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REPUBLIC OF KENYA MINISTRY OF AGRICULTURE SMALL HOLDER HORTICULTURE MARKETING PROGRAMME. SHoMaP DRAFT REPORT VALUE CHAIN STUDY ON POTATO, CABBAGE AND GARDEN PEA NYANDARUA NORTH DISTRICT April 2010 Prepared by:- Capital Guardians P.O. Box 26446-00504 Nairobi Tel: +254 020-559127, Cell: 0720- 317176, 0720-426845 Email: firstname.lastname@example.com 1 TABLES OF CONTENTS LIST OF TABLES ............................................................................................................................................................. 3 ACKNOWLEDGEMENT .............................................................................................................................................. 6 EXECUTIVE SUMMARY .............................................................................................................................................. 7 INTRODUCTION AND BACKGROUND ............................................................................................................. 16 1.1 Introduction ..................................................................................................................................... 16 1.2 SHoMaP Program .................................................................................................................................. 16 1.3 Study Objective ...................................................................................................................................... 17 1.4 Specific Tasks ......................................................................................................................................... 18 2.1 Approach ............................................................................................................................................... 20 2.2 Methodology .......................................................................................................................................... 20 2.3 Limitations ............................................................................................................................................. 21 3.0 SELECTION OF TARGET VALUE CHAIN CROPS .................................................................................... 23 3.1 Overview of the Study Area.................................................................................................................... 23 3.2 Review of Horticulture production in Nyandarua District....................................................................... 23 4.0 VALUE CHAIN ANALYSIS ............................................................................................................................... 27 4.1 Potato Value Chain................................................................................................................................. 27 4.2: The Cabbage Value Chain...................................................................................................................... 63 4.3 Garden Peas ........................................................................................................................................... 84 APPENDIXII: LIST OF MARKETS FOR UPGRADING/REHABILITATION AND DEVELOPMENT ......................................................................................................................................................... 113 Division ............................................................................................................................................................................ 113 APPENDIX IV: FARMERS GROUPS AND THEIR CHALLENGES ........................................................... 114 APPENDIX V: INVENTORY OF INPUT SUPPLIERS/STOCKISTS IN NYANDARUA NORTH ..... 116 APENDIX VI: LIST OF PARTICIPANTS ............................................................................................................. 116 2 LIST OF TABLES Table 4: Weighting ResultsERROR! 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Table 5 Ranking Results ........................................................................................................ 26 Table 7: Name Of Dealer/Stockists Per Division ................................................................... 35 Table 8: Main Actors In Potato Seed Production. ................................................................. 35 Table 11: Actors In Potato Production Chain ....................................................................... 42 Table 12: Constraints In The Potato Production Chain And Recommended Interventions ... 45 Table 13: Actors And Their Roles In The Potato Marketing Chain ..................................... 48 Table 14: Farm Level Marketing Activities........................................................................... 49 Table 15: Summary Of Constraints Per Chain Link And Recommended Interventions ....... 55 Table 16 -Value Share Of Actors In The Marketing Chain .................................................... 57 Table 17: Summary Of The Major Public Stakeholders In The Value Chain ........................ 58 Table 18: Summary Of Constraint Per Link Of The Chain And Recommended Interventions ......................................................................................................................................... 62 Table 19: Main Actors In The Input Supply In The Cabbage Subsector ................................ 67 Table 20: Summary Constraints In Input Supply And Recommended Interventions ........... 68 Table 21: Cabbage Production In Nyandarua (2005-2008) Tons .......................................... 69 Table 22: Major Actors In Cabbage Production Chain .......................................................... 71 Table 23: Constraints And Recommended Interventions ....................................................... 72 Table 24: Actors And Their Roles In The Cabbage Marketing Chain ................................. 74 Table 25: Constraints And Recommended Interventions ....................................................... 79 Table 26 : Value Share Of Actors In The Marketing Chain ................................................... 81 Table 27 : Summary Of The Major Public Stakeholders In The Value Chain ....................... 82 Table 28: Summary Of The Major Constraints And Recommended Interventions .............. 83 Table 29: Actors In The Input Supply Chain .......................................................................... 88 Table 30: Constraints In Input Supply And Recommended Interventions ............................ 89 Table 31: Garden Peas Production In Nyandarua (2004-2008) Tons ..................................... 91 Table 32: Actors In The Input Supply Chain .......................................................................... 92 Table 33: Key Constraints In Production Chain ..................................................................... 93 Table 34: Actors And Their Roles In The Garden Peas Marketing Chain ........................... 95 Table 35 : Constraints And Recommended Interventions ...................................................... 97 Table 36: Value Share Of Actors In The Marketing Chain .................................................... 99 Table 19: Farmer's Organization Constraints Analysis ........................................................ 103 Table 37: Summary Of The Major Public Stakeholders In The Value Chain ........................ 99 Table 38: The Major Constraints And Recommended Interventions ................................... 101 Table 39: Proposed District Action Plan .............................................................................. 108 3 LIST OF FIGURES Figure 1: Area Under Horticulture Production In Nyandarua ................................................ 23 Figure 2: Production In Nyandarua District 2002-2008 (Tons) ................................................. 23 Figure 3: The Potato Value Chain Map .................................................................................. 27 Figure 4 Potato Seed Production System In Kenya. ............................................................... 33 Figure 5: Potato Seed Production 2006-2009 ......................................................................... 34 Figure 6: Potato Production Trend In Nyandarua District (2004-2008 .................................. 39 Figure 7: Area Under Potato Production Trend In Nyandarua N District,0- .......................... 39 Figure 8: Market Prices Of 110 Kg Potato Bag ......................................................................... 40 Figure 9: Potato Marketing Channels In Nyandarua District ................................................. 56 Figure 10; Cabbage ................................................................................................................. 63 Figure 11: Cabbage Value Chain ......................................................................................... 64 Figure12 Cabbage Production Trends In Nyandarua District ................................................... 68 Figure 14: Marketing Channels For Cabbages In Nyandarua District .................................. 77 Figure 15: The Garden Peas Value Chain Map ...................................................................... 85 Figure 16: Garden Peas Marketing Channel ........................................................................... 96 4 ACRONYMS ADC Agricultural Development Corporation ATC Agricultural Training Center CAN Calcium Ammonium Nitrate CIGs Common Interest Groups CIP International Potato Center CS Certified Seed DAO District Agricultural Officer DAP Diamonium Phosphate FADC Focal Area Development Committee FGD Focus Group Discussion FPEAK Fresh Produce Exporters Association of Kenya FSS Farmer Saved Seed GDP Gross Domestic Product GMA Gross Margin Analysis HCDA Horticultural Crops Development Authority IFAD International Fund for Agricultural Development KACE Kenya Agricultural Commodity Exchange KARI Kenya Agricultural Research Institute KENFAP Kenya National Farmers Producers Association KEPHIS Kenya Plant Health Inspectorate Service KES Kenya Shilling KFA Kenya Farmers Association MoA Ministry of Agriculture NALEP National Agricultural and Livestock Extension Programme NGO Non Governmental Organization NSQCS National Standards Quality Control Service PCB Pest Control Board PMG Producer Marketing Group SACCO Savings and Credit Cooperative Organization SHoMaP Smallholder Horticultural Marketing Programme USAID-EU United Sates Agency for International Development-European Union VCA Value Chain Analysis 5 ACKNOWLEDGEMENT We wish to sincerely thank everyone who contributed in the provision of crucial data and information and the preparation of this report. While it is not possible to mention everybody who contributed to this study by name, we would like, in particular, to thank Ms W. Karanja, the DAO, and staff Nyandarua North District and the District Stakeholders who in every way provided relevant information for this study without whose cooperation and support this task would have not been completed satisfactorily. We also wish to thank SHoMaP Project Manager Mr S. Mbogo and management staff for their support and the Lead Consultant, Emerson Zhou, for their valuable input to the study. Finally we also wish to thank the team of consultants from Capital Guardians for their dedication in preparation of the study. The opinions expressed in this report, however, are purely those of the authors and are based on observations and findings during the study. Joshua Ogola ( Team Leader) George Odette Nick Ondego 6 EXECUTIVE SUMMARY This report presents the findings of the Value Chain Analysis (VCA) study on Irish Potato, Cabbage and Garden Pea conducted in Nyandarua North District.. The value chain study was commissioned by SHoMaP program and targeted support to small scale farmers (SSF) to improve their incomes and livelihoods. The program is supported by IFAD and is being implemented by the Ministry of Agriculture in collaboration with other line ministries. The VC study focused on the general description and mapping of the target commodity value chains, performance, the identification of key players, actors, constraints and barriers limiting farmers" access to markets and effective integration into the value chain The study explored the needs for small scale producers" skills platform, roles, challenges and chain relationships with different actors along the chain including the input suppliers, market traders, transporters, small scale processors and service providers. Recommendations for interventions were provided at every stage of the value chain. Overall Objectives The overall scope of the assignment was to carry out value chain study of 3 target horticultural commodities in Nyandarua district and propose Investment priorities for the identified VC commodities and recommendations for interventions. The specific objectives of the VCA study were threefold: Identify 3 horticulture value chain commodities that have the greatest potential to serve as a vehicle for poverty reduction and source of livelihood for a majority of smallholder farmers within the target areas. Form the foundation for identifying and review of the desired market interventions, training needs, demand driven market infrastructure investments and evaluating requests for Programme support Identify emerging marketing trends, constraints that are inhibiting market development and opportunities for supporting initiatives of local communities, farmers groups, traders, and other value-chain participants and develop an action plan for the target district 7 Methodology The study entailed literature review on all aspects of horticulture production and market value chain activities in the district, and field data and information collection. The primary data and information served as the main framework for analysis while secondary information provided valuable inputs into the understanding the study. The identification and mapping of the value chain commodities was done through a review of listing of all potential horticultural crops grown in the Nyandarua North district. The Value Chain commodities were then selected through weighting and ranking based on five criteria agreed on by consensus, namely; profitability of the VC commodity, existence of a good and growing market, the number of potential beneficiaries involved in the production of the commodity, existence of value chain leadership, and the investment requirement at entry. Weighting of the commodities was done by giving a percentage weight on a scale of 0 to 100 percent for each of the criteria. A Likert scale of 1 to 5 was then employed (with 5 = the best case scenario, and 1 = the worst case scenario) to rank the selected target commodities. And based on these criteria the 3 most potential commodities, the Irish Potato, Cabbage and Garden Pea were selected for in-depth value chain analysis Primary data was collected through a participatory approach using focus group discussions and interviews with a cross-section of district and industry stakeholders which included farmers" representatives, input suppliers, processors, traders and service providers. Semi structured questionnaires were used to collect data and information from the various actors in the three (3) target commodity value chains in the project area. The Ministry of Agriculture staff at the district, other line ministries and district stakeholders participated in the selection and discussion processes Study Findings Study Area The study established that Nyandarua North district is one of the major horticulture producing areas in the country with over 44,000 farm families engaged in various horticulture enterprises and agricultural activities. Extensively, over ten different horticultural commodities including Irish potato, Cabbages, Garden Peas, Onions, Carrots, Tomatoes, Snow peas, Spinach and Kales are grown in the district. Maize, wheat and dairy keeping are also major economic enterprises in the area. A number of fruits are also grown. Given resource base and favorable ecological conditions, the district has the potential and capacity to expand area and volume of horticultural production in the future. General Observations 8 In terms of support services and enabling environment, the study noted that farmers in the target commodity value chains have received adequate but insufficient extension services and technical training that are required to facilitate their operations efficiently. However, farmers and traders were not organized in any way to improve and mitigate on their risks in the value chain. Producers and traders would be better off working together when they can progress to improve institutional issues and business relations in their respective value chains. The current level of infrastructure and institutional developments in the producing areas in the district is equally insufficient to unlock the agricultural potential of the small scale farmers and propel their growth. It was observed that farmers and traders operate in information –poor environment, and of uncertainty and high costs. In particular, the study pointed at the poor access roads, physical markets, market information, technical skills and lack of farmers groups, which were not commodity VC specific, as major constraints affecting development of the target commodity value chains across board. This underpinned the reemergence of certain VC specific recommendations and interventions. VALUE CHAIN ANALYSIS Potato Value Chain Potato Production Potato is an important food crop, after Maize, in Kenya. Nyandarua district is one of the major potato growing districts in Central Province with about 10,000 Small Scale farmers (SSF) estimated to be engaged in production of the crop. The crop is grown largely by small scale farmers with average holding of between .O.25 and 2 ha. At the time of study, the average yield of potato in Nyandarua district was 7-8 tons /ha which is well below the national average yield of 15-20 tons /ha. The study established that the majority of the SSF lack sufficient technical skills and capacity to improve their economic productivity and to effectively integrate in the production chain. This was manifested in poor crop husbandry and low produce quality, emphatically suggesting the need to enhance technical training and capacity building of farmers in production and agribusiness development. Potato Seed Supply The study found out that the inadequate availability and high cost of certified potato seeds was a major constraint leading to less use of clean potato seeds and low productivity. The seed supply is the weakest link in the production chain. KARI is the major source of basic potato seed but its capacity is constrained by its mandate of carrying out both research and seed development. There was no large private sector investor in potato seed production, and only a few farmer groups were identified to be involved in seed multiplication. Own supply and/ or recycling of seed still remain the most important source of potato seed in the district. This coupled with low use of fertilizers due to high cost and lack of appreciation by farmers of its contribution to enhancing yields has lead to low economic productivity of the commodity. 9 Sub-sector Actors and Channels The main Actors in the potato subsector are input suppliers, farmers, market traders, processors and consumers. At the production level it was noted that farmers are still operating at less than optimal level of economic productivity due to small farm sizes and poor technical skills on their part. Marketing Channels The study indicated that the potato marketing system is dominated by a large number of intermediaries, including brokers/middlemen controlling up to 80% of potato sold in the local markets, wholesalers an retailers. Approximately 10% of the production is consumed on farm while another 10% was attributed to post harvest losses. At the market level traders reported poor physical market infrastructure and multiple taxation by the Local Authorities as some of the major constraints affecting trading environment. The study also established poor access roads, and inadequate access to marketing support services as other constraints in affecting viability of potato marketing. The lack of enforcement on the use of standard bag has opened avenue for continued use of "extended bag" which denies producers their fair share of the revenue as the standard bag of potato is sold at the same price as the "extended bag" of potato with no reference to weight. This noted this could be attributed to policy weakness and poor coordination in the subsector. Institutional Development In terms of support services, the MoA was the primary institution providing basic extension services. This was complimented by other public and private sector institutions and organizations. However, inspire of being an important food crop, there was no national potato policy that would govern its production and marketing. Enhancing provision of support services by the MoA in collaboration with the private sector organizations would increase farmer"s productivity and their potential to effectively integrate and maximize on the value chain. In addition, the absence of a strong and efficient farmer"s organization to cater for the producers" interest and procurement of inputs and other services was a major weakness that impact on production and marketing of the commodity. However, there exists the Kenya National Potato Farmers" Association (KENAPOFA), whose presence is not effective in the project area. It is important to strengthen KENAPOFA to facilitate value chain leadership in the market value chain. Subsector Constraints and Opportunities Besides the inadequate availability of Potato seed, the other major constraints hampering the development of the potato subsector were identified as lack of access to credit, high cost of agrochemicals, pest and diseases infestation, and limited access to market information. 10 Limited processing was observed being undertaken in the Potato sub sector in the district. However, opportunities avail for product diversification and increased value addition and processing into potato chips, French fries, crisps, granules and potato flour. There is good market demand for processed potato products particularly in the urban areas. Opportunities also avail for increased production through increased use of certified seeds, expanded extension services through enlisting community extension workers and up scaling production practices. There is enormous potential for commercial seed production through support to farmers" groups" seed multipliers. Major Recommendations In order to systemically address the constraints in the Potato subsector, a number of interventions are needed to unlock the potential of the subsector in Nyandarua North district. These include: Collaboration with KARI and private sector organizations to promote the propagation/multiplication and distribution of certified high yielding potato seeds to farmers, up scaling extension services and strengthening of the existing FGs in seed multiplication as well as establishing seed quality control system.. Enhance training and capacity building of farmers on crop production and post harvest management in order to foster diffusion of agricultural technologies, increase productivity, value addition and agribusiness development. Improve access roads and market infrastructures to ease access to markets and create better environmental sanitation Support small scale pilot processing initiatives in selected divisions in the district and train small scale processors to improve their technical skills in value addition. Cabbage Value Chain Cabbage Production Cabbage production in Nyandarua North district is highly seasonal. This coupled with the lack of farm storage facilities has led to high post harvest losses and price instability in the market. The crop is grown by small scale farmers mainly for subsistence with little commercial orientation. Poor crop husbandry among farmers and perish ability are generally blamed for the poor quality of produce. Farmers reported average yield of cabbage at 10 bags /ha which is well below the expected national average yield potential of 15 tons /ha. The high incidence of Pests and diseases was reported as the main cause adversely affecting yields and productivity. The study established that the majority of the SSF cannot improve their economic productivity due to small farm sizes and poor agronomic management and lack of farmers" organization suggesting the need to enhance their technical capacity to intensify production, and provide training on entrepreneurial skills and organizational development. 11 Input Supply The high cost of improved seed and fertilizer was a major constraint in the sub sector leading to limited use of these inputs. The study established that the small stockist lack capital and technical skills to adequately stock inputs and appropriately advice farmers on the appropriate use and safe application of agrochemicals. Besides high cost, the prevalence of counterfeit agrochemicals was also growing concern among farmers requiring urgent attention to protect farmers from further loss in productivity and low returns Subsector Actors and Channels The primary actors in the cabbage value chain were input suppliers, producers and market traders. The study showed that the linkage between these actors is still weak and uncoordinated as each actor operates in an isolated environment. Farmers sell their produce either directly to the markets or to middlemen. Due to inadequate skills and their small sizes, farmers cannot produce economical marketable quantities to earn good returns. Marketing Channels Cabbage is a highly perishable vegetable that should be marketed immediately after harvest. The commodity is marketed mainly through brokers and rural traders. The study found out that about 80% of total production is sold directly in the local wholesale and retail markets, 10% is used for home consumption and another 10% is attributed to postharvest losses. Owing to seasonality and perisability, price fluctuations is a common characteristic leading to low returns to farmers. The traders dominate the channel and dictated final prices. There was little produce standards/grading to differentiate produce with quality and price. There was no processing observed being undertaken in the cabbage sub-sector in the district, although opportunities exist in dehydrated cabbages and packaging for longer shelf-life Gross Margin With an average gross margin above Sh. 21,760/= per acre, cabbage production is rated as a viable enterprise in the district. This margin, however, depending on market prices and seasonality, could be higher with grading and availability of storage facilities Institutional Development The organizational development in the sub sector is poor. There were few farmers groups and no specialized traders association working in the sub sector. The main activities of the farmers groups involved production collection and marketing. However their activities were constrained by their lack of organization, inadequate technical skills, poor physical infrastructure, lack of information and limited access to markets. 12 Sub sector Constraints and Opportunities The most constraints specific to production and marketing were identified as related to the high cost of farm inputs including agrochemicals; poor market infrastructure, price fluctuations and lack of market information which all combined have limited improvement in productivity. Due to poor basic access roads infrastructure some farmers in the producing areas cannot linked to wholesale markets. In addition, the poor roads, especially during rainy seasons leads to deterioration of produce quality during transportation and high transport cost. This also results reduction of the real time delivery to markets. The farmers have little access to market information and lacked market outlets and incurred high post harvest losses owing to perishability and lack of storage facilities. Major Recommendations In-order to support the development of the sub sector it is necessary for the project to: Support development of physical infrastructures in the producing areas to facilitate production and market access Facilitate the formation of farmers groups and promote supportive market institutions such as setting of grades and standards and establishing storage facilities to enable farmers manage price risks. The project should also strengthening delivery and dissemination of market information . Support training and capacity building of farmers and farmer groups on crop production; produce quality and grading, enterprise planning and post harvest handling. Garden Peas Production This is a high value commodity in the project area, which is not produced as a pure stand crop, but mostly intercropped, with maize in the field. Production is still characterized by low volumes and poor quality of produce as the crop is grown largely for domestic use. With increased adoption and appreciation of the high yielding and high value potentials of the crop and a growing demand, commercial production is achievable. 13 Input supply The main input for Garden Pea production is seed. The crop requires little use of nitrogenous fertilizer and other agrochemicals. The high cost of improved seed, however, was a major constraint leading to limited use of this input. Sub sector Actors and Channels Garden Pea is marketed mainly in the local rural and urban markets. The main intermediaries in the marketing chain were the brokers and the retailers. Due to the small quantities produced, there was insignificant wholesale marketing of the crop noted in the project area. As a high value commodity, the supper markets offered opportunities for farmers, but because of quality standards few farmers are able to supply this market segment as they cannot meet market standards. Marketing Channels The crop is marketed in both unshelled and shelled forms. On the supply side of the market chain, the brokers control the marketing function since they are able to consolidate marketable volumes from the different farms and transport the produce to the market for further sale. Retailing, however, is the most vibrant segment of the marketing chain. The study revealed that about 10 % of the produce( including post harvest losses) is used for home consumption, 80% is sold directly to the market and another 10% is sold through middlemen and the travelling trader who sell to local markets in the district. Gross Margin As an enterprise, production and trade in the commodity is commercially viable. Farmers will earn an average gross margin of more than KES 20832/= per acre depending on the yield levels and market price. Traders" average gross margin per bag was KES 265/= per bag but also depending on the market price, could be higher. Institutional Development:. There were no farmers groups observed to be involved in the production of the commodity in the district. However, there was some small scale processing of the crop being undertaken by farmers" group in the district notable by Mawingu Fresh Growers and Kaage SHG. As a result of being an intercropped commodity, extension services are lost in the main crop the field. Sub sector Constraints and Opportunities The main constraints hampering the development of the crop in the district were identified as high price of inputs, lack of grading, low consumption levels, and lack of awareness about the crop as a viable commercial enterprise. High transport cost due to poor road network and small uneconomical quantities also adversely impact on production and marketing efficiency and this may hamper the realization of future development of the crop. The small scale farmers in the district would require assistance and 14 support from the program for them to be able to organize into groups and coordinate their actions to optimize production and their participation in the chain. The crop has a niche market among the upper income consumers in major urban towns country-wide wide. Opportunities exist to add value through grading, threshing and packaging for local market in the groceries and super markets. With growing urban population and rising incomes supper markets offer the most observable market outlets and growth segment, provided quality and standards can be promoted and sustained. Major Recommendations Commercial production of the crop can be increased substantially if the crop consumption is stimulated. This can be achieved through awareness creation on the nutritional value of the crop and market research to assess the market demand. The project can play a meaningful role in the development of the sub sector in the district by: Being complementary to existing supporting programs like SHEP and NALEP in the area to providing support in production development particularly with regard to provision of extension services and training of farmers Promoting consumption of peas through awareness campaigns of its nutritional value and market opportunities. Promote commercial production as a high yielding income crop Transforming the existing supply chain arrangements into a sustainable value chain with a value chain leader 15 INTRODUCTION AND BACKGROUND 1.1 Introduction The Agricultural industry is a major player in the Kenyan economy contributing about 26% of the Gross Domestic Product (GDP) and a further 27% through linkages with manufacturing, distribution and service-related sectors. About 80% of the population live in rural areas and thrive on it. The Government of Kenya has put in place a Strategy for Revitalizing Agriculture, 2004 –2014, and the Kenya Vision 2030 with the aim of improving the economic development and reducing poverty. In agriculture, crop production is often categorized into food crops, industrial crops and horticultural crops. As a sector in the Agricultural industry, horticulture has emerged as a trail blazer in setting pace for employment creation, increasing income of smallholder farmers, and increased food security , particularly in the rural areas in the country. 