Micro and small enterprises in horticulture
This is a call to action for systems leaders in Kenya to come together and address governance and structural weaknesses in the horticulture sector and raise its performance. Are you capable of identifying leverage points to transform informal markets and micro and small enterprise in horticulture? The African Food Fellowship needs you to mobilise networks to support MSEs to feed a healthier Kenya.
How is micro and small enterprise in horticulture important to food systems in Kenya?
Micro and small enterprises – or MSEs – are the backbone of the Kenyan economy. Most MSEs operate in unregulated, informal markets, but are vital for job creation and poverty alleviation. The informal economy accounts for 34% of the country’s GDP and employs 81% of its labour – about 13 million people. Along with medium-sized enterprises, MSEs supply more than three-quarters of Kenya’s food. These MSEs providing fresh fruit and vegetables are crucial for making food systems more sensitive to nutrition.
The importance of the role of MSEs in mitigating the risks of unsafe food and unhealthy diets is becoming ever more important and relevant, on account of structural changes in Kenya’s food systems. Unprecedented urbanisation, consumer preferences and dietary shifts mirroring Western trajectories are resulting in the ultra-consumption of highly processed food and over-consumption of meat. In turn, these changes are causing issues with the country’s nutritional security; a quarter of Kenyans are overweight and three million are clinically obese, a number triple that of 2013.
Since Kenya’s food systems are currently transitioning to more modern structures, there is no better time for interventions that strengthen informal produce markets and emerging enterprises. This said, Kenyan horticultural development has been on the political agenda for several decades. The national government has put forward several policies and frameworks to transform the sector into a more commercially oriented and inclusive one: The Agricultural Sector Development Strategy 2010–2020 and Vision 2030, for example. However, experience teaches us that informal markets are too often a blind spot for governments. Besides having the potential to improve nutrition, MSEs in the informal sector are capable of empowering women and young people through employment and income generation, and raising their quality of life.
What is the current state of micro and small enterprise in horticulture in Kenya?
Horticulture is one of the most dynamic sectors of Kenya’s economy, currently contributing a third of the value of agricultural output. In 2018, the export of horticultural products generated €1.5 billion. Fruit and vegetables made up between a quarter and a third of exports, and 8% and 26% of total value respectively.
Up to 80% of horticultural producers in Kenya are micro-, small- and medium-sized enterprises, which means this sector employs around seven million people. In general, these MSEs’ value chains are informal, fragmented and unorganised. 15 counties supply 74% of fresh produce, more than half of which is produced on farms less than 10 acres. Most of these farms are in rural and peri-urban areas, and family-owned. Due to their limited financial capital and low volumes and standards, they often rely on informal channels to sell their products. They lack direct access to markets, due to high transport costs, and sell to farmgate traders. These farm-gate traders take this produce to open-air markets and kiosks, where women own three-quarters of businesses. Over 90% of urban fresh produce sales take place in these hubs.
What are the challenges for systems leadership in micro and small enterprise in horticulture in Kenya?
The role of MSEs in horticulture is rapidly changing. Challenges that were once isolated are becoming increasingly interconnected. MSEs lack irrigation, have limited productivity and produce inconsistent quality. They lack the knowledge, technology, finances and institutional support necessary for growth. The absence of regulation creates concerns about the safety of their food production, handling and preparation practices. Recent food safety scandals have stressed the importance of having control on these value chains, which often penalises MSEs unable to deliver consistent quantity and quality to supermarkets. It is vital that future stakeholders work together on MSE value chains. The production cycle for fruit and vegetables is short, owing to their perishability, so MSEs would hugely benefit from increased chain-wide coordination to minimise loss and waste.
This is a call to action for systems leaders to collectively address governance and structural weaknesses in the horticulture sector and improve its performance. There are some big questions that systems leaders have to grapple with. For instance, how do we reach, support and assure MSEs operating outside current regulatory frameworks? Can we enhance their provision of quality to traders and formal markets? What is the best way to build a resilient sector inclusive of MSEs? Do you have solutions to offer? The African Food Fellowship aims to gather individuals who can mobilise networks and institutions to support MSEs and untap their potential for feeding a healthier population.
Sources of information:
- (2020). FAOSTAT statistical database. http://www.fao.org/faostat/en/
- Ndemo, B., & Mkalama, B. (2019). Micro, Small and Medium Enterprises in Kenya: Current State, Opportunities and Challenges. TH Tambunan, Development of MSMEs in Developing Countries: Stories from Asia, Africa and Latin America, 3, 236-250.
- Chemeltorit, P., Saavedra Y., and Gema, J. (2018). Food traceability in the domestic horticulture sector in Kenya: An overview. Practice brief 005. Wageningen University & Research. Wageningen.
- Gema, J., Keige, J., Chemeltorit, P., Ngetich, T., Moreno Echeverri, I., Saavedra Gonzalez, Y., and Koomen, I. (2018). Catalysing food safety in the domestic horticulture sector in Kenya: The potential link between export production and evolving domestic supply chains. Wageningen Centre for Development Innovation, Wageningen University & Research. Report WCDI-18-051. Wageningen.
- Philip Chemeltorit , Yeray Saavedra, Joyce Gema. 2018. Food traceability in the domestic horticulture sector in Kenya: An overview. 3R Research Report 003. 3R Kenya Project.
- Matui, M. S., Gonzalez, Y. S., Gema, J., & Koomen, I. (2016). From aid to sustainable trade: driving competitive horticulture sector development: A quick scan of the horticulture sector (No. 16-03/CDI-16-045). Wageningen Centre for Development Innovation
- Rampa, F., & Dekeyser, K. (2020). AgrInvest-Food Systems Project–Political economy analysis of the Kenyan food systems: Key political economy factors and promising value chains to improve food system sustainability. Food & Agriculture Org.
- Agriprofocus Scan of the horticulture Funding landscape in Kenya 2019
- Climate smart agriculture Opportunities in the kenyan Horti sector, MFA 2019
- Agriculture and Food Authority, AFA. 2017. Creating Wage Employment in Horticulture Sector in Kenya.Agriculture and Food Authority.iiASDS, 2010. Agricultural Sector Development Strategy, 2010-2020. Government of Kenya
- Neven, D., Odera, M. M., Reardon, T., & Wang, H. (2009). Kenyan supermarkets, emerging middle-class horticultural farmers, and employment impacts on the rural poor. World Development, 37(11), 1802-1811.
- Tyce, M. (2020). A ‘private-sector success story’? Uncovering the role of politics and the state in Kenya’s horticultural export sector. The Journal of Development Studies, 56(10), 1877-1893.