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The Practice of the Development of Africa’s Agro-industry Chain. Dr Stephen Mbithi CEO: FPEAK- Kenya Fresh Produce Exporters Association of Kenya Coordinating CEO: Hort Council for Africa (HCA) Chiefexecutive@fpeak.org +254722716956.
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The Practice of the Development of Africa’s Agro-industry Chain Dr Stephen Mbithi CEO: FPEAK- Kenya Fresh Produce Exporters Association of Kenya Coordinating CEO: Hort Council for Africa (HCA) Chiefexecutive@fpeak.org +254722716956 28-July: Dar: 2012 China-Africa Poverty Reduction and Development Forum
...a Viable Option:High value Agric for Poverty alleviation • Example: Kenyan Hort: • Total value – 3.7 billion US$ • Exports 2011: 1.2 billion US$ • Vegetables/Fruits: 650 million US$ • Flowers – 550 mil US$ • Domestic: • 2.5 mil US$ (2008 estimates) • 1.5 million farmers on hort, total 4.5 mil direct/indirect dependent (11% of total population) • The Players: • Smallholders-70% by value of fruits and vege exports, and about 10% flowers • Large scale growers- mainly in flowers (10% flowers are smallholder produced)
How it happens… • A market-led production….STRICTLY • Production synchronized with supply contracts secured with EU supermarkets (82% total hort exports) • Exporter – Led Smallholder production • Standardization, therefore bulking at smallholder level • 24 hours from farm to supermarkets in the market • Limited or no cold storage facilities in fields • Cold storage/packaging/processing facilities at Nairobi • About 1,000MT fresh produce air-freighted daily during peak selling season
what about…Standards? • Standards compliance KEY to marketing • Enhancing Consumer confidence- standards are a passport to trade • Small-scale farmers comply to standards • Official Control Systems • Market Standards- Compliance is Private sector driven • KenyaGAP…benchmarked to GLOBALGAP • Certification system
What we have learnt… • Smallholder production is Profitable: • Either small or large is OK..not medium size • 1 acre to 10 Ha or above 40 HA • Economies of scale Vs return on investment for mechanization • CORRECTION- smallholder- commercial NOT subsistence farming • Uniform practices, and standards compliance • Key to bulking, hence key to smallholder participation in the global value chain • Training- horticulture is knowledge intensive • Facilitative Govt Policy • Strong Government standards enforcement Institutions • Phytosanitary and Sanitary standards institutions • Private sector leadership is key, • Need for strong private sector organizations • Role of FPEAK (since 1976) • Public- private Partnerships: • Practical Training Centre (PTC)
…Future Perspectives • Market diversification is a MUST • China market for African agriculture is KEY to future contribution of farming to poverty alleviation in Africa • Reducing Cost of production and logistics • Chinese Technology is key. • Water distribution, transport, greenhouses • Needed • More cost-effective sea and air connectivity between east Africa and China • Smallholder production is the future: • Land pressure (high population) in high potential areas • Better wealth distribution for agric revenue • Large-smallscale linkages, and efficient value chains- remain key
Thank You Dr Stephen Mbithi chiefexecutive@fpeak.org +254722716956