1.1.1 Horticultural Sub-Sector The Horticultural Sector comprises of fruits, flowers, vegetables, spices and herbs. The majority of horticultural crops producers are small-scale (below 10 acres) farmers who contribute about 50- 60% of the total production), while Large-scale (above20 acres) growers dominate the commercial production. The sub-sector has continued to register increasing growth over the last five years with an average growth rate of 12% and contributes 13% of GDP. It is a large foreign Exchange earner, second to tourism and employs close to two and half (2.5) million people in both formal and informal sectors. The sub-sector is an important avenue for wealth and jobs in rural areas. 1.2 SHoMaP Program The Small Holder Horticultural marketing Program (SHoMaP) is an initiative supported by IFAD which aims to address the inefficiencies and constraints in horticultural marketing through improvements in the horticultural marketing system, infrastructural development, institutional strengthening and investments in domestic horticulture value chains. The Programme aims to address inefficiencies and constraints in input supply and horticultural marketing with the aim of (a) reducing farm unit cost of inputs, (b) improving the quality of inputs and the services that input suppliers provide to smallholders, (c) raising the quality of horticultural produce traded in the domestic market, and (d) increasing and stabilizing farm- gate prices. The program is being implemented by the Ministry of Agriculture in collaboration with other line ministries. 16 1.2.1 Programme Goals The development goals of SHoMaP are to: (a) increase incomes and reduce poverty among poor rural households in medium-high potential farming areas for which horticulture is a source of livelihood; and (b) increase the health and welfare of Kenyans by improving the quality and increasing the quantity of horticultural produce consumed within the country. 1.2.2 Programme Purpose The Programme purposes will be pursued to achieve these goals, that is, to increase: (a) the output of and (b) the net margins per unit of land earned by resource-poor smallholders from horticultural production for the domestic market; (c) employment opportunities in the production, processing and marketing of horticultural produce, and; (d) to reduce the cost to consumers. 1.2.3 Target Population The main beneficiaries of the Programme are smallholders producing horticultural crops for the domestic market, rural unemployed and underemployed men and women, and domestic consumers of horticultural produce. 1.3 Study Objective The overall objective of the VCA study was to identify 3 value chain commodities, emerging marketing trends, constraints that are inhibiting market development and opportunities for supporting initiatives of local communities, informal and formal groups of farmers, traders, and other value-chain participants and to develop the programme intervention activities and action plans for the target district. This will form the foundation for identifying and review of the desired market interventions, training needs, potential demand driven market infrastructure investments, evaluating requests for Programme support, and providing support to increase the efficiency of natural market evolution that has positive impact on domestic horticulture sub-sector. Finally, VCA was to identify horticulture value chains within the target district that have the greatest potential to serve as a vehicle for poverty reduction and source of livelihood for a majority of smallholder farmers within the target areas. 17 1.4 Specific Tasks 1 Facilitate a stakeholder driven process to select up to three domestic horticulture value chains for each of the programme target districts. Target crops are to be selected on the basis of a criteria consistent with the programme objectives of contributing to increases in smallholder farmer incomes 2 Map the market channels for each selected value chain, identify the value chain processes that the commodity passes from the producer to the final consumer (product development - processing, value adding, product handling and marketing, pricing, price formation, and causes of price instability; and all primary and secondary actors (producers, producer associations, brokers, traders etc) within each selected value chain, their roles and interrelationships in the input and output market. 3 Examine the level of organization of farmers within the selected value chains, identify constraints to increased organization and make recommendations on intervention activities necessary to improve their increased access to inputs and output markets 4 Analyze activities of market intermediaries (input stockists, traders, broker"s transporters etc) within the selected value chains and identify the constraints and opportunities to increased efficiency in provision of inputs and produce marketing services. Identify measures that will address such constraints and tap existing opportunities; 5 Examine use of inputs by farmers producing the identified commodities. Identify the main constraints to access to inputs that depress production, discourage quality improvement and otherwise reduce the net returns of smallholders and reduce the demand for Labour engaged in domestic horticulture production and recommend intervention activities that could address identified constraints. 6 Calculate simplified gross and net marketing margins that would inform on market inefficiency within the value chain; 7 Examine physical constraints to market access including the state of infrastructure such as roads and markets. Identify infrastructures that the programme could invest in and improve physical access of farmers to markets and the trading environment of the markets. 8 Identify constraints within the sub-sector value chain related to access to marketing support services (marketing information, credit) and market infrastructure. 9 Review current value addition activities within the chain and identify constraints and unexploited potential. Draw conclusions for the most productive ways in which the programme can support value adding that, in particular benefit poor households 18 10 Examine governance issues within target value chains including policy, regulation and institutional constraints affecting access to markets by farmers and traders as well as enforcement issues with respect to standards and quality. 11 Conduct an exhaustive capacity needs assessment of relevant government stakeholders and identify specific and appropriate interventions/training to bridge the identified gaps. 12 Formulate cost-effective intervention activities that can address the constraints identified at various levels of the value chain and contribute to rise in net earnings of farmers, improve quality, increase production and employment, and reduce poverty. The intervention activities shall be presented and organized under the various SHoMaP sub-components as outlined in the Appraisal report. 13 Map some key variables that will complement the findings of the VCA and aid in better informed decision making on innovative market interventions that would add value to the existing and emerging marketing practices; 19 2.0 APPROACH AND METHODOLOGY 2.1 Approach The study entailed literature review and documents study on all aspects of horticulture production and market value chain activities in Nyandarua district and field data and information collection. On the basis of the reviews, the consultant identified 11 value chain horticultural crops being grown in the target district. These included tomatoes and onions considered as emerging crops in the area. This was followed by consultative meetings with the District Technical Team which included the District Agricultural officer, District crops officer, Divisional agricultural officers and the district Horticultural Committee. Basing on accounts of gross margin, production level and potential number of farmers engaged in the enterprise Kales, Spinach, Amaranth and Snow peas were eliminated from further screening and selection, reducing the number to seven commodities. 2.2 Methodology In order to collect the information required for planning a participatory and stakeholders driven process comprising the district technical team and other purposively selected cross-section of industry stakeholders including farmers" representative was employed to select the 3 target commodities for an in- depth value chain analysis. The selection procedures were based on following weighting and ranking criteria agreed on by consensus, namely profitability of commodity, existence of a good and growing market (locally , nationally and internationally), number of potential beneficiaries involved in the production of the commodity, existence of value chain leadership, and the investment requirement at entry The procedure for weighting was done by giving a percentage weight on a scale of 0 to 100 percent for each of the criteria. A Likert scale of 1 to 5 was then employed (with 5 = the best case scenario, and 1 = the worst case scenario) to rank the selected target commodities. 2.2.1 Data Collection The commodity selection and ranking exercise was followed by a formal collection of both qualitative and quantitative data and information from the various actors in the three (3) target commodity value chains in the project area using a structured questionnaire and focus group discussions (FGD). Important pillars in the three commodity value chains included input suppliers, farmers, transporters and traders with whom interviews and discussions were held. In terms of coverage, the study instrument had components covering production trends, sub-sector actors and channels, profitability analysis, sub- sector constraints and opportunities, and possible interventions. The ministry of Agriculture and line 20 ministries also participated in the selection, and discussion process. This primary data complemented the secondary data obtained from the reviews. Data collection was carried out by the Lead Consultant and Research Assistants. Field visits and data collection covered the three divisions in the district namely; Ndaragwa, Olkalau and Ol-Joro-Orok. At the divisions the consultants established the factors, actors, channels and dynamics involved in the value chain of each targeted commodity. A combination of Focus Group Discussions, Interviews and Transect walk was used to collect data and information from farmers, stockists (input suppliers), buyers, processors and transporters. In terms of coverage, the study instrument had components including production trends, sub-sector actors and channels, profitability analysis, sub-sector constraints and opportunities, and derived probable interventions. The ultimate aim of the VCA was to develop a full understanding of the crop concerned in terms of the constraints faced by all key actors within the chain. It explored the level of organizations of farmers within the selected value chains, analyzed the activities of the market intermediaries and constraints analysis. In addition to understanding these constraints, the consultant assessed their relative importance and unexploited potential and provided recommendations on cost effective ways of addressing them by the Programme 2.2.2 Sampling Farmers, input suppliers, traders and service providers formed the focus of the study. The Ministry of Agriculture provided an inventory (the sample frame) of farmers groups and input stockiest from which respondents were drawn for interviews and focus group discussions. The Actors, involved in production, service provision or marketing of the respective target VC commodities were drawn from each of the divisions, Ndaragwa, Ol-Kalou and Ol-Joro-Orok of the district.. In order to achieve a representative sample and numbers for effective focus group discussions, a total of 135 respondents comprising of 70 famers/farmers groups ( 15 farmers from each of the divisions in the district), 11 input suppliers/stokes"s, 2 processors and some 39 traders were intensively interviewed and interacted. Each category in the divisional groups participated separately in the Focus group discussions. Traders from all the divisions were interviewed individually at their business locations. Key public and private sector institutions in the input supply chain and extension services were interviewed. The identification and selection of such respondents was done in consultation with the DAO and District Technical Team and stakeholders. The interactions, focus group discussions and interviews focused mainly on the VC performance, constraints and market opportunities, costs and margins, trends and perspectives and growth potentials in the respective VC commodities. Details of the respondents are provided in Appendix- 21 Study Sample of Chain Actors Actors/Respondents Ndaragua Ol-Kalou Ol-Joro-Orok Total District Technical team 5 2 2 9 Farmers/farmers groups 30 25 15 70 Input Suppliers 4 3 4 11 Wholesalers 6 4 2 12 Retailers 15 6 6 27 Small scale processors 0 2 2 4 Transporters 2 1 0 3 Total 62 43 31 135 2.3 Limitations Given the arduous task of establishing an effective commodity value chain, there was need for ample time for an elaborate data collection from the various principal actors in chain web than was provided in the pilot survey. In some cases, conflicting data/information was given by some respondents, particularly on production and market related data. The consultants corroborated such data/information by further analysis and verification from alternate sources. Trend analysis to establish similarities and variations in the commodity value chain was mostly limited to secondary data since field longitudinal data would require scheduled data collection over a longer period of time. Additionally, supportive data, in some instances, was only available for the past 3-4 years in Nyandarua North district against the expectations of 5 years. The need for confidentiality by the traders limited the use of focus group discussions as a methodology for data collection. Instead, therefore, the consultants deployed individual approach interviews. 22 3.0 SELECTION OF TARGET VALUE CHAIN CROPS 3.1 Overview of the Study Area In order to collect the required information that would facilitate the selection of the 3 value chain commodities, it is imperative to have a full understanding of the project area to put the study in perspective. Kenya produces a wide range of horticultural crops mainly under rain fed production systems for both the domestic and export markets. The production zones are spread around the country. Nyandarua North district, in central province, is one of the three districts (Nyandarua West, Nyandarua Central and Nyandarua North,) recently hived from the larger Nyandarua district. It is one of the major growing areas and source of horticulture produce in the country. The district covers over 1797 sq km inclusive of forest land, of which 114,230 ha are arable land suitable for agricultural production. With a population estimated in excess of 249,000 (1999) people. It has three divisions namely; Ndaragwa, Oljoro-Orok and Olkalau with a total of over 44,000 farm families, majority being small scale farmers, engaged in various agricultural enterprises. 3.2 Review of Horticulture production in Nyandarua District The value chain study started with a rapid appraisal of horticultural production in the study district. Available information shows that the main horticulture Figure 1: Area under Horticulture Production in Nyandarua crops grown in the district are Potatoes, Cabbages, Area under Horticulture Production in Nyandarua Area under crop orduction Carrots, Tomatoes, Onions, Garden Peas, 25000 20000 15000 Shallots Spinach and Kales, the latter three being 10000 5000 grown in small quantities. Small amounts of fruits 0 2002 2003 2004 2005 2006 2007 2008 such as Papaws, Mangoes and Passion fruits are Cabbages 2900 2800 2900 4000 4300 5783 5091 Potato 12020 13140 13000 13500 16800 16125 20329 also grown. Maize, Wheat and Pyrethrum are also Garden Peas 3900 3800 3900 4100 4500 7360 5904 grown in the lower highland areas. Given the good Onions 59 56 50 50 55 45 40 Carrots. 991 995 1000 1300 960 387 189 agro-ecological conditions, the district has Tomatoes 125 125 125 110 95 95 115 Shallots 160 150 100 220 325 8 11 potential for cut-flower production although little Kales Year 450 390 380 390 480 450 470 is grown at the moment. Production of Source: Ministry of Agriculture Annual Report 2002-2007 horticulture is largely under rain fed system and little irrigation is practiced although a long Lake Olbolsat and Pesi and Nyairoko Rivers some cabbages are grown under irrigation. Generally, the total area under horticulture production in the district has increased from Figure 2: Production in Nyandarua District 2002-2008 (Tons) 20,545 ha in 2002 to 32,149 ha in 2008, accounted for mainly by potato, cabbage and Garden Peas suggesting their importance as economic enterprises in the district. Table 1 show that cabbages, potatoes and Garden Peas are leading in terms of acreage and volume. In terms of acreage, area planted with potato increased from 13,000 ha in 2004 to 20,329 ha in 2008. A total of 5091 ha was planted with Cabbages 23 Figure 3: Marketed volume of various horticultural crops in Nyandarua North in 2008 up from 2900 ha in 2004. Similarly, District Marketed volume of various horticultural crops in Nyandarua North 700000 600000 for the same commodities, production of Volume in MT 500000 potatoes increased from 200,000 tons in 400000 300000 2004 to 574,000 tons in 2008, while 200000 cabbage recorded an increase from 100000 0 40,500 tons to 102,963 tons over the 2002 2003 2004 2005 2006 2007 2008 Cabbages 10000 30000 40000 75000 80000 8000 4000 same period. The increase in production Potato 110 Kg bags 198000 200000 150000 150000 200000 700000 500000 Garden peas 19000 18000 15000 15000 15000 13000 4000 was attributed relative improvement and Onions 500 450 400 500 550 600 400 Carrots. 12000 12100 125000 16000 12000 6000 3000 adoption better farming practices, Tomato 1000 1000 1000 1300 1300 1100 1500 Shallots efficiency in production and increase in 1500 1300 1300 2000 2000 3000 5000 Kales 3000 2800 Year 3000 3000 4000 4000 4000 Source : Ministry of Agriculture Nyandarua District Report-2005-2008 the number of SSF engaged in the production of these commodities. The crops were found to be suitable and adaptable to the local conditions In addition, the initial level of investment requires is affordable. The Marketed output and prices of the target commodities also maintained an upward trend between 2004 and 2007 which indicated a growing market demand and consumption of the commodities due to domestic market growth and expansion. The changing consumer preference towards the consumption of the commodities was another market driver. Farmers viewed the other crops namely carrots, onions, shallots and tomatoes as less profitable compared to potatoes, cabbages and garden peas due to low market demand. Tomatoes and Onions recorded the lowest production during 2000-2008. Green house tomato is an emerging crop in the district with high potential of being embraced by a growing number of farmers; however, the initial establishment cost is still inhibitive to a number of SSF. Production of major vegetables in the district is summarized in table1 below 3.3 Selection Approach The Value chain study was conducted through a literature review of target district reports, consultations with various stakeholders and field visits. Through this process, the consultants identified a range, (about 11) horticultural crops which are being grown in the district from which the three value chain commodities were selected. The District Technical team had initially identified 6 horticultural commodities for value chain analysis considerations. These, together including the crops identified during the review, were presented to the district stakeholders, comprising of the district team and purposively selected stakeholders including farmers; representatives, for verification. A participatory approach using focus group discussion was employed to select the 3 value chain commodities. The district stakeholders" team was also given the opportunity to add crops that are grown or have potential to do well in the district for inclusive consideration. 24 The selection of the value chain crops was carried through weighting and ranking of the crops based on the following four factors: 1) profitability of commodity 2) existence of a good and growing market (locally, nationally and internationally) 3) the number of potential beneficiaries involved in the production of the commodity and 4) existence of value chain leadership and investment requirement at entry. Priority was given to commodities that are considered profitable and have impact on a significant number of beneficiaries in the target project area from the farmers" perspective. The procedure for weighting the criteria was done by asking the individual stakeholders to first assign weights to the various criteria entering the selection process of the VC crops, by giving a percentage weight on a scale of 0 to 100 percent for each of the criteria earlier agreed on by consensus as the most important measure of value judgment. All the criteria were adjudged as having a combined weight of 100%. From the initial list of 11 value chain crops, after preliminary elimination of four commodities on account of gross margin and volume of production six (6) commodities entered the selection process of which three (3 ) value chain commodities; Potato, Cabbages, and Garden Peas, were selected for in- depth value chain analysis. Once this was done, the stakeholders were then given a chance to rank each of the 3 value chain crops in-terms of how well each value chain conforms to the selection criteria. In order to rank the 6 target commodities, a Likert scale giving a numeric ranking of 1 to 5 was employed (with 5 = the best compliance case scenario, and 1 = the minimum case scenario), for example on the issue of profitability as a criteria for value judgment, 5 would represent most profitable score category for a given commodity, while 1 would represent least profitable score category for another commodity. For ranking the commodities by gathering the numeric scores from all participants in the stakeholders group, the commodities were ranked on the basis of their weighted average numeric scores. 3.3.1 Selection Results The selection results and ranking of value chain commodities are summarized in table 1 and table 2 below respectively. Table 1: Weighting Results Criteria Wt Potatoes Cabbage Carrots Tomatoes Peas Onions Profitability of the commodity 30 28 20 20 15 10 20 Existence of a good and 18 25 20 15 10 20 10 growing market Number of Potential 17 15 25 15 10 15 15 beneficiaries Existence of Value chain 20 20 10 10 8 15 6 Leadership Investment Requirement entry 15 10 10 12 12 15 8 Total 100 98 85 72 55 75 59 Weighted Position 1 2 4 6 3 5 25 Table 2 Ranking Results Criteria Wt Potatoes Cabbage Carrots Tomatoes Garden Onions Peas Profitability of the commodity 30 4 5 2 3 3 3 Existence of a good and growing 18 5 4 3 4 4 3 market Number of Potential beneficiaries 17 5 4 2 2 3 2 Existence of Value chain 20 4 2 1 1 3 1 Leadership Investment Requirement entry 15 4 3 1 2 2 2 Total Score 100 22 18 10 12 15 11 Average Score 100 4.4 3.6 2 2.4 3.0 2.2 Ranking 1 2 6 4 3 5 On the basis of fuller analysis of acreage under production, volume of production, establishment costs and net margins revealed that potatoes, cabbages and garden Peas are more cost effective to the farmers than the other crops .Their choice of potatoes may therefore not be surprising since they are already grown in the district by a large number of farmers and earn them incomes. 26 4.0 VALUE CHAIN ANALYSIS 4.1 Potato Value Chain 4. 1.1 Introduction The entry point to a commodity value chain study starts with the identification of all the key players, actors and service providers within the target value chain. It is envisaged this would entail: 1. Input suppliers 2. Producers/farmers/processors 3. Transporters 4. Buyers/Traders 5. Service Providers 4.1.2 Value Chain Map Potato is an important vegetable crop in Kenya which is produced and sold through various channels under free market conditions. The Fresh potato is marketed as seed potato, ware and processed potatoes mainly in form of potato crisps and French fries. Ware potatoes are sold in the local fresh (wet) markets directly to consumers and comprise the bulk of the produce sale in Kenya. The value chain map provides a graphic representation of the situation of the Value chain showing how the products flow through the primary system. The channels are generally the vertical chain enterprises that transform the raw materials and deliver the finished product to the consumers. In the case of the potato value chain map the channels have been identified on the basis of five core business units comprising the input supply system, production, marketing, processing and consumption. The value chain map reflects all the players and actors and their activities at the levels of potato production and marketing. The map lists the functions horizontally and the Actors and activities on the vertical scale. It is worth noting at the beginning that, the input flow is a cross cut-ting function that affects all other participants in the chain. From the point of view of the small scale farmers and as can be seen from the map, this is a traditional production supply chain which is fragmented, long and inefficient due to the large number of intermediaries, lack of organization among producers and poor market information management Below is a generic analysis of the potato value chain map which is described and illustrated graphically in figure 3. Figure 3: The Potato Value Chain Map 27 VC Production Product Marketing Basic Processing Consumption Function Input supply Producers of Common seed Potato Value Added Small scale Consumers Raw products certified seed producers farmers processors '. Brokers Household e.g. Farmers group 10,000Small Supermarket KARI Munandani scale Small Michinda Wholesaler s companies ADC farmers Institutions A Retailer C Fast food Self-Help Groups Hotels T Transporters chains O chain R S Agro chemicals stockiest Consumers Farmers Traders Processors Green Acres, Duncan Nyahururu super Midlands, Nyandarua KAPE-PHARM M.Njoroge markets Kipipiri district hospital Anne Wambui Village market ,Ngatia ni IGAI Nyahururu Agro vets, John K.Gikonyo prisons traders Malewa Agrovets, Urban market Thompsonfalls hotel Thirikwa Agrovets traders MOA MOA, ATC, MOPH MOA, HCDA KEPHIS, MOA, KEBs, LA ADC, KENAFOPA, KEBS EADN/IFC ATC LOCAL AUTHORITIES Institutional Service Providers 28 VC Inputs Production Trade Function Transportation Marketing Consumption f A Supply of potato Land preparation Loading Loading and Buying and Buying C seeds Planting, and unloading selling product for T Distribution of Earthing unloading Transportation Bulk consumptio I fertilizers and Weeding, IPM Repacking Cess payment breaking n V agrochemicals Harvesting, Buying and Storage Advice to selling Processing Quality and I grading/sorting, farmers Transport price T Packing Cess Credit Cess differentiati I Buying and selling payment institutions payment on E S A Input suppliers Lorry owner Wholesalers, Household Farmers Broker Retailers s c t Public institutions Family labor and Travelling traders Driver Hotels and Kiosks o workers Restaurants r Loaders Wholesalers, Supermarkets s Private Retailers Institutions organizations Farmers groups Processors Local Local Local Authorities Authorities Authorities 29 126.96.36.199 Support Services Extension services are important to increasing productivity. In the potato sub sector, it was observed that the Ministry of Agriculture and KARI were the main agents delivering agricultural extension services to farmers. The District Agriculture Office (DAO) is implementing various activities on Potato production, group formation, and technical advice to growers, technology demonstrations and training The Ministry co-ordinates programs in NALEP, Small Scale Horticulture Empowerment Program (SHEP) and together with KARI and KEPHIS provide extension services and training and capacity building of farmers. NALEP and SHEP are extensively involved in facilitation of farmers groups and linking small scale farmers to markets. The Horticultural Crops Development Authority (HCDA), AGMAK and a few private sector NGOs and Community based Organizations (CBOs) also compliment MoA in providing training and capacity building of farmers in the district. The Kenya National Federation of Agricultural Producers, (KENFAP), Kenya Agricultural Productivity Program (KAPP) and Kenya National Potato Farmers Association (KENAPOFA) provide marketing support and assistance to farmers, with the later expected to offer a platform for dialogue and organizing the sub sector to participate effectively in the market chain. It was noted from discussions with farmers that there was wide adoption of good agricultural practices and use of fertilizers and seed among farmers as a result of these interventions. Never the- less, it was also noted that it is probably the quantities and types of fertilizers used by farmers that had the bigger impacts on productivity, more probably than lack of information on inputs. In the case of seeds it was the availability and reliability of markets that had bigger impacts on productivity. A summary of main actors and their roles in the potato production chain in the district is provided in the table 5 below 188.8.131.52 Partnerships and Collaboration. There have been efforts by PSDA/GTZ and KARI to bring Potato farmers together through the KENAPOFA. In addition, the International Potato Centre (CIP), EADN/IFC, Genetic Technology International (GTIL), USAID are partnering with KARI and individual farmer groups in Potato seed production and multiplication in the district. CIP, working closely with KARI, is supporting research in development of basic Potato seed. KARI, CIP and GTIL are collaborating in the aero phonics miniature potato seed production at Tigoni. EADN is a private sector group, working in close collaboration with CIP, providing institutional support, capacity building to farmers on seed multiplication and positive seed selection and quality assurance in the input market. At the time of the study, EADN was supporting three (3G) farmers groups in clean seed production. 