the larg-est importer of pulses, the Indian market situation and crop positions significantly affect global prices. Importantly, con-sumption patterns in India indicate a strong preference for

low-cost varieties and the use of substitutions as prices go up ( e.g. if the price of chickpeas goes up, the import shifts to yellow peas ). Further, the major demand for pulses is gen-erated from countries that have higher population growth rates. Countries like India, with its high population growth rate and rising per capita income, is keeping the prices of pulses up. If the average price of imports by India is gener-ally lower than the global average, Indian demand neverthe-less plays a major role in keeping prices remunerative.

box 1 : global trends

• World demand for pulses is reaching an all-time high, exacer-bated by nutritional demand for a substitute protein across the world as people shift from traditional sources like meat due to dietary needs and preferences.

– Production of pulses has seen unprecedented growth over the past decade.

– Global production of pulses reached 73.2 million tons in 2013.

– Although the area cultivated has significantly increased, pro-ductivity remains low, especially in developing countries.

– South Asia is the biggest pulse producing region in the world, accounting altogether for 25 % of world pulse production.

– Pulses of African origin have gained significant importance in recent years, currently accounting for roughly 20 % of global production.

– Dry peas constitute 24 % of the world’s pulse production, followed by dry beans ( 17 % ), chickpeas ( 16 % ), dry broad beans and cowpeas ( 9 % each ), lentils and pigeon peas ( 6 % each ), and others.

• Pulse exports are dominated by a small number of leading suppliers.

– The major exporter of pulses in 2011 was Canada ( 28.9 % share of world exports ), followed by Myanmar ( 9.7 % ), China and the United States ( with approximately 9.2 % share of world exports each ).

– The total value of Canada’s pulse exports in 2014 amounted to about US $ 2.8 billion.

– Pulses of African origin are gaining market share.• Switch of import markets from the West to the East.

– International demand and consumption growth are now driven by the Indian market, which in turn keeps pulse prices remunerative.

– Pulses of African origin are gaining market share. – Significant contraction of European demand, once the lead

importer. – Other key markets include China and the MENA region. – Dry peas, kidney beans and lentils dominate the trade in

pulses.

Photo: Kiyo (CC BY-NC 2.0), Kidney Beans.Apg

an eVolVing Value Chain in need of suppoRt 4

box 2 : the sector’s socioeconomic importance to kenya

Endowed with over 569,000 square kilometres of land, Kenya boasts a wide range of ecological regions and plant life. The country straddles the equator, it enjoys areas of both temperate and tropical climate, and its 475 endemic plant species include a variety of pulses.*

Production of pulses began to increase following Kenya’s independ-ence. From 1960 to 1982, output more than doubled to 568,000 tons per year, due in large part to the growth of dry bean production.** Continuing to grow through 1993, production fell off in the mid-1990s. Nevertheless, growth has picked up again in recent years.

Today, pulses are an important food source for the Kenyan population due to their nutritional value, high protein content and relatively low cost when compared with meat.*** Pulses are gaining in popularity among farmers due to their hardiness and resistance to drought, which makes them ideal for Kenya, where rainfall is sporadic because it is governed by the erratic movement of the intertropical convergence zone.**** Further complicating the matter, weather has been particu-larly unpredictable in recent years due to climate change. This has led many farmers to abandon wheat production in favour of pulses, which mature quickly and can thrive with limited rainfall.*****

Figure 8 : Kenyan production of pulses, 1961–2013

275 370

450

700

482

758

0

200

400

600

800

1.000

1961 1971 1981 1991 2001 2013

Tons

, tho

usan

ds


* Wambugu P.W. and Muthamia Z.K. (2009). Country Report on the State of Plant Genetic Resources for Food and Agriculture: Kenya, p. 19. Kenya Agricultural Research Institute; National Genebank of Kenya.

** Food and Agriculture Organization of the United Nations (2015). Statistics database. Available from http://faostat3.fao.org/download/T/*/E. Accessed 5 August 2015.

*** Katungi, E., Farrow. A., Chianu. J., Sperling. L., and Beebe. S. (2009). Common Bean in Eastern and Southern Africa: A Situation and Outlook Analysis. International Centre for Tropical Agriculture.

**** Pereira, Charles (1996). The role of agricultural research in the development of Kenya before independence. In Review of Kenyan Agricultural Research, Vol. 1, p. 9.

***** Njagi, Kagondu (2013). As wheat yields fall in Kenya, farmers turn to beans. Thomson Reuters Foundation, 25 April.

4.– Information source for the value chain – consultations and desk research, prominently using the following source : Dalipagic, Ian and Elepu, Dr. Gabriel ( 2014 ). Agricultural Value Chain Analysis in Northern Uganda : Maize, Rice, Groundnuts, Sunflower and Sesame. Action Against Hunger / ACF International.

28


A wide array of actors works together throughout the sector in order to produce and sell pulses on both domestic and international markets. Vertical business linkages tend to be undeveloped and informal.5 Trade is based on temporary relationships and most actors do not use contracts.

ReseaRCh and deVelopment

The pulses sector had historically received little attention from research and support institutions, which tended to focus more on crops such as maize. In recent years, in-stitutions including the Kenya Agricultural and Livestock Research Organization ( KALRO ), local universities, non-governmental organizations and other local research or-ganizations have begun to engage more with the sector, producing higher-yield crop varieties that cater to local conditions. Regional institutions such as the Association for Strengthening Agricultural Research in Eastern and Central Africa and its Eastern and Central Africa Bean Research Network have also played a role.

In the bean subsector, a number of disease- and pest-resistant varieties have been developed. KALRO, the International Crops Research Institute for the Semi-Arid Tropics ( ICRISAT ), the University of Nairobi and Winrock International meanwhile have developed a number of high-yielding varieties of pigeon pea that are adapted to local conditions and resistant to diseases. ICRISAT in particular has been actively promoting the use of enhanced pigeon pea varieties in Eastern province.

inputs

The value chain’s main inputs are labour and seeds, which are mainly domestic. Most farms use their own beans for seed or buy from local markets ; improved varieties are generally only used where there is Government or donor intervention. It is estimated that 75 % of cowpea seeds and 95 % of pigeon pea seeds come from farm retention or neighbouring households. Certified and improved seeds, where used, may come from local businesses supplied by the Kenya Seed Company Ltd ( cowpeas ) and ICRISAT ( pi-geon peas ), the latter of which contracts local farmers to generate the certified seeds.

Supplying certified pulse seeds is perceived as quite risky, as self-pollinated seeds can easily be retained and used to achieve similar yields.6 This limits greater devel-opment of the supply chain, which is further complicated by farmers’ reluctance to pay the high cost of certified seeds.7 Additionally, there is only a limited commercial mar-ket for minor crop seeds, making it difficult for suppliers

5.– Ibid. : p. 124.6.– Ibid, : p. 118.7.– Ibid, : p, 153.

to achieve economies of scale. Where there is a shortage of seed due to a poor harvest, supplies are either bought from neighbouring regions at markets or supplied by the Government or donors.8 Other inputs such as fertilizers, in-secticides and pesticides are only used by a small propor-tion of the sector’s farmers. Some farmers do use manure.

pRoduCtion

The next step in the value chain is production, which is undertaken on smallholder farms and characterized by ploughing, planting and weeding.9 Planting and harvesting are accomplished by manual labour, while oxen ploughs and hoes are often used in ploughing and weeding. Beans are grown during both the short and long rains periods ( September / December and February / June respectively ).10 Pigeon pea is planted at the beginning of the short rains.11 The short- and medium-duration varieties are harvested as fresh vegetable from February to April, while the long dura-tion variety is usually harvested as dry grain between August and September.

Kenyan farmers currently cultivate pulses on 1.47 million ha of land. All three metrics – area harvested, production volume, and yield – have grown between 2000 and 2013, despite periods of fluctuation.

According to the FAO, Kenya is the seventeenth top producer of pulses worldwide – and number four in Africa after Nigeria, the United Republic of Tanzania and Ethiopia – involving roughly 1.8 million households in the production of pulses in general. Kenyan farms produced more than 1 million tons of pulses in 2013, including dry beans ( 715,000 tons ), pigeon peas ( 166,000 tons ), and cowpeas ( 134,000 tons ). As illustrated in figure 10, production growth since the turn of the century ( 6.2 % CAGR from 2000 to 2013 ) has been driven largely by increased cultivation of dry beans, pigeon peas and cowpeas, which have grown by a CAGR of 6.1 %, 7.4 % and 10.1 % respectively over the past decade. The production of lentils, while small, has grown by 8.0 % per annum.

8.– Ibid. : p, 118.9.– Ibid. : p. 134.10.– Ibid. : p. 119.11.– Ibid. : p. 134.

[ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

29

Figure 9 : Production of pulses in Kenya, 2000–2013

-

1.000

2.000

3.000

4.000

5.000

6.000

- 200 400 600 800

1.000 1.200 1.400 1.600 1.800

2000

20

01 20

02 20

03 20

04

2005

20

06 20

07 20

08 20

09 20

10 20

11 20

12 20

13

hg/h

a

Tons

, tho

usan

ds to

ns

Hect

ares

, tho

usan

ds

Area harvested (ha, lhs) Production (tons, lhs) Yield (hg/ha, rhs)


Figure 10 : Production of pulses in Kenya by subsector, 2000–2013 ( thousands of tons )

0

200

400

600

800

1.000

1.200

2000

20

01

2002

20

03

2004

20

05

2006

20

07

2008

20

09

2010

20

11

2012

20

13

Tons

, tho

usan

ds

Beans, dry Pigeon peas Cowpeas, dry Chickpeas Lentils Pulses, nes

30


0

200

400

600

800

1.000

2000

20

01

2002

20

03

2004

20

05

2006

20

07

2008

20

09

2010

20

11

2012

20

13

Tons

, tho

usan

ds

Beans, dry Chick peas Cow peas, dry Pigeon peas Lentils Pulses, nes


Figure 11 : Kenyan production of dry beans, 2000–2013

-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

-

200

400

600

800

1.000

1.200

2000

20

01 20

02 20

03 20

04 20

05 20

06 20

07 20

08 20

09 20

10 20

11 20

12 20

13

Hg/h

a

Tons

, tho

usan

ds

hect

ares

, tho

usan

ds



dry beans

The common bean is the most widely farmed pulse in Kenya ; it accounts for nearly 70 % of Kenya’s total pulse production12 and Kenya is the eighth-largest producer of dry beans in the world ( 2.3 % of global production ).13 Beans

12.– Food and Agriculture Organization of the United Nations ( 2015 ). Sta-tistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August 2015.13.– Ibid.

are one of the most important staple foods and sources of protein for Kenyans and they are critical to food security.14 Nevertheless, while they were historically grown for suste-nance, beans have become an important source of income for small Kenyan farmers. They are usually intercropped with maize, sugar cane and coffee, and they are grown entirely

14.– United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report – Kenya, p. 113. USAID.


31

by smallholder farmers.15 Roughly 1.5 million households are engaged in bean cultivation.

Farmers cultivated dry beans on over 1 million ha in 2013, up from 770,000 in 2000.16 Dry beans are produced mainly in the Rift Valley ( 33 % ), Eastern province ( 24 % ), Nyanza ( 185 ), Western province ( 12 % ) and Central province ( 12 % ).17 While production has been unsteady due to reliance on the variable rainfall, consumption has been growing in double digits since the turn of the century. As such, Kenya often imports beans in order to fill the deficit and meet do-mestic demand. It should also be noted that while yields have improved by 20 % since 2000, they are still well below the levels achieved throughout the rest of the world ( 2013 : 7,850 hectograms ( hg ) / ha ).18

Cowpeas

Cowpeas account for roughly 16 % of Kenya’s pulse produc-tion. Less critical to the national food supply, cowpeas are still an importance source of food for subsistence farmers, as well as being used for fodder.19 Indeed, they are grown

15.– Ibid. : p. 119.16.– Food and Agriculture Organization of the United Nations ( 2015 ). Sta-tistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Ac-cessed 5 August 2015.17.– United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report – Kenya, p. 115. USAID.18.– Food and Agriculture Organization of the United Nations ( 2015 ). Sta-tistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Ac-cessed 5 August 2015.19.– United States Agency for International Development ( 2010 ). Staple Foods

mainly by women for household consumption, although commercial production is becoming more prevalent. The average female grower cultivates cowpeas on a small plot measuring 0.25 to 1 ha in size. They are generally inter-cropped with maize, millet and sorghum.

Farmers grow cowpeas on 192,000 ha of land, up nearly 100 % since the turn of the century.20 They do well in dry cli-mates and 90 % of them are produced in Eastern province, mainly in Mwingi, Makueni, Kitui, Mbeere and Tharaka.21 Minor volumes are also produced in Coast province ( 3.7 % ), Nyanza ( 2 % ), Rift Valley ( 1.6 % ), and North Eastern ( 0.78 % ), Central ( 0.6 % ) and Western ( 0.3 % ) provinces. Although production has increased at a steady pace, it is still unable to fully meet domestic demand. Officials estimate that pro-duction can only meet between 60 % and 75 % of demand and, as with dry beans, additional supplies are imported to fill the gap.22

As illustrated figure 12, production has increased due to the growth of area harvested as well as improvements in yield. After growing over the last decade, the yield of Kenyan farmers ( 6,378 hg / ha ) surpassed the world average of 5,219 hg / ha in 2013.

Value Chain Analysis, Country Report – Kenya, p. 153. USAID.20.– Food and Agriculture Organization of the United Nations ( 2015 ). Sta-tistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August 2015.21.– United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report – Kenya, p. 153. USAID.22.– Ibid. : p. 151.

Figure 12 : Kenyan production of cowpeas, 2000–2013

-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

-

50

100

150

200

250

2000

20

01 20

02 20

03 20

04

2005

20

06 20

07 20

08 20

09 20

10 20

11 20

12 20

13

Hg/h

a

Tons

, tho

usan

ds

Hect

ares

, tho

usan

ds



32


Figure 13 : Kenyan production of pigeon peas, 2000–2013

- 1.000 2.000 3.000 4.000 5.000 6.000 7.000

-

50

100

150

200

250

2000

20

01 20

02 20

03 20

04 20

05 20

06 20

07 20

08 20

09 20

10 20

11 20

12 20

13

Hg/h

a

Tons

, tho

usan

ds

Hect

ares

, tho

usan

ds



pigeon peas

Pigeon peas accounted for 9.7 % of total pulse production in 2013.23 The peas are rich in protein and can be eaten fresh or dry ; the leaves and hulls can be used to feed livestock ; and the stems can be used for firewood.24 In addition, pi-geon peas are able to fix atmospheric nitrogen into the soil, especially pertinent given that soils in semi-arid regions tend to be deficient in nitrogen.

Pigeon peas are grown by smallholder farms ranging in size from 0.2 to 1.4 ha for both sustenance and income.25 It has been estimated that they are cultivated by up to 100 % of farming families in certain areas, and roughly two-thirds of these sell a portion of their produce. They are intercropped with both grains and other legumes such as beans, green gram and cowpeas. All varieties of pigeon pea are grown in Kenya, including those of short ( 100–120 days to mature with determinate growth habit ), medium ( 150–200 days with indeterminate growth habit ) and long duration ( more than 200 days with indeterminate growth habit ) maturities.

Pigeon peas are cultivated on 144,000 ha of land.26 This is a decline of 16 % from the area under cultivation in 2000. They are grown in arid and semi-arid climates, and 99 % of Kenyan cultivation occurs in Eastern province,27 with 80 %

23.– Food and Agriculture Organization of the United Nations ( 2015 ). Sta-tistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Ac-cessed 5 August 2015.24.– United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report – Kenya, p. 126. USAID.25.– Ibid. : p. 127.26.– Food and Agriculture Organization of the United Nations ( 2015 ). Sta-tistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Ac-cessed 5 August 2015.27.– United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report – Kenya, p. 128. USAID.

concentrated in Machakos ( 33 % of national production ), Makueni ( 25 % ) and Kitui ( 22 % ).

Despite a decline in area under cultivation between 2000 and 2013, production has increased by 12 % over the same period due to a 33 % increase in yield.28 Even so, and despite these improvements, yields remain well below the world av-erage of 7,509 hg / ha in 2013.

Chickpeas

At 25 %, chickpeas have the highest protein content of any pulse.29 Nevertheless, they are a relatively less important crop in Kenya, accounting for only 0.01 % of total pulse pro-duction. They are grown in the same areas as cowpeas and pigeon peas ( Eastern province ).30

ColleCtion and distRiBution

Once harvested, the majority of pulse crops are retained for consumption at home or sold to other households or locally at markets. The remainder is sold to both local and regional wholesalers, assemblers, brokers, agents and traders. While similar, each of the three main subsectors is characterized by slightly different distribution mechanisms in which the goods are assembled and sold throughout wholesale and retail channels.

28.– Food and Agriculture Organization of the United Nations ( 2015 ). Sta-tistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Ac-cessed 5 August 2015.29.– United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report – Kenya, p. 157. USAID.30.– Ibid. : p. 158.

Photo: (CC BY-SA 2.0) CIAT (CC BY-SA 2.0), bean market5.Apg


33

dry beans

It is estimated that 60 % of the beans produced are con-sumed by the household and the remaining 40 % are sold.31 While some are sold directly by the producers to wholesal-ers, retailers and households, beans are also consolidated by farm gate agents ( either farmers or local traders ) and regional traders who transport the goods to traders and wholesalers in urban centres. Wholesalers include both in-dividuals and institutions such as the National Cereals and Produce Board, and they tend to be present at multiple lev-els of the value chain. Most wholesalers do not operate full-time, instead engaging in parallel activities or moving away from beans during off-seasons. Wholesalers sell the goods to domestic retailers while also engaging in export. Retailing meanwhile is conducted by local traders in markets and shops. Mixed wholesaling and retailing is quite common.

pigeon peas

Pigeon peas can be sold as fresh vegetables, dry grain or dhal. Roughly 60 % of the crop is used for dry grain while 40 % is used as a vegetable.32 While 62 % of dry grain

31.– Ibid. : p. 12032.– Ibid. : p. 135.

harvests are sold, that percentage falls to only 10 % for vege-table peas. The high level of household consumption is due to pigeon peas’ relative sweetness and cheapness when compared to alternatives, as well as the fact that they are harvested during times of staple food shortage.

Most farmers sell dry grain at farm gates, distributing pigeon peas to rural wholesalers, rural assemblers, rural open-air retailers, rural retail shopkeepers, and directly to rural consumers and farmers.33 The rural assemblers, in turn, sell the peas to rural retailers and wholesalers. Rural wholesalers sell to rural open-air markets, urban wholesalers and urban exporters / processors. Urban wholesalers and processors sell to urban supermarkets, open-air retailers and retail shopkeepers, who in turn sell the goods to urban consumers. Lastly, exporters add value through processing such as the production of dhal before selling their goods on foreign markets, namely to India and Europe.34

Vegetable pigeon peas meanwhile are typically pur-chased by rural assemblers / brokers who buy and bulk peas in the pod before selling them to rural open-air retailers, ru-ral wholesalers, urban wholesalers and urban exporters.35 It should be noted that farmers do sell the peas directly to rural open-air retailers, rural consumers, rural wholesalers and urban exporters. Urban exporters are considered to be a very important outlet for farmers because they often purchase vegetable pigeon peas directly from the produc-ers. Exporters generally collect peas at designated points throughout the week according to flight schedules. Physical attributes are tested and pesticide residue tests may be performed if required. Fresh vegetable exports depend on close collaboration and planning between farmers and ex-port agents.

Cowpeas

Cowpeas are grown as both grain and vegetable.36 The majority of green vegetable is consumed at home, while up to 70 % of dried grain is sold to rural assemblers / bro-kers / wholesalers at local markets and farm gates, and to rural consumers, open-air retailers and shopkeepers. Regional brokers and wholesalers may sell the goods to posho mill processors in urban areas, to urban wholesal-ers, or directly to urban retail shopkeepers. Local traders meanwhile sell to either rural posho mill processors or urban wholesalers. Urban posho mill processors sell to both urban supermarkets and regional markets, while rural processors sell to rural retail shops and local household consumers. Urban wholesalers sell to urban retail shopkeepers and ur-ban supermarkets, who in turn sell to the final consumers.

33.– Ibid. : p. 137.34.– Shiferaw B. and others ( 2008 ). Unlocking the Potential oA High-Value Legumes in the Semi-Arid Regions : Analyses oA the Pigeonpea Value Chains in Kenya, p. 17. Nairobi, Kenya : International Crops Research Institute for the Semi-Arid Tropics.35.– Ibid. : p. 140.36.– Ibid. : p. 154.

34


Figure 14 : Current value chain

Nat

iona

l com

pone

nt o

f the

val

ue c

hain

Nat

iona

l mar

ket

Food

Saf

ety

and

qual

ity r

egul

atio

ns :

Ken

ya B

urea

u of

Sta

ndar

ds, K

AR

I., W

eigh

ts a

nd M

easu

res

Dep

t., G

over

nmen

t Che

mis

t’s D

ept.,

Dep

t. of

Vet

erin

ary

Ser

vice

s, K

enya

Dai

ry B

oard

, Hor

ticul

tura

l Cro

ps D

evel

opm

ent A

utho

riy

/ K

RA

Cou

nty

Gov

ernm

ent /

Min

istr

y of

Agr

icul

ture

, Liv

esto

ck a

nd F

ishe

ries

/ M

inis

try

of In

dust

rial

izat

ion

and

Ente

rpri

se D

evel

opm

ent

SP

S S

ervi

ces,

See

d C

ertif

icat

ion,

Ana

lytic

al C

hem

ical

Lab

orat

ory:

Ken

ya P

lant

Hea

lth In

spec

tora

te S

ervi

ce (

KEP

HIS

)

Sup

port

ser

vice

s

Res

earc

h an

d de

velo

pmen

t

Min

istr

y of

Hea

lth –

Dep

artm

ent o

f Pub

lic H

ealth

Inpu

ts

See

ds

Che

mic

al fe

rtili

zers

(i

n sm

all p

ropo

rtio

n)

Farm

equ

ipm

ent

Labo

ur

(qua

lifie

d/te

chni

cal)

Land

Wat

er

Pest

icid

e an

d in

sect

icid

e (i

n sm

all p

ropo

rtio

n)

Ass

embl

y/bu

lkin

g

Loca

l who

lesa

lers

Reg

iona

l w

hole

sale

rs

Ass

embl

ers

Inte

rmed

iate

tr

ader

s

Bul

king

age

nts

Trad

ers

Pro

cess

ing

Pige

on p

ea (

Nai

robi

, M

omba

sa)

De-

hulli

ng

Spl

ittin

g

Cle

anin

g S

ortin

g

Inte

rnat

iona

l tr

ansp

orte

r

Man

ure

(les

s th

an

25%

of f

arm

ers)

Dry

gra

in c

owpe

as

Rur

al p

osho

mill

pr

oces

sors

Urb

an p

osho

mill

P

roce

ssor

s

Bea

ns

Loca

l mar

kets

60%

hou

seho

ld r

eten

tion

Pige

on p

ea

ICR

ISA

T/K

ALR

O

Uni

vers

ities

Indi

a

Uni

ted

Ara

b Em

irat

es

Sou

th A

fric

a

Cow

peas

Non

-gov

ernm

enta

l org

aniz

atio

ns

East

ern

and

Cen

tral

Afr

ica

Bea

n R

esea

rch

Net

wor

k

Mar

ket p

rice

info

rmat

ion

: EP

C/K

ENin

vest

Fina

ncia

l ser

vice

s in

clud

ing

form

al (

bank

s) a

nd in

form

al le

ndin

g so

urce

s

Exte

nsio

n se

rvic

es

Inst

itutio

ns

Who

lesa

ling

Pri

vate

w

hole

sale

rs

Nat

iona

l C

erea

ls a

nd

Pro

duce

B

oard

30%

hou

seho

ld r

eten

tion

Loca

l mar

kets

(s

choo

ls/h

ospi

tals

)

Urb

an s

uper

mar

kets

Rur

al/u

rban

ret

ail

shop

keep

ers

Sm

all l

ocal

/reg

iona

l tr

ader

s

hous

ehol

d re

tent

ion

Urb

an s

uper

mar

kets

(dr

y, d

hal)

Urb

an

cons

umer

sU

rban

ope

n ai

r re

taile

rs

(veg

etab

le a

nd d

ry)

Urb

an r

etai

ler

shop

keep

ers

(dry

, dha

l)

Lege

nd

Nat

iona

l com

pone

ntIn

tern

atio

nal c

ompo

nent

East

ern

Afr

ica

Gra

in C

ounc

il

Rur

al o

pen-

air

Rur

al r

etai

l sho

p

Chi

ckpe

as &

Nav

y be

an s

ub-s

ecto

rs a

re u

nder

deve

lope

d bu

t with

hig

h po

tent

ial

Exte

rnal

com

petit

ion

Uni

ted

Sta

tes

Uga

nda

Uni

ted

Rep

ublic

of

Tan

zani

a

Can

ada

Paki

stan

EAC

Indo

nesi

a

US

D 5

8 m

illio

nM

ainl

y ki

dney

be

an a

nd

whi

te p

ea

bean

Polis

hing

Pack

agin

g

Impo

rt: 7

8,60

0 to

ns

- ki

dney

bea

ns,

- w

hite

pea

bea

ns-

dry

peas

Uga

nda

(46.

8 %

)U

nite

d S

tate

s

(30.

6 %

)U

nite

d R

epub

lic

of T

anza

nia

(14.

5%)

Ethi

opia

Pro

duct

ion:

smal

lhol

der

farm

s D

ry b

eans

529

kt

cow

peas

122

kt

Pige

on p

eas

73 k

t

17t

h gl

obal

ly

1.8

mill

ion

hous

ehol

ds

1.4

mill

ion

Ha

Plo

ughi

ng

Pla

ntin

g

Wee

ding

Spr

ayin

g

Har

vest

ing

Dry

ing

Bag

ging

Rec

ord

keep

ing


35

institutional suppoRt to the Value ChainThe efficiency of the pulses sector value chain is also deter-mined by the function and roles of the trade and investment support institutions involved in supporting sector devel-opment. These institutions can be grouped in four main categories :

Policy support network : These institutions represent minis-tries and competent authorities responsible for influencing or implementing policies and regulations.

