Presentation on theme: "Farm Concern International Winning markets for farming communities Value chain concepts Mumbi Kimathi Mrs. Programmes Director Market & Chains Analyst."— Presentation transcript:
Farm Concern International Winning markets for farming communities Value chain concepts Mumbi Kimathi Mrs. Programmes Director Market & Chains Analyst
Farm Concern International Mission To build Pro-poor market development initiatives and commercialization of poor households in Sub-Saharan Africa for enhanced community empowerment Vision Commercialized African households with increased incomes and better livelihoods
Value chains The value chain approach, is a concept that links raw materials, components and manufactured goods and further highlight the various transaction levels as good & services are moved to final consumers. Value chains are highly dynamic, ordinarily with several value addition levels.
Market Destinations and Value Chains as a means Nature of destination markets highly dictate value chains systems developed by market players. Value chains only enhance entry to markets. Key market segments; –Consumer markets –Business markets –Reseller market –Governments & Institutional markets –International markets
Market environment Traditional or formalized marketplace determines who are the Value chain players & systems Africa is characterized by traditional markets –Kenya’s horticulture sub-sector; Market shares [ Based on Volume] 92 % Domestic market 8% International markets [ 6% cut flowers & 2% fruits & vegetables] Domestic market shares: 18% Supermarkets & Groceries and 82% Traditional markets
Minimally identified value chains and BDS systems Under- developed marketing infrastructure Minimal economic activities Large parcels of land characterised by low productivity Mixed food and cash economy Semi – commercial production systems Commercial BDS systems established Relatively high investment levels Medium / large-scale farmers Low poverty index High private sector investments Cash economy Active regional and global value chains Well established business partnerships Poverty line Value chain discrimination
Typical value chains Farm gate sales Village-based broker Level 2 Brokerage services Wholesalers Financial Intermediaries Banks Credit Co. Insurance Co. Business markets e.g. Processors Consumer markets e.g. traditional fresh produce markets Specialized consumer markets Govt. & Institutional market Retailers Market Intermediaries Physical Dist. Firms Market service firms Resellers
Emerging threats in Sub-Saharan Africa Weak production systems that will eventually fail to support food chains in both rural and urban areas Increased urbanization in Sub-Saharan Africa demands stable rural production systems to support emerging food demands for priority products e.g. roots & tubers, cereals, legumes, horticultural products etc. Food prices would increase as result of weak food chains thus increased cost of living….and more slums in SSA
MOA –Benefits Analysis: benefits sought by the medium processors –quality, consistency and competitive prices. large scale processors often supply them with lower grade nuts with fluctuating prices. With increased efficiency and economies of scale the cottage processors can supply top grade nuts at competitive stable prices of Ksh. 400 per kilo. medium processors outsource nuts as semi- processed from large processors quality assurance system needs to be installed in the cottage processing industry.