30 4.1.3 Input supply and Distribution System The main inputs for potato production are potato seed, labour, machinery, fertilizer and fungicides. These are produced and supplied by potato seed breeders, seed multipliers, agrochemical and farm input stockists and hardware shops. Policy regulatory bodies are an integral part of the input supply system. The potato input supply and distribution system is briefly described below: 18.104.22.168 Potato Seed Potato seed is the main input in potato production. There are three types of potato seeds: Common seed (Farmer saved seed-FSS), Certified Seed (CS) and improved seed (IS). The Common seed represents about 80% of the seed supply which the farmers supply their own, exchange with other farmers or buy in the local market. Certified seed is produced by Kenya Agricultural Research Institute, (KARI), Tigoni, and the improved seed is supplied through the seed multiplication system. KARI, Tigoni, is the sole breeder of basic potato seeds in the country. The basic seed is bulked through three generations at three farms operated by the institute in Tigoni and Molo or through the Agricultural Development Corporation (ADC) and farmers themselves. After three multiplications at KARI, the seed is sold to farmers for production of ware and seed potatoes. The major potato seed varieties maintained by the national seed program include Annet, Roslin Eburu (B53), Roslin Bumbwe, Nyayo, Roslin Ruaka, Roslin Tana, Desiree, Kerr's Pink, and Kenya Baraka. Certified seed makes up only 4% of the total seed market... According to KARI, seed yield potential varies from one variety to another with an average of about 15 tubers per seed. It was reported that only a few farmers in the district who grow potatoes have ever purchased certified seed due to high cost and lack of a reliable marketing system. Clean Seed production and utilization by farmers is the weakest link in the value chain and an area that provides opportunity for intervention and improvement. At the national level KARI has the mandate to conduct research works on potato. It has recommended several potato varieties suitable for every part of Kenya. It is also involved in producing high quality pre- basic seed through tissue culture technique, which is distributed throughout the country. Certification of seed quality is the responsibility of the National Seed Quality Control Service (NSQCS), the Kenya Plant Health Inspectorate Services (KEPHIS) which ensures that basic seeds are certified before they are sold and distributed. Certification may continue through several multiplications stages. The Agricultural Development Corporation (ADC) is the main potato seed multiplier in the country There is no large scale private sector involvement in multiplication of potato seeds and only a small number of individual and some 12 farmers" groups were identified as actively engaged in potato seed multiplication both as an income generation activity and for own use as seed 31 In the district and this seed can be sourced by neighboring farms and from the local markets for planting. Some of the farmers groups were being supported by EADN/IFDC (Extending Agro Dealers Network/International Fertilizer Development Cooperation and the 3 G (availing clean seed to farmers within 3 generation to grow seeds). This has increased availability and usage of clean seed. This included. Some of these farmers groups include. Munandani SHG. (Ndaragua) Michinda SHG, (Ndaragwa ;) Mathakwa Kugeria ( Mirangine) Kirima SHG (Mirangine ) Pyhort SHG (Oljoro-Orok.) ATC, Ol-Joro Orok Mr Mwangi (Ndaragwa) The Farmer Saved Seed is that which is retained by the farmer for the next planting (approximately 5% of production). Small potatoes are selected for seed because they are, on preference, more difficult to sell and easier to transport and store on the farm. A positive seed selection supports this process. Some traders and transporters are also involved at one stage or the other in potato seed selling and distribution. It was noted during the study that some farmers were sourcing the potato seeds through contract farming arrangements. It was noted, however, that own supply, approximately 80% , or recycling of seed still make the most important source of seed for farmers in the district. The MOA was cited as the main source of public extension services and advice to seed multipliers. Figure 5 illustrates the potato seed production and supply system in Kenya 32 Figure 4 Potato seed production system in Kenya. ADC: Multiplication of CIP: Breeding and KARI: Breeder of clean seed distribution of foundation seed and certified seeds distribution Local traders / SSF: Informal seed exchange, 12 -Farmers groups: stockists Common seed multiplication and distribution, Buy from local seed Common seed traders multiplication Commercial trader Also purchases from local merchants Inspection, Certification and Extension Services: KEPHIS, MoA, EADN/IFC, ICIPE 33 According to KARI-Tigoni, 1,217 tons of seed were propagated in 2006 rising Figure 5: Potato seed production 2006-2009 to 1,559 tons in 2008. This was 1800 Potato seed poduction trend 2006-2009 1600 equivalent to about to 4% of the 1400 national potato seed which is not Production in MT 1200 commensurate with farmers 1000 demand. The price of the KARI 800 certified potato seed increased 600 from shs 1900 in 1996 to Ksh 400 2,220 per 50 Kg bag in 2009 which 200 0 farmers considered to be high. The 2007/ 2008/ 2006 2009 seed growers on the other hand sell 08 09 exorbitantly at between shs 2000 Potato seed 1217 1559 Year 1019 760 poduction and shs 2500 per 50kg bag due to the inadequate quantities produced. Figure 6 above shows a declining trend in potato seed production over the past four years from 1,217 tons in 2006 to 1,019 tons in 2008. In response to this gap, KARI -Tigoni, in collaboration with USAID-EU is implementing a mini seed production program using aeroponics technology as measure to increase its capacity for potato seed production. 18.104.22.168 Fertilizer The main fertilizer used in potato production is DAP. At the moment all fertilizer requirements for the country is imported by the National Cereals and Produce Board and other private sector players which is sold through local stockiest and stores. Farm manure is also used a great deal in the district. The prices for fertilizers vary between locations, currently ranging from Ksh 2500 to shs 2700 per 50kg bag and this difference reflects the distance from the source of supply. Although a majority of farmers, 80% were reported using fertilizers, there is in- adequate application due to its high cost and lack of appreciation to its contribution to enhancing yields. 188.8.131.52 Pesticides and Herbicides Pesticides/insecticides and herbicides are important in potato production. These are also obtained from the local dealers and merchants within outside the district at competitive prices. 34 22.214.171.124 Distribution System There are about 100 small scale dealers and individual stockists in the district who are involved in selling and distribution of agricultural farm implements and agrochemical inputs of which the top 10 ones include: Table 3: Name of Dealer/Stockists per division NDARAGUA DIVISION OL-KALAU DIVISION OL-JORO OROCK DIVISION 1.National Cereals and Produce 1.Merit Agro vets 1.Farm Input systems Ltd Board 2.Farm Factor 2.Vumulia Agro supplies 2.Green Acres, 3.Tumaini stores 3 .Charagita Agro vet. 3.KAPE-PHARM Agro vets, 4.KFA 4.Hope Agro vets 4.Malewa Agro vets, 5.Thirikwa Agro vets, 6.Ventagro, 7.Country Focus 8.Farm input systems Each of these dealers source inputs individually from the major suppliers either from Nyahururu, Nakuru or Nairobi. The stockiest are spread across the district and easily accessible to farmers. Some of these stockiest represent major input manufacturers such as Farm Chem., Osho Chemicals, Bayer Chemicals (E.A ), Sygenta and Amiran (K).The major public institution involved in distribution were identified as National Cereal and Produce Board and Kenya Farmers Association. At the time of the study, there was an Interim Agro input supplier"s organization for Nyandarua district. A summary of key actors and their roles in the input supply chain is provided in Table 4 below Table 4: Main Actors in Potato seed production. NAME OF ACTOR ROLE AND SERVICES LIMITATIONS Certified Potato Seeds KARI –Tigoni and substations Potato seed breeding and distribution Low capacity to produce adequate potato in Molo, seed farmers requirements ADC(Improved Seed) Seed multiplication and sale to farmers Limited capacity undertake seed multiplication due to inadequate farm size, and high cost of planting material Common Seed 12 Farmers groups (Muhandaini Producing common/clean seed, exchange and Lack of technical skills in positive seed SHG, Kirima, TC, Michinda) selling to other farmers selection and low compliance to quality requirements Service Providers Ministry of Agriculture Extension support to seed producers and Few extension staff and outreach seed distribution KEPHIS Certification and quality assurance Inadequate technical staff to undertake seed certification in the field PCPB Registration and quality assurance of Weak capacity to monitor/control quality pesticides and distribution. NCPB Importation and distribution of fertilizers Not a core business hence not prioritized as a major service Other Inputs: Fertilizers, Pesticides, Herbicides 100 stockiest and input dealers( Stocking and selling of seeds and fertilizers Limited access to capital to stock inputs and Green Acres, Vetagro, KAPE, ,training of farmers on chemical application lack of technical skills to advise farmers on KFA, Malewa) the use and application of chemicals. Partners EADN/IFC/ Training and support to seed multipliers on Limited resources positive selection CIP Supporting research and potato seed varietal Budgetary limitation development Support to 3G clean seed potato growers,(ATC, Mr. Mwangi) GTIL/USAID Supporting aphonics miniature potato seed Limited production production at Tigoni 35 4.1.4 Constraints in Input Supply Input suppliers pointed out three major constraints: 1. Inadequate availability and high cost of quality potato seed. An important problem identified in the district during the study with regard to input supplies was the inadequate availability and high cost of quality seed potato largely because of low capacity and lack of institutionalized system for seed development, multiplication and distribution to farmers. This was a major concern to input dealers as much to the farmers. When seed quality seed was available, it was expensive. Coupled with limited capital most stockists" cannot stock economic quantities for sale. In some instances farmers used varieties not suited to market needs. The seed growers indicated weak extension services and that most farmers were reluctant to pay the extra price for quality seed. 2. High cost of Agrochemicals and fertilizers. This was cited by stockists as one the constraints leading to low stock levels. High internal transport costs occasioned by poor infrastructure were also mentioned. In addition, some unscrupulous traders supply adulterated agrochemicals due to lack of proper product labeling and awareness on the part of stockists was also noted. Stokists further stressed on the need for effective monitoring of quality standards of inputs. On the other hand the stockists felt the need to coalesce into an association to gain to stockists economies of scale and increase bargaining power in the input sourcing. 3. Limited technical knowledge. There was apparent lack of technical skills and understanding among input dealers about correct use and application protocol of fertilizers and other chemicals. It was reported that most dealers /stockists have little knowledge to guide and give advice to farmers on appropriate application and the impacts of chemicals on their health. However, suppliers felt that they can play a role in information transfer and agronomic advice to the farmers regarding correct use and application of chemicals. The main constraints reported by the input dealers with regard to input supplies and trading are summarized in Table 8. 36 Table 8: Constraints in Input supply chain and recommended Interventions CHAIN LINK CONSTRAINT CAUSE EFFECT RECOMMENDED INTERVENTION Seed Inadequate Low level of research, and low Low utilization Support KARI and farmers" groups production availability of capacity by KARI and ADC and low for seed multiplication and training quality potato seed productivity on positive seed selection. Acquisition Limited access Stringent financial requirements Inadequate Facilitation of increased capital to purchase by banks stock and accessibility to credit for input stocks tendency to dealers/stockists. Kilimo Biashara charge high credit available at Equity bank prices Distribution Lack of Technical Lack of compliance by stockists In appropriate Formation of stockiest association Skills and enforcement of regulations advice on use to access training and achieve by PCPB. Stockists are not of chemicals to economies of scale in input adequately trained in input trade farmers sourcing and distribution. Update knowledge of stockists on new varieties/technologies through timely information 4.1.5 Recommended Interventions In the context of the foregoing, it is recommended that the program should support interventions in the following: 1. Clean Potato Seed. In order to improve availability of quality clean potato seed, it is important for SHoMaP to support multiplication and dissemination of improved seeds by individual farmers and producer groups as a business and for own consumption. This can be achieved through collaboration with KARI, ADC, KEPHIS and EADN/IFC to increase production and supply of basic at subsidized price to multipliers 2. Training of Input Stockiest Farmers require to be informed of appropriate use of chemicals by the Stokists at the point of sale; however, the stockiest do not have the technical capacity to do so. In view of this, it is important to train the stockists so that they can impart appropriate knowledge on chemical use and application to farmers. This can be achieved through effective partnerships with major input suppliers. 3. Input dealers Association To empower input suppliers and mainstream them in the input supply chain, there is a need to support the Interim Input supplier"s organization through capacity building to facilitate availability of quality inputs, mitigate on input prices, and provide information on prices, new products and control mushrooming of unqualified input suppliers. Opportunity exists for individual farmers, farmers groups or organization to engage in seed multiplication as a commercial venture. 37 4.1.6 Potato Production. Potato is the second most important food crop in the country after maize and plays a major role in food security and the reduction of hunger in the country. The crop contributes to wealth creation, income generation and employment. It is estimated that currently about 600,000 small scale farmers country-wide are engaged in potato production. There were no evident large scale potato farmers in Nyandarua district. Potato production in Kenya has been declining over the past years from 1.1 million tons in 2004 to 980,000 tons in 2005 with a further drop to 784,000 tons in 2007. It is currently estimated that about 120,000 hectares are planted with potato annually. This translates to an estimated 960,000 tons of ware potato annually, at an average yield of 8 tons per ha. The main potato growing zones are found in areas with yearly rainfall of between 850 mm and 1200 mm, at altitudes between 1, 500 m and 2, 800 m above sea level. These areas are situated mainly in the Central, Rift Valley and Eastern provinces of Kenya. Rift Valley and Eastern provinces account for the bulk of the crop production in the country. It is widely grown in all suitable ecological belts in the country. 220.127.116.11 Yield and Variety There are two main types of potato varieties grown in Kenya, namely; white and red skinned varieties. The white varieties are; Nyayo, Mushomoro, Tana kimande, Tigoni and Kihoro, while the red skinned varieties are Meru, Arka, Asante, Sangi, Gorofu, Dutch Robjyn, Mukori, Disaree, Meru Mugaruro, Humba Thuti and Ngure. While the varieties of potatoes grown in Kenya vary across districts, the widely grown varieties are mainly the Nyayo,Tigoni, Sangi and Asante which are a mixed of traditional seeds and certified improved varieties . In Kenya, average Potato yields are variable depending on variety and agronomic practices in potato cultivation. The national average yield achieved by the small-scale farmer is between 7 and 8 tons per hectare. Large-scale farmers generally achieve higher yields, approximately 15 to 20 tons per hectare. Yields of improved varieties average 8-10 tons per ha, which although lower than the estimated 15 tons, is significantly higher than yields of traditional variety. The low yields could be due in part to the low fertilizer application, and poor management practices as well as use of inferior quality seed. 220.127.116.11 Potato Production in Nyandarua North district Potato is one of the popular vegetables grown in large quantities in Nyandarua district. It is the second most important economic activity in the district after dairy. Potato is grown in all the three divisions of Nyandarua North district; Ndaragua, Olkalau and Oljoro-Orock Some 10,000 small- scale- holder farmers are estimated to be engaged in the production of the crop. The bulk of production is carried on small farm holdings averaging between 0.25 and 2 ha. Production is characterized by low yields and low quantity output. 38 The area under potato production in the district has been on the upward trend, increasing from a total of 13,140 hectares in 2004 to 16,125 in 2007, with a Figure 6: Area under potato production trend in Nyandarua N district,2004-2008 further increase to 20,329 hectares in 2008. According to KARI, the expected yield per ha in the district is 10-15 tons using proper agronomic practices. However, based on discussions with the farmers Area-Ha under potato production Nyandarua North district 2004-2008 groups, the actual yields realized 25,000 in the last 5 years was between 7 20,000 and 8 tons per ha. Part of the reason for the low yield in the 15,000 district was due to inadequate Area in HA 10,000 application of farm inputs which 5,000 the farmers linked to high input costs. From an entrepreneurship 0 2004 2005 2006 2007 2008 perspective, this yield level is Surface Area-Ha under potato 13,500 13,500 16,800 16,125 20,329 production unattainable in terms of optimal production level Year and profit maximization. Efficient husbandry and use of improved seed could increase average yields to higher levels. Figure 7: Potato Production trend in Nyandarua District (2004-2008 Figure 8 shows that, in spite of the low yield levels, potato production in the district increased from 1,690,000 tons in 2004 to a peak of 2,184,000 tons in 2006 valued at shs 710 million and shs1.1 billion respectively. This increase in Potato Production trend in NyandaruaDistrict (2004-2008) production was attributed to the 2,500 increased demand for potatoes during the period. Production, 2,000 however, dipped to 738, 442 tons Production in MT 1,500 in 2007 and 574, 442 tons in 2008, the lowest level ever 1,000 recorded for the district. This 500 decline was partly attributed to 0 low use of inputs, poor quality 2004 2005 2006 2007 2008 Potato Production ( 000 Mt) 1,690 1,755 2,184 738 574 seeds and the 2007 post election Source: MOA- Annual Report, Nyandarua District 2008 instability. This production Year trend is illustrated graphically in figure.8 39 It was noted that farmers were typically operating their farms at very low levels of economic productivity, producing both for subsistence household consumption and for commercial sale; still using poor production practices and techniques and applying in-adequate fertilizer because they are unable to purchase required quantities due to high costs. However, in spite of this, given good ecological conditions, Nyandarua is a potential source of potatoes in the future. 188.8.131.52 Potato Prices In the past five years, potato prices in the district Figure 8: market prices of 110 kg potato bag have shown a clear pattern of Trend of Average prices for (110Kg potato bag) tendency. There is a clear inverse 1600 correlation of supply and price 1400 1200 trends due to seasonality. The price in KSh 1000 available time series data show a 800 Source: Potato Production trend in Nyandarua District (2004-2008 600 rising trend of prices. Prices, 400 however, varied and have fluctuated 200 with season, skin color and even 0 2004 2005 2006 2007 2008 from one division to another, Average prices(110Kg bag) 1390 1,400 500 700 1500 depending on supply situation and year market conditions. Prices are determined by, and vary with supply and demand, season, marketing channels and potato quality. The highest prices are achieved during the period when production levels are low... At the time of study, farm- gate prices ranged between shs 800 and shs 1,000 per 110 kg bag .Normally prices are cyclical, high at the commencement of the season declining gradually as the supplies increase. Relative supply and demand for potatoes and effective distance to wholesale markets, coupled with poor state of the roads affect the farm gate price. During glut seasons, farm gate price is likely to be less than half the ultimate retail price or can crash to as low as Shs 200/per 110 kg bag. On the other hand, market prices ranged from Ksh.1, 500 to Ksh. 2,500 per 110 kg bag but depending on the season may reach as high as ksh 6000 per bag during shortages. In the super markets, potato is sold by weight (kg) and the prices ranged from are Ksh 80.00 to over Ksh.150.00. per Kg for good quality potato. 220.127.116.11 Production System Potato production is markedly seasonal and depends on climatic conditions with glut production common during the rainy seasons resulting in depressed producer prices. Production is higher than the market can absorb during peak seasons and produce go to waste because of lack of on farm storage and market outlets. Potato is grown in subsistence as well as commercial households. 40 Potato production starts with land preparation, seed acquisition, planting/fertilizer application, earthling, through weeding and pest and disease control, second earthling to harvesting. In most instances, farmers use family labour, however, there are cases where hired labour is used. Production is dependent on rain- fed system and use of irrigation is negligible, although the benefits and potential for increased production through of irrigation are high. The use of irrigation is limited due to the high cost of irrigation infrastructure. In large scale farms state-of-the-art agricultural technology is employed using high levels of purchased inputs. For small scale farmers, however, it was noted that intensive use of such inputs is limited as only few farmers" own tractors as much as practice little crop rotation. Planting of potatoes is at the beginning of the rains, two seasons in a year, April/May and October/December depending on the rain pattern. Even though the extension services recommend a seed rate of 2 tons/ha, this is achieved only in a few instances. Commonly, the application rates vary from 1.3 to 1.6 tons/ha. Potatoes are planted at a spacing of about 30 cm, in rows about 60 cm apart. Manure and/or fertilizer are applied at planting time if available. The crop is weeded two or three times at two- week intervals starting about four to six weeks after planting. It is a gender balanced enterprise. Women labour is utilized more in planting, grading and sorting while the manure involved in land preparation. The typical production pattern is provided below Table. Potato Growing Calendar in Nyandarua District Crop Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Activity Planting Growth Harvesting Source .Field survey Harvesting is usually about four months after planting. Potatoes are harvested twice in a year in the months of July and December and are normally done manually by hand using sticks, jembes, pangs or hoes. Due to lack of on –farm storage facilities, farmers are forced to harvest when there is ready market, the lack of which leads to high temporal and spatial post harvest losses. Although potatoes are produced twice a year, it is but consumed all year round; therefore on farm storage plays an important role in creation of time and place utility. As a coping mechanism, some farmers were observed storing potatoes underground in closed pits on the farm. Grading occurs at harvest time, with small tubers set aside for seed and damaged ones for immediate consumption or animal feed 41 22.214.171.124 Pests and Diseases Farmers reported that potato is highly prone to diseases, particularly bacterial wilt, late blight and soft rot which have direct impact on the yields realized in the area. Bacterial wilt [(Pseudomonas solanacearum)] is a major production problem not only in Nyandarua but also in other potato growing areas in the country, especially those at lower altitudes; at higher elevations it is generally unimportant. In the traditional potato-growing areas in the lower parts of the district, wilt can be found in almost all of the plots, but incidence per field varies. Another bacterial disease, Late blight, is also affecting the crop. Even though many farmers spray their crops, losses can be severe because infestation of the crop is higher during the rainy season. Other destructive agents include potato aphids, potato tuber borer and potato viruses, particularly, the leaf roll and alfalfa mosaic virus have been recorded. The aphid-transmitted viruses cause the most losses, especially in seed stocks retained by farmers and those that move through the informal seed trade. Aphid- borne viruses are known to spread in rustic stores and can also be widespread and its incidence is high throughout all potato-growing areas, often reaching as high as 90% in some varieties. Application of fungicides, use of clean seed and resistant varieties greatly help to contain these diseases. 126.96.36.199 Actors in Production Chain The principal actor in the potato production system is the small scale farmer and farmer group"s potato seed producers and multipliers. These include some 10,000 SSF, over 12 farmer groups besides the input suppliers. The other actors were identified to include the ADC and the Agricultural Training Centre (ATC) at Ol-Joro-Orok. .Table 5: Actors in Potato production chain MAIN ACTORS ROLE/SERVICES LIMITATIONS 10,000 Small scale Farmers Potato production and marketing of potatoes at farm Limited technical knowledge on (SSF), level and production of potato seed crop production, agribusiness development and seed production. 40 farmers groups and 12 seed Potato production and seed multiplication Limited technical knowledge on multipliers seed production and positive selection Service Providers Role/services Limitations ATC at Oljoro –Orok Technical training of producers and processors on value Budgetary limitations to launch addition trainings Ministry of Agriculture Technical trainings and extension services, policy Few staff and outreach. (NALEP, ,SHEP, and advice and facilitating formation of farmers groups, Budgetary limitation SHoMaP NMK, CDKDAP, CIGs KAPP AGMAK Training and capacity building of farmers and input Budgetary limitation stockists KENFAP Promotion of producer associations and processing- Limited capacity and outreach to value addition farmers. KENAPOFA Lobbying for farmers interests Limited capacity lack of organization Seed Company of Kenya 42 22.214.171.124 Constraints in Potato Production An assessment of the potato production and discussions with farmers in the district revealed that farmers have not embraced potato growing as a business enterprise. They little appreciate and understand the market dynamics and actors in the chain. They cited the in- adequate availability of potato seed, limited technical know-how, poor quality potatoes, access to markets, poor access roads and poor institutional networking as some of the constraints limiting their potential to improve their incomes and participation in the market value chain. 1. Inadequate availability of quality potato seeds. A critical constraint identified in production was the inadequate availability of quality seeds due to lack institutionalized multiplication and distribution system. KARI is able to meet 4% of total seed demand. Farmers indicated the adverse effects of lack of access to credit in the acquisition of potato seed and their general operations. This coupled with high cost of potato seed has resulted in low use of certified seeds and heavy reliance on FSS, hence low productivity and poor produce quality. 2. High cost of agrochemical inputs. This was cited as main cause for low utilization of fertilizers, pesticides and herbicides hence resulting in low productivity. They cited lack of capital to purchase the required agrochemical inputs in required amounts thus applying less of the recommended quantities per ha consequently resulting in low yields to the farmer. 3. Poor Rural Access Roads. Farmers cited poor rural access roads as limiting their access to markets and are to blame for low farm gate prices, high transportation cost and reduced margins. In order to facilitate access and transportation of produce to the markets, it is important to improve and maintain conditions of the access roads in small holder producing areas within the district. Details of access roads mentioned are contained in Appendix II. 4. Weak Extension services. The study showed that farmers had varying adoption of good agricultural practices. There was wide adoption and less use of fertilizers and high quality seed among farmers. However, the number and technical knowledge on the part of the MoA extension staff remains limited, arguing, therefore, that enhanced extension services was necessary to raise farmer"s awareness on new and existing technology to raise productivity. The delivery of extension services could best be complimented through partnerships with private sector services providers including NGO"s and farmers organizations. 4. Poor produce quality, primarily due to lack of technical knowledge on good agricultural practices on the part of small holder farmers was also cited as one among the several constraints producers face in potato production and marketing in the district..It was noted that produce quality was also affected by the high incidence of pest and diseases on the crop. In addition, most farmers lack the know how to identify and manage pests and diseases leading to high post harvest losses. Besides, still many farmers do not practice crop rotation on their farms. 43 5. Lack of credit was mentioned as one of the main bottleneck in input acquisition. This is due to stringent requirements imposed by the financial institutions, requiring collateral and reluctance on their part on account of perceived risk associated with small holder farmers. 6. Poor information access and transfer was raised as a concern, although the MoA extension staff is visible on the ground and reacting quickly to farmers" needs. However, the number of the extension could be increased to improve on outreach. Farmers" felt the need to improve information flow among them through exchange tours and farmer field schools as well as creating information dissemination points at the divisions and market centres. There could be need to build a durable platform for the information exchange and appropriate packaging of the knowledge and information through instructive materials in farmer friendly manner. 7. Farmer organization. At the national level there is the Kenya National Potato Farmers Association with a presence in the district. However, this organiasation is still nascent and need to be strengthened to take up its role in assisting the farmers. There are also several commodity specific farmer groups in the district. A summary of the main constraints in potato production chain is provided in table 12 below. 