Trade services network : These institutions or agencies provide a wide range of trade-related services to both Government and enterprises.

Business services network : These are associations, or ma-jor representatives of commercial service providers used by exporters to effect international trade transactions.

Civil society network : These institutions are not explicitly engaged in the sector’s trade-related activities. However, they are opinion leaders representing specific interests that have a bearing on the sector’s export potential and socio-economic development.

Figure 15 : Trade support network

Policy support network

� Ministry of Agriculture, Livestock and Fisheries ( MALF ) � KALRO � KALRO Food Crops Research Institute � Agriculture, Fisheries and Food Authority ( AFFA ) � Ministry of Industrialization and Enterprise Development ( MoIED ) � Kenya Industrial Research and Development Institute � Micro and Small Enterprises Authority � Ministry of Foreign Affairs & International Trade � Ministry of Commerce, Tourism and East Africa Region � Department of Public Health � National Treasury � Kenya Revenue Authority ( KRA ) � Ministry of Transport and Infrastructure � County governments

Trade services network

� Eastern Africa Grain Council ( EAGC ) � Cereal Growers Association ( CGA ) � Kenya Agricultural Commodity Exchange � Export Promotion Council ( EPC ) � Kenya Investment Authority ( KenInvest ) � Kenya National Chamber of Commerce and Industry ( KNCCI ) � Kenya National Farmers’ Federation ( KENAFF ) � Kenya Private Sector Alliance ( KEPSA ) � Seed Trade Association of Kenya ( STAK ) � Kenya Plant Health Inspectorate Service ( KEPHIS ) � Agrochemicals Association of Kenya � National Cereals and Produce Board � Export Processing Zones Authority ( EPZA ) � Kenya Bureau of Standards ( KEBS ) � Kenya Industrial Property Institute � Indian Council of Agricultural Research ( ICAR )

Business services network

� India Pulses and Grains Association ( IPGA ) � Kenya Ports Authority � Exim Bank of India � Commercial banks

Civil society network � International Centre of Insect Physiology and Ecology � ICRISAT � Jomo Kenyatta University of Agriculture and Technology

36


poliCy suppoRt netwoRk

MALF is responsible for formulating, implementing and monitoring agricultural legislation, regulations and policies. It is the institution responsible for regulation and quality con-trol of inputs, produce and products from the agricultural sector, and is in charge of managing and controlling pests and diseases. The Ministry is also tasked with supporting agricultural research and promoting technology delivery as well as collecting, maintaining and managing information on the agricultural sector.

� KALRO, a corporate body under the aegis of MALF, was created to establish a suitable legal and institutional framework for coordination of agricultural research.

� AFFA, a state corporation, is the successor of former regulatory institutions in the sector that were merged into Directorates under the Authority, including a Food Crops Directorate.

MoIED is responsible for the promotion of industrialization and enterprise development in Kenya. This Ministry is tasked with the formulation and implementation of industrializa-tion and cooperative policy, implementation of the indus-trial property rights regime, and elaboration of private sector development policy and strategy. Quality control, includ-ing industrial standards development, also falls under the competence of this Ministry.

� Under the aegis of MoIED, the Kenya Industrial Research and Development Institute was established as a multi-disciplinary institution to undertake industrial research, technology and innovation, and disseminate findings that will have a positive impact on national development.

� The Micro and Small Enterprises Authority is a state corporation established for the promotion, development and regulation of the micro and small enterprise sector in Kenya. Its mandate is to formulate and review policies and programmes for the sector.

In addition to managing Kenya’s foreign policy and inter-national trade affairs, the Ministry of Foreign Affairs and International Trade manages Kenya’s missions and embas-sies abroad as well as joint commissions and joint trade committees with other countries. The Ministry also has a trade representative function.

The Department of Public Health under the Ministry of Health is tasked with overall responsibility for food safety in Kenya.

In addition to its main function of formulating financial and economic policies, the National Treasury is also re-sponsible for developing and maintaining sound fiscal and monetary policies that facilitate socioeconomic develop-ment. The Treasury therefore plays a key role in creating an enabling environment in which economic sectors can oper-ate effectively and efficiently. The Treasury also regulates the financial sector on which all other sectors depend for investment resources.

The core mandate of the KRA is to assess, collect and en-force laws relating to revenue. The Authority also promotes compliance with Kenya’s tax, trade and border legislation and regulations.

The Ministry of Transport and Infrastructure is respon-sible for roads development policy management, and mari-time and rail transport management. The Ministry has two departments, namely the State Department of Transport and the State Department of Infrastructure.

County governments will be instrumental in supporting the Supporting Indian Trade and Investment in Africa ( SITA ) Initiative as they oversee at county level agricultural matters, including crops, and plant and animal disease control, as well as trade development and regulation, including market regulations, trade licences and cooperative societies. There are 47 counties in Kenya, which are geographical units en-visioned by the 2010 Constitution of Kenya as the units of devolved government.

tRade seRViCes netwoRk

EAGC is a membership-based organization offering de-tailed market information services to its members. The Council is charged with developing and promoting a struc-tured grain trading system in East Africa. It also strives to improve the policy and trading environment in the region with respect to the grain trade, strengthening market con-nections and reducing constraints along the value chain. The Eastern Africa Grain Institute was launched in 2012 as a specialized division of EAGC to institutionalize capacity-building interventions. The Institute operates as a strategic business unit offering practical grain post-production and marketing courses for a fee.

CGA is a national member-based farmers’ organization whose mission is to bring small and large commercial cereal farmers together in addressing industry challenges in Kenya. CGA works with industry stakeholders such as agricultural input suppliers, financial institutions, insurance companies, output buyers, development partners, non-governmental organizations and others to provide services to its members.

The EPC is tasked with coordinating and harmonizing export development and promotion activities in the country, providing leadership to all national export programmes. EPC is the focal point for export development and promotion ac-tivities in the country.

KenInvest is a statutory body established with the main objective of promoting investments in Kenya. It is respon-sible for facilitating the implementation of new investment projects, providing aftercare services for new and existing investments, and organizing investment promotion activi-ties both locally and internationally. The core functions of KenInvest include policy advocacy, investment promotion and investment facilitation.

KNCCI is a non-profit, autonomous, private sector in-stitution and membership-based organization. KNCCI


37

promotes, protects and develops the commercial, indus-trial and investment interests of its members. The Chamber also aims at influencing development policies, strategies and support measures so as to achieve the best economic climate for the business community’s varied interests.

KENAFF is a non-political, non-profit, member-based umbrella organization of all farmers in Kenya. It represents their interests with the objective of articulating issues affect-ing them through focused lobbying and advocacy, targeted capacity-building, and promotion of sector stakeholders’ cohesiveness in dispensing and progressive uptake of agri-cultural innovations for enhancing the socioeconomic status of farmers.

KEPSA, a limited liability membership organization, is the private sector apex and umbrella body set up to bring to-gether the business community in a single voice to engage and influence public policy for an enabling business environ-ment. KEPSA is a key player in championing the interests of the Kenyan business community in trade, investment and industrial relations.

STAK was formed to represent the interests of the seed sector and to promote the development of formal seed trade. STAK is an organization of seed companies which are registered by KEPHIS to produce, process and / or mar-ket seeds in Kenya, including service providers in the seed industry.

KEPHIS is the Government parastatal whose respon-sibility is to assure the quality of agricultural inputs and produce to prevent adverse impacts on the economy, the environment and human health. Its mission is ‘to provide a science-based regulatory service by assuring the quality of agricultural inputs and produce to promote food security and sustainable development.’

The Agrochemicals Association of Kenya is the na-tional representative of the international agrochemical in-dustry represented worldwide by CropLife International ( formerly International Group of National Associations of Manufacturers of Agrochemical Products ). This member-ship-based association is the umbrella organization in Kenya for manufacturers, formulators, repackers, import-ers, distributors, farmers and users of pest control prod-ucts ( pesticides ). Its objectives include promoting public education on the safe use of pesticides and working with the Government towards the regulation and importation of pesticides into the country and exports out of the country.

The National Cereals and Produce Board procures, manages and distributes the country’s strategic grain re-serves and famine relief stocks. It undertakes market sta-bilization of grain through various interventions and trades commercially in grains and related products. Additionally, it distributes farm inputs ( fertilizers ) at subsidized prices to enhance agricultural productivity.

EPZA is a state corporation under MoIED. The Authority is responsible for the development of Export Processing Zones ( EPZs ), including the provision of advice on the removal of impediments to, and creation of incentives for,

export-oriented production in EPZs. EPZA is also responsi-ble for the regulation and administration of approved activi-ties within EPZs.

KEBS is the Government agency responsible for govern-ing and maintaining the standards and practices of metrol-ogy in Kenya. The KEBS Board of Directors is known as the National Standards Council and is the policymaking body for supervising and controlling the administration and finan-cial management of the Bureau.

The Kenya Industrial Property Institute is a parastatal under MoIED. Its functions encompass the administration of industrial property rights, the provision of technological information to the public, and the provision of training on industrial property.

ICAR is an autonomous organization under the Depart-ment of Agricultural Research and Education, Ministry of Agriculture and Farmers Welfare, Government of India. The Council is the apex body for coordinating, guiding and managing research and education in agriculture in the entire country.

Business seRViCes netwoRk

The Kenya Ports Authority is a state corporation under the Ministry of Transport and Infrastructure, with the responsibil-ity to facilitate and promote global maritime trade through provision of competitive port services.

IPGA is the apex organization of import and export trad-ers of pulses and grains in India. It acts as a facilitator for the pulses trade in India on behalf of its 400 members and pivotal associations who represent a cross-section of over 10,000 stakeholders in the supply chain.

The Exim Bank of India provides financial assistance for Indian exports, Indian imports, pre-shipment credit, and promoting India’s foreign trade.

CiVil soCiety netwoRk

ICRISAT is a non-profit, non-political organization that con-ducts agricultural research for development in Asia and sub-Saharan Africa with a wide array of partners throughout the world. The Institute works towards increasing dryland farmers’ crop productivity and incomes, while improving the resilience of their lands and livelihoods, by applying scien-tific innovations backed up with adequate policy, marketing and other support services. ICRISAT mandate crops include chickpeas and pigeon peas.

The Jomo Kenyatta University of Agriculture and Technology offers training, research and innovation in the fields of agriculture, engineering, technology, enterprise de-velopment, built environment, health sciences, social sci-ences and other applied sciences.

38


kenya : ( CuRRently ) a small tRading playeR gloBally in pulses

Driven by a strong 30 % annual growth in value of pulse ex-ports between 2010 and 2014, thereby outperforming the 7 % global import growth over the same time period, Kenya is con-tinuously increasing its world market share, though from a low base. Despite Kenya’s booming exports of pulses in recent years, the country remains a small player in the global market, only ranking 26 in world exports with a global share of 0.44 % in 2014. Kenya exported an estimated 62.2 million tons of pulses in 2013–2014, with an export value of US $ 49.8 million.

Notwithstanding this remarkable growth, trade trends have not been stable, and high volatility has characterized the sec-tor’s exports over the decade, with sharp variations observed within short periods of time, notably falling below US $ 10 million in 2009 before rebounding to reach a record high of US $ 59 million in 2013. This high volatility of pulse exports is reflected in the trade balance for the commodity. Apart from the good results observed in 2010, it is only since 2013 that the trade balance for pulses in Kenya became positive, standing at US $ 12.3 million in 2014, boosted by the impres-sive growth of the sector’s exports during the past two years.

However, this surplus is fragile because the country con-tinues to import large quantities of pulses, importing approx-imately 81,000 tons of pulses in 2013–2014 to meet domestic demand ; imports which consisted primarily of kidney beans & white pea beans, and dry peas ( the country remains a net importer of these products ). Its main suppliers include the United States ( 26.6 % of Kenya’s imports of pulses in 2014 ), Ethiopia ( 22.4 % ), the United Republic of Tanzania ( 13.9 % ) and Uganda ( 13.0 % ).37 While the United States exports al-

37.– International Trade Centre ( 2015 ). Trade Map Database ( mirror data ). Avail-able from http : // www.trademap.org / Index.aspx. Accessed 28 October 2015.

most exclusively dry peas to Kenya, Ethiopia provides the Kenyan market with kidney beans & white pea beans, while Uganda and the United Republic of Tanzania mainly export black / green gram beans.

expoRt paRtneRs

Looking at Kenya’s main export partners, trade flows depict a sector vulnerable to purchases by a few countries and very unstable trends. As indicated in figure 17, Kenya’s exports are highly dependent on the Asian market, and more specifi-cally on the Indian and Pakistani markets. These two coun-tries together accounted for 82 % of the pulses exported by Kenya in 2013–2014, indicating a high degree of concentra-tion of the country’s exports. Kenya’s vulnerability to India’s demand was evident in 2011, when exports to India fell by 89 % compared with 2010 levels, resulting in Kenya’s total exports plummeting by 51 %. Market concentrations have worsened since 2011. Overall, export growth was primarily driven by further market penetration in existing markets for existing products.

While the share of total pulse exports from Kenya into the Asian market has increased since 2011, the reverse trend was observed for the African continent as a target market, the latter only attracting about 10 % of Kenya’s total exports of pulses in 2013–2014. Kenyan exports have not yet reached the demanding markets of Europe – where exports have been very meagre ( not exceeding US $ 1 million ) – and North America, with virtually non-existent flows.

Figure 18 : Kenyan exports of pulses to selected markets, 2004–2014 ( US $ millions )

0

20

40

60

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US$,

mill

ions

Africa America Asia Europe World

Sources : ITC calculations based on United Nations Comtrade statistics until January 2011 ; ITC calculations based on data from the Kenya National Bureau of Statistics from January 2011 until January 2013 ; and ITC calculations based on United Nations Comtrade statistics since January 2013.

Note : Data covering the years 2012 and 2014 are mirror data ( i.e. data reported by Kenya’s trade partners ).


39

expoRt pRoduCt Basket

The majority of Kenya’s pulse exports are comprised of ‘kidney beans & white pea beans’ ( 51 % of exports in 2013–2014 ), and ‘leguminous vegetables, dried’ ( 18 % ), which were, in 2013, primarily dominated by exports of ‘pigeon peas’, the later accounting for 96 % of total exports within this category.38 The next most exported category ‘urd, mung, black / green gram beans’ accounted for 15 % of Kenya’s pulse exports. Product concentration represents a serious issue in the sector, as the top three products listed above comprise 84 % of the country’s pulse exports.

Some signs of product diversification were observed over the past decade, driven by the progression of pulse exports. From only three varieties of pulses valued above US $ 0.1 million and only five registered export flows in 2004, Kenya reported exports for 8 to 10 varieties in 2013–2014, including four varieties valued above US $ 1 million.

Overall, trade statistics show that Kenyan pulse exports are very volatile, with no evidence of clear trends. Exports

38.– The 2012 version of the harmonized system nomenclature modified the category ‘Leguminous vegetables dried…’, it excluded ‘Pigeon peas..’ and created a single HS 6 code for this product. Hence trade data specific to this product are only available since 2012. Note that ‘Beans dried,…’ was also amended and since 2012 ‘cowpeas’ have their own HS code.

of ‘kidney beans & white pea beans’ and ‘urd, mung, black / green gram beans’ grew significantly over the past five years, albeit from a very low base ( CAGR of 236 % and 259 % between 2010 and 2014, respectively ), while the trends for other varieties are less certain, reflecting the low level of survivability of Kenyan pulse exports.

Of particular concern, however, is the decline in exports of ‘peas, dried’ While this used to be an important product whose exports were valued at more than US $ 13 million in 2010, exports of this product plummeted to US $ 0.6 million in 2014.

From an international perspective, paradoxically, ‘urd, mung, black / green gram…’, one of Kenya’s most vibrant ex-port products, is the variety of pulses for which world imports have grown the least, i.e. 1 %, over the period 2010–2014. However, prospects are bright for the ‘kidney beans & white pea beans…’ segment, Kenya’s leading export product, with international demand for this category of pulses growing at an average of 8 % between 2010 and 2014.

Kenya’s product diversification is nevertheless promis-ing, providing that concerted actions are taken to expand further and promote long survival rates. Extra efforts also need to be made to penetrate new markets and to unlock the production of more pulse varieties.

Figure 19 : Kenya’s export basket of pulses, 2004–2014 ( US $ thousands )

0

20

40

60

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US$,

mill

ions

Other Lentils (071340) Leguminous vegetables, dried (071390) Peas, dried (071310) Beans, dried (071339) Pigeon peas (071360) Urd, mung, black/green gram beans (071331) Kidney beans & white pea beans (071333) Total

Sources : ITC calculations based on United Nations Comtrade statistics until January 2011 ; ITC calculations based on data from the Kenya National Bureau of Statistics from January 2011 until January 2013 ; and ITC calculations based on United Nations Comtrade statistics since January 2013.

Note : Data covering the years 2012 and 2014 are mirror data ( i.e. data reported by Kenya’s trade partners ).

40


Regional BenChmaRking ( kenya, united RepuBliC of tanzania, ethiopia )

Figures 20 to 21 and table 6 provide some important details that assist in benchmarking Kenya’s position in the broader pulses sector vis-à-vis key regional competitors, namely the United Republic of Tanzania and Ethiopia.

Ethiopia has largely dominated regional production of pulses over the past decade, increasing its volume pro-duced from approximately 1 million tons in 2003 to roughly 2.7 million tons in 2012. However, a severe drop in Ethiopian production was reported in 2013 with a produced volume less than half that of 2012, resulting in the country losing its leadership position to the United Republic of Tanzania. Tanzanian production has followed a steady upward trend in recent years, reaching a record high of 1.9 million tons in 2012–2013. Despite a steady increase since 2008, the volumes produced in Kenya were significantly below that of its regional neighbours, with 1 million tons produced in 2013.

There is considerable similarity between the varieties grown in Kenya and the United Republic of Tanzania. In both countries pulse production is highly concentrated on beans, this variety accounting for 73 % and 65 % of the total production of pulses in Kenya and the United Republic of Tanzania in 2013, respectively. To a lesser extent, cowpeas and pigeon peas also represent an important share of their production. As the two countries have very similar product baskets, competitive advantage – in terms of price and qual-ity in particular – will be of utmost importance when it comes to selling pulses across borders.

The production of pulses in Ethiopia presents very differ-ent characteristics, with peas being half of total production,

followed by chickpeas ( 31 % ) and beans ( 19 % ). As a con-sequence, Ethiopian exporters do not operate in the same market segments as their Kenyan and Tanzanian peers.

Despite a drop in production in 2013, Ethiopia remains the undisputed leader in pulse exports with approximately 330,000 tons exported in 2013, more than the exports of the United Republic of Tanzania ( 175,000 tons ) and Kenya ( 65,000 tons ) combined. Ethiopian exports have increased more than threefold since 2004. Pronounced oscillation has characterized the export sector for Kenya and the United Republic of Tanzania over the last decade. This trend indi-cates low export survival rates, meaning that export rela-tionships are fluctuating, confirming some of the challenges identified below concerning the difficulty faced by Kenya in supplying consistently adequate volume or quality of pulses to global buyers. The Ethiopian export sector, on the other hand, has reached a higher level of maturity.

Similarly, the export to production ratio presents pro-nounced variations in Kenya, oscillating between 0.5 % and 9 % over the last decade, once again highlighting low export survival rates in the country. In the United Republic of Tanzania and Ethiopia, export to production ratios have followed similar trends, stabilizing at around 10 % between 2007 and 2012. The significant increase of the ratio reported for Ethiopia in 2013 can be explained by the drop in domes-tic production that same year, indicating that the country has managed to maintain, and even increase ( see Figure 21 above ) its level of pulse export volumes, in turn indicating the strength of its relationships with international buyers.

Figure 20 : Pulse production, Ethiopia, Kenya and the United Republic of Tanzania, 2005–2013 ( tons )


Table 6 : Production of pulses by varieties, Ethiopia, Kenya and the United Republic of Tanzania, 2013 ( tons )

KenyaUnited Republic

of TanzaniaEthiopia

Beans 714,492 1,113,541 457 411

Chickpeas 50 110,116 409,733

Cow peas 133,756 188,717 n/a

Pigeon peas 165,636 247,387 n/a

Peas n/a 130 000 379,831

EthiopiaSource : Food and Agriculture Organization of the United Nations ( 2015 ).


41

Figure 21 : Pulses exports, Ethiopia, Kenya and the United Republic of Tanzania, 2001–2013 ( tons )

United Republic of Tanzania, 2001–2013 (tons)


Figure 22 : Export to production, Ethiopia, Kenya and the United Republic of Tanzania, 2003–2013 ( % )

0

20

40

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

%

Ethiopia

United Republic of Tanzania

Kenya

Source : ITC calculations based on Food and Agriculture Organization of the United Nations ( 2015 ) data.

the Role of inVestment in the CuRRent pulses Value Chain

the kenyan Business enViRonment foR the pulses seCtoR

the national-level investment climate

Table 7 presents several indicators of the attractiveness of Kenya’s business environment, particularly as it compares with those of other likely destinations for pulse FDI. In terms of the ease of doing business and economic freedom, Kenya is in the same ballpark as India, Pakistan and the United Republic of Tanzania. Myanmar, which is the source of 90 % of India’s pulse imports, lags significantly in both in-dicators, giving Kenya and the United Republic of Tanzania a relative selling point among Indian and Pakistani investors. Kenya rates below only India in the Global Competitiveness Index, wherein the World Economic Forum ranks Kenya fifti-eth in the world for innovative capacity. This is a factor which may play out in the ability of public and private research institutes to develop better pulse varieties and, eventu-ally, more innovative pulse-based food products. However, Kenya is at the back of the pack, along with Bangladesh and Myanmar, in terms of the perception of corruption, and the United Nations Conference on Trade and Development ranks Kenya last among these seven countries for realization of its FDI potential.

In terms of FDI policy specifically, Kenya meets the funda-mental needs of FDI projects in that FDI is given national treatment. There are standard guarantees against expropria-tion ; there are no foreign exchange controls ; profits may be remitted freely ; and there are very few sectors in which FDI is prohibited ( i.e. telecoms, insurance and fishing ). Although foreigners and foreign-controlled companies may not own land, 99-year leases are available.

Bilateral investment treaties with 14 countries ( five in force ; nine ratified but not yet in force ) and Kenya’s mem-bership in the International Centre for the Settlement of Investment Disputes provide investors with additional confidence that they will be treated fairly by the Kenyan Government.

Export-oriented pulse processors are likely to establish within the country’s EPZs, where tenants are afforded a package of incentives and support, including :

� 10-year corporate tax holiday and 25 % tax rate thereafter � 10-year withholding tax holiday on dividend remittance � Duty and value added tax exemption on all inputs except

motor vehicles � 100 % investment deduction on capital expenditures for

20 years � Stamp duty exemption � Exemption from pre-shipment inspection � Availability of on-site Customs inspection � Work permits for senior expatriate staff

42


Table 7 : The investment climate in Kenya and possible competitors for pulse investment

International benchmark IndiaUnited Republic

of TanzaniaPakistan Kenya Bangladesh Ethiopia Myanmar

Average of six major rankings 94 108 115 121 125 127 136

Ease of Doing Business ranking ( World Bank Group, 2015 ) 142 131 128 136 173 132 177

Competitive Industrial Performance ranking ( United Nations Industrial Development

Organization, 2010 ) 43 106 74 102 78 130 Not ranked

Global Competitiveness Index ( World Economic Forum, 2014 ) 71 121 129 90 109 118 134

Inward FDI Performance Index ( United Nations Conference on Trade and

Development, 2010 ) 97 59 110 129 114 120 52

Corruption Perception Index ( Transparency International, 2014 ) 85 119 126 145 ( tie ) 145 ( tie ) 110 156

Economic Freedom Index ( Heritage Foundation, 2015 ) 128 109 121 122 131 149 161

Source: World Bank

sector specifics

Agro-industry is one of six national priorities for develop-ment under Kenya’s main development programme, Vision 2030. Concrete implementation of the Government’s prior-itization of agribusiness is evident in a new law, regulatory streamlining and financial support. The Crops Act of 2013 aims to increase competitiveness, crop and market diversity, and private investment through a reduction of regulation, bureaucracy, taxes and institutional overlap. For example, AFFA consolidates and streamlines eight public bodies for the regulation and promotion of agriculture. In addition, a new Commodities Fund provides financial support to grow-ers for farm inputs and operations. However, the Seed and Plant Varieties Act remains an obstacle to the upgrading of quality and volume.

Primary producers are now supported by a one-stop land registration process and a 100 % industrial building al-lowance on agricultural land, which plans to increase sev-enfold the total land area under irrigation. Processors, who depend on low electricity rates to be competitive, can look forward to new generation projects underway that are ex-pected to lower electricity tariffs by between half and two-thirds, making Kenyan electricity cheaper than the United Republic of Tanzania’s.

One of the sector characteristics which may be most problematic for investors is the dominance of smallholder farmers in Kenyan pulse production. Scattered and small-scale production impedes consistency of product quality and quantity, tailoring of product characteristics to buyers, and efficient marketing. However, as this is a characteristic of regional agriculture generally, Kenya is not at a relative disadvantage and it could in fact achieve a significant com-petitive advantage by making progress in the organization of pulse markets.

The success of Kenya in attracting investment to pulses and agribusiness depends on exploitation of Kenya’s position as the most important hub for global business in East Africa, with relatively good logistics and better international distribu-tion channels. Several additional initiatives for logistics bode well for this goal, including the following.

4. Major developments in transportation infrastructure, allowing commodities to get to market more quickly and vastly more cheaply. The Mombasa–Nairobi leg of a broad-gauge railway that will eventually extend to Kigali is due to be completed within about a year, cutting transportation costs by an astounding 80 % and giving pulse processors in Kenya better access to Rwanda, the tenth-largest producer of dry beans in 2012. The broad-gauge railway will also cut time to port from as many as 12 hours by truck to only six hours. This development is important for the tandem objective of doubling the ton-nage handled by Mombasa’s port to 2 million containers in the next two years.

