Agribusiness for Africa’s Prosperity. Country Case Studies
Upgrading value chains in Kenya’s agribusiness Upgrading in agribusiness takes many forms, ranging from product or processes upgrading, the upgrading of the entire value chain or upgrading the capacity and competence of the Kenya Bureau of Standards (KEBS) to provide certification services to guarantee the quality of products. This will require strengthening the laboratory capacity of KEBS, including setting up satellite laboratories to serve processors outside the capital city of Nairobi. This should be complemented by the establishment of a national accreditation body to coordinate all accreditation and certification activities in the country. Other measures suggested during the interviews with industrialists and stakeholders include encouraging the processing of domestic concentrates, instead of using imports, and creating linkages with farmers through appropriate incentives. Provision of necessary infrastructure, like roads, electricity and communication, as well as coordination of the various players is important for national competitiveness. In addition to strengthening the existing quality assurance bodies, the government, with private sector cooperation, will need to establish sectoral training institutions. The private sector should contribute to competence and capacity within individual firms and institutions through support for information and communication technology (ICT) and the development of specific skills. Enhancing agro-processing technology and its access especially by small scale farmers is critical for upgrading, and measures should be introduced to facilitate linkages between government agencies to improve service provision and the operating environment for PPPs. Empirical evidence suggests that successful countries build on their comparative advantage in primary commodities through investment in innovations to increase value addition. Governments play an important role in such cases by providing infrastructure, business service technical upgrading, and technical assistance to the private sector. In Kenya, the opportunity for upgrading some value chains in the agro-industry could take advantage of the already existing export opportunities where the country has a comparative advantage for value addition. Horticultural exports provide a suitable example for Kenya. Areas of upgrading could include taking advantage of the changing lifestyles and consumption patterns in the export markets where consumers prefer fresh produce to processed products. This could be achieved through improved packaging to improve the shelf life of the fresh produce exports. Connected to this is also the need to invest in efficient transportation to minimize wastage through from the production to the marketing. It is noteworthy that one of the factors to which the success of the horticultural sector can be attributed is the investment in infrastructure and logistics for air freight for perishable products as well as safety and quality assurances. The establishment of the Kenya Plant Health Inspectorate Services (KEPHIS) has played a key role in supply control and in the establishment of traceability systems. In addition, the upgrading of packaging house facilities, like improved water sanitation and advanced cold treatment and cold storage systems, have been undertaken by private enterprises in fresh produce export, enabling them to meet the demand for high quality fresh produce like salads and other semi-prepared vegetable products in the UK (FAO 2008). Targeting commodities and producers for value addition The Ministry of Trade and Industry (MoTI) has identified as priority industries processing fruits and vegetables, dairy produce, meat, hides and skins, fish and fish products, fermented beverages, and vegetable and animal oils. The main reason for this selection is based on the high production potential in the country which is not currently exploited.
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