44 Table 6: Constraints in the Potato production chain and recommended Interventions CHAIN LINK CONSTRAINTS CAUSE EFFECT RECOMMENDED INTERVENTIONS Input Supply Inadequate availability of Low level of investment in seed Low productivity and poor quality Support farmers groups seed multiplication and certification efforts, good quality potato seed production by KARI and seed product encourage adoption of improved seeds and teach positive seed selection multipliers High cost of agrochemical Lack farmers organization and Low utilization of inputs and low Formation of farmer groups/cooperative for farmers to achieve Inputs joint sourcing and yields and margins economies of scale in input sourcing and distribution. Reduce tax on concentrates and packaging materials Access to capital/Credit Stringent bank requirements Low utilization of inputs Create a credit window/ financial services scheme for farmers to access low cost credits for input purchase, promote farmer bases SACCOs. Production Low and poor produce Limited technical knowledge on Low price margins and returns Training and capacity building for farmers on good crop husbandry quality crop production, (GAP), use quality seeds, positive seed selection, and post harvest handling to improve technical skills and increase productivity. Strengthen extension services. Encourage contract farming to stabilize quality High incidence of diseases Low awareness and training of Low productivity and poor quality Strengthen extension services and FFs to introduce new technologies, and pests infestation farmers on IPM ,lack of crop product provide training to farmers on IPM and on-farm demonstration. rotation Inadequate water for Climatic change Low productivity, variable prices due Better timing of production; improve quality and on-farm storage, sustainable crop to glut and shortages Support investment in water harvesting and micro irrigation production and seasonality infrastructure. High farm level post Lack of technical skills on Loss of produce and reduced Support establishment of appropriate on-farm handling, packaging and harvest losses (10-15%) produce handling &, storage income to farmer storage, facilities to reduce post-harvest losses, develop materials and conduct training on product handling. Poor rural access roads Low investment in High transportation costs, low Support rehabilitation of identified rural access roads as indicated in the development of rural access returns and inaccessibility action plan to reduce transportation. roads and maintenance Lack of farmers Small scale multiple enterprises Weak control of the production Facilitate formation of farmers association/federation/cooperatives, organization unable to work together, small chain. Exploitation by higher level sensitize and train farmers on attitude change and farming as a business volume production, farmer chain actors. attitude and lack of trust Low bargaining power and economies of scale 45 188.8.131.52 Recommended Interventions In order to systemically address the foregoing bottlenecks in the potato value chain at the production level the following interventions are recommended: 1. Increasing Availability of clean planting materials. Support to improvement of quality potato seed by streamlining the seed potato subsector to improve availability of clean planting materials. This inter-alia would include support to farmers groups and complimenting efforts of the private sector NGOs 2. Improving Produce Quality. One of the causes of poor –low quality of produce was attributed to use of poor quality potato seeds, lack of technical knowledge on the part of SSF. In giving support to improving yield and product quality, farmers should be encouraged to use quality certified seeds from contracted seed multipliers/farmers groups. This can be achieved through improved extension service by the Ministry of Agriculture in collaboration with KARI, ADC and KEPHIS to increase seed production and certification. 3. Training and capacity building of farmers. It was noted that while the MoA technical staff and farmers have the basic skills on seed and Ware potato production and agribusiness, there is still a gap in knowledge on the use of agro chemicals, good agricultural practices and agribusiness development, hence the need for enhanced training and capacity building on the importance of using corrects seeds, production scheduling, farm input application and management and integrated pest management. This can be achieved by through collaboration with relevant service providers and strengthening the MoA extension services to undertake farmers training on agribusiness development and strengthening farmer field schools, demonstrations and developing simple training materials and manuals. Use armers" Field School (FFS) in integrated crop management. Farmer-to-Farmer transfer of technology and Village Extension Worker (VEW) are some of the other approaches that can be adopted for the wider diffusion of technologies and practices 4. High Cost of Production. Assist the Potato growers in reducing their cost of production and achieve competitive and comparative advantage over the import... As discussed earlier the seed management has the biggest impact on the cost followed by disease management. Reduction in the cost of production can be achieved through; a. Adoption of appropriate variety suitable to location specific conditions, b. Use of quality seed c. Adoption of improved production management practices 1. Farmers Association: Farmers Association is an important institution that assists farmers in produce marketing and advocacy for improvement in business environment. There is need to support KENAPOFA to be the chain leader the subsector. Encourage the potato Common 46 interest groups to register with the association. In addition, there is need to facilitate potato stakeholder"s Forum to improve dialogue and exchange of information and experiences. These could be achieved through capacity building, farmer"s organization development and adoption of Farmers field"s schools. (FFs) and demonstrations. Opportunity exists for farmers to increased yields through increased use of certified seeds and enhanced production skills. 4.1.7 Potato Marketing and Commercialization Potatoes in Kenya are marketed mainly in the local and domestic markets. Potato export is still minimal and insignificant. The market outlets for potato exist virtually in all urban and the rural areas in the country. Approximately 80% of national potato production is commercialized fresh for household consumption through wholesale, retail and processing systems. The market for potatoes, however, still appears ad-hoc and static, unlike in other crops such as maize, tea and coffee where marketing is organized. The market chain actors appear to remain in same situations without any visible horizontal or vertical movements in the value chain. 220.127.116.11 Market Segments and Channels The main products traded in the market are fresh potato and processed potato crisps and chips. The main attributes of the product considered by the market include the color of the skin and size of the tubers. The consumer preferences are driven by taste and usage. For example the French fries processors prefer white skinned potatoes and those with fewer noodles. Four distinct market channel segments were identified for potato as a commodity in the district. These are; 1. Farm level marketing 2. Market places 3. Processing 4. Consumption. Each segment performs different functions and several actors are involved along the value chain. 47 184.108.40.206 Market Chain Actors The market is dominated by a large number of intermediaries. During the focus group discussions with traders in the district, the following actors were identified; Brokers/middlemen, transporters, wholesalers and retailers. Processors and supermarkets provide avenues for marketing of value added products. A summary of main Actors and their roles in the potato marketing chain is provided in table 13 below Table 13: Actors and their roles in the Potato marketing chain MARKET CHAIN CHAIN ACTOR ROLES/SERVICE SEGMENT Farm Level marketing Small scale farmers (10,000 SSF) and 30 Harvesting, sorting, grading and pricing of Price variations farmer groups potatoes Poor market inform Limited value addit Poor and unstandar Time of harvesting Brokers/Middlemen.(A few individuals Identifying produce, harvesting, negotiating Not organized nor usually resident within the local prices and packaging legal recognition, community) Brokers fix prices a Transporters ( A few individual Transportation of produce to market places Few transporters transporters from outside the district Poor access roads hired by buyers) Produce consolidat Market Places 50 Wholesalers across 3 main wholesale Buying, bulking and selling produce to retailers, High transportation markets processors and institutions Fluctuating offer p Poor market infra water and sanitation 300 Retailers, Vendors and hawkers Bulk breaking and retailing produce in debes, and Small and intermitt tins to individual consumers High buying prices Unsold produce Poor market infras and sanitation, elec Local Authority. Cess/Levy collection, provision of market Budgetary limitatio infrastructures and facilities and governance Weak enforcemen compliance require Processing and value Value addition and commercialization of potato Limited value adde added products 5 Small Scale processors. Midland crisps and chips Low quality potatoe processors, Gwathika ni Igai Women Lack of and high co group, ATC Oljoro-Orok, Kipipiri Limited technical k processors, Supermarkets 5 Supermarkets, Kiosks, groceries, fast Selling fresh and processed potato chips and Competing shelves food chains crisps Poor quality Consumption Institutions, Schools and local Consumption of potatoes and value added Quality restaurants, hotels and Canteens products High consumer pri 60,000 Households and farm families Consumption of potatoes and value added High consumer pri products Low quality of pota 4.1.7. 3.Farm Level Marketing. The principal actors at the farm level are the small scale farmers and the broker or commission agents. A number of primary marketing and value adding activities are carried at the farm level as indicated in Table 14 below. 48 Table 14: Farm level marketing activities VALUE ADDING ACTIVITIES MARKETING ACTIVITIES OBSERVATIONS Timing of Harvesting Pricing negotiation Time of harvest and maturity of On farm Storage Search for buyer and market information crop impacts on produce price Loading Transportation of produce On-farm storage is not widespread or practiced and is often lacking Packaging Use of extended bag is common, Promotion effort hence need for enforcing Sorting and grading harmonization of packaging standards Sorting and Grading is visually done by size and quality The farmer undertakes harvesting of the crop, sorting and price negotiations with the broker, the later undertaking almost all the marketing transactions including grading, packing and transportation of the produce to market places.. Thus, the farmer who is the producer is at the lower end of the chain and is condemned to be a price taker and has no decision making role in these activities only makes a decision on time of harvesting, grading and sorting. These transactions may also occur at some other point where the farmer hands over ownership of the product to the next value chain participant. 220.127.116.11 Farm-level Brokers. The middlemen or" brokers"(Market Kings) as they are commonly known are usually residents and members of the community directed or hired by buyers on a commission basis to assemble the crop and to negotiate for a pre-agreed price. The broker on behalf of the buyer contacts the farmers often leaves bags and may even pay a deposit to secure a given quantity of the crop to be delivered. The broker is responsible to buyers for maintaining quality standards and ensuring correct quantities are delivered. Farmers reported that quite a substantial part of the marketable volumes, the bulk, about 80% of potatoes produced in the district, is marketed through the brokers. The brokers have very good trade relationship with the wholesalers and even retailers. They also regularly exchange market information on demand and prices Due to their small sizes and lack of organization, farmers cannot generate economical volumes to market for themselves and benefit from economies of scale. The farm level brokers make opportunistic margins as farmers lack information to negotiate prices and have no other market channels. The presence of brokers in the marketing channel is viewed differently, sometimes as a menace, exploiter and barrier to flow of information by both farmers and traders alike. Producers complain of exploitation by brokers as much as they acknowledge they fulfill a role in the marketing chain, mitigating market risk by directing supply and demand network. More importantly they are the main channel linking farmers to markets. However, as a result of their presence there is no direct contact between the farmers and the final market outlet. Their key competencies are that they have the entire chain information in terms of produce seasonality, buyers, suppliers and prices. 49 It was noted that these brokers seem to operate in collusion and in close businesses relations with their clients and therefore experience little competition leading to market imperfections. Given their important role, there is need for their registration, education and mainstreaming in the market chain. 220.127.116.11 Grading, standards and packaging Potato is one of those agricultural commodities where grading is minimal to differentiate the produce by quality. This is because farmers have yet to appreciate the benefits of grading and that the produce payment system is uniform and does not recognize quality. The study showed that produce quality was only visually distinguished by size and colour as the main criteria for determining quality and price at all stages of the chain... Establishment of grades and enforcement of standards could encourage product differentiation, better pricing and improved returns to farmers and traders. The common and standard unit of marketing potatoes is the 110 Kgs bag. The observed practice is that packaging is supplied and carried out by the broker at the farm. It is important to note here that this raises the cost of produce, the farmer unconscious of it, hence lower produce price. The continued use of the "extended" bag has reflected pricing deficiencies with consequent loss of revenues to farmers and traders. The "extended" bag (120-150 kg) has been used to deny farmers their rightful share of the revenue as the bag is sold at similar prices to the ordinary bag without reference to weight. Therefore, there is need to enforce the use of standardized packaging to improve farmers income. A strong institutional mechanism involving farmers, police and local authority is imperative to instill compliance. 50 4.1.8 Market places A number of well established marketing channels for distribution and sale of potatoes were identified. These comprise of market brokers, wholesalers and retailers. 22.214.171.124 Market -Level Brokers. At the wholesale markets, the brokers intermediate between demand and supply. They usually approach transporters or lorry operators and offer to sell the potatoes at negotiated prices and commissions. Often times they match up buyers and sellers and help them negotiate the price. All brokers irrespective of their level do not buy the produce themselves and operate on a commission basis which must be paid regardless of whether the trader losses or gain and so they are not really traders but service providers. The broker, at the time of study, sold potatoes in the wholesale markets at between shs 1,100 and shs 1,500 per 110 kg bag. Smaller scale agents distribute smaller quantities down the line of the marketing system providing services such as re-packaging and hauling. 220.127.116.11 Wholesalers. Farmers reported, approximately 20%of produce is handled by wholesalers. Wholesalers normally bulk the produce and may even grade and store them for a while and are able to sell in individual bags. Other wholesalers even break the bulk and sell in smaller quantities e.g. a half bag, debes (18 kg) as may be required by the customer. At the time of the study, wholesalers were purchasing potatoes from the market-level brokers at between ksh 1,350 and 1,700 and sell at shs 2000 or higher price per bag. 184.108.40.206 Retailers: These retailers include a wide range of entrepreneurs from the traveling trader, village road side vendors, hawkers and fixed location traders. These handle about 45% of produce in the district. They retail whenever they can find space, along streets or within and wholesale markets. At the time of the study, the larger retailers buy in wholesale units from the established wholesalers or market brokers in the market place at between shs 1,800 and shs 2,200 per bag and sometimes from the farms at lower price and transport produce by pick-ups, public transport or bicycles to the market place. The retailers break bulk even further by selling in much smaller amounts, in heaps and tins, which are displayed and specified in terms of various values usually shs 10 or Shs 20, per heap or tin of potatoes. 22.214.171.124 The Traveling Trader: These are the traders who go to the farms to buy, consolidate produce from widely scattered farms and transport to the market places. They normally pay the farmers in cash and assume ownership of the produce at the farm gate and bear all the trading costs hereafter until they sell the produce. A small quantity of potatoes usually 1-5 bags or less is marketed directly by producers to the traveling traders. 51 18.104.22.168 Transporters: These are individual transporters who use their own trucks or Lorries to ship produce to wholesale outlets at a fee. They commonly rely on market brokers to locate customers for them for transshipment of produce to local and external terminal markets such as Nakuru and Nairobi, or deliver directly to storeowners, or institutions. It was observed that there were only a few transporters and most of who came from outside the district. The transporters perform a remarkable role in the marketing chain as they ensure daily availability and distribution of the produce. These transporters are just involved in the transport business and are not involved in the potato trade in any other way only in a few instances when they do both.. The Lorries ranged from 3-5 tons canters to 7-10 ton Lorries. The hire rates for transport to main urban markets were fairly constant throughout the year within the district. Traders owning their Lorries would deal in 50-100 bags a day depending on capacity of the vehicle. Smaller readers would combine to hire transport. Farmers and small traders reported that they get market information through the truck drivers too. 220.127.116.11 Local Authorities. The wholesale markets are within the jurisdiction of respective local Town council Authorities, being the Ndaragua, Olkalau and Ol-joro-Orok town councils. Irrespective of the category, the wholesalers and retailers at the designated market places are taxed per bag by the Town Council Authorities a fixed fee of ksh 20 per day. A fixed location fee of ksh 200/per month is also charged a fixed trader to operate at the whole sale market. The traders are charged a one -time fee of Shs 300 per lorry load into the market place. The main market segments for fresh and processed potato products are the households, institutions, hotels and restaurants. Hotels and the local chicken restaurants buy potato mostly from the wholesale markets and retailers for frying into chips and is an important segment of the potato market outlet. This is an interesting market segment since their potato requirement is of less stringent quality than for processors. In household consumption sector, the market can be divided further into "Rural" and "Urban" consumers. The distinct characteristic of urban areas is high population and they therefore have a high demand for processed potatoes. In this segment consumers get their products from the local street vendors and small chips retail outlets. Potatoes have become a major component in the diet of many schools, hospitals and the prisons which have introduced potato and chips in their menu. The household, however, remains the end market for potatoes. Potatoes are consumed in nearly all households in both urban and rural areas in the country. The per capita consumption, however, is still low at about 28-30 Kgs. Supermarkets have become major outlets for potato crisps most of which is sourced from small and medium size processors. The most distinctly observable source of new growth in demand for potatoes is in the restaurants and hotels and small scale processors that use it to make potato crisps and French fries. 52 220.127.116.11 Processing and Value Addition: Although the value addition starts at the farm level when the farmer sorts and bags the produce, the primary value addition begins with processing of the commodity into potato chips and crisps by the small scale processing enterprises and individual entrepreneurs . Processing of potato into crisps and chips begins with washing, peeling and cutting, frying, drying (solvent extraction) and packaging. The main raw material input for processing of potato chips is potato while others inputs include processing equipments, cooking oil, salt, energy, packaging material, and in some cases flavoring. Peeling of Potatoes involves removal of the skin and slicing into various sizes ready for frying. Data captured from the ATC, Oljoro-Orok indicated an estimated investment cost of Ksh 400,000/= for a small scale crisp processing unit/ From field observations, a few value addition activities were being undertaken by Women Self help groups and individual entrepreneurs. Notable ones included Gwathika ni Igai Women Group (Oljoro- Orock) Kipipiri Foods Ltd and Midland Processors Ltd all undertaking small scale processing of potato crisps. The Agricultural Training Center (ATC) at Oljo-Ororok was also identified as a potato processing demonstration site and training of small scale agro-processors in value addition. It was observed that there is still little value addition of potatoes and that the level of production of potato crisps has not reached sufficient volume and quality for commercialization. The Super markets, local kiosks and groceries and canteens are the dominant outlet for processed potato crisps. 126.96.36.199 Physical Markets and Infrastructure Daily markets include both wholesale and retail markets in the main urban centres. There are five (5) main wholesale markets which also function as retail markets in Nyandarua. These included Nyahururu, Ndaragwa, Olkalou, Kasuku and Oljoro-Orok .These markets are outlets for potato and other agricultural produce in the district and are open on average daily with main market days twice a week on alternate days. There are also a number of other emerging rural market centers for potato such as Mailo Inya, Shamatta in Ndaragua and Passenga and Ndundori in Ol-Kalou and Charagita in Ol-Joro-Orok. Nyahururu wholesale market although outside the Nyandarua district, is the biggest wholesale market for the district where most traders converge for further bulk breaking. It is the most vibrant whole sale market and assembly point in the potato marketing system in the district. . It was observed that these markets are generally in poor physical conditions and hygiene which make trading difficult especially during the rainy seasons. It was noted that the wholesale markets also lack proper storage and cooling facilities where the produce can be held in good condition for any appreciable length of time. In some cases these markets also lack electricity, water and sanitation facilities. For example, the Nyahururu wholesale market is overcrowded and has limited access into and out of the facility. Retailing is difficult on the lanes inside the markets. Most of these markets with the exception of Nyahururu operate open air style. Traders felt that upgrading and or provision of market sheds, stalls, and 53 electricity, water and sanitation facilities at the main wholesale markets would improve the trading environment and hygiene. List of markets mentioned for rehabilitation is provided in appendix 4. However, the potato grown in Nyandarua supplies not only the local consumption but also the domestic market. The market extends beyond the borders of Nyandarua district to Nakuru and Nairobi (Wakulima) as the main external markets, and to as far as Mombasa (Kongowea). 22.214.171.124 Market Constraints and Recommended Interventions The value chain analysis reveals that the single major marketing risk as perceived by the traders in the study district is the low and fluctuating price of potatoes. This is re-enforced by a combination of other marketing constraints such as long distances to markets, poor physical market infrastructure, poor access roads and lack of market information that expose traders to exploitation by middlemen. Traders cited the following bottlenecks to trading including; 1. Poor Physical market infrastructure and facilities. Traders raised concern over the lack of trading facilities such as market stalls, sheds, storage, water and sanitation at the market places as major limitations that make trading uncompetitive. Improving whole sale and retail market centers with necessary auxiliary facilities would greatly improve trading 2. Price fluctuations. Potato production is highly seasonal with glut production resulting in depressed producer prices and high post harvest losses. Seasonality is purely a climatic change issue where the farmers have little control over, and this coupled with over supply in production is generally blamed 3. Poor access roads: Traders mentioned poor access roads leading to producing areas and high cost of transport as one of the major causes to inaccessibility of markets. This consequently leads to high market price. 4. Multiple levies. In particular, traders raised the issue of high and multiple levies /cess charged by the local Authorities" and Town Councils on the movement and sale of the produce. This was recognized as one of the major bottlenecks limiting their potential to maximize business returns. Reducing the number of levies imposed on traders or consolidating them into a cheaper one-stop charge would attract increased use of the market facilities and improve traders profitability 5. Low level of processing/value addition, primarily due to the high costs of processing equipments, lack of credit and limited technical know-how 54 Table 7: Summary of Constraints per chain link and recommended interventions CHAIN CONSTRAINTS CAUSE EFFECTS RECOMMENDED INTERVENTIONS LINK Market trading High cost of Poor access road network, High price and low sales Improve existing rural access road infrastructure transportation high cost of fuel, network at designated small holder producing areas to reduce transportation cost Poor market Weak market information Fluctuations in prices Establish rural based market information dissemination information flow dissemination strategies points for information briefs on prices, supply, and demand trends, and enhance use of ICT ,mobile telephony and media related technology and extension services Poor packaging Lack of awareness on value Price variability. Use of the Support enforcement of standards on quality and standards and of produce grading and extended bag and other packaging and facilitate strong surveillance and compliance packaging standards variable packaging and institutional compliance. Promote responsible trading measurement standards ethics Market Poor market Low investment by local High cost of trading. Health Support upgrading of the existing market Infrastructure infrastructure and authorities in market hazard to traders and infrastructures into modern market facilities, including and facilities facilities infrastructure development. consumers market stalls, sheds and produce storage Budgetary constraints High and Multiple Need to maximize revenue Increased cost of trading and Consultation with local authority with a view to Levy by Local reduced profitability establishing one stop levy. Formation of the market Authorities traders associations Processing Low value Lack of awareness on value Limited value added products Sensitize and train small scale farmers and processors on addition addition, high cost of and diversification value addition. Link small scale processors to equipments and lack of appropriate processing technologies, capital to purchase equipment. 55 126.96.36.199 Recommended Interventions 1. Improving market infrastructure and facilities: It was noted that the physical conditions and facilities of the markets are inadequate and in poor state. In view of this the project should support the construction of market infrastructure and facilities including provision of market stall, sheds, storage, electricity water and sanitation to improve trading environment in the main whole sale markets. 2. Improving access roads. To mitigate the high transport costs, traders mentioned the need for the rehabilitation of the access roads, in particular, the Pessi-Mahinga and Karai-Nyakinyua roads in Ndaragua, and the Mumbi –Shiranga and Kahii-Olobolosat roads in Olkalau and Oljoro-Orok respectively as important considerations for action 3. Value addition; Based on the observation and analysis of information captured on the potato commodity, it was noted that limited value addition and/or processing of potato is being undertaken. In view of this it is recommended that, SHoMaP should work in collaboration with institutions such as KIRDI, KARI, ATC and MOA to Support some pilot processing units in selected divisions/areas which would act as demonstration projects. Business opportunity exists in establishing cooling and storage facilities and value addition through diversification. 126.96.36.199 Marketing Channel The main marketing channels for potato (fresh and processed) in Nyandarua, right from the farmer to the consumer, basically consist of wholesalers and retailers. Data from the local authorities showed that on average over 300 traders operate daily at the wholesale markets, marketing not only potatoes but also other agricultural produce. Retailers are the most vibrant segment of the market channel. Typical channels that potato traders follow to the ultimate destination for consumption are basically in five segments as illustrated in figure 9. Figure 9: Potato marketing Channels in Nyandarua District Assembly trader Rural wholesaler Urban Wholesaler Retailer Consumer Producers Rural wholesaler Retailer Consumer Retailer Consumer Processor Retailer Consumer 56 4.1.9 Costs and Margins Agricultural trading is a high risk business because of market imperfections and lack of supporting services. The most significant cost to the farmer is the potato seed and fertilizer. On the other hand potato traders incur three main costs in buying the produce, transportation and market levies. 184.108.40.206 Gross Margin The Gross Margin is sometimes called, the income above variable/operational costs, and is often justified as a practical technique for identifying the economic "best-bet" enterprises for farmers. It is also a good method for profitability assessment since it uses information that farmers have readily at hand, including costs of production, marketing and revenues from products. Calculating gross margins for the farmer was derived from information provided by farmers and traders on costs and revenues and the share of each actor as the product moves along the chain during the field study. As given in the Worksheet in Appendix 1, the total farm level cost of producing potatoes at the time of study was estimated at shs 33,200 per ha, comprising mainly of the inputs. Of this seed represents the most important cost item, followed by fertilizers, and land preparation. The gross margin received by the farmer a according to the estimate was shs 46,800 per ha respectively. The gross revenue stood at shs 80,000 per ha. However, it was observed that establishment costs varied from one farmer to the other depending on the level of input usage and crop management. At this level farmers are just breaking even if the opportunity cost of labor is taken into account. 188.8.131.52 Marketing Margins During discussions with traders, it was noted that their marketing margins depended on how competitive the market is, seasonality and the distance from the markets. Basing on variable cost, selling and gross trading incomes, and the value share for each actor in the potato marketing chain was derived as summarized in table 10 and figure below. Table 8 -Value share of actors in the marketing chain 1 2 3 4 5 6 7 Chain actor Variable Selling Price Gross Added Value Gross % Value cost income margin% share Farmer 415 800 385 800 48 32 Market broker 800 1200 400 400 33.3 16 Wholesaler 1745 2000 255 800 12.75 32 Retailer 2200 2500 300 500 10.4 20 2,500 100 57 At the time of study, the farm broker bought potato at shs 800 per 110 kg bag Value share of actors in the market chain and sold it to the wholesaler at shs 1,200 Retailer, Farmer, per bag, giving them a margin of shs 400 20, 20% 32, 32% per bag reflecting their commission. The Wholesaler wholesaler on the other hand sold the , 32, 32% produce to the market retailer at shs 2,000 per bag who later sold it at sh 2, 500 per Market broker, 16, the bag, to the retailer, being the final 16% Farmer Market broker consumer retail price, earning a margin of shs 500 per bag. There is, however, huge variation in buying and selling prices among the actors downstream, reflecting the apparent disorder and market imperfection in the subsector. The market value share reflects the size of the value or the percentage of the final retail price each actor in the chain manages to capture as well as the cost and risks each actor put in the chain. In-terms of revenue, the farmers gross income is a big share of his/her total revenue, being 48% and 32% gross margin and value share per bag respectively which could be higher with an increase in farm gate price. 