5. Drastic reduction of electricity costs, enabling more competitive agroprocessing. The geothermal electricity generation project at Naivasha, about 100 km from the major pulse producing regions of clusters of Nairobi, has the potential to reduce electricity costs from US $ 0.14 or US $ 0.15 per kilowatt-hour down to US $ 0.05.

6. Creation of a Government industrialization fund that would provide loans for start-ups and machinery up-grades in light manufacturing industries where unreli-able, technologically outdated machines are in wide use. By providing internationally competitive interest rates of 5 % to 6 % instead of the 14 % to 18 % available now and imposing less onerous equity requirements, the Government would add to the competitiveness of pulse processors.


43

CompetitiVe ConstRaints affeCting the Value Chain

Traditionally, the scope of export strategies and roadmaps has been defined in terms of market entry, such as market access, trade promotion and export development. This ig-nores several important factors in a country’s competitive-ness. For an export strategy to be effective it must address a wider set of constraints, including any factor that limits the ability of firms to supply export goods and services, the quality of the business environment, and the development impact of the country’s trade, which is important to its sus-tainability. This integrated approach is illustrated by the four gears framework schematic on the right.

Supply-side issues affect production capacity and include challenges in areas such as availability of appropriate skills and competencies, diversification capacity, technology and low value addition in the sector’s products.

Business environment constraints are those that influence transaction costs, such as regulatory environment, admin-istrative procedures and documentation, infrastructure bot-tlenecks, certification costs, Internet access and cost of support services.

Market entry constraints are essentially external to the coun-try ( but may also be manifested internally ), such as market access, market development, market diversification and export promotion.

Social and economic concerns include poverty reduction, gender equity, youth development, environmental sustain-ability and regional integration.

Border IssuesBorder-In Issues

Border-Out IssuesDevelopment Issues

CapacityDevelopment

Cost ofDoing Business

Developinig skills

and Entrepreneurship

Capac

ity

Diversi

ficati

on

Infrastructure and

Regulatory Reform

Trad

eFa

cilita

tion

Market Accessand Policy Reform

National Promotion

and Branding Trad

e Su

ppor

t

Serv

ices

Poverty Alleviationand Gender Issues

Regional Development

and Integration

Envir

onm

enta

l

Sust

aina

bilit

y and

Clim

ate

Chan

ge

supply-side issues

Unreliable and inconsistent supply of certified seeds neg-atively impacts yields and quality – and quantity – consist-ency. The availability of certified seeds of certain varieties for farmers is not guaranteed, due notably to a deficient seed multiplication system and, more generally, to poor regulation of the seed propagation sector, as well as a lack of knowl-edge transfer between seed producers and farmers. In addi-tion, controls to fight against the use of non-certified, or fake, seeds appear to be insufficient. In particular, companies engaged in dry bean production are reluctant to engage in bean seeds because of the high risks associated with the genetic nature of the crop.

Value chain segment Inputs

Severity ● ● ● ● ●

HighlightSeed producers have not identified pulses as a

priority crop for the development of seeds.

PoA reference 1.2.1 to 1.2.5

Low use of improved pulse varieties prevents the sector from achieving high yields and consistent supply quantities. The introduction of adapted hybrid / higher-yielding varieties, which have different specificities such as high adaptability in different climatic conditions and rapid maturity dates, has been limited in Kenya. Important reasons include the low availability of seeds caused by the lack of a large-scale seed multiplication and distribution scheme for hybrid varieties, and limited interaction between seed companies, export-ers, farmers, research institutes such as ICRISAT and public actors. Pigeon pea producers are notably constrained by limited access to high-quality seeds.



HighlightProducers tend to retain seeds from their production for

replanting the following season.

PoA reference 1.1.4, 1.2.1 to 1.2.5 and 1.4.3

There is lack of knowledge about international market re-quirements for pulses. If it is agreed that the industry would benefit from higher-yielding varieties ( see above ), seed se-lection should also be made according to international mar-ket demand. It will therefore be important to identify varieties and characteristics of pulses – within the broad types such as pigeon peas, chickpeas ( yellow gram ) and green grams ( mung beans ) – that are suitable for the identified cultivation areas and for which there is significant demand, notably tar-geting the Indian market. Seed production and multiplication should also be oriented towards those varieties.

Photo: (CC BY-SA 2.0) CIAT (CC BY-SA 2.0), Bean plant assessments.Apg

44




HighlightPulse producers have limited access to information on market requirements that would help them identify the

varieties to be grown.

PoA reference 1.1.2, 1.1.4, and 1.4.1

The use of appropriate pesticides and fertilizers is insuf-ficient, preventing the sector from achieving higher yields. This is mainly due to the limited knowledge of producers on soil characteristics and important diseases, and the type and quantity of fertilizers and pesticides needed for their crops.



HighlightThere is a lack of awareness on the importance of

fertilizers and pesticides.

PoA reference 1.3.1, 1.3.2 and 1.4.1

The supply of fertilizers is not adapted to needs of the pulses industry. Like most sub-Saharan African countries, Kenya depends on international markets for its fertilizers because local production is non-existent or limited. The Kenyan Government imports fertilizers and ensures distri-bution to farmers at subsidized costs. However, the quality and suitability of the fertilizers used is questionable, and voices are being raised to involve the private sector in sup-plying fertilizers in order to improve accessibility and pro-ductivity while simultaneously reducing prices by avoiding international price fluctuations. Preliminary discussion with the private sector would be needed to create awareness about the opportunity that the pulses industry represents.



HighlightThe supply of fertilizers should be reconsidered and the

participation of the private sector encouraged.

PoA reference 1.3.1 and 1.3.2

Low level of pest and disease control in the production of pulses and limited surveillance of common pests such as Helicoverpa armigera and pod fly that can severely affect the production of pulses. In particular, there is a high incidence of pest attacks ( e.g. nematodes ) and diseases encountered in dry pea and cowpea production. Without proper storage, a pest called the cowpea weevil can consume nearly all the cowpeas stored on farms. In general, the use of chemicals against pest infestation is insufficient.



HighlightA plan for integrated pest management process for

pulses would be needed.


Another major constraint currently hindering the per-formance of the sector in Kenya is the low adoption of improved agricultural practices. The relatively low produc-tivity of the domestic pulses sector can be partly explained by the low adoption of improved farming ( including existing production technologies ), harvesting and postharvest tech-niques ( see below ). Two reasons can be given to explain this situation : the limited training of the majority of smallholders and farmers’ organizations and the low level of research and development in the sector. The sector would also benefit from better technological transfer.


45

Value chain segment All segments


Highlight The industry has limited knowledge of best practices.


Poor postharvest capacities and technologies result in significant losses in the sector. A recent study conducted by the Alliance for a Green Revolution in Africa estimates that the percentage loss of crops of grain legumes during postharvest handling in Kenya reaches 25 %.39 Postharvest losses stem from the limited use of existing warehouses and certified storage facilities, or lack of them, as well as other physical postharvest facilities such as cleaning, sorting, grading, drying, polishing and bagging. The study further indicates that ‘at smallholder levels, suitable technologies for harvesting, transportation, drying, storing and primary processing of grain legumes are still underdeveloped.’40

This situation leads to farmers / collectors selling at open markets or roadsides with little hygiene, which in turn affects the quality of the product at the processor level. In particular, because of the lack of storage facilities and due the fact that this crop is very sensitive to pest attacks, producers of cow-peas are often forced to sell their cowpeas at harvest, when prices are at their lowest levels. As indicated above, poor handling and postharvest techniques and limited knowledge of best practices also contribute to the situation.

Value chain segment Postharvest / collection


Highlight

Fostering the use of existing aggregation centres and warehouses and making other services like cleaning,

sorting, grading and packaging available at warehouses would contribute to reducing postharvest losses. Further, EAGC indicated that these aggregation centres could be instrumental for the development of the pulses sector as

they could also be used as trading hubs for pulses.

PoA reference 1.4.1, 2.2.1, 2.2.2, 2.4.3, and 3.1.5

Limited knowledge of the potential of pulses in the country, as the sector receives little attention from support institutions, which tend to focus more on crops such as maize. Areas with high potential for pulse production are yet to be defined.

Value chain segment Production


HighlightPulse production has triggered little interest from farmers

and is usually intercropped with maize, sugar cane and coffee.

PoA reference 1.1.1, 1.1.2, 1.4.1, and 3.1.2

39.– Alliance for a Green Revolution in Africa ( 2013 ). Establishing the Status oA Post-Harvest Losses and Storage Aor MaAor Staple Crops in Eleven AArican Countries ( Phase I ), p. xviii. Nairobi, Kenya : AGRA.40.– Ibid. : p.51.

Limited product quality is the major limiting factor for the export of pulses from Kenya, and sub-Saharan Africa in general. Quality, a major concern for the Asian market, ap-pears to be uneven in the Kenyan pulse industry, especially at the grass-roots level. Because quality certification and standardization mechanisms are not very widespread in the sector, buyers find it difficult to trust suppliers as there is a risk that the required quality will not be provided.

In addition, suppliers need to be knowledgeable about the specific quality requirements of each destination coun-try and have a structure that should be adapted to meet the specific needs of buyers, conditions that are not and currently cannot be met. As this has proven to be difficult in Kenya and in other sub-Saharan African countries, buy-ers in international markets prefer to buy from transnational companies because they offer a better assurance of quality.



HighlightQuality issues need to be addressed along the entire

pulses value chain from production to processing and exporting.

PoA reference 1.2.1 to 1.2.5, and 1.4.1 to 1.4.3

Most pulses are exported in raw non-value added / limited value added form by processors. It is difficult, at this stage of maturity of the sector, to add value to pulse products in Kenya due to a lack of adequate processing equipment ; lim-ited knowledge of client needs and of value addition oppor-tunities ; absence of support mechanisms ; uncertain supply of inputs ; limited access to technology for smallholders ; and challenging production infrastructures. Looking specifically at cowpeas, there is limited availability of diversified product value addition.

Value chain segment Production / processing


Highlight

One of the key objectives of this roadmap is to develop processing capacity in Kenya for processing and

export of value added pulses, notably through fostering technology transfer.

PoA reference 1.4.2 and 2.2.1 to 2.2.3

Weak extension services stem from a shortage of extension service workers, limited investment in extension services, and limited field presence of public extension service em-ployees. In addition, extension services are often generic and not crop-specific. A study published by the International Food Policy Research Institute in 2011 further indicates that out of the 5,470 staff members the Kenya public extension comprised that year, only 103 had a Master of Science de-gree, and four were trained at the PhD level, indicating the

Photo: (CC BY-SA 2.0) Tanzania Pulses, 5126-chana-daal.Apg

46


relatively low level of qualification of public extension service employees.41

The involvement of extension workers engaged in seed production, seed storage, seed testing and seed certifica-tion would benefit the sector by achieving the objective of quality seed production and distribution.

Value chain segment Inputs / production


Highlight

Capacity-building programmes for private sector extension services, involving seed companies

and agrochemical companies, will be needed to support pulse production in the field.

PoA reference 1.4.3

Business enViRonment issues

Logistical challenges remain a major limitation to smooth and cheaper export to target markets and act as a barrier for buyers to access the Kenyan markets. For pigeon pea producers, for example, the geographical dispersion of farm-ers and farms, complicated by poor transport infrastructure, results in high assembly and transports costs, hampering the propensity to exploit export markets, particularly for dhal. The high cost of transport stems from the high cost of diesel and the poor condition of roads, particularly in rural areas.



Highlight

The poor transportation infrastructure results in high assembly costs and significant postharvest losses.

The rail / road network should be further developed for cheaper transport to the port of Mombasa.

PoA reference 1..2.3 and 2.3.1 to 2.3.3

Lack of harmonization of agricultural policies at county and national level. As counties also have their own poli-cies, the recent devolution process initiated by the 2010 Constitution of Kenya has generated some confusion re-garding the implementation and enforcement of policies as well as the distribution of responsibilities and functions between the different governing and administrative bodies.



Highlight

The rapid and ambitious decentralization process has generated a certain level of complexity

associated with the distribution of roles and responsibilities, in particular in the agricultural sector


41.– International Food Policy Research Institute Worldwide Extension Study ( 2011 ). Extension and advisory services in Kenya : a brief history of pub-lic extension services policies, resources and advisory activities in Kenya. Available from http : // www.worldwide-extension.org / africa / kenya / s-kenya.

The markets are not properly structured and organized, partly resulting from low levels of cooperation among the different actors, poor horizontal and vertical linkages, and a lack of trust among the different stakeholders operating in the sector ( farmers, traders, assemblers and wholesalers ). This lack of coordination among stakeholders leads to inef-ficient sector development and implementation of policies. In addition, farmer groups and cooperatives in the pulses sector appear to be weak or non-existent.



Highlight

It is believed that farmers’ organizations at county level could play a key role in structuring the markets,

developing stronger networks and building trust among the different actors operating alongside the supply chain.

PoA reference 1.1.1, 2.2.2, 2.4.3, and 3.1.1 to 3.1.3

There is limited access to finance for smallholder farm-ers and exporters in the pulses sector. Farmers, especially resource-poor smallholders, are often unattractive credit candidates for financial institutions because of the unpre-dictable, fragmented and unstructured nature of their agri-cultural activities. There is a lack of suitable and affordable finance for smallholders operating in the pulses sector.



HighlightSolutions are being developed, such as the new

Commodities Fund that provides financial support to growers for farm inputs and operations.


Pho

to: C

C0

Pub

lic D

omai

n


47

maRket entRy issues

Limited use of contract farming to secure long-term busi-ness agreements with international buyers. One of the reasons why international buyers find it easier to buy from transnationals in Kenya and other African countries relates to the issue of contract management. In order to better man-age contract defaults and buyers’ risk, international buyers and processors tend to acquire commodities from reputed companies in the ports, as the risk default is more manage-able. Another way of minimizing this risk is to send a repre-sentative from the buying company to the seller’s location to ensure that the terms of the contract are well understood and delivered. However, this practice pushes the cost of procurement to a higher level.



HighlightThe market structure is not mature enough to manage

contract defaults and buyers’ risk management systems do not allow them to participate in such markets directly.


Lack of information exchange among value chain actors leads to inefficiencies along the value chain, with farmers having little understanding of market and buyer require-ments and often engaging in suboptimal contract arrange-ments. Weak capacities of farmers’ organizations, weak extension services and lack of specific market information services are partly responsible for this lack of information.



HighlightThere is little or no knowledge of international

markets and export buyer requirements.

PoA reference 1.1.2, 1.1.3 ; and 3.2.1 to 3.2.4

Absence of export promotion and branding efforts. To build export competitiveness, the pulse products sec-tor must have an established brand outside the country. Ensuring that the sector’s products are of a minimum qual-ity and supplied with consistency is a given prerequisite in this regard. Another important dimension is developing an effective brand promotion campaign, which is made difficult by the low level of organization in the sector and the small per capita size of smallholders.

Value chain segment Marketing and distribution


Highlight

The sector would greatly benefit from outreach programmes that seek to promote interaction between

Kenya’s value chain actors and their foreign buyers and peers.

PoA reference 2.2.1, 3.1.1 to 3.1.5, and 3.3.1

Limited investment promotion in the pulse processing sector. Investment promotion activities such as setting up an EPZ for pulse processing for export purposes, offering an incentive package for investors or offering financial support would be required to better promote investment in pulses and pulse processing in Kenya.



Highlight

Developing integrated pulse processing parks like the Special Economic Zones or EPZs for export purposes

could also envisaged in the long term to promote FDI in pulse processing.


deVelopment issues

Requirement to enhance productive engagement of women in the sectorWith roughly 1.8 million households involved in the produc-tion of pulses in Kenya, the development of the sector could have a high socioeconomic impact. The development of the industry could significantly boost job creation and generate indirect employment.

Despite the lack of statistics on workers, it seems that women play a significant role in Kenya’s pulses sector, no-tably as the majority of cowpea growers are women who grow the crop primarily for household food.42 However, in-complete gender statistics provide an incomplete overview of the gender situation and quality gender disaggregated data would be needed to benchmark the country in terms of gender and women’s empowerment.



PoA referenceAll POA activities will have a gender component

where applicable

42.– United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report – Kenya, p. 153. USAID.

Photo: CIAT (CC BY-SA 2.0), climbing beans.Apg

[ THE WAY FORWARD ]

49

the way foRwaRd

The previous section of this document delineates the sec-tor’s value chain and its operators, and it reviews its overall positioning within the global industry context in order to con-firm its current performance. The following sections discuss the strategic development and positioning of the sector to increase its performance. In doing so, the sections discuss two questions – ‘where do we want to go ?’ and ‘how do we get there?’

In order to realize these goals, structural deficiencies along the four gears ( supply side, business environment, market entry and development side ) will be addressed and

identified opportunities will be leveraged. The following is a delineation of the proposed vision and strategic approach in this direction.

Through the definition of the specific strategic objectives, the roadmap sets the goals to be achieved in the next five years. The description of the future value chain will highlight focus areas for structural improvements of sector opera-tions, define specific market opportunities and identify target areas for investment. These steps are then further detailed in a structured and prioritized manner within the PoA.

stRategiC oBjeCtiVes

The roadmap provides Kenya with a detailed PoA to achieve growth in the sector within the next five-year period. The roadmap is articulated around the following strategic objectives.

strategic objective 1 : strengthen the production base of the sector

Strategic Objective 1: Strengthen the production base of the sector

Operational Objective 1.1: Develop a baseline for the sector and encourage information sharing among

sector stakeholders

Operational Objective 1.2: Ensure a reliable and consistent supply of

certified seeds.

Operational Objective 1.3: Enhance availability and adoption of quality (non-seed based) inputs

Operational Objective 1.4: Improve adoption of best practices

in the sector

The pulses industry in Kenya being largely underdeveloped, this first objective will be of utmost importance in order to build stronger linkages across the value chain, to structure the sector and alleviate difficulties in production.

The starting point for the strategic development of the sector will be to undertake a comprehensive mapping study at the national level to identify the regions with high potential for pulses in Kenya, including an agronomic assessment of the topography of the land to measure the potential of dif-ferent types of pulses. Logistical considerations, storage in-frastructure, market structure and trading practices will also be taken into consideration in order to obtain a clear picture of the current pulses industry in Kenya.

In order to strengthen the production base of the sector, it will be important to work hand in hand with previously identi-fied farmers’ organizations. These groups will play a key role in relaying information and aiding understanding of the SITA action at grass-roots level, and will benefit from capacity-building activities aimed at developing their knowledge base on pulse production and handling.

One of the most significant challenges faced by the pulse production industry in Kenya is achieving adequate dissemination of improved seed varieties. The lack of such dissemination has severely limited gains in productivity in recent years. Particular attention should therefore be paid to strengthening the seed supply in the sector, notably through

50


the identification and development of varieties of pulses that are suitable for the identified regions and that are in line with international market requirements. Improved seeds will then be distributed through farmers’ associations. A stronger in-volvement of the private sector will also be encouraged to ensure regular supply of the quality seeds necessary for the good development of the industry.

Also related to enhancing the use of quality inputs, and in addition to seed supply, an important element under this strategic objective will be to ensure that the sector has ac-cess to a strong base of inputs, in particular pesticides and fertilizers that are suitable for specific soil characteristics and

pulse varieties. A plan to improve availability of these prod-ucts for pulse farmers will be developed.

Pilot farm initiatives for production and harvesting of the identified pulses will also be established, providing a platform for the exchange of best practices with farmers’ organizations. Following this initiative, a vast programme to scale up production ( sowing and harvesting ) of the identi-fied pulses will be undertaken in the previously identified regions.

Finally, strengthening the sector will be achieved by improving postharvest management and ensuring that the crop is handled and stored properly.

strategic objective 2 : promote fdi and develop processing capacity in kenya for processing and expor t of value added pulses

Strategic Objective 2: Promote FDI and Developing Processing Capacity in

Kenya for processing and export of value added pulses.

Operational Objective 2.1: Promote Investment in pulses

processing sector

Operational Objective 2.2: Facilitate technology transfer and equipment upgrade in the sector

Operational Objective 2.3: Improve essential Infrastructure in the

sector

Operational Objective 2.4: Improve access to finance in the sector

Promoting FDI in the pulse processing sector will be instru-mental in achieving this objective. The ban on exports of processed pulses imposed in India since 2006 ( with minor exceptions ) has led Indian investors to establish process-ing plants abroad to supply the large South Asian diaspora across the world. Although Indian FDI has targeted coun-tries like Nepal, Myanmar and the UAE, African countries – and Kenya in particular – could also take advantage of this market opportunity and become a preferred destination for pulse processors from India. However, although Kenya has a ready market for processed pulses, coupled with logistics infrastructure and the availability of cheap resources like la-bour, electricity and raw material ( pulse crops ), important efforts will have to be made for the country to become more attractive for foreign investors.

It will be of utmost importance to incorporate specific policies for FDI in pulse production and processing in Kenya, something that can be achieved by advocating and making policy proposals and recommendations to provide incentives ( tax holidays, simplified licensing processes, etc. ) to foreign enterprises with the view to stimulating investment in the processed pulses sector. Developing integrated pulse processing parks like the Special Economic Zones or EPZs for export purposes could also be envisaged in the long term to promote FDI in pulse processing.

Structured investment promotion efforts for sector devel-opment ( processing ) will also be organized as part of this strategic objective. An important step will be to promote technology transfers to allow Kenyan investors interested in pulse processing to develop their activities, namely through the setting up and supply of processing machinery such as dhal plants from India ( including cleaning, drying, splitting, polishing, etc. ). Developing the processing capacity for ex-port of value added pulses in Kenya will also be encouraged by providing buyers with credit for the supply of technology from India.

Finally, investment will be promoted by inviting investors, explaining the investment opportunities, providing sector information and matchmaking with local producers. The project will also support the organization of visits to foreign countries for investment promotion to explore new markets, new products and new business partners. Study visits will also be an opportunity for local market players to learn inter-national practices in investment, to disseminate information about investment opportunities in Kenya, and to learn about modernization of the sector along the supply chain.

Improvements in essential infrastructure are also a prior-ity. Facilitating increased trade of pulses from Kenya will also be achieved by, first of all, raising awareness of the neces-sity of cold chains for specific pulse varieties such as green

Photo: (CC BY-SA 2.0) Paola Zaragoza (CC BY-NC-ND 2.0), Fresh pigeon peas.Apg

[ THE WAY FORWARD ]

51

gram, and then by developing these cold chains to ensure that the quality of the crop is maintained. Promoting private investment in cold storage will be fostered in that regard through various incentive mechanisms.

Activities falling under this strategic objective will also focus on developing access to finance instruments that will benefit the pulses sector, including the development of an export guarantee fund as well as the inclusion of the sector in exist-ing instruments / policies.

strategic objective 3 : develop markets and improve access to market-side information and branding for the sector

Strategic Objective 3: Develop markets,build the Kenyan Pulses brand, and facilitate provision of

market intelligence

Operational Objective 3.1: Support market development – domestic and

international- efforts

Operational Objective 3.2: Develop new tools for provision of

timely and relevant market intelligence

Operational Objective 3.3: Build and Promote the Kenyan Pulses

brand

Because the Kenyan pulses sector is still little-known in-ternationally, a key step towards achieving this objective is to ensure structured export development and promo-tion efforts. Building the capacities of commercial attachés concerning pulses and their processed products will be conducted in this regard, and regular trade missions to selected target markets for business owners from the sec-tor will be organized. Specific market development plans for these priority target markets will also be designed and implemented.

In addition, and in order to enable local exporters to meet international buyers, participation in trade meets and international and bilateral trade fairs will be strengthened, notably through closer collaboration with international puls-es sector agencies. Given the predominance of the Indian market, fostering knowledge sharing and business con-nections between Kenyan pulse producers and their Indian counterparts would benefit the industry and help better understand Indian and international market requirements. Regular study tours to India for visits to market yards and processors of pulses will also be organized for this purpose.

In order to improve the visibility of the Kenyan pulses sector, the roadmap will support the organization of a branding initiative, notably through exploring new branding of pulses by designing a comprehensive branding strategy

for the industry. In that regard, formulating a systematic ‘sourced in Kenya’ campaign in envisaged to leverage co-branding opportunities for products in premium markets.

The development of reliable market information systems will ensure the continuous growth and global reach of the sector. This objective will be achieved through providing timely and relevant trade information for value chain stake-holders, including detailed market reports.

Following a needs assessment and based on existing market information systems, a network will be set up to col-lect, analyse and disseminate production, market, prices and trade information for the pulses sector. Information col-lection should cover domestic as well as key international target markets and be completed in collaboration with lo-cal businesses. For this purpose, the Regional Agricultural Trade Intelligence Network ( RATIN ) system will be upgrad-ed to pull data from the Agricultural Marketing Information Network ( AGMARKNET ) in India and other free information sources. Once the market information system is operational, regular training to exporters on collection, analysis and use of trade information will be provided to facilitate market entry.

New initiatives such as short message services ( SMS ) to deliver prices and other information to farmers and traders for pulses could also be envisaged.

