AgricultureOverview of the Kenyan Horticultural Sub-sector.

Selina LiyengwaOctober 16, 20211038 min
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Agriculture is the backbone of the Kenyan economy. It not only provides a source of employment to the nation but also contributes to the country’s GDP (Gross Domestic Product). According to the Food and Agriculture Organization of the United Nations (FAO), agriculture contributes 26% of Kenya’s GDP and another 27% through linkages with other sectors.

Horticulture is the largest sub-sector of agriculture in the country, contributing 33% of the agricultural GDP according to the Agriculture and Food Authority (AFA). Moreover, horticulture is the third-largest foreign exchange earner for Kenya. The sub-sector garners roughly Kshs.150 Billion annually hence making a significant contribution to the Kenyan economy. As maintained by the Fresh Produce Exporters Association of Kenya (FPEAK), the industry provides direct employment opportunities to about 350,000 individuals and supports over 6 million livelihoods. According to the Kenya Economic Survey conducted in 2017, the leading sub-sectors in agriculture were dairy, tea and horticulture in that order.

In 2017, the domestic value of horticulture production was estimated at Kshs. 207.5 Billion. In 2018, an increment of 19.7% occurred and the value noted was Kshs. 248.5 Billion.  Floriculture accounted for 45.5% of the domestic value growth in horticulture. The value of horticultural produce exported in 2018 was Kshs. 153.68 Billion. This was an increase from the previous year’s exports by Kshs. 38.358 Billion. An increase in vegetable exports was observed and was attributed to exporters compliance with export market requirements especially the European Union. The increase in fruit exports was attributed to an increase in prices from new and traditional markets and acceptability of the fruits due to improved observance of proper harvesting time.

The Kenyan horticulture sub-sector faces 6 key challenges according to a global competitive study carried out by USAID (United States Agency for International Development) on Kenya’s horticulture sector.

The unit costs at the farm level are very high. The study noted that implementation of Good Agricultural Practices (GAPs) by farmers is low. The problem is intensified by limited access to inputs such as seeds, fertilizer, irrigation equipment and finance due to the costly nature of these inputs. It was also noted that postharvest losses substantially reduce the amount of product available for export. The low yields coupled up with inconsistent product volumes reduces the appeal of Kenya as a supplier.

Another challenge faced by the sub-sector is little to no branding. Horticulture producers in Kenya do not leverage fair trade or other certification trends. Fair trade is an arrangement whereby producers in developing countries are paid a fair price for their products by companies in developed countries. To solve the problem relating to branding, the producers could associate their products with the natural heritage of specific regions. They can also emphasise the role of small-scale farmers in producing crops.

High cost and low option transport to market also pose a great challenge to the sector. The supply chain from exporter to receiver for marine transport is obstructed by administrative processes and long transportation days to market. This can be attributed to the absence of devoted investment into Kenya-based lines to the main target markets. This leads to multiple stopovers which negatively affect transportation time. Shippers also complained that there are more administrative steps to complete than actual logistics steps.

There is also a lack of coordination among exporters. There is stiff competition among exporters as each exporter views their neighbour as a rival. The exporters thus have a slight willingness to consolidate shipments together towards a common market. In the past, organizations and agencies that offer support to exporters have failed to address the constraint of getting export market coordination for Kenyan companies. Moreover, there are a limited number of export promotion events and no advertising campaigns.

In addition to this, the onset of the Covid-19 pandemic also brought on a myriad of more challenges to the horticulture sub-sector in Kenya. According to a report released in London by Scope Markets Kenya, shipments of flowers, vegetables, herbs, and fruits to the European Union all but ceased in March 2020 following the outbreak of the Covid-19 pandemic. According to the Fresh Produce Exporters Association of Kenya by April and May 2020, Kenya’s horticulture industry was losing about $3.5 million a day. However, notwithstanding the challenges brought about by the pandemic, the horticulture sub-sector has performed fairly well. Earnings from exporting flowers, fruits, and vegetables for the year 2020 stood at Ksh 108 Billion, Ksh 18 Billion and Ksh 24 Billion respectively. Even though the earnings recorded were an improvement compared to 2019 earnings by 5%, a huge portion of the earnings went into covering the cost of air freights. Growers and exporters were thus unable to realize their expected profits.

An analysis done by Scope Markets Kenya shows that while some demand for horticulture exports has returned and losses have reduced, the outlook remains bleak throughout the coming months.

Selina Liyengwa

Content writer at Cue Africa. Email: selinakanguha9@gmail.com LinkedIn: Selina Liyengwa.

One comment

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