4.1.10 Governance and Services The value chain governance essentially determines the success of intervention strategies. In the potato commodity value chain, several institutions and organizations were identified that play various roles. These included the MoA, KARI, KEPHIS and Local Authorities. A summary of these institutions and their roles is provided in the table 15 below. Table 9: Summary of the major Public stakeholders in the Value chain NAME SPECIFIC SERVICE LIMITATION PROVIDED Input Supply Systems and services KARI-Tigoni Research in basic seed, Low level of research and ,budgetary constraint and high multiplication, and distribution cost of royalties Agricultural Development Multiplication and distribution Limited land and financial resources to purchase basic Corporation (ADC) seeds for multiplication and high cost of basic seed Kenya Plant Health Quality Assurance Inadequate field staff to carry out inspection and Inspectorate Services certification (KEPHIS) Pest Control and Product Board Licensing, policy enforcement, Weak capacity to effectively control and monitor (PCPB) and Monitoring of accreditation standards and distribution of agrochemicals, long period and application of chemicals and for registration for local reformulation and re-packing. pesticides use Ministry Of Agriculture Distribution of seeds and In adequate extension staff trained in agribusiness provision of Extension services development and budgetary constraint Marketing Systems: Ministry of Cooperative and Farmers cooperative and Weak collaboration with MoA Marketing Development marketing Local Authorities Provision of market physical Budgetary constraint and weak capacity to monitor infrastructure and surveillance regulations Value addition ATC-Oljoro-Orok Training of small scale agro- Budgetary limitations processing and demonstration 58 4.1. 10.1 Governance Issues Within the potato value chain map, the main governance issues identified were concerned with chain relationship, supporting institutions, coordination and management, input supply, technical capacity building for farmers and actors. The lack of compliance with market standards and absence of sub chain policy also raised governance issues 184.108.40.206 Chain Relationship From discussions, farmers reported strong relationship with extension services as evidenced by their frequent interactions. Farmers interviewed demonstrated good knowledge of where to source farm inputs suggesting effective interrelationship between farmers and input suppliers. However, the link between the farmer and the buyer tends to be weak, an ad-hoc one- time affair, and transactions are highly personalized with the broker. There is little communication between the farmer and traders. This has lead to high level of mistrust on both sides. Strengthening relations between the producer and traders would benefit both. This can be facilitated through regular sub sector forums. Market transaction costs were influenced by traders and distance to the market of destination. From the traders point of view a system that would identify and ensure source of supply would save them time and transportation cost. This would best be achieved if farmers were organized themselves. Developing chain partnerships and respect to rules and market standards are equally important to sustain the value chain relationship. The farmers Common Interest Groups (CIGs) and KENAPOFA, if strengthened, would go a long way in improving farmer- broker-trader relationship and transparency in the value chain. 18.104.22.168 Input supply KARI – Tigoni can only produce 4% of the national potato seed demand. ADC and a few farmers groups augment production through multiplication in their farms. In spite of this, the current seed production is inadequate to meet the market demand, besides being expensive beyond the means of many small scale farmers who are forced to rely on their FSS for planting. The in-adequate availability of seed is exacerbated by lack of institutionalized system for seed and planting materials development, multiplication and distribution to farmers. The way forward is to support farmers" groups for quality seed multiplication to increase production so that improved seed can be available to the farmer at affordable prices. 184.108.40.206 Technical capacity building Currently potato farmers are not well connected with markets. They wait for brokers and other traders to come and buy, who often offer very low prices. They produce small- low quality quantities that are little geared to market needs. They lack adequate technical skills on crop production, disease and post harvest management, organizational development, financial management and generally handling farming as business enterprise. It is important to make these farmers crop specialists and given better farming skills so that they can produce a better crop of higher quality. These technical packages can also be extended to the input 59 suppliers. Building engagement and alliances with private sector service providers to train farmers on production and agribusiness would be vital for capacity building and chain upgrading in the sub sector. 184.108.40.206 Standards, Quality and Grades Production quality necessarily involves the application of standards concerning the pre-harvest period, keeping produce infection free and respect for grading and packaging standards. Standards are a set of technical specifications that define the quality features, size, weights and packaging of a product. In the market Standardization is when these are made uniform or consistent. At the production level, quality assurance standard was observed in the input supply system as demonstrated by attempts to produce good quality seed right from KARI through ADC to the farmer. However, KEPHIS has not effectively provided adequate inspectorate services on the ground to ensure quality seed production, partly due to inadequate capacity, thus there is, therefore need, first to strengthen KEPHIS"s capacity to carry out certification services and secondly to empower farmers to be able to produce and recognize good quality seeds. The high cost of seed has also limited farmer"s use of certified seed. Grading of potato at the farm was rarely practiced, rather is done by observation while the rampart use of "extended bags" packaging has not been adequately enforced as a weight standard measure in the potato industry. This reflects weakness on the part of the relevant enforcement authorities. KENAPOFA which is supposed to be the farmers" watchdog in this regard has not been successful in this effort. Compliance to standards will improve trade in potato to become more remunerative and client oriented, thus give farmers and traders a reference point for the level of quality and quantity consumers may demand as well as add value to their business. Developing new and improved institutional arrangements for enforcement of packaging standards would improve potato trading and business returns to both farmers and traders. 188.8.131.52 Institutional Constraints Three main aspects, farmers", organization standards and market information were identified. The absence of a strong farmers group and poor market information were noted. A well –functioning farmers group is an important part of the market value chain and better trading conditions. In between producers and consumers there is a network of wholesalers and retailers who sell potato. The traditional practice of finding sellers and negotiating deals individually is costly and ineffective. The presence of a farmers group will set a forum from where the farmer will receive training on proper crop husbandry, organizational development and facilitate provision of trade information, access to financial services, stabilization of prices and building alliances with other actors in the chain. This will also promote quality services to members, good governance and chain relations. It is therefore imperative to adequately facilitate and support farmers groups for seed multiplication to ensure increased availability of improved quality seed. The market information and dissemination system in the industry is weak and inadequate. The MoA collects a lot of market information on tradable agricultural commodities every other day; however, this is never made public quickly enough for farmers and traders. Consequently, cheating, mutual suspicion and distrust 60 are rife between producers and traders. Collaborating with MoA and linking with the Kenya Agricultural Commodity Exchange Ltd (KACE) would enhance the provision of market information and dissemination to both the farmer and traders. Setting up rural based market and agribusiness information points at different market and divisional centers, use of mobile telephony, radio and trade net system would offer updates on prices and enable farmers and traders to identify, access and link with profitable market opportunities 220.127.116.11 Policy Leverage and Regulation The business of farming and trading is strongly influenced by public policies, the most important ones being laws, regulation and standards, taxation, public infrastructure and provision of services. A notable drawback in the subsector is the absence of subsector policy and lack of effective institutional coordination. No institutional mechanism has been developed to establish efficient value chain of the commodity. Being a major crop, the ministry of Agriculture should undertake a review of the horticulture policy with a view to developing potato sub sector policy to guide the sub-sector operations. Policy development for the industry can achieved through a consultative process involving all the stakeholders including private sector. Local government authorities can promote better trading by ensuring good management, standards and facilities in market places. They develop and monitor regulations on where to the traders can set up their business, hygiene food items, standards and collect levies and cess on produce. Market levies, lack of storage facilities, trading sheds, electricity, water and sanitation were some of the urgent problems to address to improve potato trading. Interview with farmers indicated that movement of goods across divisions in the district attracts double payment of cess. To this end, market levies should be rationalized into affordable one-time stop fee, and visibly used to improve services at the market places. In addition facilities at the market places should also be improved. The Local authorities can play an important role in increasing efficiency and enforcing compliance to packaging standards, grades, weights and measures as well as mediate and co-ordinate various stakeholders in observing standards. 4.1.11 Summary of Constraints and Proposed interventions The farm to market value chain analysis has permeated the identification of deficiencies, and market –led intervention activities that SHoMaP could support to strengthen the potato market value chain and improve returns to actors" long different points in the chain. 1. The in adequate availability of quality potato seed is a major concern to the small scale holder producers. The study indicates that only about 4% of certified seed is available for local potato production, the bulk being common seed generated through the multiplication system. This is supplemented by FSS. Even with all these efforts, seed quality and supply still remains a challenge. 2. Limited technical knowledge of farmers and input suppliers, was reported, with as high as 70% of farmers little equipped with technical knowledge and skills on good a agricultural practices (GAP), a situation which is blamed on low output and product quality. 61 3. Poor Access roads: Across the district farmers cannot access the market or if they do at high transport cost, due to poor rural access roads. The study identified the major access roads in the three divisions of the district which farmer felt should be improved to enhance movement of produce to the markets. 4. Poor market conditions: The physical conditions of the market places are poor with few facilities for shelter, market stalls, sheds, storage and low hygiene standards. Marketing takes place either within make shift structures, but mostly in open spaces. There is opportunity to improve the market infrastructures and facilities through a combination of public and private sector funding and participation. The following is a summary of the major constraints ranked in their order of importance, and recommended interventions for SHoMaP in the potato subsector. Table 10: Summary of Constraint per link of the chain and recommended interventions Chain Link Constraints Ranking Recommended Intervention Level Input Supply and Inadequate quality potato 1 Support small scale farmers groups to in clean seed services seeds multiplication to increase production Production Limited technical 2 Intensify technical training and capacity building of farmers and Knowledge of farmers extension staff through workshops to improve farmers productivity through partnership with service providers Poor access road 3 Support the rehabilitation of identified rural access road infrastructure infrastructure as indicated in the district action Plan High price of inputs from 4 Facilitate formation of input dealers and stockiest association to Agrochemical companies gain economies of scale in input sourcing and distribution as well as facilitating their access to credit facilities Marketing Lack of market and poor 5 Provide training to farmers on market survey and establish market information flow market information points for briefs on prices, supply, and demand trends, enhance ICT and media related technology to link farmers to market opportunities Poor market infrastructure 6 Support the improvement and upgrading of the whole sale and facilities markets as identified in the district action plan Low value addition Support investments in appropriate equipment and technology acquisition for value addition. Support training and capacity building for small scale processors on value addition through partnership with ATC-Oljoro-Orok 62 4.2: The Cabbage Value Chain 4.2.1 Introduction Cabbage is one of the most important vegetables grown in Kenya for the local fresh market. It is grown by both small and medium scale farmers and marketed in rural and urban areas. It is grown under both rain fed and irrigated conditions. The cabbage thrives under a wide range of climatic conditions but better in cooler temperatures. In addition, it can tolerate hard colds, but severe freezes can be damaging. Figure 9: Cabbage vegetable The cabbage flavor improves with cooler temperatures because plant cells work to convert starches to sugar to protect the plant against the cold. The result is a sweet, fresh taste that surpasses that of store-bought greens. Cabbage is mainly used for cooking and as a salad. It can also be used as livestock feed. 4.2.2 Cabbage Value Chain map The cabbage value chain has been presented in a conventional format with key function reflected horizontally and the associated Actors or functionaries identified on the vertical scale. The value chain comprises of input suppliers, farmers, traders and consumers. The activities of each actor are provided alonsid. Market data indicate that about 80% of total production is marketed through traders and that the industry experience high level of post harvest losses. The typical value chain map is illustrated in figure 11 below 63 Figure 10: Cabbage Value Chain 10-15% wastage 10% of crop on 75-80% of total vegetable production goes to market unchanged farm cons. Consummation Consumption Input Supply Production Marketing , Small holder Local Market Urban market Kenya Seed, Househ Simlaw, EA seed producers, Ndaaragu, olds Stamatas, comp, Stockiest farmers, input Olkalau, Passenga, suppliers, CIGs Okjoro Orok, Kasuku, Green Acres, Mailo-Inya, Nyahururu, KFA, Malewa Transporters 50 Retailers, 20 Ndondori, Kasuku Individual (few) Supermarkets Instituti Wholesalers Gathanji Transporters: ons Lorries, Pick- Vendors, (schools Pick-ups, ups Hawkers KEPHIS, , KEBS, MOA MoA, ATC, NGOs, Local Authorities, KACE, MoPH 0 Wholesalers prisons, SHEP, NALEP, MoPH NCPB, Equity Bank Service providers: Hotels, restaura nts 64 Activities of Actors in the Cabbage Value Chain VC Inputs Transportation Consumption function Production Trade Transportation Marketing f A Loading and Loading and Loading Buying and C Supply of Nursery and Buying propagatio handling unloading selling product T improved seed unloading n Buying and selling Bulk breaking for I seeds Land Transportat Transporting ion consumpti V Distribution of preparation Transport Storage on Transplanti Cess I fertilizers and Cess payment payment Value addition ng agrochemicals T Fertilizer Cess payment Quality I Advice to Weeding and price farmers ,IPM differentiat E ion Credit Harvesting S Grading/so institutions rting, Packing On-farm selling A Input Farmer and Vehicle Owner Lorry Owner Retailer Broker Individual Suppliers Farmer Groups C Households T O (Public & Workers Porter Wholesaler Lorry Driver Kiosk Public R Private Owner/Hawker Institutions S institutions) (Hospitals, Extension Handcart Educational) services Pickup driver Mobile Trader Driver Supermarket Private Institutions ( Hotels, Credit Driver/ Rural vendor Porter Restaurants) Institutions Processor Cyclist Cart driver 65 4.2.3 Input Supply and Distribution System 220.127.116.11 Seed supply The main inputs for cabbage production include cabbage seed, agro-chemicals and labor. The main seed merchants and distributors in vegetable seeds in the country were identified to include Kenya Seed Company Ltd, East African Seed Company Ltd and Simlaw Seed Ltd from which local stockists in the district purchase their requirements. Most of the seed requirement is satisfied through importation. In the supply chain, the Kenya Plant Health Inspectorate services (KEPHIS) provides quality assurance services ensuring that the seeds are certified at the point entry into the country and before they are sold and distributed to farmers. Dealers indicated that cabbage seed was easily available in good quality and quantity for purposes of production. However farmers indicated the need to avail these agrochemicals in smaller repackaged affordable pack sizes. The improved-local cabbage seeds- retails at ksh 120 per 50 mg sachet which farmers considered to be affordable. On the other hand, the price of highbreed certified cabbage seed which retails at ksh 1200 for the same quantity was somehow considered to be high. Farmers often germinate seeds in the nursery before planting. In some cases farmers also plant the seeds directly. In addition it was established that the Small stockiest lack capital and technical skills to adequately stock inputs and appropriately advice farmers 188.8.131.52 Other Inputs. A part from cabbage seed, SSF use few of the other inputs, which include fertilizer, pesticides, and herbicides, are used in cabbage production. Farmers reported instances of poor (adulterated) quality agrochemicals primarily because of the weak capacity of the PCBB to effectively control distribution; general lack of awareness on the part of farmers and weak product labeling, suggesting the need to enforce product labeling standards and accountability of registered distributors on the authenticity of their products. Currently, fertilizers in the market are Compound, Supper phosphate and Urea. The main fertilizer used in cabbage production is DAP and sometimes NPK depending on the soil conditions. All of these inputs are imported by major Agrochemical companies, but are sourced locally from input dealers including stockiest and merchants. Some farmers use compost manure instead of fertilizers. The Pest Control and Product Board (PCPB) is the main regulator in the input trade, ensuring registration of dealers and providing information and monitoring of quality standards. It was noted that PCPB has not been responsive enough to encourage private sector in local formulation of cheaper agrochemicals because of long and restrictive registration requirements and high tax regimes that discourage local formulation and re-packaging. In order to improve supply of agrochemicals The strong presence of the government in the fertilizer market was noted although this has not crowded out the dealers in the input trade. Price of fertilizer varies and at the time of study ranged from Ksh 2,500 to shs 2,700 per 50kg bag depending on location and distance from the source of supply and this has followed some government guidelines. 66 The high fertilizer prices are a problem affecting all In- put dealers. This could be attributed to high internal transport costs occasioned by both the poor road infrastructure and high fuel costs. In response to the high prices, dealers should develop a strategy to engage the manufacturers/importers with a view to containing price escalations. Coalescing themselves into an association within the recently launched Interim Input dealers Association, would also give them economies of scale in procurement of fertilizers and other agrochemical inputs. In addition the government should be encouraged to reduce VAT on the target inputs as well as on concentrates and packaging materials required for local formulation with a view to reducing cost of agrochemicals. The existence of the local retail outlets, most of which act as agents for manufacturers, ensures that farmers can get the required inputs in the amounts they require. 18.104.22.168 Distribution System The main actors in Cabbage seed distribution included the local seed merchants, agrochemical companies and small scale stockists spread across the district. Some of the stockists are representatives of major seed merchants. The Seed traders Association of Kenya is an important player in the industry with regard to development of regulations in seed trade, however it is constrained by weak capacity. These actors are illustrated in table 13 below: Table 11: Main Actors in the input supply in the cabbage subsector MAIN ACTOR ROLE/SERVICE LIMITATION 72 Seed Supply companies.-(KFA, Seed companies, Selling and distribution of Weak geographical presence Kenya seed company, East Africa Seed Growers, ) seed, fertilizers, chemicals, training and technical advice to farmers Over 100 Agrochemical companies and Stockists: Selling and distribution of Smaller stockiest lack capital and (Green Acres, Vetagro, Tumaini, Farm inputs, Merit, seed, fertilizers, chemicals, technical skills to adequately stock Rurii) training and technical advice inputs and appropriately advice to farmers farmers Pest Control and Product Board.(PCPB) Policy and registration Weak capacity to oversee and control ,licensing and regulation of agrochemicals market agro chemicals market AGMAK Training of input Limited capacity and budgetary dealers/stokists and farmers constraints Seed Trade Association of Kenya Harmonies the certification of Weak capacity to develop and seed across borders to limit monitor of standards inconveniences 188.8.131.52 Constraints in Input supply During discussions, dealers cited lack of capital, high prices of fertilizers and agrochemicals and hybrid seed as limiting their capacity to stock adequate quantities to meet farmers" needs. The lack of technical know- how and coordination among them were also a concern. The high cost of improved seed was caused by the low investment in local production of improved seed consequently leading to low utilization by farmers and low productivity. 1. Limited access to capital: The other major constraint identified by inputs suppliers was the lack of access to credit due to high of interest rates, lack of collateral for security and reluctance on the part of commercial banks to lend to small scale traders on account of perceived risk associated with them. Efforts 67 to encourage linking input provision to credit facilities have enjoyed limited success. Most of the stokists felt that the local banks and financial institutions have stringent requirements that lock them out from accessing credit to stock their shops. 2. Limited technical Know-how. Discussions with Input traders indicated they lack the capacity to advise farmers on appropriate application and management of agrochemicals. This has the direct effect on supplies and product credibility, suggesting need for training and capacity building The main constraints reported by the input dealers are summarized in table 14 Table 12: Summary Constraints in Input supply and recommended interventions CAUSE EFFECTS RECOMMENDED CONSTRAINTS INTERVENTIONS High price of low investment in Low sales and Support investment in highbred seed improved seed local production of margins production hybrid seed Lack of access to Stringent conditions Inadequate stock and Linking input suppliers to credit and capital/credit required by financial availability promote input suppliers based SACCO institutions Limited technical Lack of training of Inability to provide Proactively train input stockiest know-how of stockists on appropriate advice dealers agrochemical use and management 4.2.5Recomended Interventions 1. Capacity building. The lack of technical know-how on the part of input dealers could be addressed through training of input dealers a creating a platform for regular dialog among stake holders including the major agrochemical companies. 4.2.4 Cabbage Production Cabbage production in Kenya is carried out largely by the small scale holder farmers who typically are operating their farms at very low levels of economic productivity. Production is characterized by low usage of inputs, poor production husbandry and technologies. Fertilizer is not widely used, however, farmers reported using pesticides/insecticides and herbicides for Figure11 cabbage production trends in Nyandarua district both pest and weed control. At the Cabbage production trend in Nyandarua north District national level a total of 20,559 ha were 120 Production in thausand tones planted with cabbages in 2006 rising to 100 24,892 ha in 2007. Production of 80 cabbages consistently increased from 60 248,523 tons in 2003 to 529,003 tons in 40 2005 before dropping to 416, 373 tons in 20 2006. 0 2005 2006 2007 2008 Year 68 Nyandarua is a potential cabbage producing area in the country where both local and improved varieties of cabbages are grown. Cabbage production increased from 80,000 tons in 2005 to 86,000 tons in 2006 before dipping to 78,185 tons in 2007 and increasing again to 102,963 tons in 2008, thus strengthening forecast for increase in future production. The district accounts for nearly 50% of cabbage production in central province. Table 15 provides past data and trend in cabbage production in the district. The table shows a rather steady and rising trend in cabbage production since 2005. Table 13: Cabbage Production in Nyandarua (2005-2008) tons Year 2005 2006 2007 2008 Ha Mt Ha Mt Ha Mt Ha Mt National Output 20529 529,003 20559 416,373 24892 609292 Central Province 9562 239050 9641 241025 14370 359250 9,330 195,392 Nyandarua 4,000 80,000- 4,300 86,000 5783 78,185 5091 102,963 Districts Percentage 42 23 45 36 40 22 55 53 share% Source: MOA- Annual Nyandarua district Reports, 2005- 2009. 220.127.116.11. Production System Cabbage cultivation starts with seed acquisition, nursery propagation, followed by land preparation, planting, fertilizer application, ear- thing, through to weeding, pest and disease management and harvesting. Cabbage can be grown in altitudes ranging from 800 to over 2,000m above sea level. Optimum temperatures for cabbage growing are achieved at 16-20oC. At temperatures above 25 oC, head formation is reduced. The crop is grown largely by small scales farmers with holdings of less than 2 ha. Cabbages grow on a wide range of soil types ranging from light sand to heavier clays. Soils with high organic matter give the best yields. Soil pH should be in the range of 6-6.5 for actual growth and a higher pH is important for root control. Heavy soils in suitable rainfall areas can produce good crops with little or no irrigation. Good drainage is important and in high-rainfall areas, the crop is grown on raised beds to improve drainage and, for this reason, when working the soil, it is necessary to keep it in the raised position at all times Yield and Variety: The main varieties of cabbages grown in the district are the Copenhagen, Sugar Loaf and Gloria Hybrid. Yields vary with variety and agronomic practices adopted by the farmers. Based on discussions with the farmers" groups, the actual yields realized was between 8-10 tons per acre, lower than the expected level of 15 tons. Part of the reason for the low yield was due to inadequate application of farm fertilizer which the farmers linked to high input costs and high cost of improved seed. Crop Husbandry: The cultivation of cabbages starts on nursery beds. Raised beds (1 Meter wide and any desired length) are usually recommended for the wet areas especially with heavy soils, and sunken beds for dry areas/seasons. Cabbage seeds are small; hence, the soil should be well prepared to a fine tilth. Healthy and vigorous seedlings should be transplanted when they are 10-12 cm high and about 4-6 weeks old. Seeds 69 should be obtained from a stockist to ensure good quality seeds are used. If the soils are low in organic matter, 1-2 handfuls (up to 20 tons/ha) of manure should be applied. If fowl manure (deep litter) is available it should be applied at around 22 m3 /ha and thus fertilizer rates can be reduced by around one third. A basic dressing of phosphate fertilizer (46% P2 O5 at 200kg/ha is recommended in soils low in phosphorus. Early application of lime is recommended in soil preparation if the soil pH is less than 6.0. In acidic soils, lime should be applied at a rate of 500-1,000 kg/ha. DAP should not be used in acidic soils. However, over-lime application erodes the essential element manganese which may become unavailable to plants. Instead, triple or double superphosphate or compound fertilizer (NPK) should be used. The plants should be top dressed with nitrogen fertilizer at the rate of 100kg/ha when seedlings are established and a second top dressing at the rate of 200 kg/ha when the leaves start to fold. It is important to have the soil tested to determine the soil nutrient status where possible before planting. Pests and diseases: Cabbage is highly prone to pests and diseases, particularly the Diamond Back- Moth, Aphids, Red Spider Mites and Caterpillars. These adversely affect produce quality and result in high post harvest losses. The field should, therefore, be kept weed free. Mulching is advisable to conserve moisture, control weeds and reduce the spread of disease incidence. Cabbages should not be grown after cabbage or other cruciferous crops so as to reduce the spread of soil-borne diseases and pests which can be harboured by the weeds. While farmers reported using chemical to control diseases, they were not fully aware of the proper management practices. Harvesting and Post harvest handling: Cabbages are grown and harvested about 3 times in a year with the first crop planted in March, second crop in August, and the third crop planted in November. Depending on the variety, harvesting starts 1.5 to 3 months after transplanting and lasts for 3-4 weeks. Harvesting should be done when the heads are firm and only 3-4 wrapper leaves should be left to protect the head and keep it fresh. A cabbage is mature when the head is firm to touch. Heads firm gradually until they become hard. If left too long the heads can split and become unmarketable. Cutting is usually carried out in the morning and heads are cut so that a few wrapper leaves are present to protect the heart. Cabbages are either marketed by the heads with full leaf or may be trimmed and packed in bags or crates. In general farmers sold the produce immediately after harvest and do not store the produce for prolonged period as storage facilities were often lacking. Cabbage should be handled carefully from field to storage, and only solid heads with no yellowing, decay, or mechanical injuries should be stored. Before the heads are stored, all loose leaves should be trimmed away; only three to five tight wrapper leaves should be left on the head. Loose leaves interfere with ventilation between heads, and yet ventilation is essential for successful storage. Avoid bruising the head as it encourages rotting 70 Prices: At the time of study farm gate price ranged from sh 10-15 per head. This can be as low as shs 5 per head during glut seasons irrespective of the size. Systemic grading of cabbages is hardly practiced and is traditionally done by eye and physical sorting. This has the direct effect on final price received by the farmer. There was a direct seasonal effect with minimum prices received during peak harvest periods when supply is beyond market demand. 