52


leVeRaging pRoduCt diVeRsifiCation and maRket oppoRtunities

Table 8 : Product diversification and market opportunities

Target market ProductDistribution channel

2013 Kenyan exports to market

( US $ )

Average annual export growth in

value ( % ) ( 2010–2013 )

Gross domestic product growth

2015–2020 forecast( yearly % change )

India and Pakistan

� Pigeon peas � Chickpeas ( yellow gram ) � Kidney beans � Green gram ( green mung ) � Processed dhal

� Wholesalers � Processors 29,579,823 200

India 7.5 %Pakistan 5 %

China � Dry peas � Green gram ( green mung )

� Wholesalers � Processors 976,018 382 China 6.3 %

Europe ( including the United Kingdom )

� Dry beans, processed dahl, pigeon peas, chickpeas ( yellow gram ) kidney beans & green gram ( green mung )

� Processed dhal

� Wholesalers � Processors � Distributors 104,979,149 52 United Kingdom 2.2 %

North Africa ( Algeria, Morocco, Egypt ) and MENA region ( UAE, Qatar, Israel )

� Pigeon peas � Chickpeas ( yellow gram ) � Green gram ( green mung ) � Processed dhal

� Wholesalers � Distributors 6,502,354 431 UAE 3.5 %

United States and Canada � Processed dhal

� Wholesalers � Distributors 909,377 148

United States 2.5 %Canada 2 %

Regional markets

� Mixed beans � Sugar beans � Processed dhal

� Wholesalers � Distributors 9,005,281 55

Kenya 7 %Uganda 6 %

south asia – india and pakistan – raw and processed pulsespigeon peas, chickpeas ( yellow gram ), kidney beans, green gram ( green mung ), processed dhal

The South Asian market is the largest consumer of pulses and most African pulses are consumed by these countries. Within South Asia, India and Pakistan are the major consum-ers. India started to import pulses from African countries in the 1970s through government companies. With popularity growing, private players also entered the market and the trade spread to the whole of the South Asian region.

Pulses consumption is a part of the staple diet of sub-continental people. India alone imports more than 4–5 million tons of pulses every year. Apart from countries like Australia, Canada and Myanmar, imports also come from African countries. Rising population and incomes have put pressure on the pulse supply and it is estimated by the in-dustry that by 2030 pulse demand will be 32 million tons annually. This will require an increase of production of 80 %.43

43.– National Council of Applied Economic Research, India ( 2014 ). India’s Pulses Scenario. New Delhi.

As this seems unlikely, import dependency is expected to remain high. Hence, the Indian market offers long-term op-portunity for international suppliers.

Although the major African origin pulse category im-ported into South Asia is Tanzanian pigeon peas, Kenyan pulse exports to India are also increasing. India also imports some pigeon peas from Malawi and has recently begun to import from Sudan. India also imports green gram ( green mung beans ) from the United Republic of Tanzania, Kenya and Mozambique. Finally, chickpeas and kidney beans are imported from Ethiopia. India will remain a major importer of pulses in the coming years, especially chickpeas, mung beans, black mapte and pigeon peas, imports of which have skyrocketed in the past decade.44

44.– Ibid.

[ THE WAY FORWARD ]

53

In April 2014 the Government of India extended the ban on exports of pulses until further orders, but allowed outbound shipments of kabuli chana, organic pulses and lentils with some riders from the Directorate General of Foreign Trade:

Prohibition on export of pulses has been extended till further orders. But, there are two exceptions to this. One is export of Kabuli Chana. Second is export of organic pulses and lentils, but with a ceiling of 10 million tons per annum and subject to certain conditions.

Export of pulses was initially prohibited for a period of six months in 2006, which was extended from time to time.

Pakistan imports various types of pulses from Australia, Canada, Ethiopia and a few other countries. For chickpeas, the major exporter from Africa is Ethiopia. Although domes-tic supply increased in 2012 / 13 and reduced imports, the trend has reversed and imports soared again in 2013 / 14. As per the Pakistan Bureau of Statistics, the import volume of pulses surged by 71 % to 61,738 tons in February 2015 from 36,175 tons in February 2014.45 2015 has been another bad year for pulses in Pakistan, as production has gone down by nearly 40 %. Against its total requirement of around 1 million tons, the production has been 600,000 tons.46

Kenya has an opportunity to increase its exports to India as it has already been exporting green gram ( mung beans ) and pigeon peas to India. Many Indian processors know Kenyan origin pulses. India imports roughly 3.5 % of its total imports of mung beans and 1.5 % of its pigeon peas from Kenya. This may be small but can be increased.

However, for the medium term, opportunities for exports of processed pulses ( dhal ) to India are exciting. The Indian Government does not discourage processed imports and as the processing cost is lower in Kenya, the opportunity is high. Pulse processing should be a key component of the future value chain and its market development capacities to South Asia and beyond.

Kenya is a new entrant in the pulses industry and has to compete with the United Republic of Tanzania and Malawi for the market. However, green gram ( mung beans ) is a type where Kenya has an edge. It is also ready to launch

45.– Online Indus News ( 2015 ). Pulses import rises by 37 %, 24 March. Available from http : // www.onlineindus.com / pulses-import-rises-by-37 / .46.– The Dawn ( 2015 ). Another dal crisis : Pakistan is jailing shopkeepers to combat pulse shortage, 20 October. Available from http : / /scroll.in / arti-cle / 763514 / another-daal-crisis-pakistan-is-jailing-shopkeepers-as-it-com-bats-pulse-shortage.

improved varieties of pigeon peas. Since the volume of business is smaller, medium-sized pulse processors and distributors ( 20–50 tons per day ) in India and Pakistan who had been importing pulses from East Africa have begun exploring the possibility of setting up trading offices in the region. The competition for them is lower in Kenya than in the United Republic of Tanzania and Malawi.

The rising prices of pulses in India and the somewhat monopolistic approach of the large-scale traders from Africa has led Indian buyers and investors to look for alternatives and to cut out middlemen and directly source their inputs. Existing trade relations are helping them in this. These in-vestors are looking for an investment opportunity in pulse processing and should be targeted for investment promo-tion. Investors look for cost advantage that can be obtained by exporting only dhal as opposed to raw pulses, which includes the parts of the pulses that will eventually become a waste by-product of processing. Therefore, most of the Indian and Pakistani traders planning to invest in Kenya can be expected to pursue processing at a later stage, once supply has been established, if they find the investment cli-mate conducive. With the attractiveness of Kenya being su-perior to other competing countries in the region, attracting FDI to critical agribusiness sectors and services will need a focused approach to lay the groundwork for higher value added food processing in the longer term.

The expansion of the market in India and Pakistan and the increased activities of traders in procurement and pro-cessing of pulses will expand the future value chain and introduce more traders, leading to marginally better prices for producers, better understanding of quality grades, and competitive pressure on other traders to secure supply through contracts. The broadening of the pulse process-ing base in Kenya is an important step towards making the processing of higher value added food products feasible in the country.

In the future value chain, to further penetrate the Indian market with the export of raw pulses, it is essential to : im-prove seed quality and availability ; strengthen the input dis-tribution network, including finance ; develop agribusiness services and enhance storage, warehouses and logistics ; and strengthen technical capacities of agencies like KEBS and EPC in investor targeting for the pulses sector.

China : raw and processed pulses

types of pulses – dry peas, green gram ( green mung )

China continues to play a unique and essential role in just about any global market imaginable, and pulses are no ex-ception. After India, China is the second major player in the Asian market. China was a net exporter of pulses for years but recently, with its growing middle class, increasing in-come levels, changing dietary habits and expanding taste for pulses, it is expected that demand will outstrip supply in the future. China has now started to import pulses such as

54


dry peas. China was a major exporter of black beans in the world until the rising costs of production in Chinese agricul-ture posed a challenge. Also, the black bean producing area in southwest China was faced with some challenges in 2013 as a result of massive floods which significantly reduced production. Since then China has lost some market share and this loss looks irreversible.

The new dynamics have led to increased imports of dry peas by China. Recently, China commissioned upgrading of new factories for the production of starch and vermicelli. This has resulted in huge imports of dry peas by China. The carry-over stock in 2014 kept imports low, to a level of 780,000 tons,47 but in the long term this is expected to rise. Also, Chinese dietary habits are changing and dry peas are being increasingly consumed as snacks and other food. This will also keep increasing and as a result China is ex-pected to emerge as a major importer. In addition to dry peas, imports of green gram are also increasing in China.

As it is an expanding market, China is a viable export market for Kenyan pulses. Kenya has been exporting dry peas but has not exported to China. In addition, the mar-ket for green gram ( green mung beans ) is also expanding. This is an opportunity for Kenya. However, Kenyan exporters need support to establish this market as an export destina-tion. Exporters may face challenges in dealing with admin-istrative procedures on the Chinese side, as well as facing distribution challenges. A proper understanding of proce-dures will allow exporters to export greater quantities.

In similarity with India, China is increasingly demanding pulses and becoming a source of investment as domestic Chinese producers face rising production costs and seek to offshore pulse purchasing, production and processing. The expansion of the market has created opportunities for collaboration with China’s importers and processors. To ex-pand this market, Kenyan producers will need to understand the details of the varieties and types of pulses demanded and the procedural aspects of the trade.

europe ( including the united kingdom )

Beans, processed dhal, pigeon peas, chickpeas ( yellow gram ), kidney beans and green gram ( green mung )

Europe was a major importer of pulses, accounting for around 45 % of the world’s imports of pulses until 2004.48 However, since then Europe’s share has declined and now stands at about 22 % of world imports. Spain, France and the United Kingdom account for the majority of the con-sumption of pulses in Europe. The ways in which pulses are consumed are very different across Europe due to differ-ent regional food habits and traditions, and to differences

47.– As per industry estimates by experts at various conferences.48.– Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August 2015.

in the supplies of grain legumes. Canned products domi-nate pulse sales as opposed to pulses sold in packets. Dry beans are the most consumed but the preference between varieties varies according to country.

Europe is showing a reversal of this trend and a recent increase in preferences for vegan and gluten-free diets can help restore growth in the demand for pulses in Europe. A major challenge for exports to Europe concerns the quality standards that must be reached, both at a technical regula-tion level and private standards set by supermarkets and distributors.

While Kenya has been exporting pulses like dry peas and others to several European countries such as France, Spain, the Netherlands and the United Kingdom, quantities remain low. The increasing preference for gluten-free diets and the movement from animal protein to vegetable protein in recent years has opened up new opportunities for Kenyan exports with the gradual increase in demand for processed pulses.

Further, the ban on export of processed dhal from India has also created opportunity for Kenya in the dhal indus-try. The Asian diaspora in the United Kingdom has a high demand for processed dhal, which can be exported from Kenya. However, challenges exist pertaining to standards compliance and quality requirements, particularly for pro-cessed dhal.

mena region

types of pulses – green gram ( green mung ) pigeon peas, chickpeas ( yellow gram ) ( including processed dhal )

The MENA markets are a high potential market for pulses. Algeria is one of the largest importers of lentils. Pulses such as chickpeas, lentils, peas and beans feature prominently in the cuisine of MENA countries. In addition to traditional uses for pulses like soups, tagines, curries and hummus, pulses can also be added to processed meats, frozen pre-pared meals and salads for a nutritional boost. They can also be used to enhance baked goods, snacks, beverages and dairy products. This region has high population growth rates and many countries are seeing extraordinary growth in food services and retail sales. Its massive potential as a trading region is just beginning to be realized. Consumers in the MENA region are increasingly using supermarkets for food purchases, which has in turn led to an increase in demand for processed pulses such as canned pulses and pulse flours.

There is also a boom in the hospitality industry, and as a result new cuisines are being introduced. Countries like Morocco, Egypt and Israel, and the city of Dubai ( UAE ) are showing extraordinary growth in the hotel industry. This is pushing the demand for pulses, as well as other food crops, to new levels. Algeria is already one of the largest consum-ers of lentils in the world. Hence, the demand for pulses is on the rise among both traditional consumers and new


[ THE WAY FORWARD ]

55

markets in this region. Further, with the large South Asian diaspora population in the Middle East, the demand for processed dhal is also high.

Kenya has exported pulses such as dry beans, dry peas and mung beans to countries like Oman, Bahrain and Yemen. Nevertheless, export levels remain small. There is an opportunity to expand the quantities of exports to these countries. Also, there is an opportunity to export to processors that are establishing process-ing plants to continue the export of dhal following the ban in India.

united states and Canada

processed dhal

The United States and Canada have large South Asian diaspora populations. The de-mand for processed dhal is high in these regions. Since exports from India discontin-ued in 2006, major processors have been ex-porting from newly established plants in Dubai. However, with the preferential duty system, easy availability of pulses as a raw material and cheap-er electricity and labour, Kenya can be an exporter to this region. The establishment of EPZs and the pro-posed agro-industry park can play a big role in this.

Regional markets

mixed beans, processed dhal

Two of the five countries with the largest per capita pulse consumption in Africa are fellow East African Community ( EAC ) members ( i.e. Rwanda and Burundi ). Relatively nearby Ethiopia is another top consumer where a major portion of dietary protein comes from pulses. Pulses, and more specifically common beans, are a major source of protein in southern Africa. They have long been a part of staple diets in this region. The region offers a good market for beans. The target consumers in this region would be lo-cal populations, although ethnic South Asian communities in

the region also provide a niche. Adding regional marketing of processed pulses to the sector’s activities would provide the sector with reduced risk through diversification, greater economy of scale, and more options for efficient aggrega-tion and distribution within the region.

The region has a huge South Asian diaspora popula-tion. Their staple diet includes processed dhal and with the export ban from India there is scope to access this market. However, it will require investment in processing facilities. Once that is made, the regional market as well as the inter-national market can be explored.

leVeRaging inVestment to sCale up opeRations and ClimB the Value addition laddeRAs the global population grows and concern over food se-curity with it, the fact that 60 % of the world’s uncultivated arable land is in Africa is earning the continent considerable attention as a source of food commodities and agribusi-ness investment opportunities. The African population itself is projected to double between 2010 and 2050, many of

whom will represent a new middle class, as six of the world’s 10 fastest-growing economies are in Africa. As a conse-quence of these trends, Africa’s food market is projected to grow from US $ 313 billion in 2010 to US $ 1 trillion in 2030, with a corresponding boom in investment.

56


A US $ 500 million investment announced by Syngenta across multiple African countries is an example of the sort of large-scale investment which is becoming possible and which Kenya could be targeting. Syngenta plans to make the investment over 10 years in local production, logistics, distribution channel development, recruitment, and training for seed and crop-protection products.

Kenya’s strengths in terms of attracting investment are its higher levels of industrialization, worker skills, connectiv-ity with international commodity markets, a domestic trade deficit in pulses, and duty-free EPZs which allow 20 % of production to be sold domestically.

Certain investments will become feasible only after the efficient organization of regional pulse markets and exten-sion of financing to vastly more smallholder farmers. For international investors, Kenya may become attractive in the medium term as an export-oriented processing centre or as a regional trading hub for pulses produced throughout East Africa.

However, full realization of this role as a market hub de-pends on the ability of Kenyan market actors and public stakeholders to organize the East African pulse market, which is characterized today by weak market information and inefficient marketing channels, simultaneously lower-ing farmer incomes and raising the price of pulses. Kenya’s relative position in the region as a producer and consumer of white maize is similar, yet Nairobi has established itself as a price-setting exchange centre for East African white maize on the relative strength and organization of a few large trad-ers and public agricultural institutions.

pulse tRading and pRoCessing

In the short term, trading in pulses is the main opportunity likely to attract foreign investors. Medium-sized pulse pro-cessors and distributors ( 20–50 tons per day ) in India and Pakistan who had been sourcing pulses from East Africa have begun exploring the possibility of setting up trading offices in the region. This appears to be stimulated by the competitive threat of Export Trading Group expanding from Africa-based trading alone into processing and distribution in its South Asian markets. As such, these investors present very immediate opportunities for investment generation in the pulses sector and should be targeted for investment promotion as quickly as possible, before they choose to establish in the United Republic of Tanzania or elsewhere.

Primary production of pulses on a large scale has not historically been an activity to attract FDI ; however, there is significant investment opportunity for existing domestic farmers to expand pulse production. Kenya is a global lead-er in pigeon pea production ( fifth in 2012 ) and dry beans ( eighth in 2012 ), with significant room for expanded produc-tion, especially considering the suitability of red and green gram as an intercrop with several of Kenya’s major cash crops : maize, sugar and sorghum. At the same time, global

demand is growing for pulses as a heart-healthy food and may be boosted further by the United Nations designation of 2016 as the International Year of Pulses.

Traders and processors with experience in contract farm-ing arrangements could have an important effect on total production and the organization of the Kenyan market, but such companies depend on tight control over inputs. High-quality imported seeds are a key input, and high-quality seed pulses are themselves a likely output for sale in pre-mium markets.

At the same time, the seed law in its current form may represent a sort of opportunity for investment promoters. Specifically, a seed company wanting to do business in Kenya would find more favourable treatment by incorporat-ing an affiliate in the country than by trying to export seeds to it. Monsanto, for example, already has a vegetable seed division in Nairobi, which might be enticed to develop high-quality seed pulses for Kenya if it saw a substantial market for them forming.

agRiBusiness inputs and seRViCes

Perhaps the most attractive investments in the pulses sector are those that go beyond pulses specifically and have much larger markets in agribusiness generally, such as seeds, farm machinery and agrochemicals. Almost 75 % of Kenyans depend on agriculture in one way or another for their liveli-hoods, yet agriculture is largely conducted by smallholder farmers who make little use of the most modern inputs.

Table 9 presents the group of companies which collec-tively control large majorities of the global markets in their given fields. These are not the only potential investors and smaller regional companies may be better poised to move quickly into Kenya given their proximity and knowledge of the country. However, world-leading companies wanting to retain that leadership are likely to consider expansion into Africa more and more as the continent is given increasing importance in global food strategies. Conversely, realizing full potential for agribusiness is more likely if the world’s lead-ing players are involved in the scaling up of its production.

Furthermore, most of the companies in table 9 already have presences in the region. Future investment projects in Kenya might originate with headquarters or with these regional affiliates. For the companies with no presence cur-rently in Kenya, a first venture would likely take the form of a sales office. Although this does not create the jobs, technol-ogy spillovers or skill spillovers of a manufacturing project, for example, the possibility of a sales office should not be dismissed by investment promoters as being of low value. A first sales office is an opportunity for a foreign company to make tentative entry into a new market, learning the busi-ness landscape and achieving a level of comfort. Of more immediate importance, it can provide Kenya’s pulses sector with valuable access to more affordable, high-quality inputs that are essential to the strengthening of the sector.

[ THE WAY FORWARD ]

57

Table 9 : Value chain segments needing FDI and likely sources

Value chain segments where FDI is needed and viable

Leading companies with foreign affiliates in Eastern

and Southern AfricaSource country

Eastern and Southern African countries with an existing affiliate

Seeds, fertilizers, and pesticides – sales, distribution, manufacturing, and research and development

BASF Germany South Africa

Bayer Crop Science Germany Mozambique, South Africa, Sudan, Zambia, Zimbabwe

Dow AgroSciences United States South Africa

DuPont ( Pioneer ) United StatesEthiopia, Kenya, South Africa, United Republic of Tanzania,

Zambia, Zimbabwe

KWS ( seeds ) Germany Kenya, South Africa, Sudan

Monsanto United States Kenya, Malawi, South Africa, Zimbabwe

Syngenta SwitzerlandEthiopia, Kenya, Mozambique, South Africa, Sudan, United

Republic of Tanzania, Zambia, Zimbabwe

Farm machinery and equipment – sales, distribution, manufacturing, operation, maintenance and repair

AGCO United States None

CLAAS Germany None

CNH Netherlands South Africa

John Deere United States South Africa

Kubota JapanKenya, Madagascar, Mozambique, South Africa, United

Republic of Tanzania, Uganda

SAME Deutz-Fahr Italy None

Animal feed – manufacturing, and research and development

Brasil Foods Brazil None

Cargill United States Kenya, Mozambique, South Africa, Zambia, Zimbabwe

Charoen Pokphand Thailand None

New Hope Group China None

Tyson Foods United States None

Vertically integrated trading, including warehousing, transportation and risk management ( as well as agricultural consulting and manufacturing of biofuels and animal feed in some cases )

Archer Daniels Midland United States None

Bunge United States Kenya, South Africa

Cargill United States Kenya, Mozambique, South Africa, Zambia, Zimbabwe

Louis Dreyfus Commodities Netherlands Kenya, South Africa

Quality testing and certification Cotecna Switzerland South Africa

Intertek United KingdomDjibouti, Kenya, Mozambique, South Africa, United Republic of

Tanzania, Uganda

NSF United States South Africa

SCS United States None ( only Ghana in Africa )

SGS Switzerland

Burundi, Djibouti, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mozambique, South Africa, United Republic of

Tanzania, Uganda, Zambia, Zimbabwe

Sources : Shand, Hope ( 2012 ) ; Noealt Corporate Services ( 2013 ) ; Peter Best and Ken Jennison ( 2012 ) ; Murphy, S., Burch, D. and Clapp, J. ( 2012 ) ; and company websites.

58


identified oppoRtunities foR inVestment

The following opportunity areas for investment have been identified within the sector value chain. The activities are mostly sequential in the sector’s development, although with some overlap. Target investor groups are italicized.

1. Processing of mostly imported pulses and their export to South Asia. Particularly as EAC integration deepens, raw pulses may be sourced from the United Republic of Tanzania, potentially Ethiopia, and perhaps eventually from within Kenya for processing and export to South Asia. Kenya’s industrial capacity, EPZ frame-work, transportation infrastructure and established trade networks with India make pulse processing for export to India a likelier, profit-making enterprise than, say, primary production of pulses. These investors are likely

to be domestic pulse processors Arom India or perhaps Pakistan. However, Export Trading Group’s recent at-tempts to enter pulse processing and its large presence in Kenya make it another viable target Aor investment promotion in pulse processing. – China, too, should increasingly demand pulses

and become a source of investment, as domestic Chinese producers face rising production costs and seek to offshore pulse purchasing, production and processing.

Primary production

• Basic • Higher value added

Processing Domestic

distribution

• Regional • Mass market,

South Asia • South Asian

diaspora • Niche markets

Export

2. Import-substituting distribution of processed pulses in Kenya, and particularly to the ethnic South Asian market segment. With a production base in EPZs for processed pulses, and with EPZ regulations allowing 20 % of production to be sold within Kenya and the rest of the EAC, an export-oriented processor could also make major inroads in the domestic Kenyan market, which currently imports most of its processed pulses from India. With the recent trend to integrate processing

and trading, many oA the likeliest investors in this activity will be the same as in #1 above. This would also put competitive pressure on the Kenyan companies that currently distribute, within Kenya, processed pulses that have been imported from India. These domestic inves-tors may in turn be stimulated to compete by investing in the scale, quality, and / or speed of their warehouses, trucks, packaging, marketing, etc.

Primary production

• Basic • Higher value aded

Processing Domestic

distribution




Export

3. Regional distribution of processed pulses to Ethiopia, Rwanda and Burundi. Three of the five countries with the largest per capita pulse consumption in Africa share a border with Kenya ( i.e. Ethiopia ) or are fellow EAC members ( i.e. Rwanda and Burundi ). Expanding marketing efforts from Kenya to this larger region is a natural step for the established producers in #1 and #2 above, especially Ethiopia because it falls outside of the EAC and is therefore not subject to the 20 % cap on EPZ production being sold to the ‘domestic’ EAC market.

Target consumers in this region would be indigenous populations rather than ethnic South Asian communi-ties. Likewise, new investors in this broader regional dis-tribution network Aor Kenyan pulse exports might include more non-ethnic Indian investors Arom Kenya, the United Republic oA Tanzania, Ethiopia, Rwanda and Burundi. – Although less immediately accessible and without the

same tariff advantages, the large pulse-consuming countries of West Africa, Niger and Burkina Faso, could become second-phase ‘regional’ targets for these investors and investors.

[ THE WAY FORWARD ]

59

Primary production


Processing Domestic

distribution




Export

4. Export of processed pulses to the South Asian diaspo-ra in the Gulf States, North America, the EU, Malaysia, South Africa and Mauritius. Although considerably smaller markets than those of South Asia, these markets still comprise tens of millions of consumers, many offer

higher margins, and leading brands may be less than a decade old. In addition to the investors in #1 and #2 above, members oA the diaspora in target markets are likely sources of equity financing and possibly business networks, though probably not technical expertise.

Primary production


Processing Domestic

distribution




Export

5. Higher value added processing for niche markets. Particularly in the EU and North America, there is a small but quickly growing demand for products that are gluten-free ( e.g. pasta, vermicelli, chips ), vegetarian, organic and fair-trade certified, for which pulses can be

an important ingredient. These require more advanced technologies and processing facilities, and investors could be maAor or niche Aood producers with current Aacilities in India, China, or the target markets.

Primary production


Processing Domestic

distribution




Export

6. Primary production. Kenya is not a significant producer of pulses today and it is unlikely to become one without the national Government providing farmers with sig-nificant encouragement, guidance and support of the sort detailed in this roadmap’s PoA. If such activities are successfully undertaken, investment could become attractive in primary production of pulses or, likelier, contract Aarming arrangements by vertically integrated aggregators / processors / traders, as well as by do-mestic investors anywhere along the value chain. This should be an important source of the high-quality inputs ( seed, fertilizer, good agricultural practices, etc. ) that are needed to transform the sector’s productivity.

Note : Primary production is placed at the end of this list because it is much more challenging to get large numbers of farmers to start producing a consistently large and high-quality supply of pulses where it has not existed before, than to import existing supply and set up pulse processors in EPZs. However, raw pulse production could be started much earlier in the above sequence, with adequate commit-ment and supervision by the Government. The earlier and more successAul Kenya’s entry into primary production, the more investment opportunities will be available to domestic entrepreneurs.