220.127.116.11 Actors in the Production Chain Cabbage production in Nyandarua district involves a few actors including mainly the small scale farmers, Inputs suppliers and service providers. About 4000 farmers are actively involved in production of the crop and a few farmers groups in the lower zone. Seed and agrochemicals supply was fed through the local distribution network. Support services providers identified in the sub-sector included the Ministry of agriculture and a few private sector organizations. 184.108.40.206 Support Services This is an extremely important area for increasing farmer"s productivity and profitability. Adequate extension services were available from the Ministry of Agriculture, as the primary supplier, through various programs including NALEP and SHEP. These services have emphasized on increasing level of farm productivity, formation of farmers groups and empowerment of farmers through capacity building. However, due to limited resources and number and capacity of technical staff, the dissemination of process has been rather, thus the Ministry"s outreach to farmers. A few private sector organizations and NGOs also played a role in promoting cabbage production and capacity building of farmers in the district. These initiatives are expected to promote commercial oriented production. However, the linkage between producers and traders is still weak due to lack of strong institutions farmers in the sub sector. A summary of main Actors in the cabbage production chain is provided in table 16 below Table 14: Major Actors in Cabbage Production Chain VALUE CHAIN MAIN ACTOR ROLE/SERVICE LIMITATION LEVEL Production 4000 SSF, and Farmers groups Producing cabbages and farm level Limited technical skills on marketing production Support Services and Ministry of Agriculture Policy development and Extension Limited staff programs and technical services and training of staff and farmers NALEP Demand driven extension Formation Limited staff capacity. of CIGs, technical training and agribusiness development SHEP Training of small holder farmers, and Limited capacity and infrastructure development budgetary constraints CKDAP Support irrigation infrastructure to Limited resources boost production, draught resistance planting materials NMK Grants for food security Limited resources 220.127.116.11 Production Constraints 71 Cabbage production is affected by seasonality and lack of market. Farmers cited poor access roads, low and poor quality cabbage due to poor crop management, high incidence of pest and diseases; price fluctuations and high post harvest losses as some of the constraints limiting their potential to increase production. 1. Incidence of pests and diseases: Farmers reported that cabbage is highly prone to pests and diseases, particularly the Diamond Back- Moth, Aphids, and Caterpillars which negatively impact on produce quality and result in high post harvest losses. . The incidence of disease and pest seems to be quite severe causing high yield losses. The losses are also due to deterioration of quality and post-harvest losses. This primarily due to inadequate extension services and limited knowledge on the part of farmers to identify and control pests and diseases .Use of pesticides and resistant varieties and integrated peat management have greatly helped to alleviate and control these diseases. Promotion of cost-effective technologies such as on farm storage and strengthening of extension services can substantially reduce post harvest losses. 2. Limited technical know-how: The apparent lack of technical knowledge was evident among farmers particularly on production, organization development, agribusiness development and marketing and value addition. Farmers blamed this on weak extension and lack of effective support services. 3. Lack of storage facilities: Post harvest losses arise from lack of on- farm storage facilities and poor handling of produce. The commodity is highly perishable. Farmers therefore must find market for the product immediately after harvest or find suitable storage for a limited period of time before damage to realize better prices. At the farm level the losses are due to improper harvesting (cuts) and postharvest handling (lack of curing). the average loss estimated at 10-15% 4. Seasonality: Cabbage production is highly seasonal. Sustainable production throughout the year can be achieved through support to small scale irrigation development, better timing of production and on –farm storage Farmers reported the following major challenges and constraints. (Table 17) Table 15: Constraints and recommended interventions CONSTRAINTS CAUSE EFFECTS RECOMMENDED INTERVENTIONS Poor quality of Lack of technical Low yields and low Improve farmers" technical skills through produce know-how produce quality training and capacity building on post , harvest handling, encourage use of improved seeds varieties Limited technical Inadequate training Low productivity Train FAR mers on production techniques skills and lack of awareness on new technology High incidence of Lack of knowledge on Low productivity Train farmers on production techniques, pests and diseases IPM and IPM High post harvest Poor produce Fluctuation in Introduce small scale irrigation agriculture, losses handling, pests and production, prices and better timing of production calendar, diseases loss of income. establish on-farm storage 126.96.36.199 Recommended Interventions 72 1. Technical training and capacity building; From discussion with farmers it was established that poor quality of produce is generally caused by lack of technical knowhow and poor agronomic practices by the small scale holder farmer which leads to low yields and produce quality. In order to address this constraint, training and capacity building of farmers on production, pest and disease management and post harvest handling is imperative. The project should support farmers in adopting integrated pest management practices. The disease and pest management practice should also include the adoption of varieties resistant to prevailing diseases in the production areas. This can be achieved through partnerships with private sector service providers. 2. Irrigation development; Seasonality is a natural phenomenon affecting agricultural production. In the case of cabbage subsector, a sustainable production can be achieved through introduction of small scale irrigation along the river Pesi and Nyairoko. 3. Development of storage facilities. In order to extend product life and stabilize producer prices it the project, in partnership with Local Authority and CDF, should support initiatives for construction of farm based storage facilities to improve on product quality. There is opportunity for farmers to increase production formation producer marketing groups to be able to access markets in the district and beyond. Investments in irrigation would further ensure sustainable supply of product throughout the year and reduce price fluctuations. 4.2.5 Cabbage Marketing System Cabbage in Kenya is marketed mainly in the domestic market where they are sold in heaps of heads and rarely by weight. The product is transported to the market places in bags or crates using Lorries and picks- ups. Cabbage is highly perishable and therefore most farmers are forced to harvest when there is ready market, since they lack appropriate on- farm storage facilities. Proper handling is essential to retain cabbage quality hence value. A number of functionaries are involved in the marketing of the commodity. The main market segments for cabbage as a commodity in the district were identified to include farm-level marketing, brokers, retailers, institutions and households. Institutions and household are the most distinctly observable source of demand for cabbages. The main end market for cabbages in the district comes from the local schools, prisons, hospitals, hotels and restaurants. The small scale farmers have little control of the marketing system and the system is largely dominated by the broker. Such farmers were found less oriented to market with the primary objective of the production being for subsistence and only the small part of the production goes to market. 18.104.22.168 Actors in the Cabbage market value chain. 73 Different Actors were identified at the various market segments each of whom performs a different role. The primary Actor in the marketing chain is the broker who links the farmers to the markets. The other important Actors identified included market traders, the wholesalers and retailers at the various rural and urban markets, Local Authorities, institutions and household consumers. Besides being producers, farmers too actively participate in the direct marketing of the product. .A summary of Actors and their roles in the market chain is provided in table 18.below Table 16: Actors and their roles in the Cabbage marketing chain CHAIN ACTOR ROLES LIMITATIONS 4,000 SSF and 10 farmers Production , harvesting of Price fluctuations and limited control over pricing, groups cabbages and negotiate prices high post harvest losses Brokers Identifying producers and No contractual relationship with the farmers, are matching to buyers, provide not transparent in their operations, not legally packaging, negotiate prices and mainstreamed in the chain organizes transportation to markets Wholesalers Buying ,bulking and selling Poor market conditions. Long distances from produce to retailers and farms to markets, Increased prices from brokers consumers Retailers Bulk-breaking and selling Poor market infrastructures, price fluctuations, cabbages to consumers losses due to unsold produce Local Authorities Provision of market infrastructure Budgetary limitation and facilities, charging levies/cess and market fees. Institutions, households, Consumption High consumer price, low quality of hotels and restaurants cabbages 184.108.40.206 Farm level Marketing At the farm level, the brokers and the farmer are the significant actors. The brokers are usually hired by buyers on a commission basis to assemble the crop and to negotiate for a pre-agreed price. The brokers are directed by traders who often own the Lorries which transport the commodities to various market places. They often provide the bags and may even pay a deposit to secure a given quantity of the crop to be delivered. Farmers reported that the bulk, about 80% of total production in the district, is marketed through the brokers. It was noted that due to their small sizes farmers cannot generate sufficient volumes to market for themselves and benefit from economies of scale, hence the opportunity created for the broker. The brokers relegate the farmer to a mere price taker due to their competence and control of information in the entire market chain in terms of produce seasonality, availability, buyers, suppliers and prices and thrives mainly on asymmetric market information. At the farm level, typical with other agricultural commodities, the farmer carries out various marketing and value adding activities including harvesting, on farm storage, sorting, and price negotiations. Farmers complained of exploitation by brokers as much as they acknowledged they fulfill a role in the marketing chain, mitigating market risk by directing supply and demand network. However, as a result of their presence there is no direct contact between the farmers and the final market outlet, thus distorting marketing system. 74 As is typical to small holder farmers, due to their small farm sizes and small quantity production, farmers cannot generate economical volumes to market for themselves. They are not organized into marketing associations to market their cabbages or determine the price. As a result, the farm level brokers make opportunistic margins, as high as sh 2-3 per cabbage head, as farmers lack information to negotiate prices and have no other market channels. Storage at farm level is either lacking or not a widespread practice and most produce are typically sold shortly after harvest. Grading of cabbages is practiced by sorting and by size. 4.2.6. Market Traders In the cabbage market chain, the next group of actors were trades (including the market-level brokers wholesalers, retailers), and consumers. 126.96.36.199 Market- Level- Brokers At the whole sale markets, the market-level brokers usually approach Lorry operators and offer to sell the product at negotiated prices. These brokers could as well be farm level brokers and are normally paid on commission which is reflective of their margins and value share in the market chain. Brokers are therefore an important and integral part of the marketing chain that should be recognized, registered and trained to instill positive attitude, transparency and institutionalize their participation in the marketing chain. 22.214.171.124 Wholesalers/Retailers These are traders who principally buy from market level brokers and occasionally directly from the farmers. Their main role is in produce bulking and distribution to various retail outlets such as schools, institutions and hospitality sector. It was noted that there were very few wholesalers operating in the cabbage marketing chain, partly due to the perishable nature of the produce and lack of pre-cooling storage facilities at the wholesale markets. The retailers were mainly fixed location traders who sell in heaps and single heads. The heads are specified in terms of their size-(small, medium and large) and value depending on size, ranging from shs10 to shs 25. The wholesalers and retailers are taxed per bag, a fixed fee of ksh 200 per month for space to operate at the whole sale markets, and the retailer a fee of ksh 20 per day irrespective of the quantity in all wholesale markets by the Local Authorities. 184.108.40.206 Transporters: A few individual transporters who are hired by buyers to ship produce to wholesale markets within and outside the district were spotted. They would transport any other commodity or good. They commonly rely on market brokers to locate customers or buyers with produce for transshipment to terminal market places. It was noted that some of the transporters also operate as traders. Due to their transient nature of operation it was difficult to identify regular transporters by name or entity. 75 220.127.116.11 Packaging The observed practice at the farm level is the standard packaging in sisal sacks. However the use of extended bags was observed thus resulting in size variations and difficulty in pricing. A Standard bag weighs on average 90 Kg and the extended bag weighs between 120 and 150 Kgs .The use of the extended bag was observed and this denies the farmer their fair share in revenue. Although packaging was not a major issue, there is need to observe the use of standardized packaging to regulate trade in the product and improve farmers" income. 18.104.22.168 Cabbage Markets The main wholesale markets for Cabbages in the district are Ndaragwa, Nyahururu, Oljoro-Orok and Olkalou where traders converge for their trading transactions. Each of these markets is visited by an average 300 traders and several consumers on each market day. These markets also function as daily retail markets. It was observed these wholesale markets are in poor physical conditions and hygiene without market roofs, shelter, sheds, stalls, electricity, storage and cooling facilities where the produce can be held in good condition for any appreciable length of time. This has made retailing difficult in the poor open air structures. The study also identified six (6) rural open –air retail markets including Kasuku, Passenga and Ndondori which operate daily for the rural sellers and vendors, and several small cluster markets a round market centers. In order to improve the trading environment, traders felt that the local Authority should develop the main wholesale markets, in particular the Ndaragwa, Olkalou and Ol-Joro-Orok markets to modern wholesale markets with necessary physical and sanitation facilities. Cabbage from Nyandarua, however are marketed beyond the district borders to Nairobi (Wakulima) and Nakuru. 126.96.36.199 Processing While no processing of cabbages is being done in the district at the moment, there is potential for value addition for dehydrated cabbages and packaging using simple technologies already developed by the ATC, Oljoro-Orok. This has the potential of increasing farmers" income. 76 184.108.40.206 Marketing Channel Cabbage is marketed through various channels. The observable marketing channels in the district, from the farmer to the consumer are illustrated in figure 13 below. Figure 12: Marketing Channels for Cabbages in Nyandarua District Producers Middlemen Urban municipal Rural Markets markets Urban Wholesalers Markets Market centers, Green Supermarkets kiosks, Groceries", Road side sellers On-farm Urban and rural household consumption Consumption at institutions, consumption schools, colleges, universities etc. 77 22.214.171.124 Marketing Constraints During discussions, traders cited the following major constraints. 1. Poor Access roads. Access Road: Access roads are key to marketing. Observations and discussions with both traders and farmers revealed that access roads in the producing areas are in deplorable conditions, thus making physical communication, linkage and delivery of produce to the markets difficult and costly. 2. Perishability and high post harvest losses (as high as 10-15%). Post harvest loses include perish ability, damage to crop during harvesting and handling. These are due mainly to poor product handling techniques on the part of small scale farmers and traders and lack of appropriate on farm level storage and poor marketing facilities at the wholesale markets for pre-cooling purposes. 3. Poor Physical markets. From observations and discussion with traders it was established that the wholesale markets were in poor physical conditions and hygiene manifested in lack of proper sanitation, lack of produce stalls , water and electricity leading to poor trading environment.. 4. Poor market information. The existence of a market is critical for efficient operation of marketing system: From the situation assessment, it was noted that farmers and traders do not have systematic ways of accessing information on commodity prices and market opportunities leading to inaccessibility to new market. 5. Price fluctuations. Cabbage production is highly seasonal with glut production resulting in depressed and low producer prices and high post harvest losses. Seasonality is purely a climatic change issue where the farmers have little control over, and this coupled with over supply is generally blamed for the price instability. This consequently leads to lower returns to the farmers. 78 Table 17: Constraints and recommended Interventions CONSTRAINTS CAUSE EFFECTS RECOMMENDED INTERVENTIONS Poor rural access Low investment in access road High transport cost and Improve rural access roads in the producing areas as identified in the district roads development maintenance limited access to market action plan. outlets Perishability Poor storage facilities Low sales price provide capacity building in market research and linkage and provision of storage Lack of market facilities High post harvest Pest and diseases, lack of on farm Loss of produce, Low Train farmers on post-harvest handling and IPM, support development of loss storage, market outlets poor returns appropriate on farm storage product handling Multiple taxation Need to maximize revenue for Increased costs to The Municipal Council should review the taxation policy and consolidate the Local Authorities business transaction various charges into affordable one stop payment leading to high consumer prices Poor physical Low investment by local Poor trading Upgrade the existing market structures and facilities as outlined in the action plan market authorities in market infrastructure environment and development, Budgetary limitation hygiene infrastructure and facilities Poor market Poor market dissemination, Low returns and Establish market information points at market centers for information briefs on information limited market surveys and exploitation by brokers prices, supply, and demand, enhance use of ICT, mobile telephony and media information materials related technology and extension services 79 188.8.131.52 Recommended Interventions 1. Improving market infrastructure and facilities: In order to improve the trading environment and reduce post harvest losses, recommended that SHoMaP should support construction of appropriate modern market facilities at the wholesale markets, specifically the Ndaragua, Olkalou and Ol-Joro Orock wholesale markets. This can be achieved in collaboration with Nyandarua Local Authority 2. Rehabilitation of Access roads: Access road is key to marketing, discussion with traders revealed the state of access roads in Nyandarua north in deplorable conditions hence making the linkage between markets and farmers costly. Farmers mentioned, in particular, the need to improve the Ndogino-Mahianyu-Kiahiti road, Pesi-Mahinga and Kahii-Olbolsat access roads. This effort can be achieved through a close collaboration between SHoMaP and the Ministry of roads , local authority and CDF 3. Market Information and dissemination: It was noted that traders do not have systematic ways of accessing information on commodity prices and market opportunities. In order to improve this situation it"s recommended that SHoMaP should work in collaboration with KACE and the Agricultural Information Resource Center (AIRC) to develop and disseminate available information to traders through simple market bulletins and mobile telephony on a regular basis so as to enable them respond more effectively to market needs. Being a highly perishable commodity, the need for storage and cooling facilities present a viable investment opportunity for private sector. Farmers should be encouraged to explore processing of dehydrated cabbages for human consumption and use of cabbages for animal feed 4.2.7 Costs and Margins 188.8.131.52 Gross Margin At the time of the study the average cost of producing cabbages in the study district was estimated at shs 47,500 per ha and comprised mainly of the cost of inputs, while gross margin was estimated at shs 24,500 per ha. The gross revenue was estimated at shs 72,000 per ha. However, it was observed that establishment costs varied from one farmer to the other depending on the level of crop management. The work sheet is provided in appendix I 80 188.8.131.52 Marketing Margin Traders marketing margins were influenced by how competitive the market is, seasonality and the distance from the markets. The value share for market actors in the cabbage marketing chain is summarized in table 26 below. The work sheet is provided in appendix VI Table 18 : Value share of actors in the marketing chain 1 2 3 4 5 6 7 Chain actor Variable Selling price Gross Added Value Gross %Value cost Income margin% share Farmer 528 800 272 800 34 40 Market broker None 1200 400 400 33.3 20 Wholesaler 1395 1600 205 400 12.8 20 Retailer 1840 2000 160 400 8 20 Retail consumer 2000 100 price Source: Field investigation, 2009. The broker bought cabbages at a Value share of actors in the cabbage market farm gate price of shs 800 per bag and chain sold it to the market trader at shs Retailer, 20, 20% 1,200 per bag, giving him or her a Farmer, 40, margin of shs 400 per bag and this 40% reflected his/her commission. He did Wholesaler, not incur any costs as all his/her cost 20, 20% was met by the buyer to the equivalent of buying price. The wholesaler sold Market Farmer Market broker broker, the produce to the market retailer at 20, 20% shs 1,600 per bag who later sold it at sh2000 per bag, being the final retail price, earning him/her a margin of shs-400 per bag. The value share is the final retail price and the cost each actor in the chain manages to capture and incurs in the chain. The farmer"s gross margin and value share in the cabbage trade is a big share of his/her total revenue, being 34% and 40% per bag sold which could be higher with an increase in farm gate price. 81 4. 2.8 Governance and Services The value chain governance essentially determines the success of intervention strategies. In the cabbage commodity value chain, a few public institutions and organizations performing various market based roles were identified. These included the MoA and Local Authorities, and the Agricultural Training Centers among others. A summary of these institutions and their roles is provided in the table 21 below. Table 19 : Summary of the Major Public Stakeholders in the Value Chain NAME SPECIFIC SERVICES LIMITATION Input Supply Systems: and services Pest Control and Product Board (PCPB) Licensing, policy enforcement, and Weak capacity to effectively control Monitoring of accreditation and application and monitor standards and of chemicals and pesticides use distribution of agrochemicals, Long period for registration of local stockiest Ministry Of Agriculture Distribution of seeds and provision of Inadequate extension staff and Extension services budgetary limitations Marketing Systems: Ministry of Cooperative and Marketing Farmers cooperative and marketing Weak collaboration Development Local Authorities Provision of physical infrastructure Weak capacity to monitor regulations and inadequate financial resources Processing System: ATC-Oljoro-Orok Training of small scale agro-processing and Budgetary limitations demonstration 4.2.9 Governance Issues The main governance issues in the cabbage value chain were concerned with chain relationship, capacity building for farmers and market access. 22.214.171.124 Chain Relationship An interactive relation between farmers and traders is crucial for successful business. From the discussions with stakeholders, it was noted that links between the farmer and the buyer is weak and ad- hoc leading to high level of mistrust between them. The market value chain is dominantly buyer driven being influenced by the traders. Strengthening relations between the producer and traders would benefit both parties. This would be best achieved if farmers were organized. 126.96.36.199 Capacity Building Currently farmers in the subsector produce small and poor quality produce for the local market due to poor of technical skills. It is important to equip farmers with better skills so that they can produce a better crop of a higher quality. Through farmers group the farmer is best place to will receive training on proper crop husbandry, organizational development, financial management and access credit. This training can also be extended to the input suppliers and traders. Building engagement and strategic alliances with private sector service providers to provide training to farmers would be vital to enhance and up- scaling farmers" technical skills. 82 22.214.171.124 Standards, Quality and Grades Continued use of use of the "extended bags" packaging, is a concern that has not been adequately addressed. This reflects weakness on the part of the relevant policy enforcement authorities. Local authorities can play an important role in enforcing the 90 kg bag as the standard unit measure. Improved institutional arrangements for enforcing use of uniform packaging standards would improve trading and business returns to both the farmers and traders. 126.96.36.199 Policy Leverage and Regulation The business of farmers and traders is strongly influenced by public policies, the most important ones being laws, regulation and standards, taxation, public infrastructure and provision of services. Local government authorities can promote better trading environment by ensuring good management, standards and provision of market infrastructure and facilities. They develop and monitor regulation on where to the traders can set up their business, hygiene, standards and collect levies and cess on produce. Market levies, Storage, trading sheds, electricity, hygiene and security were some of the urgent problems to address. Interview with farmers indicate that movement of goods across divisions attracts double payment of cess. Market facilities at the wholesale markets should be improved and market levies rationalized into affordable one-time stop fees, and visibly used to improve services at the market places 4.2.10 Summary of major constraints and recommended interventions In summary the following are the major constraints traders face in cabbage trading. Table 20: Summary of the major constraints and recommended interventions CHAIN LINK CONSTRAINTS RANKING RECOMMENDED INTERVENTIONS Marketing High cost of 1 Improve rural access road infrastructure network as logistics transportation outlined in the district action plan Physical markets Poor market facilities 2 Upgrade existing market infrastructure and facilities including market sheds, stalls, storage, electricity, water and sanitation as outlined in the district action plan Market Poor market 3 Training and capacity building of trades, improve institutions information flow market information access on prices, supply and demand data through ICT and media related technology Lack of traders 4 Facilitate formation of traders association to increase association bargaining power and economies of scale 83 4.3 Garden Peas 4.3.1 Introduction Garden Peas, otherwise known as field Peas is one of the important and one of the most popular Legumes in Kenya whose production is growing in importance with increasing demand. The crop is grown by small scale holders for subsistence and for the local fresh market. It is a source of food and family income to majority of small holder farmers. It is grown as an intercrop with other crops in the field. Generally, Garden pea is the most commonly grown leguminous crop both for domestic and commercial purposes. Peas are cultivated for the fresh green seeds, tender green pods, dried seeds and foliage and manure Dry seeds are used for food, as salad and feed. For food, they are cooked whole, split or ground into flour, and boiled or roasted. Fresh peas are canned or frozen in the immature form. It is a major vegetable and commercial crop The legume thrives better in higher altitudes with cooler temperatures and cannot tolerate excessive humidity which adversely affects its growth. This makes it a suitable crop in the upper and lower highlands of Nyandarua district. However, in-spite of its growing importance and the fact that it can be grown in many parts of the country, there was little recorded information available on the crop. This consequently limited the value chain analysis study on the commodity. 4.3.2 Value Chain Map The following value chain segments were identified included the Input supply, production and marketing. This is illustrated in figure 15. 84 Figure 13: The Garden Peas Value Chain Map Production Transportation Retailing Consumption Input Supply Kenya Seed, Broker Broker Households E.A Seed Co, 2000 A Simlaw, SSF, Hotels and c Retailers Retailers NCPB Farmer restaurants t groups Restaurants o Stokists: r Green Acres, MoA, Local Auth MOPH Tumaini, KEPHIS, Local Auth Farm Factor, Local Auth Transporters Malewa Hope SERVICE PROVIDERS 85 Activities of Actors in the value chain VC Inputs Production Transportation Marketing Consumption function Trade f A Loading and Loading Buying and Buying C Supply of Nursery propagation unloading and selling product improved seed T seeds Land unloading for Buying and selling Transportat Bulk breaking I Distribution of preparation ion consumpti Transport Storage on V fertilizers and Transplantin Cess g Cess payment Value addition I agrochemicals Fertilizer payment Quality T Advice to Weeding Cess payment and price I farmers ,IPM differentiat E Credit Harvesting ion institutions Grading/sort S ing, Packing On-farm selling Input Farmer and Broker Lorry Owner Retailer Individual A Suppliers Farmer Groups Households C T Wholesaler Kiosk Public (Public & Workers Lorry Driver Owner/Hawker Institutions O Private (Hospitals, institutions) Educational) R Extension Mobile Trader Handcart Supermarket Private services Driver Institutions ( S Hotels, Restaurants) Rural vendor Porter Processor 86 4.3.3 Input Supply and Distribution System; 18.104.22.168 Seed Supply The main inputs in Garden pea production are seeds, fertilizer, pesticides, herbicides and labor. These inputs are available locally from major seed distributors and agrochemical stokists in the country. There are over 72 seed companies involved in seed distribution in Kenya. The Kenya Seed company is the chief producer and supplier of vegetable seeds in Kenya, through its subsidiary, Simlaw Seeds Ltd. Other seed merchants and suppliers include East African seed growers Ltd. Other Actors in the seed supply system included the East Africa Seed Growers Ltd and several stokists. KARI and KEPHIS provide support in seed multiplication that enables farmers to produce healthy seed of good quality with acceptable market value. However, production of vegetable seeds has been constrained by inadequate research and investment in the seed sector, availability and quality. Much of the currently available seed is expensive, imported, and of poor quality. The Kenya seed Traders Association has provided support to farmers in seed multiplication and ensuring availability. Lack of certified seeds is an area that adversely affects production. Discussions with farmers indicated that most farmers use FSS for planting due primarily to lack and high cost of certified seeds. The Certified seeds retail at shs 170 per 50 gm which farmers considered high. Farmers often plant the seeds directly in the farms. Family labor is usually employed and is significant factor in the production of Garden Peas. 22.214.171.124 Fertilizer and Agrochemicals Garden peas as a crop requires little nitrogen fertilizer compared to other vegetable crops. To be able to achieve higher yields, a basic application of DAP fertilizer at 200kg/ha and composed manure or top dressing with CAN is recommended at planting time to promote flowering. Too much nitrogen in the soil will promote vegetative growth at the expense of pod production and will result in stunted growth. Pesticides/insecticides and herbicides are used for both pest and weed control respectively. Price of fertilizer varies and at the time of study was ranging from shs 2,500 to shs 2,700 per 50kg bag depending on location and distance from the source of supply. 