Primary production


Processing Domestic

distribution


South Asia • Niche, higher

value added

Export

60


Figure 23 : Future value chain

Nat

iona

l com

pone

nt o

f th

e va

lue

chai

n

Nat

iona

l mar

ket

Food

Saf

ety

and

qual

ity r

egul

atio

ns: K

enya

Bur

eau

of S

tand

ards

, KA

RI.,

Wei

ghts

and

Mea

sure

s D

ept.,

Gov

ernm

ent C

hem

ist’s

Dep

t., D

ept.

of V

eter

inar

y S

ervi

ces,

Ken

ya D

airy

Boa

rd, H

ortic

ultu

ral C

rops

Dev

elop

men

t Aut

horiy

/ K

RA

Cou

nty

gove

rnm

ents

/ M

inis

try

of A

gric

ultu

re, L

ives

tock

and

Fis

herie

s /

Min

istr

y of

Indu

stria

lizat

ion

and

Ente

rpris

e D

evel

opm

ent

SP

S S

ervi

ces,

See

d C

ertif

icat

ion,

Ana

lytic

al C

hem

ical

Lab

orat

ory:

Ken

ya P

lant

Hea

lth In

spec

tora

te S

ervi

ce (

KEP

HIS

)

Suppor

t se

rvic

es

Res

earc

h an

d de

velo

pmen

t

Min

istr

y of

Hea

lth –

Dep

artm

ent o

f P

ublic

Hea

lth

Inpu

ts

See

ds

Che

mic

al f

ertil

izer

s

(in

smal

l pro

port

ion)

Farm

equ

ipm

ent

Labo

ur

(qua

lifie

d/te

chni

cal)

Land

Wat

er

Pes

ticid

e an

d

inse

ctic

ide(

in s

mal

l

prop

ortio

n)

Pro

duct

ion:

smal

lhol

der

farm

s

Dry

bea

ns 5

29

kt,

cow

peas

12

2kt

,

Pig

eonp

eas

73

kt

17

th g

loba

lly 1

.8

mill

ion

hous

ehol

ds

1.4

mill

ion

Ha

Plo

ughi

ng

Pla

ntin

g

Wee

ding

Ass

embl

y/bu

lkin

g

Loca

l who

lesa

lers

Reg

iona

l

who

lesa

lers

Ass

embl

ers

Inte

rmed

iate

trad

ers

Bul

king

age

nts

Trad

ers

Pro

cess

ing

Pig

eon

pea

(Nai

robi

,

Mom

basa

)

De-

hulli

ng

Spl

ittin

g

Cle

anin

g S

ortin

g

Inte

rnat

iona

l

tran

spor

ter

Man

ure

(les

s th

an

25

% o

f fa

rmer

s)

Dry

gra

in c

owpe

as

Rur

al p

osho

mill

Pro

cess

ors

Urb

an p

osho

mill

Pro

cess

ors

Bea

ns

Loca

l mar

kets

Pig

eon

pea

Incr

ease

d co

llabo

ratio

n w

ith In

dian

res

earc

h in

stitu

tions

, IC

RIS

AT/K

ALR

O

Uni

vers

ities

Indi

a

- P

igeo

n pe

as

- C

hick

peas

(ye

llow

gra

m)

- K

idne

y be

ans

- G

reen

gra

m

- P

roce

ssed

dha

l

MEN

A-

Pig

eon

peas

- C

hick

peas

(ye

llow

gra

m)

- G

reen

gra

m (

gree

n m

ung)

- P

roce

ssed

dha

l

Cow

peas

Non

-gov

ernm

enta

l org

aniz

atio

ns

East

ern

and

Cen

tral

Afr

ica

Bea

n R

esea

rch

Net

wor

k

Mar

ket p

rice

info

rmat

ion

: EP

C/K

enIn

vest

Fina

ncia

l ser

vice

s in

clud

ing

form

al (

bank

s) a

nd in

form

al le

ndin

g so

urce

s

Exte

nsio

n se

rvic

es

Inst

itutio

ns

Who

lesa

ling

Priv

ate

who

lesa

lers

Nat

iona

l C

erea

ls a

nd

Pro

duce

B

oard

Loca

l mar

kets

(sch

ools

/hos

pita

ls)

Urb

an s

uper

mar

kets

Rur

al/u

rban

ret

ail

shop

keep

ers

Sm

all l

ocal

/reg

iona

l

trad

ers

Urb

an s

uper

mar

kets

(d

ry, d

hal)

Urb

an

cons

umer

sU

rban

ope

n ai

r re

taile

rs

(veg

etab

le a

nd d

ry)

Urb

an r

etai

ler

shop

keep

ers

(dry

, dha

l)

Legen

d

Nat

iona

l com

pone

ntIn

tern

atio

nal c

ompo

nent

East

ern

Afr

ica

Gra

in C

ounc

il

Rur

al o

pen-

air

Rur

al r

etai

l sho

p

Chi

ckpe

a &

nav

y be

an s

ub-s

ecto

rs a

re u

nder

deve

lope

d

but w

ith h

igh

pote

ntia

l

Pak

ista

n-

Pig

eon

peas

- C

hick

peas

(ye

llow

gra

m)

- K

idne

y be

ans

- G

reen

gra

m

- P

roce

ssed

dha

l

EAC

- M

ixed

bea

ns

- S

ugar

bea

ns

- P

roce

ssed

dha

l

Nor

th A

mer

ica

(Uni

ted

Sta

tes

and

Can

ada)

- P

roce

ssed

dha

l

Spr

ayin

g

Har

vest

ing

Dry

ing

Bag

ging

Pol

ishi

ngP

acka

ging

Rec

ord

keep

ing

Impo

rt: 7

8,6

00

ton

s

- ki

dney

bea

ns,

- w

hite

pea

bea

ns,

- dr

y pe

as

Uga

nda

(46

.8 %

)

Uni

ted

Sta

tes

(30

.6 %

)

Uni

ted

Rep

ublic

of

Tanz

ania

(1

4.5

%)

Enha

nced

ava

labi

lity

and

adop

tion

Enha

nced

ava

labi

lity

and

adop

tion

Dev

elop

men

t/en

hanc

emen

t of

agrib

usin

ess

serv

ices

Thru

st o

n sp

urrin

g

Inve

stm

ent

Emer

genc

e of

a n

ew v

alue

cha

in b

ranc

h: I

MP

OR

T->

PR

OC

ESS

-> E

XPO

RT

to S

outh

Asi

an m

arke

ts

Mar

ketin

g pr

oces

sed

puls

es

to d

omes

tic m

arke

t as

an

impo

rt-s

ubst

itutio

n

mec

hani

sm

Impr

oved

and

focu

sed

mar

ketin

g

of p

roce

ssed

pul

ses

to E

AC

Targ

eted

mar

ketin

g

to d

iasp

ora

in:

Gul

f S

tate

s

Nor

th A

mer

ica

EU Sou

th A

fric

a an

d

Mau

ritiu

s

Con

trac

t far

min

g

arra

ngem

ents

EU-

Dry

bea

ns

- P

igeo

n pe

as-

Chi

ckpe

as

- K

idne

y be

ans

- G

reen

gra

m-

Pro

cess

ed d

hal

Chi

na

- D

ry p

eas

- G

reen

gra

m

Focu

sed

mar

ketin

g

on s

peci

fic h

igh

pote

ntia

l pro

duct

s

as n

oted

Photo: (CC BY-SA 2.0) CC0 Public Domain, LoggaWiggler.Apg

[ MOVING TO ACTION ]

61

moVing to aCtion

The development of the future value chain for the Kenyan pulses sector is a five-year project defined through a con-sultative process between public and private sector stake-holders in Kenya.

pRioRity aCtions

Achieving the strategic objectives and realizing the future value chain depends heavily on the ability of sector stake-holders to start implementing and coordinating the activities defined in the Value Chain Roadmap’s PoA. For this reason, a list of key priority activities has been identified in order to kick-start the implementation of the roadmap.

Table 10 : The priority actions to kick-start implementation

Activities Lead implementer

Undertake a feasibility study to identify the areas with high potential for pulses, particularly in areas that produce agricultural products all year round.

� Conduct a detailed agronomic assessment of the topography of the land to identify the potential for different varieties of pulses.

� Consider a feasibility study for other regions that can support high potential areas to allow for synchronization of pulse production.

� Conduct commodity demand and agroecological zones suitability assessments. EAGC

Establish a seed bank through a partnership between ICRISAT and EAGC, to ensure availability of seeds at all times. Adopt a public–private partnership ( PPP ) model between Government, farmers and other stakeholders, where capital expenditure would be public and operating costs would be private.

The seed bank will maintain a certain level of stocks and ensure the availability of certified seeds of certain varieties to farmers.

Under this component, quota requirements and specifications in terms of varieties will be defined every year for each participating farmers’ organization to ensure the sustainability of the bank. ICRISAT

Develop a pilot project with ICRISAT and STAK for seed production and multiplication.

� EAGC to provide the overall facilitation wherein seed firms will be invited to invest in a seed multiplication programme by ICRISAT.

� EAGC will facilitate the interaction between seed companies, exporters, farmers and ICRISAT. � EAGC to encourage members and other private sector players for investment in the form

of a PPP to establish a large-scale seed multiplication and distribution scheme for hybrid varieties. � EAGC and farmers’ organizations to work with ICRISAT to develop a number of demonstration plots f

or farmers to understand the benefits of hybrid / higher-yielding varieties. STAK

62



Identify, through detailed profiling, key farmers’ organizations ( identify an initial list of 10–15 farmers’ organizations in high potential areas ) operating in the selected counties ( including organizations that are not yet involved in pulses ) to serve as a nucleus for select pilot initiatives.

� Evaluate the reach of the farmers’ organizations. � Evaluate the past work done by the organizations in the pulses value chain

( or other commodities ). � Evaluate the implementation capacity of the different organizations. � Create a profile for each sector organization. CGA

Implement a pilot farms initiative – as a demonstrator initiative – for the production of the identified pulses in the selected areas. The pilot farm will be a focused farm that will be used to cultivate pulses with the view to providing a showcase for best practices and the potential of pulses. Assistance will be provided in terms of :

� Access to quality inputs ( including seeds ), including pesticides and fertilizers ( including training on safe application ) ; � Building capacities and knowledge on pulse production, including soil analysis and water management, sowing,

and protection from diseases and pest attacks ; � Developing the farmers’ organizations’ knowledge of the pulses market, including prices,

market requirements and global outlook ( including national, local, market ) ; � Training on farming and postharvest techniques ( cleaning, sorting, grading, drying, polishing, bagging, storage, etc. ) ; � Showcasing different pulse varieties and existing production technologies through pilot farms

with the support of scientists from KALRO and ICRISAT ; � Increasing the participation of farmers’ organizations in awareness-raising campaigns

on crop diversification and sustainability aspects ; � Assistance with identifying markets and buyers for the harvest. CGA

Develop and conduct a Training of Trainers programme ( four sessions of one week each ; two to four week courses ) with batches of 10–20 trainers per county coming from previously identified farmers’ organizations.

Training program curricula will be developed in collaboration with entities such as ICAR ( Indian Institute of Pulses Research ), KALRO, ICRISAT and other stakeholders, and will cover the following areas :

� Suitable pulse varieties and their diagnostic characteristics ; � Exploring the possibilities of underutilized pulse varieties with the view to enhancing

their production in different cropping systems ; � Improved agro-techniques for enhancing production, including planting techniques and fertilizer application ; � Identification and management of pests, disease control, fertilizers, and pesticides and their application. � With the support of the trained trainers, disseminate information through on-site trainings with farmers at county level. EAGC

Conduct an equipment study to assess the type of equipment needed in the future by pulse growers ( also looking at equipment that can be used for both pulses and other crops ). Assessment study should include the following information and criteria.

� Mapping of manufacturers of processing equipment in India and Kenya ( types, processing capacity, technical support and spares ).

� Type of equipment, including dhal plants from India ( including cleaning, drying, splitting, polishing, etc. ). � Training requirements for local technicians to maintain the equipment. � Cost of the equipment – actual and associated costs – including financing mechanisms. � Capacity and diversity ( multipurpose during low seasons where other crops can be processed ) use of processing. � Packaging range of equipment – smaller / bigger packets etc. � Specifications including machine productive life. � Spare parts availability and support services. � Compatibility to alternative sources of energy. � Alternative sources of the same equipment outside India and Kenya

( e.g. Brazil, Italy, Japan, China, Viet Nam ) to feed into a comparative cost-benefit analysis ).

Based on the equipment study, bring equipment manufacturers in India and distributors in the region to Kenya to meet face to face with farmers’ organizations, etc. so they see whether there is a business case for setting up shop in Kenya.

Provide buyers with credit for the supply of technology from India and deploy affordable leasing options for equipment that farmers’ organizations can access through Exim Bank of India. EAGC

Organize a study tour to India – in collaboration with IPGA – that will include visits to market yards and processors of pulses in India ( Indore / Delhi ). This study tour will be organized once a year for a group of 15–30 market players ( including farmers, assemblers, traders, processors, financial institutions, research institutes and government officials ) identified jointly by EAGC and ITC.

The visit will allow the participants to see the operations of the Indian industry and develop business linkages. IPGA


[ MOVING TO ACTION ]

63


Undertake a pilot initiative to build capacity of, and to find a market for, the collective of 18,000 farmers ( Eastern and Coast regions ) that are brought together by the Kenya Red Cross.

� Build capacity for sorting, grading and packaging. � Establish collection points and certified storage facilities with the required facilities ( cleaning, sorting, grading, etc. ). � Assist in improving marketing of the crop. � Link to buyers before the harvest so that proper quality and inputs are made available. EAGC

Link existing market information platforms such as RATIN, National Farmers Information Service, M-Farm and CerealMart, to provide information on pulses. The existing RATIN system will be upgraded to pull data from AGMARKNET in India and other free information sources. The system will also subscribe to data vendors’ commercial services such as Reuters and Gro Ventures ( a Kenya-based information vendor ) to have access to additional sources of information to be distributed to the sector. In order to achieve this, the following steps will be will be carried out :

� Conduct a comprehensive study on existing market information systems, including a gap analysis ; � Strengthen the database for the pulses value chain for farmers, traders, aggregators and technical experts ; � Configure the system to receive and distribute information related to the pulses market ( including prices )

through external sources such as AGMARKNET ( India ) and Bloomberg.

Configure the system to receive and disseminate information from the EAGC Structured Trading Platform. EAGC

Photo: (CC BY-SA 2.0) NH53 (CC BY 2.0) , Bags oA beans.Apg

Roadmap plan of aCtion

The PoA contains a detailed list of activities organized by operational objectives and strategic objectives. The PoA serves as an exhaustive framework for the implementation of the roadmap.

66


stra

tegi

c ob

ject

ive

1 : s

treng

then

the

prod

uctio

n ba

se o

f the

sec

tor.

oper

atio

nal

objec

tives

activ

ities

prio

rity

1=hi

gh2=

med

3=lo

w

star

ting

perio

dta

rget

mea

sure

sle

ad

impl

emen

ters

supp

ortin

g im

plem

ente

rspo

tent

ial

fund

ing

sour

ce

2016

2017

2018

2019

2020

1 .1

deve

lop

a ba

selin

e fo

r th

e se

ctor

and

en

cour

age

info

r-m

atio

n sh

arin

g am

ong

sect

or

stak

ehol

ders

.

1 .1 .

1 Un

der ta

ke a

detai

led ag

rono

mic

asse

ssm

ent a

cros

s the

coun

try to

iden

tify t

he p

oten

tial o

f diff

erent

vari-

eties

of p

ulse

s, an

d in

parti

cular

area

s tha

t pro

duce

agric

ultu

ral p

rodu

cts al

l yea

r rou

nd.

• Co

nsid

er a

feasib

ility

study

for o

ther

regi

ons t

hat c

an su

ppor

t hig

h po

tentia

l area

s to

allow

for

sync

hron

izatio

n of

pul

ses p

rodu

ction

.•

Cond

uct c

omm

odity

dem

and

and

agro

ecol

ogica

l zon

es su

itabi

lity a

sses

smen

ts.•

Asse

ss th

e pot

entia

l for

pul

se ex

ports

from

the p

oten

tial p

rodu

ction

area

s, inc

ludi

ng as

sess

men

ts of

lo

gisti

cs ro

utes

to p

orts

and

storag

e inf

rastru

cture

in th

e reg

ions

.

1X

• Fe

asib

ility

study

is

com

plete

d by

the e

nd

of 2

016

EAGC

MAL

F, K

ENAF

F, co

unty

gove

rnm

ents

Wor

ld B

ank

Grou

p

1 .1 .

2 Fo

ster p

ublic

–priv

ate d

ialog

ue in

the p

ulse

s sec

tor t

hrou

gh o

rgan

izatio

n of

secto

r dev

elopm

ent /

matc

h-m

aking

even

ts. Th

e aim

is to

und

ersta

nd p

rojec

ted su

pply

and

dem

and

for p

roce

ssed

pul

ses ;

spec

ifica

tions

fo

r pul

se ex

port

mark

ets ; a

nd in

vestm

ent o

ppor

tunit

ies in

mee

ting

pulse

secto

r-spe

cific

dem

and

for s

ervic

es

such

as eq

uipm

ent s

uppl

y, ag

greg

ation

, pos

tharv

est s

ervic

es, p

acka

ging

, qua

lity a

ssur

ance

and

mark

eting

.Ev

ents

to b

e aim

ed at

pul

se p

roce

ssor

s, tra

ders,

farm

ers’

asso

ciatio

ns, a

grib

usine

ss su

ppor

t ser

vice p

rovid

ers

and

relev

ant p

ublic

insti

tutio

ns.

2X

XX

• Ev

ent h

eld ev

ery q

uarte

r sta

rting

Q1

2016

EAGC

EPC,

KEN

AFF,

MAL

F,

KEPS

A, M

oIED,

KEB

SSI

TA

( Par

tner

ship

Pl

atfor

ms )

1 .1 .

3 Br

ing C

usto

ms a

utho

rities

and

othe

r aut

horit

ies fr

om In

dia a

nd K

enya

face

to fa

ce to

disc

uss c

omm

on

chall

enge

s tha

t exp

orter

s typ

ically

face

in th

e actu

al ex

porti

ng p

roce

ss, s

uch

as :

• De

lays i

n cle

aranc

e of g

oods

in p

ort

• Cu

rrenc

y flu

ctuati

ons

• Un

derd

evelo

ped

infras

tructu

re•

Non-

tariff

barr

iers.

This

is to

expl

ore s

olut

ions

to co

mm

on is

sues

and

then

mak

e exp

orter

s and

impo

rters

aware

of t

he so

lutio

ns.

2X

XX

XX

• Fir

st ro

undt

able

held

in

mid

-201

6 an

d rep

eated

an

nuall

y

KRA

Keny

a Por

ts Au

thor

ity,

Mini

stry o

f For

eign

Af-

fairs

and

Inter

natio

nal

Trade

, EPC

, EPZ

A

SITA

1 .1 .

4 Ide

ntify

varie

ties a

nd ch

aracte

ristic

s of p

ulse

s – w

ithin

the b

road

type

s suc

h as

pig

eon

peas

, chic

kpea

s ( y

ellow

gram

) and

gree

n gr

am ( m

ung

bean

s ) –

for t

he In

dian

mark

et th

at are

suita

ble f

or th

e ide

ntifi

ed cu

lti-

vatio

n are

as ( t

hrou

gh th

e fea

sibili

ty stu

dy ) b

ut al

so fo

r whic

h th

ere is

sign

ifica

nt d

eman

d ( in

cludi

ng co

lour

, m

aturit

y per

iod,

ecol

ogica

l req

uirem

ents )

.Fo

r the

iden

tified

varie

ties,

form

ulate

a fiv

e-ye

ar se

ed d

evelo

pmen

t rol

ling

plan

( by c

atego

ry, va

riety,

crop

and

regio

n ).

1X

• As

sess

men

t com

plete

d by

M

ay 2

016

• Se

ed d

evelo

pmen

t plan

co

mpl

eted

by D

ecem

ber

2016

ICRI

SAT

STAK

, farm

ers’

as-

socia

tions

, KAL

RO, K

E-PH

IS, M

ALF,

EAG

C

1 .2

ensu

re a

re

liabl

e an

d co

n-sis

tent

sup

ply

of

certi

fied

seed

s .

1 .2 .

1 Es

tablis

h a s

eed

bank

, thr

ough

a pa

rtner

ship

betw

een

ICRI

SAT a

nd E

AGC,

to im

prov

e ava

ilabi

lity l

evels

of

seed

s. Ad

opt a

PPP

mod

el be

twee

n Go

vern

men

t, far

mer

s and

oth

er st

akeh

olde

rs, w

here

capi

tal ex

pend

iture

woul

d be

pub

lic an

d op

erati

ng co

sts w

ould

be p

rivate

.Th

e see

d ba

nk w

ill m

aintai

n a c

ertai

n lev

el of

stoc

ks an

d en

sure

the a

vaila

bilit

y of c

ertif

ied se

eds o

f cer

tain

varie

ties t

o far

mer

s.Un

der t

his co

mpo

nent

, quo

ta req

uirem

ents

and

spec

ifica

tions

in te

rms o

f vari

eties

will

be d

efine

d ev

ery y

ear

for e

ach

parti

cipati

ng fa

rmer

s’ or

ganiz

ation

to en

sure

the s

ustai

nabi

lity o

f the

seed

ban

k.

2X

XX

X•

Prop

osal

for s

eed

bank

de

velo

ped

by th

e end

of

201

7•

Seed

ban

k esta

blish

ed

in 20

18

ICRI

SAT /

EA

GCST

AK, M

ALF,

KAL

RO,

KEPH

IS

1 .2 .

2 De

velo

p a p

ilot p

rojec

t foc

using

on

seed

pro

ducti

on an

d m

ultip

licati

on.

• Pr

ojec

t to

take t

he sh

ape o

f a P

PP w

herei

n se

ed fi

rms w

ill b

e inv

ited

to in

vest

in a s

eed

mul

tiplic

ation

pr

ogram

me f

or h

igh-

yield

ing va

rietie

s by I

CRIS

AT. I

n ret

urn,

seed

firm

s will

hav

e a re

ady m

arket

with

pul

se

farm

ers.

• EA

GC an

d far

mer

s’ or

ganiz

ation

s to

work

with

ICRI

SAT t

o de

velo

p a n

umbe

r of d

emon

strati

on p

lots

for

farm

ers t

o un

derst

and

the b

enefi

ts of

hyb

rid /

highe

r-yiel

ding

varie

ties.

1X

XX

XX

• Pr

opos

al de

velo

ped

by th

e en

d of

201

6•

Pilot

pro

ject i

nitiat

ed b

y m

id-2

017

• De

mon

strati

on p

lots

estab

lishe

d ( d

ates t

o be

de

term

ined )

EAGC

STAK

, ICR

ISAT

, KE -

NAFF

, farm

ers’

orga

ni-za

tions

, MAL

F

SITA

[ ROADMAP PLAN OF ACTION ]

67

stra

tegi

c ob

ject

ive

1 : s

treng

then

the

prod

uctio

n ba

se o

f the

sec

tor.

oper

atio

nal

objec

tives

activ

ities

prio

rity

1=hi

gh2=

med

3=lo

w

star

ting

perio

dta

rget

mea

sure

sle

ad

impl

emen

ters

supp

ortin

g im

plem

ente

rspo

tent

ial

fund

ing

sour

ce

2016

2017

2018

2019

2020

1 .2

ensu

re a

re

liabl

e an

d co

n-sis

tent

sup

ply

of

certi

fied

seed

s .

1 .2 .

3 Re

infor

ce th

e im

plem

entat

ion

and

enfo

rcem

ent o

f the

See

d an

d Pl

ant V

ariety

Act

( 197

5, am

ende

d in

2012

), aim

ing at

ensu

ring

prop

er av

ailab

ility

of ce

rtifie

d se

eds.

Step

s inc

lude

the f

ollo

wing

.

• Co

nduc

t a q

uick a

sses

smen

t on

the l

evel

of im

plem

entat

ion

and

cove

rage o

f this

Act,

and

the e

xpec

ted

impa

ct of

dev

olut

ion

on th

e im

plem

entat

ion

of th

e Act.

• Ha

rmon

ize p

olici

es at

nati

onal

level

and

coun

ty lev

el an

d su

gges

t step

s to

impr

ove c

oord

inatio

n wi

th

coun

ties f

or en

forc

ing th

e pol

icies

.•

Advo

cate

for t

he im

plem

entat

ion

of a

polic

y for

syste

mati

c see

d co

ntro

ls to

figh

t aga

inst t

he u

se o

f non

-ce

rtifie

d se

eds.

• Co

nsid

er re

vising

the p

olicy

supp

ortin

g se

ed d

evelo

pmen

t by r

esea

rch

instit

utes

to au

thor

ize p

artn

ersh

ips

with

seed

bree

ders

on a

cont

ractu

al ba

sis.

• Cr

eate

aware

ness

of t

he A

ct, d

issem

inate

infor

mati

on.

3X

• As

sess

men

t and

rec

omm

enda

tions

pr

ovid

ed to

MAL

F by

the

end

of 2

016

MAL

FCo

unty

gove

rnm

ents,

KE

NAFF

1 .2 .

4 Es

tablis

h a f

inanc

e mec

hanis

m ( s

chem

e ) to

pro

mot

e priv

ate se

ctor i

nves

tmen

t in

seed

dev

elopm

ent.

• Th

e sch

eme w

ill in

volve

, thr

ough

don

or as

sistan

ce /

budg

etary

alloc

ation

from

the G

over

nmen

t, th

e sett

ing

up o

f a fu

nd b

y STA

K th

at wi

ll su

ppor

t inv

estm

ent i

n de

velo

ping

infra

struc

ture

for s

eed

deve

lopm

ent,

i.e. c

reatio

n of

infra

struc

ture

facili

ties r

elatin

g to

seed

clea

ning,

grad

ing an

d pr

oces

sing ;

seed

trea

ting,

pa

ckag

ing an

d sto

rage u

nits ;

as w

ell as

for s

eed

testin

g fac

ilitie

s.•

Priva

te co

mpa

nies,

indivi

dual

entre

pren

eurs,

seed

coop

erati

ves a

nd p

artn

ersh

ip fa

rms w

ill b

e elig

ible

for

soft

loan

subs

idies

.•

This

finan

ce m

echa

nism

will

be i

mpl

emen

ted th

roug

h pr

e-id

entif

ied b

anks

and

will

invol

ve a

cred

it-lin

ked

back

-end

ed ca

pital

subs

idy t

o be

pro

vided

at th

e rate

of 5

0 % fo

r new

com

ers,

and

25 %

for e

stabl

ished

co

mpa

nies,

of th

e pro

ject c

ost s

ubjec

t to

a max

imum

lim

it of

US $

50,0

00 p

er u

nit o

n se

ed in

frastr

uctu

re de

velo

pmen

t.

2X

XX

X•

Prop

osal

for f

und

deve

lope

d by

mid

-201

7•

Sche

me d

eplo

yed

at th

e en

d of

201

7 as

a pi

lot

STAK

EAGC

, MAL

F,Na

tiona

l Trea

sury,

M

oIED,

Savin

gs an

d Cr

edit

Co-

oper

ative

Soc

ieties

1 .2 .

5 Inc

rease

coor

dina

tion

betw

een

ICAR

( Ind

ian In

stitu

te of

Pul

ses R

esea

rch )

and

KALR

O an

d KE

PHIS

( in

charg

e of c

learin

g se

ed im

ports

) to

deve

lop

an ac

tion

plan

to fo

ster k

nowl

edge

tran

sfer t

o se

ed p

rodu

cers

and

farm

ers (

inclu

ding

intro

ducti

on an

d tra

ining

on

impr

oved

varie

ties o

f the

seed

s ), a

nd im

prov

e ins

titut

iona

l co

llabo

ratio

n.

2X

XX

XX

• Ini

tial r

ound

table

mee

ting

to d

iscus

s app

roac

h he

ld

in 20

16, r

esul

ting

in a

med

ium-to

-long

term

co

ordi

natio

n ap

proa

ch

KALR

OIC

AR, K

EPHI

S, IC

RI-

SAT,

STAK

, KEN

AFF,

co

unty

gove

rnm

ents

1 .3

enha

nce

the

avail

abilit

y an

d ad

optio

n of

qua

lity ( n

on-

seed

) inp

uts .

1 .3 .

1 De

velo

p a m

odel

for p

rivate

secto

r eng

agem

ent i

n th

e sale

of p

estic

ides

and

fertil

izers.

• Di

scus

s the

valu

e pro

posit

ion

of th

e pul

ses m

arket

with

key s

uppl

iers.

• In

a mul

ti-sta

keho

lder

setti

ng, d

evelo

p a p

lan fo

r sale

of e

nviro

nmen

tally

frien

dly,

affor

dabl

e fer

tilize

r and

pe

sticid

es to

pro

duce

rs ( in

cludi

ng d

istrib

utio

n m

odel

).

2X

XX

• Di

strib

utio

n m

odel

deve

lope

d by

early

201

8Ag

roch

emica

l As

socia

tion

of

Keny

a

MAL

F, E

AGC,

KEN

AFF,

co

unty

gove

rnm

ents

1 .3 .

2 Ide

ntify

, thr

ough

deta

iled

prof

iling

, key

farm

ers’

orga

nizati

ons o

perat

ing in

the s

electe

d co

untie

s, in-

cludi

ng o

rgan

izatio

ns th

at are

not

yet i

nvol

ved

in pu

lses,

to se

rve as

a nu

cleus

for s

elect

pilo

t init

iative

s.

• Ev

aluate

the r

each

of t

he fa

rmer

s’ or

ganiz

ation

s and

the p

ast w

ork d

one b

y eac

h or

ganiz

ation

in th

e pul

ses

valu

e cha

in ( o

r oth

er co

mm

oditi

es ).

• Ev

aluate

the i

mpl

emen

tatio

n ca

pacit

y of t

he d

iffere

nt o

rgan

izatio

ns an

d cr

eate

a pro

file f

or ea

ch

orga

nizati

on.

1X

• Te

n to

fifte

en fa

rmer

s’ or

ganiz

ation

s in

high

poten

tial a

reas i

dent

ified

an

d ap

proa

ched

for

invol

vem

ent i

n pi

lot

initia

tives

by m

id-2

015

KENA

FFEA

GC, C

GA, K

EPSA

, co

unty

gove

rnm

ents

SITA

68


stra

tegi

c ob

ject

ive

1 : s

treng

then

the

prod

uctio

n ba

se o

f the

sec

tor.

oper

atio

nal

objec

tives

activ

ities

prio

rity

1=hi

gh2=

med

3=lo

w

star

ting

perio

dta

rget

mea

sure

sle

ad

impl

emen

ters

supp

ortin

g im

plem

ente

rspo

tent

ial

fund

ing

sour

ce

2016

2017

2018

2019

2020

1 .4

impr

ove

adop

tion

of b

est

prac

tices

in th

e se

ctor

.

1 .4 .

1 Im

plem

ent a

pilo

t farm

s init

iative

s – as

a de

mon

strato

r init

iative

– fo

r the

pro

ducti

on o

f the

iden

tified

pu

lses i

n th

e sele

cted

areas

, inv

olvin

g id

entif

ied fa

rmer

s’ or

ganiz

ation

s.Sp

ecifi

cs o

n as

sistan

ce :

• Ac

cess

to q

ualit

y inp

uts (

inclu

ding

seed

s ), i

nclu

ding

pes

ticid

es an

d fer

tilize

rs ( in

cludi

ng tr

aining

on

safe

appl

icatio

n ) ;

• Bu

ild ca

pacit

ies an

d kn

owled

ge o

n pu

lse p

rodu

ction

, inc

ludi

ng so

il an

alysis

and

water

man

agem

ent,

sowi

ng, a

nd p

rotec

tion

from

dise

ases

and

pest

attac

ks ;

• De

velo

p th

e farm

ers’

orga

nizati

ons’

know

ledge

of t

he p

ulse

s mark

et, in

cludi

ng p

rices

, mark

ets

requir

emen

ts an

d gl

obal

outlo

ok ( i

nclu

ding

nati

onal,

loca

l, m

arket

) ;•

Traini

ng o

n far

ming

and

posth

arves

t tec

hniq

ues (

clea

ning,

sorti

ng, g

rading

, dryi

ng, p

olish

ing, b

aggi

ng,

storag

e, etc

. ) ;•

Show

case

the d

iffere

nt p

ulse

varie

ties a

nd th

e exis

ting

prod

uctio

n tec

hnol

ogies

thro

ugh

pilo

t farm

s with

the

supp

ort o

f scie

ntist

s fro

m K

ALRO

and

ICRI

SAT ;

• Inc

rease

the p

artic

ipati

on o

f farm

ers’

orga

nizati

ons i

n aw

arene

ss-ra

ising

cam

paig

ns o

n cr

op d

iversi

ficati

on

and

susta

inabi

lity ;

• As

sistan

ce w

ith id

entif

ying

mark

ets an

d bu

yers

for t

he h

arves

t.

1X

XX

XX

• Ide

ntifi

catio

n of

the f

arm

to b

e com

plete

d by

early

Ja

nuary

201

5•

Pilot

farm

s to

be re

ady b

y ne

xt so

wing

seas

on A

pril

/ M

ay /

June

201

6

EAGC

KENA

FF, K

EPSA

, CGA

, co

unty

gove

rnm

ents,

IC

AR, I

PGA,

ICRI

SAT

SITA

1 .4 .

2 De

velo

p a p

ilot p

roce

ssing

cent

re wh

ere p

roce

ssing

equip

men

t cou

ld b

e esta

blish

ed as

a sh

ared

facili

ty fo

r farm

ers’

orga

nizati

ons t

o us

e.

• Lo

catio

n wo

uld

be cl

ose t

o th

e pilo

t farm

s acti

vity (

dem

onstr

ator f

arms d

iscus

sed

abov

e ).

• Pr

ivatel

y ope

rated

and

man

aged

facil

ity so

that

there

is an

inter

est i

n m

aintai

ning

the e

quip

men

t and

rec

over

ing co

sts.

An o

perat

or ca

n be

chos

en th

roug

h an

Exp

ressio

n of

Inter

est.

Priva

te co

mpa

nies w

ill b

e inv

olve

d to

com

e and

de

mon

strate

equip

men

t. Th

ere is

a po

ssib

ility

that

the e

quip

men

t can

be s

ourc

ed b

y farm

ers’

orga

nizati

ons i

n ot

her c

ount

ies.

2X

XX

X•

Expr

essio

n of

Inter

est

launc

hed

by m

id-2

017

• Op

erato

r sele

cted

and

proc

essin

g ce

ntre

oper

ation

al by

the e

nd

of 2

018

MAL

FEA

GC, M

oIED,

KEB

SAg

ro-in

dus -

trial

park

deve

lope

d by

M

oIED

1 .4 .

3 De

velo

p an

d co

nduc

t a T r

aining

of T

raine

rs pr

ogram

me.

The t

rainin

g pr

ogram

me c

urric

ula w

ill b

e de-

velo

ped

in co

llabo

ratio

n wi

th en

tities

such

as IC

AR ( I

ndian

Insti

tute

of P

ulse

s Res

earc

h ), K

ALRO

, ICR

ISAT

and

othe

r stak

ehol

ders

and

will

cove

r the

follo

wing

area

s :

• Su

itabl

e pul

se va

rietie

s and

their

diag

nosti

c cha

racter

istics

;•

Expl

oring

the p

ossib

ilitie

s of u

nder

utili

zed

pulse

varie

ties w

ith th

e view

to en

hanc

ing th

eir p

rodu

ction

in a

diffe

rent c

ropp

ing sy

stem

;•

Impr

oved

agro

-tech

nique

s for

enha

ncing

pro

ducti

on, i

nclu

ding

plan

ting

techn

ique

s ; id

entif

icatio

n an

d m

anag

emen

t of p

ests ;

dise

ase c

ontro

l ; an

d fer

tilize

rs an

d pe

sticid

es an

d th

eir ap

plica

tion ;

• W

ith th

e sup

port

of th

e trai

ned

traine

rs, d

issem

inate

infor

mati

on th

roug

h on

-site

train

ings w

ith fa

rmer

s at

coun

ty lev

el.

1X

XX

XX

• Ini

tial b

atche

s of 1

0–20

tra

iners

per c

ount

y com

ing

from

prev

ious

ly id

entif

ied

farm

ers’

orga

nizati

ons

iden

tified

in m

id-2

016

• Pil

ot co

urse

of f

our

sess

ions

of o

ne w

eek

each

, two

to fo

ur w

eek

cour

ses,

initia

ted b

y end

20

16

EAGC

( Grai

n Ins

titut

e )KA

LRO,

KEN

AFF,

ICAR

, IC

RISA

T, co

unty

gov-

ernm

ents,

MAL

F

1 .4 .

4 De

velo

p a p

lan fo

r int

egrat

ed p

est m

anag

emen

t for

pul

ses t

hrou

gh th

e fol

lowi

ng ac

tiviti

es.

• Su

rveill

ance

of c

omm

on p

ests

such

as H

elico

verp

a arm

igera

and

pod

fly.

• Ide

ntify

a pi

lot a

rea fo

r phe

r om

one t

raps d

istrib

utio

n –

linke

d to

exist

ing ac

tivity

on

deve

lopi

ng

dem

onstr

ation

plo

ts.•

Deve

lop

bio-

form

ulati

on p

rodu

ction

unit

s for

pro

ducti

on o

f qua

lity H

elico

verp

a arm

igera

Nu

cleop

olyhe

dros

is vir

us ( H

aNPV

) in

adeq

uate

quan

tity i

n po

tentia

l cul

tivati

on ar

eas.

• Pr

omot

e HaN

PV u

se.

• Co

nduc

t int

egrat

ed p

est m

anag

emen

t dem

onstr

ation

s and

train

ing ( t

hrou

gh a

Farm

er F

ield

Scho

ol m

odel

) wi

th fa

rmer

s’ or

ganiz

ation

s in

culti

vatio

n are

as.

• Ide

ntify

doc

umen

tatio

n an

d va

lidate

appr

opria

te far

mer

s’ ind

igen

ous t

echn

ical k

nowl

edge

for s

calin

g up

.

2X

X•

Proj

ect c

once

ived

and

plan

ned

by ea

rly 2

016

• Pil

ot im

plem

entat

ion

to

begi

n m

id-2

016

in pa

rallel

wi

th ex

isting

pro

ject o

n de

mon

strati

on p

lots

KEPH

ISInt

erna

tiona

l Cen

tre

of In

sect

Phys

iolo

gy

and

Ecol

ogy (

Afric

an

Insec

t Scie

nce f

or F

ood

and

Healt

h ), E

AGC,

M

ALF,

KEN

AFF,

coun

ty go

vern

men

ts, IC

RISA

T, IC

AR, J

omo

Keny

atta

Unive

rsity

of A

gricu

l-tu

re an

d Te

chno

logy


69

stra

tegi

c ob

ject

ive

2 : P

rom

ote

fdi a

nd d

evel

op p

roce

ssin

g ca

paci

ty in

Ken

ya fo

r pro

cess

ing

and

expo

rt of

val

ue a

dded

pul

ses.

oper

atio

nal

objec

tive

activ

ities

prio

rity

1=hi

gh2=

med

3=lo

w

star

ting

perio

dta

rget

mea

sure

sle

ad

impl

emen

ters

supp

ortin

g im

plem

ente

rson

goin

g / f

utur

e de

velo

pmen

t pr

ogra

mm

es +

in

tern

atio

nal p

artn

ers

2016

2017

2018

2019

2020

2 .1

prom

ote

in-

vest

men

t in

the

pulse

s pr

oces

s-in

g se

ctor

.

2 .1 .

1 De

velo

p an

ince

ntive

pac

kage

for i

nves

tors,

featu

ring

the f

ollo

wing

.

• Du

al tax

hol

iday

s for

inve

stors

in pu

lses p

roce

ssing

– ta

x hol

iday

on

prof

its fr

om b

usine

ss an

d tax

ho

liday

for i

mpo

rt of

capi

tal g

oods

and

othe

r inp

uts f

or p

roce

ssing

.•

Revie

w of

pol

icies

to su

ppor

t loc

al inv

esto

rs th

roug

h EP

ZA.

• Si

mpl

ify li

cens

ing fo

r pro

cess

ors b

y offe

ring

proc

edur

al inc

entiv

es an

d se

tting

up

a one

-sto

p sh

op to

redu

ce b

urea

ucrac

y ;•

Prov

ide i

nfras

tructu

ral in

cent

ives,

e.g. f

acto

ry sh

ells,

road

buil

ding

and

land

for l

ease

at af

ford

able

rates

.•

Advo

cate

for p

refere

ntial

non

-tarif

f barr

iers t

o tra

de.

• De

velo

p po

licies

for p

rom

oting

cont

ract f

arming

.•

Offer

fina

ncial

supp

ort f

or p

rom

oting

inve

stmen

t in

proc

essin

g by

offe

ring

low

intere

st rat

e loa

ns

and

raisin

g th

e loa

n ce

iling

for b

orro

wers

who

want

to in

vest

in pu

lses.

2X

XX

X•

Incen

tive p

acka

ge

deve

lope

d an

d fin

alize

d by

m

id-2

017

KenIn

vest

EPZA

, KEP

SA, M

ALF,

EP

C, K

RA, c

ount

y go

vern

men

ts

2 .1 .

2 De

velo

p int

egrat

ed p

ulse

s pro

cess

ing p

arks l

ike th

e Spe

cial E

cono

mic

Zone

s ( bi

ll cu

rrent

ly be

ing d

iscus

sed

in pa

rliam

ent )

to p

rom

ote F

DI in

pul

se p

roce

ssing

, inc

ludi

ng th

e fol

lowi

ng.

• Se

t up

EPZs

for p

ulse

pro

cess

ing fo

r exp

ort p

urpo

ses.

• M

ake l

ogist

ics fo

r exp

ort a

vaila

ble a

t Spe

cial E

cono

mic

Zone

s / E

PZs t

hrou

gh p

ort f

acili

tatio

n, an

d Cu

stom

s ins

pecti

on an

d do

cum

entat

ion

at th

e zon

es, b

y offe

ring

proc

edur

al inc

entiv

es.

• Ad

voca

te fo

r the

impl

emen

tatio

n of

tax a

nd n

on-ta

x inc

entiv

es fo

r pul

se p

roce

ssing

and

expo

rt fro

m th

e Spe

cial E

cono

mic

Zone

s / E

PZs.

• Inv

ite In

dian

pro

cess

ors w

ith in

terna

tiona

l mark

et ac

cess

to se

t up

proc

essin

g pl

ants

( cur

rently

be

ing u

nder

taken

by E

PZA )

.•

Sign

a M

emor

andu

m o

f Und

ersta

nding

with

fina

ncial

insti

tutio

ns su

ch as

, but

not

lim

ited

to,

Keny

an co

mm

ercial

ban

ks, E

xim B

ank o

f Ind

ia an

d PT

A Ba

nk fo

r mak

ing p

rojec

t fina

ncing

av

ailab

le.•

Sign

a M

emor

andu

m o

f Und

ersta

nding

with

tech

nolo

gy p

rovid

ers t

o se

t up

plan

ts fo

r inv

esto

rs on

a t

urnk

ey b

asis.

2X

XX

X•

Feas

ibili

ty an

alysis

for

setti

ng u

p EP

Zs fo

cusin

g on

pul

ses c

ompl

eted

by

mid

-201

6•

Requ

isite

cleara

nce f

rom

au

thor

ities

rece

ived

by

mid

-201

7•

Mem

oran

dum

s of

Unde

rstan

ding

with

fin

ancia

l ins

titut

ions

and

techn

olog

y pro

vider

s sig

ned

on a

rolli

ng b

asis

• EP

Z fun

ction

al by

early

20

18

EPZA

MAL

F, M

oIED,

KenIn

vest,

coun

ty go

vern

men

ts, K

E-NA

FF ( c

urren

tly

chair

ing th

e agr

icul-

ture

secto

r boa

rd o

f KE

PSA )

,KN

CCI,

Keny

a Por

ts Au

thor

ity, K

RA

2 .1 .

3 EP

ZA sh

ould

( i ) d

edica

te ad

ditio

nal s

pace

and

facili

ties (

wareh

ouse

s, eq

uipm

ent a

nd se

rvice

s fo

r hire

, etc.

) at t

he M

omba

sa E

PZ to

facil

itate

pulse

impo

rts fo

r pro

cess

ing an

d re-

expo

rt ; an

d ( ii

) es

tablis

h a n

ew ag

ropr

oces

sing-

focu

sed

EPZ w

here

the o

utpu

t of p

ulse

-gro

wing

regi

ons c

ould

be e

f-fic

iently

cons

olid

ated

for p

roce

ssing

.*

2X

XX

X•

Feas

ibili

ty as

sess

men

t for

ex

pans

ion

com

plete

d by

the

end

of 2

017

• Re

com

men

datio

ns

integ

rated

by m

id-2

018

EPZA

KenIn

vest,

MAL

F,

MoIE

D

2 .1 .

4 M

ake p

ulse

secto

r dev

elopm

ent a

n ex

plici

t prio

rity a

mon

g th

e agr

ibus

iness

opp

ortu

nities

pro

-m

oted

by K

enInv

est (

and

EPZA

), wi

th th

e atte

ndan

t acti

vities

of :

a . P

repari

ng an

d m

aintai

ning

up-to

-date

bus

iness

info

rmati

on an

d pr

omot

iona

l mate

rial f

or ta

rget

inves

tors,

bot

h on

line a

nd in

hard

copy

;b .

Ded

icatin

g tim

e and

atten

tion

to th

e pres

entat

ion

of p

ulse

secto

r opp

ortu

nities

and

the m

ost

relev

ant t

rade s

hows

and

inves

tor c

onfer

ence

s, su

ch as

the G

loba

l Pul

se C

onfed

erati

on’s

annu

al W

orld

Pul

se C

onve

ntio

n an

d IP

GA’s

annu

al Pu

lses C

oncla

ve ;

c . C

ondu

cting

agrib

usine

ss-s

pecif

ic inv

esto

r-targ

eting

cam

paig

ns, i

n wh

ich in

vesto

r int

erest

in pu

lse p

roce

ssing

, trad

ing an

d co

ntrac

t farm

ing is

give

n sig

nifica

nt w

eight

in ta

rget

selec

tion.

2X

XX

X•

Inves

tmen

t-led

cam

paig

ns

initia

ted b

y the

end

of 2

017

KenIn

vest

EPZA

, EAG

C, M

ALF,

KE

NAFF

,KN

CCI

* Pu

lse o

utput

acro

ss th

e wes

tern

regio

ns o

f Nya

nza a

nd W

ester

n Pr

ovinc

e cou

ld co

nver

ge al

ong

route

A4

on th

e way

to N

airob

i, pos

sibly

in the

Naiv

asha

area

, tak

ing ad

vanta

ge

of th

e che

ap el

ectri

city g

ener

ated

by th

e hyd

roele

ctric

proje

ct un

der d

evelo

pmen

t the

re n

ow. A

s the

easte

rn re

gions

of E

mbu

, Kitu

i, and

Mak

ueni

conv

erge

at th

e jun

ction

of r

outes

B7

and

A109

on

the w

ay to

Mom

basa

, this

could

be a

goo

d ca

ndida

te loc

ation

for a

pro

cess

ing ce

ntre,

altho

ugh

the p

opula

tion

dens

ity o

f Kitu

i migh

t pro

vide a

read

ier w

orkfo

rce.

70


stra

tegi

c ob

ject

ive

2 : P

rom

ote

fdi a

nd d

evel

op p

roce

ssin

g ca

paci

ty in

Ken

ya fo

r pro

cess

ing

and

expo

rt of

val

ue a

dded

pul

ses.

oper

atio

nal

objec

tive

activ

ities

prio

rity

1=hi

gh2=

med

3=lo

w

star

ting

perio

dta

rget

mea

sure

sle

ad

impl

emen

ters

supp

ortin

g im

plem

ente

rson

goin

g / f

utur

e de

velo

pmen

t pr

ogra

mm

es +

in

tern

atio

nal p

artn

ers

2016

2017

2018

2019

2020

2 .1

prom

ote

in-

vest

men

t in

the

pulse

s pr

oces

s-in

g se

ctor

.

2 .1 .

5 Ad

d op

erati

on, m

ainten

ance

and

r epair

of c

omm

on ag

ribus

iness

pro

cess

ing m

achin

ery (

mill

s, po

lishe

rs, h

uller

s, sp

litter

s, m

ixers,

etc.

) to

the t

rainin

g pr

ogram

mes

of t

he E

PZA

Voca

tiona

l Trai

n-ing

Insti

tute.

Link

Insti

tute

adm

inistr

ators

with

new

and

exist

ing in

vesto

rs to

und

ersta

nd th

eir sk

ill

requir

emen

ts, w

hich

can

be fe

d ba

ck in

to th

e Ins

titut

e’s cu

rricu

lum

.

2X

XX

X•

Curri

culu

m u

pdate

d an

d int

egrat

ed b

y mid

-201

7EP

ZAKE

BS, u

niver

sities

2 .2

facil

itate

te

chno

logy

tra

nsfe

r and

eq

uipm

ent

upgr

ade

in th

e se

ctor

.

2 .2 .

1 Co

nduc

t an

equip

men

t stu

dy to

asse

ss th

e typ

e of e

quip

men

t nee

ded

in th

e fut

ure b

y pul

se

grow

ers (

also

look

ing at

equip

men

t tha

t can

be u

sed

for b

oth

pulse

s and

oth

er cr

ops )

. Ass

essm

ent

study

shou

ld in

clude

the f

ollo

wing

info

rmati

on an

d cr

iteria

.

• M

appi

ng o

f man

ufac

turer

s of p

roce

ssing

equip

men

t in

India

and

Keny

a ( typ

es, p

roce

ssing

ca

pacit

y, tec

hnica

l sup

port

and

spare

s ).

• Ty

pe o

f equ

ipm

ent,

inclu

ding

dha

l plan

ts fro

m In

dia (

inclu

ding

clea

ning,

dryi

ng, s

plitt

ing,

polis

hing,

etc.

).•

Traini

ng re

quire

men

ts fo

r loc

al tec

hnici

ans t

o m

aintai

n th

e equ

ipm

ent.

• Co

st of

the e

quip

men

t – ac

tual

and

asso

ciated

costs

– in

cludi

ng fi

nanc

ing m

echa

nism

s.•

Capa

city a

nd d

iversi

ty ( m

ultip

urpo

se d

uring

low

seas

ons w

here

othe

r cro

ps ca

n be

pr o

cess

ed ),

and

use o

f pro

cess

ing.

• Pa

ckag

ing ra

nge o

f equ

ipm

ent –

small

er /

bigg

er p

acke

ts etc

.•

Spec

ifica

tions

inclu

ding

mac

hine p

rodu

ctive

life.

• Sp

are p

arts

avail

abili

ty an

d su

ppor

t ser

vices

.•

Com

patib

ility

to al

terna

tive s

ourc

es o

f ene

rgy.

• Al

terna

tive s

ourc

es o

f the

sam

e equ

ipm

ent o

utsid

e Ind

ia an

d Ke

nya (

e.g.

Braz

il, It

aly, J

apan

, Ch

ina, V

iet N

am ) t

o fee

d int

o a c

ompa

rative

cost-

bene

fit an

alysis

.Ba

sed

on th

e equ

ipm

ent s

tudy

, brin

g eq

uipm

ent m

anuf

actu

rers i

n Ind

ia an

d di

strib

utor

s in

the r

egio

n to

Ken

ya fo

r fac

e-to

-face

mee

tings

with

farm

ers’

orga

nizati

ons e

tc. so

they

see w

heth

er th

ere is

a bu

sines

s cas

e for

setti

ng u

p sh

op in

Ken

ya.

Prov

ide b

uyer

s with

cred

it fo

r the

supp

ly of

tech

nolo

gy fr

om In

dia a

nd d

eplo

y affo

rdab

le lea

sing

op-

tions

for e

quip

men

t tha

t farm

ers’

orga

nizati

ons c

an ac

cess

thro

ugh

the E

xim B

ank o

f Ind

ia.

2X

XX

X•

Map

ping

of e

quip

men

t m

anuf

actu

rers c

ompl

eted

by m

id-2

017

• Bu

sines

s-to

-bus

iness

ev

ent o

rgan

ized

in Ke

nya i

n lat

e-20

17•

Finan

cing

instru

men

ts de

velo

ped

EAGC

Ex

im B

ank o

f Ind

ia,

Mini

stry o

f For

eign

Affai

rs &

Inter

natio

nal

Trade

, MAL

F, K

enya

Ind

ustri

al Re

searc

h an

d De

velo

pmen

t Ins

titut

e,Na

tiona

l Trea

sury,

St

ate D

epar

tmen

t of

Trade

, EAG

C, K

ENAF

F

2 .2 .