18.104.22.168 Distribution System Most vegetable seeds in Kenya are imported by seed merchants and the seeds are certified by Kenya Plant Health Inspectorate services (KEPHIS) on entry into the country before they are sold and distributed to farmers. The main distributors and marketers of vegetable seeds in Kenya are East Africa Seed Growers Ltd, Simlaw Seeds Ltd, Kenya Farmers Association (KFA), National Cereals and Produce Board and over 100 input dealers and stokists spread within the district. These include Green Acres, Farm Input Systems, Tumaini Agrovets, Malewa Farm Factor and Services, among others, as some of the main seed stockiest and dealers in agrochemicals in the 87 Nyandarua region, but several other small stockists also retail fertilizers and other inputs in the rural and urban markets. The existing seed merchants and stockists adequately provide for the farmers input requirements in the district. They have ensured ready availability of seed and agrochemical inputs to the farmers. The main actors in the input supply system are provided in table 23 below Table 21: Actors in the Input supply chain CHAIN LINK NAME OF ACTOR ROLE/SERVICE LIMITATIONS Seed and Input supply Seed supply Kenya Seed Company Production, distribution Inadequate capacity and technical advice 72 seed companies- East African Seed distribution and Adequate capacity. Seed is Seed company, Simlaw Seeds technical advice to available in adequate quantity Company, KFA, NCPB etc dealers and distributors and quality. Other inputs: Over 100 Small scale Stokists: Selling agro-chemical Lack of capital, limited Fertilizers, and (Green Acres, Malewa, Merit, Vent inputs, training and technical knowledge agrochemical inputs agro, Tumaini). National Cereals technical advice to and Produce Board, KFA farmers 126.96.36.199 Constraints in Input supply During discussions distributors/stockists mentioned two main constraints in the input supply chain. These were: 1. Lack of access to credit, primarily due to stringent requirements by the commercial banks on account of lack of collateral for security, high interest rates and perceived risk associated with lending to small scale traders, was mentioned by seed merchants, particularly the small scale stockiest as a major limitation to their ability to purchase adequate stock. 2. Limited technical skills: Input dealers on their part indicated lack of technical skills and capacity to advice farmers on the appropriate use and the application of chemicals. With better training, most stokists felt they can play a role in information transfer and agronomic advice to farmers regarding correct use of chemicals. In addition they felt they could do with being agents of National Cereals and Produce Board than being in direct competition. A summary of the main constraints reported by the input dealers, and recommended interventions is provided in table 24. 88 Table 22: Constraints in Input supply CONSTRAINTS CAUSE EFFECTS RECOMMENDED INTERVENTIONS Lack of capital for Stringent Low stock level Formation of input dealers small scale stockists requirements by association to enhance access to financial institutions finance and credit facilities from suppliers /manufacturers Inadequate Technical Lack of training Limited capacity to Training of input dealers Skills advice farmers 18.104.22.168 Recommended Interventions In order to improve the functioning of the input supply system the following intervention measures are recommended: 1. Training of Input dealers. In the context of the foregoing, it was noted that some training had been done by AGMAK, Agrochemical Companies and Kenya Farmers Association, however, there is need to enhance training, particularly with emphasize on agrochemical applications, safety and health, agribusiness development, procurement and credit. In view of this it is recommended that SHoMaP should work in collaboration with the private sector business services providers and NGOs to strengthen the capacity of input dealers to improve their capacity and enable them impart requisite information and advisory services to farmers. 2. Access to Credit: The accessibility to credit is across cutting issue affecting not only the input stockists but also the small holder farmers, and yet it is critical for business expansion. Stockist is unable to stock economic quantities of the required inputs due primarily due to lack of capital. In order to improve on this situation, it is recommended that SHoMaP should create embedded a credit facility within the program through the existing commercial banks for on lending to farmers and input stockist at subsidized rates to alleviate the credit crunch. 3. Input dealers Platform. From the discussion it was noted that there is no existing input dealers" platform that can spear head traders interest and welfare and promote efficiency, transparency the input supply chain. Hence it is recommended that SHoMaP should work with agro chemical companies to facilitate formation of input dealers forum or platform for dialogue with manufacturers and farmers to strengthen their participation in input supply chain. This could, in the longer term, gradually elevate to a stockist based SACCO as a vehicle to address the credit needs of the small scale stockists. In order to increase availability of Garden Peas seed in the market there is an opportunity for input supplier to get into contract farming with farmers to produce certified seeds for the market 89 4.3.4 Production According to the Ministry of Agriculture at the national level, a total of 12,000 hectares were planted with Garden Peas in 2007 up from 6,924 ha in 2005. Total production increased from 34,620 tons in 2005 to 59,047 tons in 2007 valued at shs1.0 billion and shs 1.7 billion respectively. Central Province posted the highest overall production of 40,385 tons in 2007 compared to 27,730 tons in 2006 reflecting annual growth rate of 55.6 %. In terms of production this was followed by Rift Valley Province posting a far distant of 15,910 tons in 2007. Nyandarua North has the potential for growing Garden Peas, particularly in the lower zones of Oljoro Orok and Olkalau divisions. At the time of study about 2000 small scale farmers covering some 945 ha were engaged in Garden Peas production, intercropped with maize, in Nyandarua district. Overall production of Garden Peas in the district increased from 15,600 tons in 2004 to 18,000 tons in 2006, but declined in 2007 and 2008 to 13,000 and 3,780 tons respectively. Part of the reason for this decline was attributed to drought and the 2007 post election violence. Yields and Variety: There are two types of pea varieties in Kenya, based on the texture of the seed coats; the Wrinkled Seed type and the Smooth Seed type variety. The main varieties grown in Kenya by the small scale farmers are Earlicrop, Onward, Alderman, "Black Eyed Susan" Ambassador and Green Feast of which the later two are grown in Nyandarua North district. At the national level yields vary from 3 tons to 10 tons per hectare, or an average of 6 tons of pods per hectare. Pea yields in Nyandarua vary depending on crop management and variety. The adapted yield for the district is estimated at 4- 5 tons per ha for the unshelled peas but could be higher if improved agronomic practices are used and commercial production is promoted. Pest and Diseases: Garden Pea is susceptible to pests and diseases, mainly the Mildews, Caterpillar, (Cutworm), Aphids, Blue butterfly , Mosaic viruses, Thrips, Bacterial blight and Anthracnose which if not controlled can result in severe drop in productivity. Bacterial blight can occur on all above-ground plant parts. Infected stems are olive-brown, while stipules and leaflets turn yellowish and/or water-soaked and the affected young pods shrivel or decay. Older pods may show water-soaked spots and may become scalded or cracked. High humidity and rains facilitate disease development. The optimum temperature for bacterial growth is facilitated at about 27.8 centigrade. If infection takes place at early growth stages, affected plants wither and die. Crop husbandry and harvesting: The first key need for peas is moisture. Peas have to be irrigated when conditions become dry. Also weed control is very essential at an early stage to reduce competition for nutrients. However, Peas develop rapidly and the need for weeding is reduced when fully grown. Shallow cultivation is recommended to avoid root damage. A suitable crop rotation program involving grains, potatoes and maize should be used. For good quality fresh market peas staking is recommended. 90 Green peas are ready for harvesting 8 to 12 weeks after planting. The time to harvest is determined by the appearance of the pods. For Garden peas this means pods should be well filled but still smooth and green. Peas are harvested when pods have reached full size but before development of seeds. As the pods mature the sugar content decreases and market appeal is lost. The harvesting period may last 4 to 6 weeks. For dry Peas the whole plant can be uprooted when about 80% of pods have turned brown and dry. The haulm is then either left in the field or carried to a threshing place to dry completely after which the Peas are threshed and winnowed. Farm gate prices for unshelled pod have varied over the last 3 years at between shs 10-12 per kg and at the time of study it ranged from ksh 15-20 per kg. Given the growing demand, there is potential for increased commercial production through increased acreage and better agronomic practices. Table 21 shows production trends in the last 3 years. Table 231: Garden Peas Production in Nyandarua (2004-2008) tons Year 2004 2005 2006 2007 2008 Description Ha Prod Ha Prod Ha Prod Ha Prod Ha Prod National 6580 23,327 6924 22,798 8075 40375 11,609 59,045 Na Na Output Central Na Na 4,600 23,000 5546 27,730 8,077 40,385 Na Na Province Nyandarua 3900 15,600 4,100 16,400 4,500 18,000 7560 22,873 5,9o4 18,836 District Percentage Na Na 89 71.3 81,1 64.9 33.4 33.4 Na Na share Source: MoA, Nyandarua District Annual Reports 2005-2008 The table above shows that during the Garden Pea production trend in Nyandarua north District period 2005-2008 production of Garden 25000 Peas in the district recorded a peak of Production in Metric tone 20000 22,873 tons in 2007 up from 16,400 tons in 2005. It was noted that Garden Peas is not a 15000 stand -alone crop in the field but 10000 intercropped mainly with maize and/or 5000 other crops. However, Nyandarua district 0 has a high potential of increasing the 2004 2005 2006 2007 2008 production of the crop in future if farmers Year can embrace as a commercial enterprise. Although production of the crop is seasonal due to climatic conditions, there were no marked variations in production volumes and price fluctuations over this period as is characteristic in other horticultural commodities 184.108.40.206 Production System 91 Production of Garden Peas starts with land preparation followed by planting and fertilizer application through to weeding and pest management. The seed usually takes 5-7 days to germinate and about 2-3 weeks to grow and start trailing on the ground. Pod colour, size and internal seed development are the normal characteristics used to assess maturity. On- farm storage, grading and packaging of produce is rarely practiced, although some packaging was observed at the market place. At the farm level, rapid deterioration of quality due to poor handling and high temperatures was noted. Most farmers, therefore, market the crop immediately after harvest as there is ready market. It was noted that farmers produce the crop in small quantities which is unattainable in terms of optimal production and profit maximization. Part of the reason for the low production was due to small land size, poor crop husbandry, intercropping, and lack of appreciation by farmers of its potential as a high value commercial crop. 184.108.40.206 Actors in the Production Chain The primary player in the production chain is the small scale farmers and the input suppliers. About some 2,000 farmers were engaged in production and harvesting of the crop. The Ministry of Agriculture provides farmer extension and technical services. There was no commodity specific agency providing targeted services to the sub sector that was observed. There were no farmers groups involved in the production chain. The existence of farmers group is imperative for the development of commodity market value chains. Furthermore the farmers groups serve as a forum for information exchange. In spite its commercial potential, as an intercrop, extension services have targeted the parent crop in the field and little attention has been given to production of the crop as a source of income and livelihood to farmers. A summary of the main actors and their roles in the production chain are provided in table 26 below Table 24: Actors in the Production Chain CHAIN LINK NAME OF ACTOR ROLE/SERVICE LIMITATIONS Production Link 2000 SSF Growing, harvesting Limited technical and marketing peas knowledge Support services Ministry of Agriculture Training, extension and Few extension staff and technical services to outreach farmers, farmers group formation Seed Trade Association of Kenya 92 184.108.40.206 Constraints in the Production Chain Owing to its high commercial value the crop has the impetus of transforming the subsistence nature of production to modern market oriented production? Similarly with improved access roads and development of the market, farmers have the opportunity improve their livelihoods. However, despite these potentials the sub sector is experiencing some constraints of which the main ones reported by farmers were: 1. Low productivity. Garden peas require keen care and tendering. Moreover as an intercrop the proper husbandry is lost to the main crop. As a result, farmers produce not only in small quantitative but also low quality product and are unable to aggregate produce at levels required to access larger markets economically. 2. Inadequate technical skills. It was noted that farmers lack the technical skills and training to undertake the rigorous tendering involved and are unaware of proper growing techniques, thus resulting in poor quality produce. This is further exacerbated by the high incidence of pests and diseases 3. Lack of commercial oriented production: Production of the commodity is still geared towards meeting subsistence needs without any commercial or market orientatation. The current commodity distribution and marketing system is inefficient and communication is still person to person. The lack of farmers groups has limited famer"s ability to access credit, bulk produce, move large volumes of produce, and even negotiate market prices and ensure produce quality. The existence of farmers group is imperative for the development of commodity market value chains. High cost transportation: The poor state of access roads to the producing areas has been blamed for the high transport costs thus leading to reduced returns to the farmer. Improving access roads will reduce logistical hurdles thus permeating easy access to markets. The key constraints are summarized in table 27 below Table 25: Key Constraints in Production Chain MAIN CAUSE EFFECTS RECOMMENDED CONSTRAINTS INTERVENTIONS Low productivity. Poor crop husbandry, Low yields and poor Train farmers on production skills to lack of technical skills, quality of produce improve productivity, train extension and intercropping staff to impart skills to SSF, encourage commercial production High cost of Poor access road Reduced margins Improve access roads as outlined in the transportation. development and and low returns to district action plan maintenance farmers Small marketable volumes Lack of Low appreciation of Subsistence Provide focused extension services and commercial commercial value by production training to farmers on farming as a production farmers Poor product quality business and farm demonstrations, FFS Intercropping, Lack of farmers Multiple enterprise Lack of control of Facilitate formation of commodity organization leading to lack of focus the chain, merely farmers association/cooperatives on any single enterprise price takers 93 22.214.171.124 Recommended Interventions 1. Technical training. In order to improve farmers capacity to produce quality produce, it is recommended that SHoMaP in collaboration with MoA, HCDA, and relevant private sector services providers should organize and conduct capacity building training for farmers on farming as a business and crop husbandry to improve productivity. As important, the project should disseminate information on production techniques through farmer field schools and demonstrations 2. Improving access roads: It is important for the produce to reach the market in time and good condition; however the current poor state of the roads does not permit efficient movement of the crop. In view of this, the project should work in collaboration with Ministry of roads, Local Authority and CDF to improve the conditions of access road in the producing areas particularly those listed in the action plan. 3. Farmers group development: As a way of stimulating market oriented production, it is imperative to facilitate formation and evolve farmers groups to commercial marketing units through production and market oriented capacity building so that they can adopt small holder commercial farming. To gain influence in the marketing chain, farmers groups will involve and keep members informed in production and marketing activities as well as help them build partnerships and profitable business relations. There appears to be a gap between the demand and supply of Garden Peas in the market, as evidenced by the fact that all the produce in the market is sold off within the day. Farmers have an opportunity to engage in commercial production of the crop 18.104.22.168 Marketing System Peas are marketed mainly in the local market in both unshelled and shelled forms. Marketing of unshelled peas is mainly through market brokers, retailers and super markets. The brokers bridge the wholesaling function which was conspicuously absent in the marketing chain. Product grading is rarely practiced and product freshness, shelf- life and quality are much stricter requirements at the supermarket levels with reference to pesticides traceability. By and large the trading in the commodity is still ad-hoc and confined to the farmer and market brokers. There was no observable market leader in the commodity value chain. The commodity is a high value crop which is largely consumed in the medium and high level households. There is increasing demand for fresh shelled peas of the common varieties in the domestic market and potential for export exists. Kenya export of garden peas in 2005 amounted to 2,206 tonnes at a value of KSh 729 million, and of snow peas 1,739 tonnes at a value of KSh 448 million. The unshelled peas too have a growing domestic market particularly in the rural urban centers. Because of small quantities, the product is package in 50 Kg bags and transported to the markets using pick-up, bicycles and motorcycles or public transport and traded in open wheel barrows and tins at the market places. 94 22.214.171.124 Market Chain Actors From discussions with farmers it was observed the commodity has a fairly weak supply and market chain with only a few actors. The main market actors included the brokers, retailers and consumers. A summary of the main actors in the market chain and their roles is provided in table 28 below Table 26: Actors and their roles in the Garden Peas marketing chain CHAIN ACTOR ROLES LIMITATIONS Brokers Crop harvesting, sorting, pricing, and Small quantizes make packaging, produce consolidation at farm produce consolidation at level and transportation to markets farm level difficult. High Selling produce to retailers and transportation costs due to consumers poor road infrastructure Transporters(few) Transportation of produce to markets Poor access roads, Levies/Cess. Super markets in Urban centres Retailing of unshelled produce Cost of preservation to extend life 30 Small scale specialized Selling, peeling and packaging of produce Poor market infrastructure commodity based traders sheds and stalls, Interruptions in delivery due to occasional shortages. Local Authorities Provision of market infrastructures, Budgetary constraint collection of CASs/levy 4.3.5 Market Segments Marketing is an essential component of income and employment generation. The development of the sub sector is underpinned by increasing commercial production, income levels and more importantly provision of production and market infrastructures. Marketing of the commodity is done at two levels; farm-level, retailing at the market places and in the supper markets. 126.96.36.199 Farm-Level Marketing The main marketing and value adding activities performed at the farm level included crop harvesting, pricing, packaging and transportation of produce to market places. The primary agent is market broker who carries out almost all of these functions. It was noted that farmers cannot generate economical volumes to market for themselves, nor are they organized into marketing groups to facilitate the marketing of the product. As a result, the market level broker controls the marketing chain. Lack of produce grading and appropriate on farm storage was noted. The commodity value chain is at its weakest at the farm-level as the brokers dominate the marketing chain; the farmer being merely a price taker, thus suggesting the need for chain upgrading through institutional development. I.e. formation of farmers groups to leverage on marketing. 184.108.40.206 Retailing. Retailing is the most vibrant segment of the trade in the commodity. Most of retailers were full time itinerant and fixed location traders. They usually sell in tins which are specified in terms of their value, depending on size, 95 ranging from KES 20 to KES 30 for the unshelled Pea. Retailing of shelled Peas also takes place alongside unshelled Peas, but by a different retailer. Shelled Peas were sold at much higher price, between shs 80 and 150 per tin. The price setting and those prevailing in the market were not related to quality of the product. Traders reported that while supply appeared limited, the market demand was assured, hence all that is supplied to the markets is immediately sold out. The fresh shelled produce is also sold in glasses and packed in plastic polythene bags without reference to any weight. There was no standard unit of packaging for the market which distorted market prices and volumes sold. Therefore; the introduction of standard packaging would improve marketing and farmers incomes 126.96.36.199 Household The most observable source of potential demand for Peas is the high income households particularly those in the urban areas. The product is widely consumed as salad in many rural and urban up market households 18.104.22.168 Physical Markets Wholesale and retailing are done at the main whole sale markets in Ndaragwa, Nyahururu, Oljoro-Orok, Olkalou and open air-markets around the urban centers. Daily rural cluster markets for the street trader/ vendor were identified to include Kasuku, Mailo-Inya, Shamatta and charagitta, Passenga, Pesi, and Ndundori which are also terminal destinations for most of the produce in the district. These markets handle over 70% of total production. It was observed that the wholesale markets are in poor physical conditions without sanitation, market stalls and storage facilities. Traders mentioned specifically the need for rehabilitation and improvements of the main wholesale markets. Both farmers and traders reported that, besides Marketing of the commodity is done at two levels; farm-level, retailing at the market places and in the supper markets lack of information , they suffer losses from inadequate marketing facilities 18.104.22.168 Market Levy/Cess At the wholesale markets brokers are charged a fixed fee of shs 20 per day per wheelbarrow by the Local Authorities. Retailers are taxed a standard fee of ksh 20 per day by the Local Authorities reflecting cost of apace and facilities at the market places. While these charges may not be much, together with high transportation costs, they increase the cost of trading and final consumer price. 188.8.131.52 Marketing Channel The t marketing channels for garden peas in the district, from the farmer to the consumer are illustrated in figure 16 below. There is significant absence of wholesalers in the marketing of Garden Peas in Nyandarua North. Figure 14: Garden Peas Marketing Channel 96 Producers Middle men/Brokers Rural Retailers Spec. Retailers Consumer 126.96.36.199 Marketing Constraints The marketing of Peas is rather simple as the produce is quickly sold after harvest owing to existence of a ready market. This notwithstanding, traders reported the following constraints, a summary of which is provided in table 29 below 1. Multiple charges. From discussions nearly all of the Peas traders were small scale vendors generating little income from the sale of the commodity. Once in the market a levy is charged per bag and for the trading space. The net effect of these charges is eventually transferred to the consumer who ultimately pays higher retail price. 2. Poor Market Infrastructure. The poor physical conditions of the wholesale markets are a deterrent to market trading and increases post harvest losses hence cost of doing business and thus reduce traders" returns. 3. High Transportation cost, due primarily to poor access roads is a major cause to high market prices. 4. Market Information. From discussions, it was noted that traders do not have systematic ways of accessing information on commodity prices and market opportunities. Table 27 : Constraints and Recommended Interventions MAJOR CAUSE EFFECTS RECOMMENDED CONSTRAINTS INTERVENTIONS Multiple charges by Need by Local Authorities to Increased cost of trading The Municipal Council should Local Authorities maximize revenue and reduced profitability review policy on levy charges and consolidate the various charges into a one stop payment Poor market Low investment priority in market High transaction cost, Upgrade the existing market infrastructure infrastructure deployment poor hygiene structures and facility as outlined in the action plan Poor market information Poor dissemination, limited Poor market decisions, Establish market information points flow and dissemination market surveys and information Low returns to traders for briefs on prices, supply, and materials demand trends, and enhance ICT and media related technology and extension services, support exchange tours High transport costs Poor access roads Increased cost of trading, Improve rural access roads , bridges reduced profitability to reduce cost of transportation 97 220.127.116.11 Recommended Interventions 1. Upgrading market infrastructure and facilities: Traders would want to carry out their business in a clean physical environment with necessary enabling auxiliary facilities. As part of the wider effort to improve the business environment, it is important to improve the physical conditions of the wholesale markets to enhance competitiveness in the trading. This can be achieved through increased investments in development of wholesale markets including construction of grading, storage and collection centers 2. Market information and dissemination: Market information is critical for efficient operation of the marketing system. In order to improve access and flow of market information, it is necessary to strengthen extension services. In this regard the MoA, working in collaboration with private sector business development services providers and KACE should make information available to farmers and traders a like through simple market bulletins, ICT related media, market studies, internet and mobile telephony on a regular basis so as to enable them respond more effectively to market needs. Establishing rural information dissemination points or villages close to the farmer provided an added advantage. 3. As a high value commodity and highly nutritious product there is an opportunity to promote consumption through awareness campaigns. The market could be better organized with a market chain leader who would co-ordinate and link farmers to markets. 4.3.6 Value Addition For the fresh market, the harvested pods are sorted and packed. Washing is not desirable as it may bruise the pods; so soiled pods are discarded during sorting along with malformed or diseased pods. Rejected pods are excellent animal feed and can also be used as green manure. Some value addition activities were noted being undertaken in the district by Mawingu Fresh Growers and Kaage SHG who also participate in negative and positive seed selection. Opportunities exist to add value through grading, threshing and packaging for local market in the groceries and super markets. 4.3.7 Costs and Margins 18.104.22.168 Gross Margin Seed is the most important input in the production of Peas. Available data at the time of study estimated the average cost of establishing Garden Peas enterprise at Shs 15,160 per acre comprising mainly of seed and labour. The gross margin was estimated at shs 20,840 per acre at estimated gross revenue of shs 36,000 per acre. This could be higher depending on the level of crop management. The work sheet is provided in appendix I 184.108.40.206 .Marketing Margins 98 During discussions, traders reported that their marketing margins in the commodity trade depended on how competitive the market is, seasonality and the cost of transportation. The value share for actors in Peas marketing chain is summarized in table 30 below. The work sheet is provided in appendix I Table 28: Value share of actors in the marketing chain 1 2 3 4 5 6 7 Chain Actor Variable Selling price Gross Added Value Gross %Value share cost Income margin% Farmer 316 750 434 750 57.86 33.3 Market broker 750 1250 500 500 40 22.2 Wholesaler 1535 1750 215 500 12.3 22.2 Retailer 1985 2250 265 500 11.8 22.3 2,250 100 The broker bought the produce at a farm gate price of shs 750 per bag and sold it to the wholesaler at shs 1,250 per bag, giving her a margin of shs 500 per bag and this reflected his/her commission. At the market, the retailer bought it at shs 1,750 per bag and later sold it at shs 2,250 per bag, being the final consumer price, earning him/her a margin of shs-500 per bag. The value share reflected the percentage of the cost each Actor put in the chain and final retail price each Actor manages to capture. The farmers" gross income and value share was a big share of his/her total revenue, being 57.8% and 33.30% per bag respectively and could be higher with an increase in farm gate price. 4.3.8 Governance and Services In the Peas commodity value chain, several institutions and organizations were identified which play various roles as provided in table 32 Table 29: Summary of the major public Stakeholders in the Value Chain NAME SPECIFIC SERVICE PROVIDED Input Supply Systems: Limitation Pest Control and Product Board (PCPB) Licensing, policy enforcement, and Weak capacity to effectively control Monitoring of accreditation and and monitor standards and application of chemicals and distribution of agrochemicals, long pesticides use period for registration of local stockiest Production System: Ministry Of Agriculture Distribution of seeds and provision Inadequate extension staff, lack of of Extension services training in agribusiness development and inadequate budgetary allocation Marketing System: Local Authorities Provision of physical infrastructure Weak capacity to monitor regulations and budgetary limitations 99 4.3.9 Governance Issues The main governance issues in the Pea value chain were concerned with chain relationship, capacity building and market standards and institutions. 