2 Co

llabo

rate w

ith co

unty

gove

rnm

ents

or o

ther

insti

tutio

ns su

ch as

coop

erati

ves t

o fo

ster t

he

use o

f exis

ting

wareh

ouse

s as s

hared

facil

ities

for p

ulse

farm

ers.

• Us

e cer

tified

stor

age b

y EAG

C ( a

nd ex

pand

certi

ficati

on if

nec

essa

ry ).

• Ide

ntify

ware

hous

es su

itabl

e for

stor

age.

Disc

uss w

ith co

unty

gove

rnm

ents

/ oth

er in

stitu

tions

the

assig

nmen

t of w

areho

uses

.•

Crea

te aw

arene

ss am

ong

farm

ers o

f ava

ilabi

lity o

f sto

rage a

nd o

ther

servi

ces (

sorti

ng, g

rading

, etc

. ).

2X

XX

X•

Ware

hous

es id

entif

ied b

y m

id-2

017

EAGC

Coun

ty go

vern

men

ts,

Natio

nal C

ereals

and

Prod

uce B

oard

, KE-

NAFF

, EAG

C

2 .2 .

3 Co

nnec

t the

food

scien

ce d

epar

tmen

ts of

univ

ersit

ies w

ith th

e Mini

stry o

f Agr

icultu

re an

d va

lue a

dded

pul

se p

roce

ssor

s ( pa

sta, v

erm

icelli

, chip

s, etc

. ) to

und

ersta

nd h

ow K

enya

n pu

lses

coul

d be

adap

ted fo

r suc

h us

e.

3X

XX

XX

• M

emor

andu

ms o

f Un

derst

andi

ng si

gned

by

mid

-201

6

MAL

FJo

mo K

enya

tta U

niver-

sity o

f Agr

icultu

re an

d Te

chno

logy,

other

uni-

versi

ties t

o be i

nclud

ed

as pe

r defi

ned s

cope

2 .3

impr

ove

esse

ntial

infra

-st

ruct

ure

in th

e se

ctor

.

2 .3 .

1 Ad

dres

s log

istica

l cha

lleng

es fo

r sm

ooth

and

chea

per e

xpor

t to

targe

t mark

ets b

y :

• De

velo

ping

the r

ail /

road

netw

ork f

or ch

eape

r tran

spor

t to

the p

ort.

The e

xistin

g pr

ojec

t of

North

ern

corri

dor w

ill b

e lev

erag

ed as

the r

ail n

etwor

k ess

entia

lly co

mpr

ises a

sing

le lin

e, ov

erlan

d rai

l trac

k fro

m M

omba

sa th

roug

h Na

irobi

, Nak

uru

and

Kisu

mu

/ Eld

oret,

whic

h are

with

in th

e pul

se-p

rodu

cing

areas

of T

aita T

aveta

. Kitu

i, M

akue

ni.an

d M

acha

kos

• De

velo

ping

the n

ew p

ort r

ail an

d ro

ad fr

om La

mu

to p

ass t

hrou

gh p

ulse

- gro

wing

area

s thr

ough

th

e Lam

u Po

rt–So

uthe

rn S

udan

–Eth

iopi

a Tran

spor

t Cor

ridor

pro

ject.

3X

XX

XX

• Fe

asib

ility

analy

sis –

th

roug

h po

sitio

n pa

per –

for

exten

sion

of ex

isting

rail

infras

tructu

re pr

ojec

ts su

bmitt

ed to

the M

inistr

y of

Trans

port

and

Infras

tructu

re by

the e

nd o

f 201

6

Mini

stry o

f Tra

nspo

rt an

d Inf

rastru

cture

Coun

ty go

vern

men

ts,Ke

nya R

ailwa

ysNo

rther

n Co

rrido

r pr

ojec

t ( La

mu

Port–

Sout

hern

Sud

an–

Ethio

pia T

ransp

ort

Corri

dor )


71

stra

tegi

c ob

ject

ive

2 : P

rom

ote

fdi a

nd d

evel

op p

roce

ssin

g ca

paci

ty in

Ken

ya fo

r pro

cess

ing

and

expo

rt of

val

ue a

dded

pul

ses.

oper

atio

nal

objec

tive

activ

ities

prio

rity

1=hi

gh2=

med

3=lo

w

star

ting

perio

dta

rget

mea

sure

sle

ad

impl

emen

ters

supp

ortin

g im

plem

ente

rson

goin

g / f

utur

e de

velo

pmen

t pr

ogra

mm

es +

in

tern

atio

nal p

artn

ers

2016

2017

2018

2019

2020

2 .3

impr

ove

esse

ntial

infra

-st

ruct

ure

in th

e se

ctor

.

2 .3 .

2 De

velo

p co

ld ch

ains f

or g

reen

gram

to en

sure

the p

reser

vatio

n of

colo

ur ( a

nd o

ther

qua

lity

param

eters

) whic

h is

the m

ain cr

iteria

use

d to

dete

rmine

the v

alue o

f this

par

ticul

ar va

riety.

Pro

mot

e pr

ivate

inves

tmen

t in

cold

stor

age f

acili

ties t

hrou

gh th

e fol

lowi

ng :

1 . A

dvoc

ate fo

r an

enab

ling

polic

y fram

ewor

k by t

he G

over

nmen

t ;2 .

Adv

ocate

for e

nabl

ing fi

scal

polic

ies to

enco

urag

e priv

ate in

vestm

ent b

y offe

ring

low

intere

st rat

e lo

ans ;

3 . L

aunc

h ten

der f

or a

share

d co

ld st

orag

e fac

ility

near

selec

t dem

onstr

ation

farm

s ;4 .

Integ

rate k

nowl

edge

shari

ng an

d tra

ining

on

the i

mpo

rtanc

e of c

old

storag

e fac

ilitie

s rela

ted to

gr

een

gram

crop

with

exist

ing Tr

aining

of T

raine

rs ini

tiativ

es.

2X

XX

X•

Posit

ion

pape

r as a

n ad

voca

cy m

echa

nism

( for

#

1 an

d #

2 ) ) s

ubm

itted

by

the e

nd o

f 201

6•

Tend

er fo

r col

d sto

rage

facili

ty lau

nche

d by

m

id-2

017

MAL

FM

oIED,

EAGC

, KEN

AFF,

Na-

tiona

l Trea

sury

2 .3 .

3 Di

rect t

he N

ation

al Tre

asur

y’s P

PP U

nit to

prio

ritize

the c

ompl

etion

of i

ts fir

st irr

igati

on P

PP7

in an

area

with

hig

h pu

lse o

utpu

t. PP

P Un

it an

d Ke

nInve

st to

colla

borat

e on

getti

ng m

axim

um ex

posu

re fo

r the

tend

er.

2X

XX

• Pr

iorit

izatio

n co

mpl

eted

and

pulse

-relat

ed p

rojec

t ini

tiated

by m

id-2

017

Natio

nal

Treas

ury

KenIn

vest

2 .4

impr

ove

ac-

cess

to fi

nanc

e in

the

sect

or .

2 .4 .

1 Es

tablis

h an

expo

rt gu

arant

ee fu

nd to

be s

et up

und

er th

e Nati

onal

Treas

ury w

ith q

uotas

to sp

e-cif

ically

addr

ess t

he p

ulse

s sec

tor.

This

fund

will

be a

strat

egic

busin

ess u

nit an

d wi

ll of

fer cr

edit

risk

insur

ance

cove

r to

expo

rters,

ban

ks, e

tc. Th

is fu

nd w

ill al

so p

rovid

e trad

e fina

nce t

hrou

gh re

finan

cing

the c

omm

ercial

ban

ks, b

ased

on

a pro

duct

deve

lope

d fo

r this

pur

pose

.Th

e prim

ary o

bjec

tive o

f the

fund

will

be t

o pr

omot

e the

coun

try’s

expo

rts b

y cov

ering

the r

isk o

f ex

port

on cr

edit.

Pro

visio

ns w

ill in

clude

:

• A

range

of i

nsur

ance

cove

rs to

Ken

yan

expo

rters

again

st th

e risk

of n

on-re

aliza

tion

of ex

port

proc

eeds

due

to co

mm

ercial

or p

oliti

cal c

ause

s ;•

Diffe

rent t

ypes

of g

uaran

tees t

o ba

nks a

nd o

ther

fina

ncial

insti

tutio

ns to

enab

le th

em to

exten

d cr

edit

facili

ties t

o ex

porte

rs on

a lib

eral

basis

.

2X

XX

• Fu

nd se

t up

and

oper

ation

al by

201

8 Na

tiona

l Tre

asur

yEA

GC, E

PC,

Exim

Ban

k of In

dia (

as

advis

er ),

com

merc

ial

bank

s, M

oIED,

MAL

F,

KEPS

A

2 .4 .

2 Fin

alize

the l

ow-in

teres

t ind

ustri

aliza

tion

fund

und

er d

evelo

pmen

t by M

oIED,

whic

h wo

uld

be

used

to p

rovid

e man

ufac

turer

s with

loan

s at i

nter

natio

nally

com

petit

ive in

teres

t rate

s in

the s

ingle

digi

ts, an

d as

sure

its co

verag

e of a

gro-

proc

esso

rs.

2X

• Fu

nd fi

naliz

ed an

d op

erati

onal

by th

e end

of

2016

MoIE

DCo

mm

ercial

ban

ks

2 .4 .

3 As

sess

opt

ions

to in

corp

orate

pul

ses i

n th

e pilo

t pr o

ject f

or st

ructu

red co

mm

odity

trad

e fi -

nanc

e.

• Ide

ntify

fina

ncial

insti

tutio

ns ( i

nclu

ding

micr

ofina

ncing

) for

par

ticip

ation

and

finan

cing.

• Ba

nks t

o su

ppor

t farm

ers w

ith p

osth

arves

t sol

utio

ns b

y fina

ncing

acqu

isitio

n of

pos

tharv

est

hand

ling

techn

olog

ies.

• Ide

ntify

ware

hous

es fo

r par

ticip

ation

in th

e pilo

t.•

Defin

e qua

lity p

aram

eters

as w

ell as

dev

elop

a pro

per g

rading

and

certi

ficati

on m

echa

nism

.•

Estab

lish

a stru

ctured

com

mod

ity tr

ade f

inanc

ing m

echa

nism

.

2X

XX

X•

Proj

ect l

aunc

hed

by th

e end

of

201

7EA

GCKE

BS, N

ation

al Ce

-rea

ls an

d Pr

oduc

e Bo

ard, M

ALF

Wor

ld B

ank

72


stra

tegi

c ob

ject

ive

3 : d

evel

op m

arke

ts a

nd im

prov

e ac

cess

to m

arke

t-sid

e in

form

atio

n an

d br

andi

ng fo

r the

sec

tor.

oper

atio

nal

objec

tive

activ

ities

prio

rity

1=hi

gh2=

med

3=lo

w

star

ting

perio

dta

rget

mea

sure

sle

ad im

plem

ente

rsu

ppor

ting

impl

emen

ters

ongo

ing

/ fut

ure

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

2016

2017

2018

2019

2020

3 .1

supp

ort

mar

ket d

evelo

p-m

ent e

fforts

, bot

h do

mes

tic a

nd

inte

rnat

iona

l .

3 .1 .

1 De

velo

p a m

echa

nism

for l

ever

aging

EAG

C’s S

tructu

r ed Tr

ading

Plat

form

for p

ulse

s.

• De

velo

p a n

ation

al ( w

holes

ale ) m

arket

thro

ugh

a netw

ork o

f ware

hous

es an

d tra

ders.

It

may

also

be a

virtu

al m

arket.

• Fo

ster t

he u

se o

f exis

ting

aggr

egati

on ce

ntres

whic

h co

uld

also

be u

sed

as tr

ading

hub

s fo

r pul

ses a

nd en

sure

that

clean

han

dling

facil

ities

are a

vaila

ble.

2X

XX

XX

• M

echa

nism

plan

ned

and

impl

emen

ted b

y ea

rly 2

017

EAGC

Coun

ty go

vern

men

ts

3 .1 .

2 Se

t up

a com

preh

ensiv

e in-

mark

et su

ppor

t pro

gram

me f

or th

e sec

tor,

with

main

focu

s on

the I

ndian

mark

et. R

egio

nal m

arkets

with

in th

e EAC

and

the C

omm

on M

arket

for E

aster

n an

d So

uthe

rn A

frica

regi

ons w

ill al

so b

e inc

lude

d. Th

is ac

tivity

aim

s to :

• Bu

ild ca

pacit

ies o

f EPC

staff

and

trade

attac

hés a

t Ken

yan

miss

ions

abro

ad o

n th

e po

tentia

l of p

ulse

s, th

eir p

roce

ssed

pro

ducts

, and

the i

mpo

rtanc

e of p

ulse

s as a

n ex

port

crop

. A m

echa

nism

will

be d

evelo

ped

to en

sure

the k

nowl

edge

gain

ed at

EPC

flow

s to

othe

r age

ncies

;•

Crea

te an

ove

rseas

mark

et int

rodu

ction

servi

ce th

r oug

h EP

C an

d Ke

nyan

miss

ions

in

targe

t cou

ntrie

s. ( E

PC re

pres

entat

ives w

ill w

ork w

ith ex

porte

rs to

dev

elop

an ex

port

plan

, fo

llowe

d by

com

merc

ial at

taché

s in

the m

issio

ns in

the t

arget

mark

ets w

ho w

ill as

sist

expo

rters

in ne

twor

king

and

busin

ess d

evelo

pmen

t ) ;•

Orga

nize t

rainin

g se

ssio

ns fo

r exp

orter

s on

proc

edur

es an

d do

cum

entat

ion

for e

xpor

t.

2X

XX

X•

In-m

arket

supp

ort

prog

ramm

e in

plac

e by

early

201

7

EPC

Mini

stry o

f For

eign

Affai

rs &

Inter

natio

nal T

rade,

coun

ty go

vern

men

ts,

MAL

F, E

AGC,

KEN

AFF,

KE

PSA

Exist

ing p

rogr

amm

es

such

as Tr

adeM

ark

East

Afric

a and

the

East

Afric

a Trad

e Hub

3 .1 .

3 Or

ganiz

e a st

udy t

our t

o Ind

ia – o

rgan

ized

in co

llabo

ratio

n wi

th IP

GA –

that

will

in-clu

de vi

sits t

o m

arket

yard

s and

pro

cess

ors o

f pul

ses i

n Ind

ia ( In

dore

/ Delh

i ). Th

is stu

dy

tour

will

be o

rgan

ized

once

a ye

ar fo

r a g

roup

of 1

5–30

mark

et pl

ayer

s ( in

cludi

ng fa

rmer

s, as

sem

bler

s, tra

ders,

pro

cess

ors,

finan

cial i

nstit

utio

ns, r

esea

rch

instit

utes

and

Gove

rnm

ent

offic

ials )

iden

tified

joint

ly by

EAG

C an

d ITC

.Th

e visi

t will

allo

w th

e par

ticip

ants

to se

e the

ope

ratio

ns o

f the

Indi

an in

dustr

y and

dev

elop

busin

ess l

inkag

es.

1X

XX

XX

• Fif

teen

to 3

0 co

mpa

nies

iden

tified

, with

the f

irst

study

tour

org

anize

d in

2016

EAGC

KENA

FF, K

EPSA

, MAL

F,

EPC

SITA

3 .1 .

4 Or

ganiz

e stru

ctured

trad

e mee

ts to

enab

le pr

evio

usly

iden

tified

( and

pro

spec

tive )

Ke

nyan

expo

rters

to m

eet g

loba

l buy

ers.

For t

his p

urpo

se, c

lose

colla

borat

ion

will

be so

ught

wi

th in

terna

tiona

l pul

ses s

ecto

r age

ncies

. This

activ

ity in

clude

s the

follo

wing

.

• Or

ganiz

e trad

e mee

ts th

at wi

ll be

leve

raged

to p

rom

ote p

ulse

expo

rts.

• Pr

omot

e Ken

yan

pulse

s thr

ough

inter

natio

nal t

rade f

airs s

uch

as G

ulfo

od, w

hich

is att

ende

d by

majo

r exp

orter

s and

impo

rters

in th

e wor

ld.

• Or

ganiz

e bila

teral

trade

facil

itatio

n fo

rum

s to

deve

lop

mark

et lin

kage

s.•

Parti

cipati

on o

f a K

enya

n de

legati

on in

CIC

ILS W

orld

Pul

ses C

onve

ntio

n ( th

e Glo

bal P

ulse

Co

nfed

erati

on ),

anot

her f

lagsh

ip p

rogr

amm

e of t

he p

ulse

s sec

tor.

• Pr

omot

ion

of K

enya

n pu

lses t

hrou

gh F

OODA

GRO,

a Ke

nyan

even

t on

food

and

agric

ultu

re.

XX

XX

X•

Trade

mee

ts or

ganiz

ed,

with

the f

irst o

ne

starti

ng in

201

6

EPC

Mini

stry o

f For

eign

Affai

rs &

Inter

natio

nal T

rade,

EAGC

, KEP

SA, c

ount

y go

vern

men

ts

3 .1 .

5 Un

derta

ke a

pilo

t init

iative

to b

uild

the c

apac

ity o

f, an

d to

find

a m

arket

for,

the c

ollec

-tiv

e of 1

8,00

0 far

mer

s ( Ea

stern

and

Coas

t reg

ions

) tha

t are

brou

ght t

ogeth

er b

y the

Ken

ya

Red

Cros

s.

• Bu

ild ca

pacit

y for

sorti

ng, g

rading

and

pack

aging

.•

Estab

lish

colle

ction

poi

nts a

nd ce

rtifie

d sto

rage c

entre

s with

the r

equir

ed fa

ciliti

es

( clea

ning,

sorti

ng, g

rading

, etc.

).•

Assis

t in

impr

oving

mark

eting

of t

he cr

op.

• Lin

k to

buye

rs be

fore

the h

arves

t so

that

prop

er q

ualit

y and

inpu

ts are

mad

e ava

ilabl

e.

1X

X•

Pilot

initi

ative

laun

ched

in

early

201

6Ke

nya R

ed C

ross

EAGC

, MAL

F, co

unty

gove

rnm

ents,

Mini

stry o

f Fo

reign

Affa

irs an

d Int

er-na

tiona

l Trad

e

SITA


73

stra

tegi

c ob

ject

ive

3 : d

evel

op m

arke

ts a

nd im

prov

e ac

cess

to m

arke

t-sid

e in

form

atio

n an

d br

andi

ng fo

r the

sec

tor.

oper

atio

nal

objec

tive

activ

ities

prio

rity

1=hi

gh2=

med

3=lo

w

star

ting

perio

dta

rget

mea

sure

sle

ad im

plem

ente

rsu

ppor

ting

impl

emen

ters

ongo

ing

/ fut

ure

deve

lopm

ent

prog

ram

mes

+

inte

rnat

iona

l pa

rtner

s

2016

2017

2018

2019

2020

3 .2

deve

lop

new

tool

s fo

r pro

vi-sio

n of

tim

ely a

nd

relev

ant m

arke

t in

tellig

ence

.

3 .2 .

1 Lin

k exis

ting

mark

et inf

orm

ation

plat

form

s suc

h as

RAT

IN, N

ation

al Fa

rmer

s Inf

orm

a-tio

n Se

rvice

, M-F

arm an

d Ce

realM

art,

to p

rovid

e inf

orm

ation

on

pulse

s. Th

e exis

ting

RATIN

sy

stem

will

be u

pgrad

ed to

pul

l data

from

AGM

ARKN

ET in

Indi

a and

oth

er fr

ee in

form

a-tio

n so

urce

s. Th

e sys

tem w

ill al

so su

bscr

ibe t

o da

ta ve

ndor

s’ co

mm

ercial

servi

ces s

uch

as

Reut

ers a

nd G

ro V

entu

res ( a

Ken

ya-b

ased

Info

rmati

on ve

ndor

) to

have

acce

ss to

addi

tiona

l so

urce

s of i

nfor

mati

on to

be d

istrib

uted

to th

e sec

tor.

In or

der t

o ac

hieve

this,

the f

ollo

wing

ste

ps w

ill b

e will

be c

arried

out

.

• Co

nduc

t a co

mpr

ehen

sive s

tudy

on

exist

ing m

arket

infor

mati

on sy

stem

s, inc

ludi

ng a

gap

analy

sis.

• St

rengt

hen

the d

ataba

se fo

r the

pul

ses v

alue c

hain

for f

armer

s, tra

ders,

aggr

egato

rs an

d tec

hnica

l exp

erts.

• Co

nfig

ure t

he sy

stem

to re

ceive

and

distr

ibut

e inf

orm

ation

relat

ed to

the p

ulse

s mark

et ( in

cludi

ng p

rices

) thr

ough

exter

nal s

ourc

es su

ch as

AGM

ARKN

ET ( I

ndia )

and

Bloo

mbe

rg.

• Co

nfig

ure t

he sy

stem

to re

ceive

and

diss

emina

te inf

orm

ation

from

EAG

C’s S

tructu

red

Tradi

ng P

latfo

rm.

2X

XX

X•

Gap

analy

sis co

nduc

ted

by th

e end

of 2

016

• Sy

stem

s int

egrat

ion

com

plete

d by

the e

nd

of 2

017

EAGC

KEPS

A,co

mm

ercial

info

rmati

on

prov

ider

s

3 .2 .

2 Se

t up

a virt

ual n

etwor

king

platf

orm

for b

uyer

s in

India

and

selle

rs in

Keny

a thr

ough

a n

etwor

king

platf

orm

and

inter

activ

e web

site,

with

requ

ired

cent

ral co

ntro

l for

secu

rity f

ea-

tures

with

a va

lidati

on m

echa

nism

to el

imina

te fak

e offe

rs.

3X

XX

X•

Netw

orkin

g pl

atfor

m in

pl

ace b

y earl

y 201

7EP

CEA

GCSI

TA

3 .2 .

3 De

velo

p an

SM

S fac

ility

aimed

at sh

aring

valu

able

infor

mati

on o

n pu

lses w

ith fa

rmer

s. Inf

orm

ation

abou

t pric

es w

ill b

e a p

ush

servi

ce, w

hile i

nfor

mati

on ab

out p

rodu

ction

tech

nol-

ogy,

sowi

ng, h

arves

ting

and

storag

e will

be a

pul

l ser

vice.

2X

X•

SMS

facili

ty in

plac

e by

mid

-201

7EA

GCTe

chno

logy

pro

vider

sRA

TIN

3 .2 .

4 Tra

in far

mer

s on

the u

se o

f mark

et inf

orm

ation

syste

m to

ols a

nd m

ake i

nfor

mati

on

abou

t pul

ses m

ore e

asily

avail

able.

Train

ing w

ill al

so fo

cus o

n int

erpr

etatio

n of

mark

et in-

form

ation

.Le

verag

e exis

ting

platf

orm

s suc

h as

SM

S se

rvice

s for

diss

emina

tion

of p

rices

and

othe

r in-

form

ation

to fa

rmer

s and

trad

ers o

perat

ing in

the p

ulse

s sec

tor i

n Ke

nya.

2X

XX

XX

• Fir

st ba

tch o

f trai

ning

prov

ided

in 2

016,

with

pl

annin

g fo

r an

annu

al ev

ent

EAGC

Tech

nolo

gy P

rovid

ers

Exist

ing in

itiati

ves

inclu

de M

-Farm

, Es

oko,

G–S

oko.

M–

Soko

3 .3

Build

and

pro

-m

ote

the

keny

an

pulse

s br

and .

3 .3 .

1 Fo

rmul

ate a

syste

mati

c ‘So

urce

d in

Keny

a’ ca

mpa

ign

/ bran

d to

leve

rage c

o-br

andi

ng

oppo

rtunit

ies fo

r pro

ducts

( targ

eting

end

cons

umer

s ) in

prem

ium m

arkets

. Dev

elop

a br

andi

ng co

mm

unica

tion

strate

gy fo

r the

Ken

yan

and

Indian

pul

ses s

ecto

rs th

at de

fines

co-

bran

ding

term

s of r

eferen

ce. S

ynch

roniz

e with

‘Buy

Ken

ya, B

uild

Keny

a’.

3X

XX

• Co

mm

unica

tion

strate

gy

initia

ted b

y earl

y 201

8EP

CEA

GC

74


APPENdix: kenya’s poliCies and tRade agReements in a nutshell

Beyond the description of the different actors in the pulses value chain in Kenya, it is important to review the policy and regulatory framework that contributes to structuring the sector’s development. The following section provides an overview of national plans, policies and initiatives directly or indirectly supporting the pulses sector’s development.

the kenyan Constitution 2010

The recently adopted Constitution is the backbone of the country’s policies and provides for two levels of Government : at national and at county level. It recognizes distinct and interdependent functions for each level of government but mandates the two to cooperate, support, consult and liaise with each other for the purpose of exchanging information, coordinating, and enhancing policies and administration.49

national plan

kenya Vision 2030

Kenya Vision 2030 is the country’s long-term development blueprint covering the period 2008–2030 and implemented through successive five-year Medium Term Plans. Based on three pillars, i.e. economic, social and political, the Vision aims to transform the country into a ‘newly industrial-izing, middle income country providing a high quality of life for all its citizens by the year 2030’.

Under the economic component, agriculture was one of six sectors50 identified on the basis of their potential to contribute to the Vision’s objective of achieving an average gross domestic product growth rate of 10 % per annum beginning in 2012.

The long-term goal of the agriculture sector, which also comprises livestock and fisheries, is the ‘attainment of food security and increased incomes through value addition by in-country processing of primary agricultural and livestock products’ something that will be achieved through an ‘innovative, commercially oriented and modern agriculture’. The specific strategies identified for the sector under Vision 2030 are also very much in line with the objectives set under the SITA Initiative for the pulses sector in Kenya, notably aiming at :

� Increasing the productivity of crops through better yields � Promoting household and private sector agricultural growth � Improving market access for smallholders through better marketing � Increasing use of uncultivated land.