18.104.22.168 Chain Relationship The business of farming thrives in a stable relationship environment where transactions are transparent at both buyer and seller levels. Links between the farmer and the buyer in the commodity trade was weak an ad-hoc. The market value chain is heavily buyer driven and controlled by the broker who has all the information in the chain. The case for Garden Peas is unique one where traders have limited contact or link with the farmers. This has made consistency in supply of quality product difficult. 188.8.131.52 Standards, Quality and Grades Standards make trading become remunerative. Grading of produce at both the farm and market places was totally absent. The produce is packed in 50 kg sisal bags and sold in tins and plastic bags at the market places. The lack of standards makes pricing difficult. In order to facilitate profitable trading in the commodity, there is need introduce standard unit measure based on size and grades and produce quality. 220.127.116.11 Market information It was noted that market information and dissemination on the commodity is weak and inadequate due partly to the fact that the produce is not widely traded. In order to improve market information, the program should link with the Kenya Agricultural Commodity Exchange Ltd (KACE) to enhance provision of market information and dissemination to the farmer and traders. Better information dissemination can also be facilitated through rural based market and agribusiness information points at different market and divisional centers, use of mobile telephony, radio and trade net system. In addition the multiple levies, although not a major concern, have made trading for the small trader who sells small quantities unprofitable. There is thus need to consolidate all the levies into affordable one-time stop fees. To address the twin problems of standards and multiple levies, it may be necessary for the project to convene a stakeholder"s workshop to discuss the various taxes and levels with a view to leaving only those that add value to the stakeholders including farmers and traders. 100 4.3.10 Summary of Major Constraints and Recommended Interventions Farmers reported adequate availability of quality seeds and inputs to meet their requirements. However, they noted with concern the low levels of production and low quality produce. Poor rural access roads and poor physical market conditions were also mentioned. The following is a summary of the major constraints and recommended interventions Table 30: The major constraints and recommended interventions CONSTRAINTS RANKING RECOMMENDED INTERVENTIONS Low volume and quality 1 Intensify production and increase land size under the crop to gain production level economies of size as well as capacity building Poor market information 2 Establish market information centers for briefs on prices, supply, and demand trends and enhance use of mobile telephony Poor access road 3 Improve rural access road infrastructure network as outlined in the infrastructure district action plan Poor market infrastructure 4 Upgrade the existing market infrastructure structures and facilities as outlined in the district action plan 4.3.11 Institutional Development in the Commodity Value Chains 126.96.36.199 Farmers Organization Farmer groups are a cross cutting issue affecting development of commodity value chains. It is not uncommon to find farmers groups engaged in the production of more than one crop hence their presence in the target commodity value chains. Being important actors in production and market chains, the farmers groups were assessed with respect to their contribution and access to inputs and markets. The producer groups are important for effective participation of farmers in the value chains. A well organized and functioning farmer groups promotes market –oriented farming system to produce products that are demanded by the market. They invest in good agricultural practices and provide market information and value to its members by ensuring quality services and good governance. They help in general awareness creation and achieving economies of scale through bulk procurement of inputs, storage, transportation and marketing of produce. Several farmer groups were identified to be involved in seed supply, production and marketing levels in the different commodity value chains 220.127.116.11 Input supply 101 A total of 80 farmer groups were active in the production of the target commodities. Of these a bout 12 farmer groups were identified to be involved in potato seed multiplication, two in production and one in value addition. Another 20 groups were involved in production and marketing of Potatoes. Although there were few farmers groups identified to be involved in any appreciable level a bout 40 groups were identified to be engaged in production and marketing of cabbage and another two were engaged in Garden Peas processing. About 20 groups were engaged in the cabbage production and only two were identified to be engage d in Garden Pea processing. The others were engaged in production of other crops. While the number farmers groups reported across the 3 commodities value chains was good it was not impressive enough as more groups could be enlisted. The organizational development was relatively better in Potato and poorer in the Garden Pea and Cabbage sub sectors with nearly of the groups experiencing management problems. Poor governance and weak leadership was often cited, suggesting nedd for enhance training in governance issues Regarding access to inputs and output markets, the groups faced a number of challenges in their operations including lack of capital to procure needed inputs which often resulted in low use of the required input, poor production technologies ,high input costs and inadequate technical skills because they had not received appreciable training in value addition and agribusiness development. These constraints are summarized in table 34. 1. Lack of technical Know-how: It was noted these groups had better access to technical training and other services and were regularly visited by the extension officers. The groups in seed multiplication also received new genetic materials for planting. However, it was reported by farmers that the groups were still weak and functioning poorly. They lacked technical skills, capital, had weak governance and experienced difficulties in accessing readily quality seeds at affordable prices. 2. High Input costs: Farmers liquidity constraint has the effect impeding their production potential .Institutively relaxing the conditions for credit access as well as reduced input prices would increase availability of credit to farmers thus enhancing the ability for increased input use. 3. Lack of economies of Scale: Closely related to the problem of weak farmers organization was the lack of economies of scale; usually fragmented and small scale pattern of production and marketing. The small quantities discourage commercialization. Farmers were not only scattered geographically, but often produce for subsistence or below potential. Extension services in the district have emphasized support to individual farmers instead of groups that would otherwise provide better opportunities to use limited resources effectively. While the old-age approach of extension farmer contact on- one- to -one basis is 102 effective, it is expensive and unsustainable as the sole means of reaching farmers with agricultural technology. 4. Access to markets: Similarly, tendency was also observed with regard to access to markets and market information. Poor market access leads to high degree of uncertainty, low profitability and lack of ability by the farmer to meet ever changing market requirements. This has resulted in low quality product and lower prices for the farmer. For effective supply, and access to markets, farmer groups require market information, storage facilities and transportation. The inadequate access to these services was exacerbated by poor access roads, and inadequate market infrastructure. The deficient market information often leads to market distortions, lower price, and hence low income to the farmer. 188.8.131.52 Trade Associations Traders Association is another area of institutional necessary for trade promotion. Traders often feel misunderstood or mistreated by farmers and public authorities, but trades who organize themselves always develop better linkages with the farmers and service providers. Traders Associations can improve rules, regulations and enforcement of quality standards by their members. Public institutions always respond positively to organized traders offering valuable support services. There were no Traders Associations across all the commodity value chains that could lobby for traders interests and build relations with farmers and other actors in the chain However, in the Potato sub sector, there was the KENAPOFA operating at the national level with minimal presence in the district. The creation and development of the Association was supported by PSDA/GTZ, however the Association remains weak and ineffectual to give farmers the needed services. At the time of study, the District Input Traders Association was information. There was also the Seed Traders Association of Kenya. Farmers reported that the linkage of these Associations with public and private sectors is weak and poor as they function in isolated environments. There were no specialized traders associations working in the Cabbage and Garden Pea sub sectors in the district. Local Authorities can promote better trading by ensuring good management and facilities at the market places. Hygiene, security, trading space and health facilities are some of the urgent problems to address. Local Authorities should involve traders in decentralized management of the markets since it they traders who work daily at the market places. Where possible, the market levies should be rationalized and visibly used to improve facilities and services at the market places. Table 31: Summary of Farmer's organization constraints 103 CONSTRAINTS CAUSES EFFECTS POSSIBLE INTERVENTIONS Lack of Technical Inadequate training and capacity Low production Training and capacity building on Know-how building on holistic agribusiness Loss of opportunity holistic agribusiness management management and farm for profit and farm development, expand development maximization extension and supportive services High cost of Low investment in potato seed low production Empower FGs to engage in input inputs production and multiplication. low market margins multiplication, Low use of fertilizer and other low farm income farm inputs inadequate availability Access to markets Poor access roads loss of produce due to Construction and rehabilitation Poor physical conditions of the perish ability of access roads and markets, markets loss of market setting grades and market Poor market in information flow. standards ,provision of market information 126.96.36.199 Recommended Interventions In spite of the constraints cited above, a farmer"s group founded on strong Common Interest Groups (CIGs) remains a sustainable and effective approach through which the farmers can strengthen their bargaining power and reduce input transaction costs. A farmers group enhances communication and interaction among the individual farmers and between them and other actors in the value chain, thus farmer to farmer extension is amplified. .Sustainability of such groups would be enhanced if farmers focus on producing for contract markets. 1. Enhance training and capacity building for farmers groups in organizational development, governance and management skills, production and agribusiness development in particular market research and value addition would leverage their potential to increase commodity production. This can be achieved through collaboration with the MoA and private sector business development services providers. 2. Increasing the provision of extension and supportive market institutions such as agricultural commodity exchange will enable farmer"s access to capital and help them manage price risks associated with technical constraints. 3. In addition, providing market information, especially over the community FM radio stations, mobile telephony and dissemination through local information points have a high penetration potential. Setting grades and standards is also critical to accessing markets 4. Improving physical infrastructure, especially the rural access roads will facilitate the connect with input suppliers and product markets 5. The project in collaboration with the MoA should continue to encourage formation of farmers groups to help enter into contracts, access extension and financial service 104 5.0 PROPOSED DISTRICT ACTION PLAN 5.1 Introduction This Action Plan has been prepared based on the discussions with the various stakeholders and analysis of information collected in the project area. The purpose of the Action Plan is to guide and facilitate the implementation of investments in production and market development of the target VC commodities by SHoMaP. Several constraints and opportunities were identified at different levels in the value chains of the target commodities. These were prioritized in reflection of their importance to the farmer and translated into an Action Plan with recommended interventions to advance the achievement of the SHoMaP goal and objectives. The Action Plan has focused on specific indicative investment projects to be implemented by SHoMaP in the district during the project life. It recognizes that specific circumstances relevant to the constraints differ and each issue may need some latitude in determining the content of each investment project. The VC analysis has showed that each of the VC commodities face unique constraints at each level requiring specific interventions. However, it is important to note that there are crosscutting constraints and synergies which are not peculiar to anyone VC for example infrastructure, physical markets, multiple- taxation, lack of access to credit and high transportation cost. Within this context, the Action Plan has focused on the following core investment areas for SHoMaP. 1. Seed Multiplication: The analysis has revealed that inadequate availability and high cost of quality potato seed is one of the major constraints leading to low production and low quality produce hence low income o the farmer. During the study it was reported that in some cases farmers are sold adulterated and underweight seeds. A proactive support to potato seed production and multiplication by the project to increase quality seed supply and productivity is therefore imperative. 2. Technical Training and Capacity Building: Analysis of the constraints in all the VCs has revealed that there is inadequate technical knowledge on crop production ,post harvest handling, positive seed selection and organization development among farmers and the inability of stockists to interpret the farm input utilization manual and provide advice to farmers are major limiting factors to production . In addition it was noted that the extension staff equally are inadequately equipped in providing agribusiness development skills to promote market development of the target VC commodities. This has consequently led to low yields and poor quality produce. Hence, it is recommended that all participating SSF and input stockists be provided with training on the above mentioned areas to improve productivity in value chain commodities. This can be achieved through collaboration between SHoMaP and other service providers such as KARI, MoA, HCDA, and local NGOs such as AGMAK 3. Improving Access roads infrastructure: The study has established that the effect of poor roads as an issue cuts across all players and actors in the three commodities value chains. This has led to inefficient distribution and marketing of the inputs and target commodities. The immediate consequent is the high 105 cost of transportation and costs of doing business; hence, leading to reduction in incomes for input suppliers, farmers and traders in the market chain. In view of this, the project should work in collaboration with Ministry of Roads, the Constituency Development Fund and Local Authorities to improve the conditions of the identified access roads in the producing areas as prioritized in the Action Plan 4. Improving Market Infrastructure and Facilities: The study has showed that traders incur major losses due to lack of storage facilities and poor environmental sanitation at the wholesale markets in the district .Thus leading to traders loosing through perishability of the commodities and loss of markets respectively. In collaboration with Local Authorities it is necessary for SHOMaP to support the development /construction of modern wholesale and retail markets with the necessary auxiliary facilities such as grading sheds, cold storage, water and sanitation facilities. 5. Market Information and Dissemination: Access to adequate and accurate information is one of the key pillars to successful market opportunities. It was noted that farmers operate in information poor- environment regarding prices and market outlets. This has created opportunities for brokers, resellers and other intermediaries to exploit the poor farmers and traders. Even with the absence of these intermediaries, farmers and traders would still continue to obtain low income due to poor access to pertinent information. In order to empower farmers and traders; it is recommended that, SHoMaP should work in collaboration with other relevant stakeholders such as KACE, HCDA, MOA and MOCM to support and enable SSF access price information and market opportunities. Furthermore, the development and dissemination of market information materials, establishment of market information points and exchange tours would strengthen stakeholder"s access to new markets and harness their competitiveness. 6. Value Addition: In any form of business value addition is critical for improved prices and income. Value addition and processing of the commodities was except in potato. This was due to inadequate investment in processing and lack of awareness of the importance of value addition in the target commodities. On this basis, a collaborative effort between SHoMaP and other relevant institutions such as KIRDI, Public Universities such as Nairobi University, Egerton University, JKUAT, ATCs and Private Sector dealing with food processing and financial institutions be established and strengthened. Additionally, one of the other major constrains associated with value addition was inability to access credit due to lack of collateral. To deal with this problem SHoMaP should create a revolving fund to assist small scale processors to acquire appropriate processing equipments. Such revolving fund should be managed through existing Financial Institutions for onward disbursements to identified beneficiaries. In addition SHoMaP should support at least on small scale pilot processing unit in every divisions 5.3 Implementation Arrangements 106 The implementation of the action plan is expected to be achieved through effective partnerships and cooperation with stakeholders in the district, all of whom have a role to play in one way or the other. Effective partnerships with existing programs in the district including SHEP, NALEP, JICA and Non-governmental and Private sector organizations are emphasized as vital as much as effective Commitment of SHoMaP in this process. The district Action Plan identified feasible projects, activities to achieve the outputs, implementation approach, and responsible institutions/organizations best placed to take responsibility for implementation. These investment projects are summarized in table 34 below. Specific activities that will address cause of the realization of these projects within the value chain are listed alongside. 107 Table 32: Proposed District Action Plan Project VC specific Rationale And Activity Implementation Arrangement Expected output Time Potential Objective Implementation Potential Frame Beneficiaries Approach Service Provider Seed Input Supply To increase training of farmers group on seed setting up farmers field Extension Quality seed 80 small Multiplication quality seed selection and production schools demonstration officers scale supply centres KARI farmers supporting farmers field schools CIP groups demonstration KEPHIS Training and Production To enhance Training and Capacity building on : Workshops/semin MOA Developed continuo About Capacity technical skill of ar KARI training materials us 10,000 Building farmers and Production (GAP) Demonstration s KEPHIS Number of process input suppliers Post harvest handling On farm trials farmers organized Farmers and farmer HCDA Organizational development and in commodity groups Exchange visits KEBS management clusters and FFs Private trained Input suppliers Agribusiness development sector Capacity building MOA Value addition BDS and training staff Resource mobilization reports Market research and surveys Small scale Production To achieve Support pilot cabbage Organize farmers in to SHoMaP and Increased 200 SSF irrigation sustainable vegetable irrigation production groups MOA production development production along Pesi and Nyakoroko Assist farmers with throughout the rivers water for irrigation year Construction Marketing To reduce DIVISION SPECIFIC ROAD Use local unskilled and SHoMaP to Number 2 years 29000 farm families and production and skilled labour work with of roads rehabilitation of business cost Ndaragua Pesi-Mahinga road- respective rehabilit access road Division 2Km authorities , ated Karai –Nyakinyua- Ministry of road road -2Km roads , Kamuka bridge constituency Olkalou Division Mumbi-Silanga road- development 13 Km committee Oljoro-Orok Kahii-Olobolosat Division road -11Km) Oljoro-Orok- Gathaigi-Silibwet- Oljoro-Orok-Gatimu road-6Km 108 Market Marketing To reduce post Ndaragua Ndaragwa Construction of market SHoMaP in Number 2years 1000 traders Infrastructure harvest losses Division wholesale/retail slabs, stalls and sheds, collaboration of and facilities and improve market provision of electricity, with local marketi general Sharmatta and water and sanitation authority , ng with environmental Sharagita rural facilities CDF , NGO all and sanitation of markets and system the market Nyahururu Town Nyahururu whole Construction of encourage running 8,000 farm families, sale market storage and sheds for private sector and 300 traders traders, water and investments in sanitation cost-effective Olkalou Division Olkalou Retail Upgrade storage cooling 2000 traders Market facilities, market stalls facilities and installation of electricity and water supply Ol-joro-Orok Mailo-Inya, Pasenga Construct sheds and 500 farm families Division rural market centers collection and traders Kasuku market Construction of 1000 traders modern market with all auxiliary facilities- Value Marketing To achieve Training processors/farmers on value Organize the SHoMaP and Diversified 3 SHG, one per Additi better prices for addition beneficiary in the MOA product division on their produces Support pilot small scale processing unit groups Facilitate credit access to purchase Organize workshop processing equipment and seminars Link them financial institution for credit access 6. Market Marketing To link farmers Transfer of information from Mobile telephony SHoMaP in Increased continuo 29000 farm families information with market the source to the recipient Develop market collaboration awareness of the us dissemination. opportunities information bulletins with KACE market Market information and MOA displays 109 APPENDIX I: COSTS AND GROSS MARGIN ANALYSIS PRODUCTION COMMODITY ACTIVITY POTATO CABBAGES GARDEN PEAS Gross Revenue 80000 72,000 36000 Costs Seeds 11000 24000 560 Fertilizer ( 4 bags 2,500per bag) 10000 12500 2500 Ploughing 2000 2000 2000 Harrowing 1500 1500 1500 Ridging 1500 0 Planting ( 8 man days) 1200 1200 800 Earthling ( 8 man days) 1200 1500 Pesticide : Ridomil 1500 3000 4500 Spraying labor ( 2 man days) 300 300 1800 Grading ( 4 man days ) 0 Harvesting ( 20 man days) 3000 1500 1500 Total Cost 33200 47500 15160 Gross margin per Ha 46800 24500 20840 Revenue per bag 1000 800 750 Cost per Bag 415 528 316 Margin per Bag * 585 272 434 MARKETING (Wholesaler) ACTIVITY POTATO CABBAGE GARDEN PEAS Buying price 1350 1000 1250 Harvesting 0 0 0 Bagging 20 20 15 Packaging 0 0 0 Transportation : Produce 100 100 50 Self Return Transport 200 200 200 Cess 5 5 Market levy 20 20 20 Commission 50 50 Total Variable cost 1745 1395 1535 Gross sales 2000 1600 1750 Trading margin 255 205 215 PROCESSING ACTIVITY POTATO CABBAGE Garden Peas Buying price 800 Washing , Peeling , Frying & Drying 1400 Cooking fat 780 Firewood 200 Polythene Bag : 5@100 500 Sealing wax 100 Salt 20 Total Cost 3,800 Gross sales 320 (25gm) packets @ 10/= 3200 Gross sales 160 (50gm) packets @ 20/= 3200 Total Gross Sales 6400 Gross Margin 2,600 110 MARKETING (Retailer) ACTIVITY POTATO CABBAGE GARDEN PEAS Buying price 2000 1600 1750 Harvesting 0 0 0 Bagging 20 20 15 Packaging 0 0 0 Transportation : Produce 0 0 0 Self Return Transport 200 200 200 Cess 0 0 0 Market levy 20 20 20 Total Variable cost 2240 1840 1985 Variable costs per bag 2240 1840 1985 Gross sales 2500 2000 2250 Gross margin 260 160 265 MARKETING (Broker) ACTIVITY POTATO CABBAGE GARDEN PEAS Buying price 900 800 750 Harvesting 0 Bagging Packaging 0 0 0 Transportation : Produce 0 0 0 Self Return Transport 0 Cess Market levy 0 Stall rent 0 Total Variable cost 900 800 750 Gross sales 1200 1200 1250 Trading margin 300 400 500 Trading Margin per bag 300 400 500 111 APPENDIX II: LIST OF RURAL ACCESS ROADS FOR REHABILITATION Name of Road Division Location Estimated Remarks Distance (Km) Pesi-Mahinga Ndaragua Ndaragua 2 Km Priority Karai-Nyakinyua Ndaragua Ndaragua 2Km Priority Gachoya-Humprey Ndaragua 3Km Long term Kamuka Bridge Ndaragua Na Priority Bari-Ngurumu Pri.sch Ndaragua Mailo-Inya 6km Kamotho Bridge road Ndaragua Leshau 2km Loadwar-Godfrey Bridge Ndaragua Kanyagia Ndogino-Mahianya-Kiahiti Ndaragua Mathingwa Highland star Ndaragua Mumbi-Siranga Rd Ol-Kalou 13 1 Kahii-Olobolsat Ol-Joro-Orok 11 Ol-JoroGathaigi-Silbwet 8km Ol-Joro-Cannan-Olbolosat 6km Ol-Joro Gatimu Rd 6km 112 APPENDIXII: LIST OF MARKETS FOR UPGRADING/REHABILITATION AND DEVELOPMENT Name of Markets Division Nyahururu- Wholesale Nyahururu/Ndaragua Expansion market Ndaragua Market Ndaragua Priority Mailo -Inya Ndaragua Daily market Stamatas Ndaragua Daily market/Collection centre Ndondori Ndaragua Daily market/collection point Passenga Ndaragua Ol-Kalou Market Ol-Kalou Priority Rorii Ol-Kalou Collection point Oljoro Orok Market Ol-Joro-Orok Priority 113 APPENDIX IV: FARMERS GROUPS AND THEIR CHALLENGES No Name of the farmer Division Main crops Main challenges reported Group 1 Mugumo-ini Youth Nyandarua Potato, Fertilizer & seeds expensive and some of poor quality, Self Help Group North Cabbage Pests and diseases (Ol"Kalou) Peas Lack of organized marketing, middlemen Poor road networks (M9/8F) Poor quality seeds High input prices e.g. fertilizer, Fungicides expensive 2 Beraka Self Help Nyandarua Garden peas High cost of inputs Group North Cabbages Lack of certified seeds (Ol"Kalou) Potatoes Poor infrastructure Crop is rain fed, flocks in the market Pest and Diseases e.g. Bacteria wilt Extended bags (3M/14F) Lack of on farm-Storage Poor access road Infrastructure Brokers/middlemen 3 Karima Youth Nyandarua Potatoes Lack of certified seeds Development Group North Cabbages High cost of fertilizers and chemicals (Ol"Kalou) Carrots No defined markets (M21/F2) High cost of seeds Low prices and price fluctuations High cost of production 4 Kigande Self Help Nyandarua G/Peas Lack of capital Group North Potatoes Climatic change (Ndaragwa Cabbages Pests and diseases Marketing problems (15M/10F) High transport cost Poor roads 5 Karagoine Self Help Nyandarua Potatoes Lack of certified seeds Group North Cabbages High cost of farm inputs 9Ndaragwa) G/Peas Lack of stable markets (16M/17F) Pest and Diseases Lack of good markets High cost of labour Water, no irrigation facilities 6 Lake Olborosat Nyandarua Carrots Low prices and fluctuating market prices Makereka Iriani SHG North Cabbages Lack of market (Ndaragwa) Potatoes High cost of labour (M21/11F) High cost of farm inputs Inadequate water for irrigation Lack of affordable certified seeds High cost of fertilizer 7 Ukulima Bora Self Nyandarua Potatoes High cost of inputs e.g. fertilizers Help Group North Peas Pests and diseases e.g. Bacterial wilt (Ol"Kalou) Cabbages Unpredictable prices in the market (17M/5F) Extended bag problem Poor roads Low prices of produce and unpredictability No proper package Exploitation by middlemen (brokers) Marketing problem 8 Mutahi Self Help Nyandarua Cabbages High cost of farm inputs Group North Peas Drainage Oljoroorok Carrots Marketing Infrastructure Water during dry season Low prices Rainfall distribution and reliability 9 Gatimu Dairy Nyandarua Cabbages High cost of farm inputs &Horticulture North Carrots Drainage (Oljoroorok) Feeder roads are very poor 114 (8M/3F) No ready market 10 Nyairoko Kariko Nyandarua Cabbages High input prices Self Help Group North Peas Pests and diseases (Oljoroorok) Carrots Poor market price (18M/6F) Poor market information Drainagez 11 Pyort Ol-joro-Orock Potato-seed Technical skills, multipication Lack of capital 12 Mireri SHG Ol-Joro Orok Garden Peas Technical skills 11 Ukulima Bora SHG Nyandarua G/peas Price fluctuations. North Cabbages High transport costs (12M/14F) (Mirangine) Carrots Low technical know-how 12 Mugumo-ini SHG Nyandarua Cabbage Fluctuating prices (10M/9F) North Kales (Mirangine) 115 APPENDIX V: INVENTORY OF INPUT SUPPLIERS/STOCKISTS IN NYANDARUA NORTH NYAHURURU NDARAGWA OL KALOU OL JORO OROK Thiriku Pharmacy Ndaragwa Farmvet Racheal Kahuruko Hope Agrovets Farmers Aid Nuclear Stores Stores Charagita Agrovets Customers Choice Yes We Can Umoja Farm Supplies Pivot Farm Supplies Farm Input & Services Green Acres Umoja Stores Country Focus KFA KAPE PHARM Tumaini Agrovets Agrovets NCPB Agrovets Bemwa Agrovets Jogamari Agrovets Green Acres Malewa Agrovets Salga Agrovets Green Farm Input Kenya Seed Thirikwa Agrovets MMS Agrovets Miami Stores East Africa Seed Vetagro Sunset Agrovets Davima Farm Seminis Eat Africa Country Focus Quality Farm Supplies Supplies Griffaton Seeds KFA Equator Agrovets Central Agrovets Amiran K Ltd NCPB Jaribu Farmers Co-op Vumilia Agro Faida Seeds Farm Factor Society Supplies Farm Chem Munene Kabocha G-Eight Phojos Enterprises Osho Chemicals Stores Viema General Shop Central Agrovets Twiga Chemicals Merit Farm Input Jopam Agrovets Geomali Agrovets Bayer East Africa Syngetta Chemicals Wakulima Agrovets MEA Fertilizers Malangine Agrovets KELPHOS Fertilizers Farm Factors & Services APENDIX VI: LIST OF PARTICIPANTS NAME ORGANISATION CONTACT ADDRESS Mary Karanja (Mrs.) DAO DAO office Nyandarua North 116 Ann Macharia Deputy DAO Nyandarua Jacinta Ilai District Horticultural Crops Officer Nyandarua Nyamwamu IFAD Desk officer Nyandarua Violet Kahiga Field officer Ndaragua J.Kanyingi DEVO Ndaragua Mrs Karamu DAO Ol-Joro Orok Mr Mwangi DAO Ndaragua M.Kariga KARI-Tigoni Kari-Tigoni J.Sagini HCDA HCDA Input Suppliers J.Njoroge KFA Nakuru Daniel Mucheni Vumilia Agro supplies Ol-Ojoro-Orok Milka Wambui Farm Inputs Services Nyahururu District Stakeholders Discussion Group: John K. Kahori Uiguano FADC Chairman Oljoroorok Charles Kimani KENAPOFA Ndaragua Rosemary Gichuhi Tunza Afya ya Jamii Yako Nyahururu S.M. Maina Stockiest Nyahururu Joseph M. Kimotho MoA Olkalau David Muraya Farmer Olkalau Margaret Kibe Taifa SACCO Ndaragua John Kamande Farmer Olkalau Leonard Mbugua Stakeholders Forum (Chairman) Olkalau Stephen Nyanja Muthethia S.H.G. Oljoroorok Farmers Focus Group Discussion Ndaaragua Division John Mwathi Farmer Ndaragua Duncan M.Njoroge Farmer Ndaragua W.Karanja Farmer Stephen Mwithi Farmer Ndaragua Dorcas Wanjiku Farmer Ol-joro-Orok John K.Gikonyo Farmer Anne Wambui Farmer Grace Wangui Farmer Processor Gwathikain Igai Women Group Processor Oljoro-Orok Nancy Wanjiku Farmer Mercy Nyambura Farmer E.Njeri Ndaragua Precila Wairimu Olkalou Esther Wanjira Esther Muirigu Ann Githinji ATC Nyahururu 117
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