Several flagship projects of interest to the pulses sector were implemented during the First Medium Term Plan ( 2008–2012 ), including the enactment of three Acts : the Agriculture, Fisheries and Food Authority Act, the Crops Act and the National Agricultural Research Act ( see below ). A Fertilizer Cost Reduction Strategy was also implemented, as well as programmes aimed at expanding irrigation coverage, improving delivery of extension services, and seed improvements.

49.– Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2015 ). National Irrigation Policy, 2015.50.– Other sectors include tourism, wholesale and retail trade, manufacturing, information and communications technology and business process outsourcing, and financial services.


75

The Second Medium Term Plan ( 2013–2017 ), that is currently being implemented, also comprises programmes and projects for the agriculture, livestock and fisheries sector. Several activities envis-aged under this Plan are in line with the objectives of the roadmap for value chain optimization developed under the SITA Initiative for the pulses sector. These flagship projects and programmes include the following.

� Implementation of the Consolidated Agricultural Reform Legislations, including setting up institu-tions such as AFFA and KALRO proposed in the new Acts ( see below ).

� The Fertilizer Cost Reduction Strategy to address issues of access to and affordability of fertiliz-ers, namely through establishing a local, privately owned fertilizer plant. Investors have already been identified and several plants are currently being established.

� Agricultural development along the Lamu Port–South Sudan–Ethiopia Transport corridor, involv-ing feasibility studies and providing investment incentives to actors interested in investing in agriculture in the region.

� The National Agricultural Sector Extension Programme aimed at improving access to agricultural extension by farmers and further strengthening agricultural research and development.

� The Agri-Business Development Programme, geared towards improving access to markets by all agricultural value chain players as well as improving and modernizing market facilities. It is anticipated that the programme will ensure the creation of local, regional and international marketing opportunities for agricultural commodities, which was identified as a significant need for the Kenyan pulses sector.

� Accelerated Agricultural Inputs Access Programme to improve access to agricultural inputs such as fertilizers, agrochemicals and certified seeds.

� Agricultural Credit and Financial Services Access Programme aimed at improving access to agricultural credit and insurance for agricultural value chain players.

� Agricultural Programme for Schools to train pupils in primary and secondary schools in agri-cultural skills and engage them in irrigated agriculture.

agriculture sector development strategy ( 2010–2020 )

This Strategy was drafted following the revision of the Strategy for Revitalizing Agriculture ( 2004–2014 ) and aims to support Vision 2030. The Agriculture Sector Development Strategy lays the foundations of Kenya’s agriculture policies and strategies, with the main objective of transforming the country into a food-secure and prosperous nation.

More specifically, it strives to ‘increase and provide the basis for equitable incomes, employ-ment and improved food security as a result of improved production and productivity in the rural smallholder farm and off-farm sectors’ ( Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries, 2011, p. 29 ). In this context, the strategy endeavours to achieve an agricultural growth rate of 7 % per year over the period 2010–2014. Its areas of intervention are structured in three components :

� Sector-wide coordination ( i.e. enabling institutional environment ) � Natural resource management ( i.e. ensure sustainability and adaptation ) � Value chain development ( i.e. long-term gains through equitable commercialization of agricul-

tural sector produce ).51

51.– Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2011 ). Agricultural Sector Development Support Programme.

76


The pulses subsector is governed by the Strategies for the Crops and Land Development Sub-sector under the Agriculture Sector Development Strategy, which lays down the pillars for the formulation and implementation of policies within the subsector, namely :

� ‘Improvement of agribusiness and market access � Strengthening of research, extension and training � Improvement of land use and crop development � Enhancing accessibility of affordable inputs and credit to farmers � Enhancing institutional efficiency and effectiveness in implementation and service delivery’

( Republic of Kenya, 2009, p.40 ).52

key national Regulations

As stated above, three pieces of legislation were crafted against the backdrop of the proposal by Kenya Vision 2030 of ‘consolidating agricultural policy reform legislation’ and the Agriculture Sector Development Strategy. The three Acts, namely the Agriculture, Fisheries and Food Authority Act ( 2013 ), the Crops Act ( 2013 ) and the Kenya Agricultural and Livestock Act ( 2013 ) are detailed hereafter, together with other key Acts and regulations.

agriculture, fisheries and food authority act ( 2013 )

This Act of Parliament provides for the consolidation of laws on the regulation and promotion of agriculture generally, and makes provisions for the respective roles of national and county governments in agriculture, excluding livestock, in line with the provisions of the Fourth Schedule of the Constitution of Kenya.53 AFFA, a state corporation, was established as a new overarching regulatory agency under the Agriculture, Fisheries and Food Authority Act of 2013. AFFA is the successor of former regulatory institutions in the sector that were merged into Directorates under the Authority with the commencement of the Crops Act, 2013 on 1 August 2014.54

In the context of devolution of competencies from Nairobi to county governments, this legislation will be of utmost importance for the development of the pulses sector as it clearly defines the roles and responsibilities of county governments, a key element in the implementation of the SITA Initiative’s activities.

Crops act ( 2013 )

The Crops Act aims to ‘consolidate and repeal various statutes relating to crops ; to provide for the growth and development of agricultural crops and for connected purposes.’

Through promotion of the production, processing, marketing and distribution of crops in suitable areas of the country, the objective of this Act is to accelerate the growth and development of agriculture in general ; enhance productivity and incomes of farmers and the rural population ; improve the investment climate and efficiency of agribusiness ; and develop agricultural crops as export crops.

52.– Republic of Kenya ( 2009 ). Agriculture Sector Development Strategy 2009–2020.53.– Republic of Kenya, Agriculture, Fisheries and Food Authority. Website. Available from http : / /agricultureauthority.go.ke / .54.– Ibid.


77

The Act comprises provisions to :

� Circumvent unnecessary regulatory bureaucracy in the crops subsector ; � Reduce unnecessary levies, taxes or other barriers to free movement of crop products and

provide for a rationalized taxation system ; � Reduce unnecessary regulation or over-regulation of the crops subsector ; � Reduce duplication and overlap of functions among institutions involved in the regulation of

crop agriculture ; � Promote competitiveness in the crops subsector and develop diversified crop products and

market outlets ; � Attract and promote private investment in crop agriculture.

Broad in scope, the Act nonetheless provides for the development of export crops and comprises incentive provisions for the promotion of the production and marketing of such crops. The pulses sector could therefore benefit from the provisions of the Act, its objectives being in line with some of the activities envisaged under the present SITA Initiative.

Awareness-raising campaigns will also be needed to disseminate information to all interested parties in the pulses sector, as the industry has little knowledge or understanding of this Act.

kenya agricultural and livestock act ( 2013 )

This Act provides for the establishment and functions of KALRO. The legislation provides for organs of KALRO and for the coordination of agricultural research activities in Kenya, activities which are of utmost importance for the development of new pulse varieties and seeds in the pulses sector.

seeds and plant Varieties act ( 1975, revised 2012 )

The Seeds and Plant Varieties Act came into force in 1975. This legal text aims to regulate and control the ‘production, processing, testing, certification and marketing of seeds’.

The Act is comprehensive in scope and encompasses crucial provisions for ensuring the supply of quality seeds for the agricultural sector as a whole. As per the Act, such regulations may in particular be made for the following purposes :

� Ensuring that reliable and adequate information is afforded as to the nature, condition and quality of seeds intended for sale ;

� Preventing the sale of seeds which are deleterious ; � Requiring the registration of persons growing any specified crop for the main purpose of seed

production, or of persons selling any seed ; � Preventing the spread of plant disease by the sale of seeds ; � Regulating, controlling or prohibiting the export of seeds ; � Regulating the containers in which seed may be sold.

Regarding seed testing, the text provides for the establishment of ‘one or more official seed testing stations’ and makes provisions for the regulation and control of the certification of the test results by an authorized officer.

The Act also includes provisions to restrict the introduction of new varieties and provides guidelines for the establishment of an index of names of plant varieties.

78


In addition, the text makes provisions to control the importation of seeds in order to prevent imports of potentially deleterious seeds and to authorize measures to prevent injurious cross-pollination, thereby guaranteeing a certain quality of seeds for the pulses sector. Seeds which are unsuitable for use in Kenya can therefore be denied access to Kenya.

Finally, the Seeds and Plant Varieties Act provides for the grant of proprietary rights to persons breeding or discovering new varieties and grants plant breeders in plant variety exclusive rights to produce reproductive material of the variety for commercial purposes.

Although the Act seems comprehensive, the question remains as to whether the provisions are being properly implemented and whether the controls and sanctions are applied. For example, it appears that the official seed testing stations contemplated by the Act have not been established. Further, it appears from the consultations held thus far that the industry is largely unaware of this Act and the provisions it encompasses, highlighting the need to raise awareness of the importance of such legislation.

national irrigation policy ( 2015 )

The National Irrigation Policy 2015 aims to stimulate and guide irrigation and drainage development through targeted technical support, intensified investment in the sector, improved research and technology, extension services, and capacity-building for both staff and farmers’ organizations to ensure development and sustainability of the subsector.55

small and medium enterprise parks

This Initiative aims at providing basic infrastructure to small and medium-sized enterprises that do not have the capital – or access to it – to invest in infrastructure but that do have the financial capacity to pay for it. The specific objectives outlined by the Government are :56

� To promote the development of small and medium industries � To enhance value addition to natural and agricultural resources � To attract local and foreign investment � To create an enabling environment through improved infrastructure � To facilitate transfer of technology � To promote productivity and competitiveness of enterprises.

micro and small enterprises act ( 2012 )

The purpose of this Act is the development, promotion and regulation of micro and small enter-prises in Kenya. It specifies the following actions :57

� Authority to advise on zoning of land � Development of infrastructure � Capacity-building programmes for micro and small enterprises � Development of markets and provision of marketing services � Technology transfer, acquisition, etc. � Creation of a Micro and Small Enterprises Development Fund � Management of the Fund.

55.– Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2015 ). National Irrigation Policy, 2015.56.– Republic of Kenya, Ministry of Industrialization ( n.d. ). BrieA on Vision 2030 ManuAacturing Sector.57.– Government of Kenya ( 2013 ). The Micro and Small Enterprises Act, 2012, Kenya Gazette Supplement No. 219 ( Acts No. 55 ).


79

The Micro and Small Enterprises Authority, a state corporation, was also established under this Act to ‘formulate and review policies and programmes, promote and develop the micro and small enterprises sector, monitor and evaluate implementation policies, programmes and activities related to micro and small enterprise development’.58

export processing zones act

This Act of Parliament provides for ‘the establishment of export processing zones and the Export Processing Zones Authority ; to provide for the promotion and facilitation of export-oriented invest-ments and the development of an enabling environment for such investment and for connected purposes’.

As for incentives the Kenyan Government provides to investors aiming to participate in Kenya’s export expansion, the following are granted to EPZ companies :59

� Ten-year corporate tax holiday and 25 % tax rate on profits thereafter ( except for commercial activities )

� Ten-year withholding tax holiday � Duty and value added tax exemption on inputs � Stamp duty exemption � Operation under essentially one licence issued by EPZA � No minimum level of investment � Rapid project approval ( under 30 days’ approval on application ) � One-stop-shop service by EPZA for set up, facilitation and aftercare ( work permits, labour

relations, port, utilities, etc. ) � On-site Customs documentation and inspection.

the investment promotion act ( 2004 )

The Investment Promotion Act of 2004, ratified on 31 December 2004, streamlined administrative and legal procedures to create a more attractive investment climate by assisting investors in obtaining the licences necessary to invest and by providing other assistance and incentives. The Act also created some new barriers with more restrictive entry regimes for FDI, namely introducing a mandatory investment threshold and restrictive screening procedure for all foreign investments.

The text makes a formal distinction between domestic and foreign investors, and requires the latter to apply to KenInvest for an Investment Certificate.60 The conditions under which KenInvest is allowed to issue an Investment Certificate to a foreign investor are restrictive, initially requiring that the amount invested be at least US $ 500,000. The Government later revised the minimum foreign investment threshold to US $ 100,000 as an amendment to the Act. In contrast, domestic investors are not required to obtain Investment Certificates ( even if their investments have to be registered with KenInvest ), with a lower minimum capital investment set at KES 5 million ( US $ 65,000 ). These restrictive screening procedures for foreign investments can be a significant impediment to FDI inflows, in particular for investors with limited financial capacities.

In addition, the investment must be deemed by KenInvest to be to the benefit of Kenya, including at least as a result of : the creation of employment for Kenyans, the acquisition of new skills or technology by Kenyans, and the contribution to tax revenues or other government revenues. The Investment Promotion Act also comprises incentive provisions, which are obtained through

58.– Republic of Kenya, Micro and Small Enterprises Authority ( 2015 ). Website. Available from http : // www.mseauthority.go.ke.59.– United States Agency for International Development ( 2014 ). Strengthening the Cotton, Textile and Apparel Value Chain in East AArica : An Assessment ( draft ).60.– An amendment later made this foreign investment certificate requirement optional.

Photo: (CC BY-SA 2.0) CC0 Public Domain, PDPics.Apg

80


the granting of an Investment Certificate by KenInvest. These provisions include the granting of temporary business licences and the entitlement to entry permits for expatriates.

Importantly for foreign investors willing to invest in the agriculture sector in Kenya, the Land Control Act of 1967 forbids non-citizens and private companies from acquiring or leasing agricultural land. However, presidential exemptions can be granted and are thus the main channel through which foreign investors can acquire agricultural land.

Also of importance for potential investments ( foreign or domestic ) in the processed pulses sector, is the development of EPZs, regulated by the Export Processing Zones Act ( 1990, with subse-quent amendments ). In addition to procedural incentives and the higher quality of infrastructure, fiscal incentives are provided for enterprises operating in EPZs such as the ‘exemption from all existing and future taxes and duties payable under the Customs and Excise Act and Value Added Tax Act on all export processing zone imports for use in the eligible business activities of the EPZ enterprise’ and exemption from the payment of income tax for the first 10 years from the date of first sale, followed by a rate of 25 % for the subsequent 10 years and the standard rate thereafter.

Finally, to encourage the transfer of technology and skills, the Government allows foreign inves-tors to acquire up to 49 % of local stockbrokerage firms and up to 70 % of local fund management companies.61

In addition, and of utmost importance for the pulses industry, the ability of foreigners to own or lease land classified as agricultural is restricted by the Land Control Act ( 1967 ), constituting an impediment to any agroprocessing investment that may require land. The development of EPZs, however, offers a tangible alternative for the development of the processed pulses industry.

61.– United States Department of State ( 2012 ). Investment climate statement – Kenya. Available from http : // www.state.gov / e / eb / rls / othr / ics / 2012 / 191175.htm.


81

rEfErENcEs

Alexandratos, N. and Bruinsma, J. ( 2012 ). World agriculture towards 2030 / 2050 : The 2012 revision. ESA Working Paper No. 12–03, June. FAO.

Alliance for a Green Revolution in Africa ( 2013 ). Establishing the Status oA Post-Harvest Losses and Storage Aor MaAor Staple Crops in Eleven AArican Countries ( Phase I ), p. xviii. Nairobi, Kenya : AGRA.

Dalipagic, Ian and Elepu, Dr. Gabriel ( 2014 ). Agricultural Value Chain Analysis in Northern Uganda : Maize, Rice, Groundnuts, Sunflower and Sesame. Action Against Hunger / ACF International.

Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August 2015.

Food and Agriculture Organization of the United Nations ( 2005 ). Pulses : Past Trends and Future Prospects. Summary of paper contributed by FAO to the 4th International Food Legumes Research Conference, New Delhi, 18–22 October. Available from http : // www.fao.org / fileadmin / tem-plates / est / COMM_MARKETS_MONITORING / Pulses / Documents / PulsesStudy.pdf.

Government of Kenya ( 2013 ). The Micro and Small Enterprises Act, 2012, Kenya Gazette Supplement No. 219 ( Acts No. 55 ).

International Food Policy Research Institute Worldwide Extension Study ( 2011 ). Extension and advisory services in Kenya : a brief history of public extension services policies, resources and ad-visory activities in Kenya. Available from http : // www.worldwide-extension.org / africa / kenya / s-kenya.

International Trade Centre ( 2015 ). Trade Map Database. Available from http : // www.trademap.org / Index.aspx. Accessed 28 October 2015.

Katungi, E., Farrow. A., Chianu. J., Sperling. L., and Beebe. S. ( 2009 ). Common Bean in Eastern and Southern AArica : A Situation and Outlook Analysis. International Centre for Tropical Agriculture.

Murphy, S., Burch, D. and Clapp, J. ( 2012 ). Cereal secrets : The world’s largest grain traders and global agriculture. Oxfam Research Reports, August.

National Council of Applied Economic Research, India ( 2014 ). India’s Pulses Scenario. New Delhi.

Njagi, Kagondu ( 2013 ). As wheat yields fall in Kenya, farmers turn to beans. Thomson Reuters Foundation, 25 April.

Noealt Corporate Services ( 2013 ). Annual Strategy Dossier – 2013 – World’s 6 Leading Agriculture Equipment ManuAacturers – Key Strategies, Plans, SWOT, Trends & Strategic Outlook.

Oloo, Jeo ( 2010 ). Food safety and quality management in Kenya : an overview of the roles played by various stakeholders. AArican Journal oA Food, Agricultural, Nutrition and Development, Vol. 10, No. 11.

Online Indus News ( 2015 ). Pulses import rises by 37 %, 24 March. Available from http : // www.onlineindus.com / pulses-import-rises-by-37 / .

Pereira, Charles ( 1996 ). The role of agricultural research in the development of Kenya before independence. In Review oA Kenyan Agricultural Research, Vol 1.

82


Peter Best and Ken Jennison ( 2012 ). Special report : top feed companies 2011–2012, 31 August. WattAgNet.com. Available from http : // www.wattagnet.com / articles / 13420-special-report- top-feed-companies-2011-2012.

Republic of Kenya ( 2009 ). Agriculture Sector Development Strategy 2009–2020.

Republic of Kenya, Agriculture, Fisheries and Food Authority. Website. Available from http : / / agricultureauthority.go.ke / .

Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2015 ). National Irrigation Policy, 2015.

Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2011 ). Agricultural Sector Development Support Programme.

Republic of Kenya, Micro and Small Enterprises Authority ( 2015 ). Website. Available from http : // www.mseauthority.go.ke.

Republic of Kenya, Ministry of Industrialization ( n.d. ). BrieA on Vision 2030 ManuAacturing Sector.

Shand, Hope ( 2012 ). The big six : a profile of corporate power in seeds, agrochemicals, & biotech. The Heritage Farm Companion ( Summer ), pp. 10–15.

Shiferaw B. and others ( 2008 ). Unlocking the Potential oA High-Value Legumes in the Semi-Arid Regions : Analyses oA the Pigeonpea Value Chains in Kenya, p. 17. Nairobi, Kenya : ICRISAT.

The Dawn ( 2015 ). Another dal crisis : Pakistan is jailing shopkeepers to combat pulse shortage, 20 October. Available from http : / /scroll.in / article / 763514 / another-daal-crisis-pakistan-is-jailing-shopkeepers-as-it-combats-pulse-shortage.

Thurston, Anne ( 1987 ). Smallholder Agriculture in Colonial Kenya : The Official Mind and the Swynnerton Plan. Cambridge African Monographs 8.

United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report – Kenya. USAID.

United States Agency for International Development ( 2014 ). Strengthening the Cotton, Textile and Apparel Value Chain in East AArica : An Assessment ( draft ).

United States Department of State ( 2012 ). Investment climate statement – Kenya. Available from http : // www.state.gov / e / eb / rls / othr / ics / 2012 / 191175.htm.

Wambugu P.W. and Muthamia Z.K. ( 2009 ). Country Report on the State oA Plant Genetic Resources Aor Food and Agriculture : Kenya, p. 19. Kenya Agricultural Research Institute ; National Genebank of Kenya.

World Bank ( 2016 ). Doing Business 2016 : Measuring Regulatory Quality and Efficiency. Washington, D.C. : World Bank Group.


83

ANNEx 1: list of inVited paRtiCipants

1st consultation – may 19,20 2015Institution / Organization Invitee Title Location

Machakos County Government Sheila Mueni MukunyaChief officer – Dept of Trade, Economic Planning and Industrialisation Machakos

Trans Nzoia County Government Veronica Okoth Minister for Economic Planning, Commerce and Industry Nanyuki

Kenya Bureau of Standards Mugambi Michubu Nairobi

Kenya National Farmers Federation ( Kenaff ) Dr John Mutunga CEO Nairobi

Eastern Africa Farmers Federation ( Eaff ) Steven Muchiri CEO Nairobi

Kilimo Biashara Initiative Florence Mbugua Nairobi

Kamili Packers Ltd Sunil Shah Nairobi

Spiceworld Ltd Beju Shah Nairobi

Export Trading Kungu Wainaina Nairobi

Nafics Grain Trading Isaac Chege Nairobi

Kings Commodities Bonface Kagechu Nairobi

Shree Sai Enterprises Bina Patel Nairobi

Food Chain Millers Anthony Ndirangu Nakuru

Chase Bank Sam Donga Nairobi

Kenya Red Cross Suada Ibrahim Manager, Disaster Risk Reduction Nairobi

Bunda Cakes Dipti Sethia Nakuru

Meru County / Kenya Agricultural Productivity Project Dr. Gilbert Muthee Mwoga Project Coordinator Meru

Silden International Mr. Paresh Patel

Mwailu Enterprises Limited Johnson Gachuhi Makueni

Export Processing Zones Authority Michael Ngaruiya Project Executive Athi River


84


2nd stakeholders consultation – aug 6,7 2015Institution / Organization Invitee Title Location

Ministry of Agriculture, Livestock and Fisheries Annastacia Kivuva Nairobi

Machakos County Government Sheila Mueni MukunyaChief officer – Dept of Trade, Economic Planning and Industrialisation Machakos

Trans Nzoia County Government Veronica OkothMinister for Economic Planning, Commerce and Industry Nanyuki

Embu County Government Dr. Francis Nyaga Kathuri Chief officer – Agriculture Embu

Kitui County Government Charles Muthui Kang’e County Minister for Agriculture, Water & Irrigation Kitui

Makueni County Government Mr.jacobus Mutuku KiiluCounty Minister for Agriculture, Livestock and Fisheries Makueni

Meru County Government Severino Kinge ManeneCounty Minister for Agriculture, Livestock and Fisheries Meru

Export Processing Zones Authority Margaret Waithaka GM Business Development Athi River

Export Processing Zones Authority Michael Ngaruiya Project Executive Athi River

Export Promotion Council Ruth Mwaniki Chief Executive Nairobi

Kenya Bureau of Standards Mugambi Michubu Nairobi

Kepsa Daniel Ndung’u Nairobi

National Cross Border Traders Association David Erulu Awilie Nairobi

Cereal Growers Association Antony Kioko CEO Nairobi

Eastern Africa Farmers Federation ( Eaff ) Steven Muchiri CEO Nairobi

Kilimo Biashara Initiative Florence Mbugua Nairobi

Kamili Packers Ltd Sunil Shah Nairobi

Spiceworld Ltd Beju Shah Nairobi

Tesamco Traders Theresia Mugore Nairobi


Namutech Enterprises Cleophas Namusiule Nairobi

Pisu & Co. Ltd Amos Okasido Nairobi

Mjengo Ltd Anne Ndunda Thika

Phoenix Procurement John Mungo Nairobi

Nafics Grain Trading Isaac Chege Nairobi

Kings Commodities Bonface Kagechu Nairobi

Winnies Pure Health Tarah Gitau Nairobi

Seaboard Overseas Fadhil Haji Mombasa

Capital Reef Kirit Kanabar Mombasa

Nakumatt Holdings Jackson Ndegwa Nairobi

Cargill Alex Dietz Nairobi

Combic Limited Monica Ndegwa Nairobi

Shree Sai Enterprises Bina Patel Nairobi

Agritrade Moses Gichuru Nairobi

Amani Flour Mills Njoro Mathew Nairobi

Food Chain Millers Anthony Ndirangu Nairobi

Kenya Institute of Food Science Technology Joyce Kiio Kiambu

Kephis Esther Kimani

Kenya Agricultural Research Institute Dr. Mulinge Nairobi



85

Institution / Organization Invitee Title Location

Consultative Group For International Agricultural Research ( Cgiar ) Joseph Karugia Nairobi

Tegemeo Institute ( Egerton University ) Francis Karim Nairobi

Jomo Kenyatta University of Agriculture & Technology Dr. David M. Nburu Dean, Faculty of Agriculture Nairobi

Kenya Agricultural & Livestock Research Organisation David Karanja Nairobi

Chase Bank Sam Donga Nairobi

Equity Bank George Macharia Nairobi

Kenya Commercial Bank Betty Maloba Nairobi

Transnational Bank Sammy Langat Nairobi

Agricultural Finance Corporation Andrew Tuimur Managing Director Nairobi

Unaitas Sacco Society Ltd Jadiel Kinyua Chief Manager, Credit Nairobi

Kenya Red Cross Suada Ibrahim Manager, Disaster Risk Reduction Nairobi

Kenya Red Cross Elijah Muli Advisor, Disaster Risk Nairobi

FSC is an independent, non-governmental, not for profit organization established to promote the responsible management of the world´s forests.

Printed by ITC Digital Printing Service on FSC paper, which is environmentally-friendly paper (without chlorine) using vegetable-based inks. The printed matter is recyclable.

Sponsored by :

In partnership with :

Street address: ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland

Postal address: ITC, Palais des Nations, 1211 Geneva 10, Switzerland

Telephone: +41-22 730 0111 Fax: +41-22 733 4439E-mail: [email protected]: www.intracen.org

VALUE CHAIN ROADMAP FOR PULSES - · PDF fileThis value chain roadmap was developed on the...

Documents

Transcript of VALUE CHAIN ROADMAP FOR PULSES - · PDF fileThis value chain roadmap was developed on the...