Amanda Namayi

I recently completed a unit called The Political Economy of Food at City St. George’s, University of London; and for my value chain analysis assignment, I chose to focus on Kenyan-grown avocados for export.

Those who are ‘regulars’ on my blog can attest that I often write about food; and as I like to say, “at the heart of food systems is food itself!” Avocado is my favourite fruit so why not study/research more about it?

I first learned about the Centre for Food Policy, University of London after participating in the City Food Symposium 2020, invited by Professor Corinna Hawkes, who was then the Director of the Centre. She now serves as the Director of the Division of Food Systems and Food Safety at the Food and Agriculture Organization (FAO).

Prof. Hawkes had come across some of the research I had done on the effects of COVID-19 on Africa’s food systems, with a specific focus on Kenya; and I was honoured that she cited me/my work in her personal blog, The Better Food Journey. After the City Food Symposium, I wanted to know more about their Centre for Food Policy and Prof. Corinna organized for a meeting with Dr. Rebecca Wells. I was particularly enthused by their course on Food Policy, and I knew right there and then that I would pursue it. Four years later, I joined the school as a student and soon after my admission and orientation, I met Prof. Hawkes in person at the FAO Headquarters in Rome, Italy! I was enthralled!

Having given you that preamble, it goes without saying that this article will have a rather academic tone as I may get a bit technical. However, I will try to make the read as palatable as I possibly can without diluting the core substance of the work that went into it. The full title of my assignment is, “Value Chain Analysis of Kenyan-Grown Avocados: Leveraging Value Addition for Increased Income and Diversified Market for Smallholder Farmers“.

The goal of the value chain analysis is to provide insights on the current structure of the avocado value chain, while exploring its reorientation to increase the income of smallholder farmers through value addition and diversification of markets.

Value Chain Actors and Functions

Avocado Export Market Value Chain

The avocado export market value chain comprises various players, such as nursery operators, traders, brokers,  farmers, processors, and exporters (Oduol et al., 2017). The value chain largely assumes the captive value chains governance model. (Gary Gereffi, 2005)

Input | Production for Export

Nursery operators in Kenya are few, and are primarily made up of government institutions such as the Kenya Agricultural and Livestock Research Organization (KALRO) and individual farmers. These nurseries offer improved avocado seedlings, including popular varieties like Hass and Fuerte (Oduol et al., 2017).

The entry of smallholder farmers in the avocado export industry has been supported by county governments, national agencies like the Kenya Forestry Research Institute (KEFRI), and non-state actors such as the World Bank.

Through various interventions, they have facilitated access to certified seedlings, provided financial support, and delivered technical training through programs like the National Agriculture Value Chain Development Project (NAVCDP). (World Bank, 2021).

Packaging and Storage | Processing

While processors invest in specialized transportation, cold storage, and processing facilities, smallholder farmers have lower direct costs associated with export marketing. However, they incur expenses indirectly due to delays in transactions and payments within the export chain (De Souza Filho and Miranda, 2019).

To minimize losses and maximize their decision-making, the smallholder farmers form marketing organizations or farmer organizations (Catherine, 2017; Zylberberg, 2013).

These institutions help farmers to:

• gather  market information on pricing and market demand (Simon, 1957).
• reduce the volatility in trade transactions such as price fluctuations, between smallholders and avocado traders.

Farmer organizations also provide a conduit for government support services, such as capacity building, post-harvest management services, and the supply of improved avocado seedlings that will lead to improved avocado productivity (Catherine, 2017).

Distribution and Marketing

Export marketing is based on contractual agreements (Mwambi et al., 2016). However, smallholder farmers often unable to directly access timely information, such as current prices, market demand, trends, and international trade opportunities.

Kenya’s main horticultural exporters, namely Kakuzi Limited, Vegpro, Sunripe, Kenya Horticultural Exporters (KHE), East African Growers (EAG), and Ideal Matunda, Keitt (Amare et al., 2019), focus on purchasing high-quality, graded avocados. These exporters acquire their avocados directly from contracted farmers or through collection centers owned and operated by farmer organizations (Kelvin Njuguna Karing’u, 2020).

The avocados that do not meet the threshold for export standards are bought by local traders and brokers. They in turn, sell the fruit to processors in major towns like Thika, Ruiru, and Nairobi (Amare et al., 2019).

From that point, the distribution chain cascades as follows:

Wholesalers: These actors buy avocados in bulk from brokers and middlemen then resell to retailers. Examples major markets.

Retailers: These players source avocados from wholesalers and sell them to smaller businesses like neighbourhood shops or mini-supermarkets.

Small informal retail outlets (“Kiosks” and “Mama Mbogas”): These vendors are the most common in the country. They provide fruit and vegetables in an informal settings, often by roadside in makeshift stalls or by hawking door-to-door.

Consumers: Avocados are consumed directly as fresh fruit or indirectly when avocado is an active ingredient such as in oils and other value added products.

Conclusion

Kenya has seen an increase in avocado production (USAID, 2017) however, small-scale farmers continue to struggle with issues such as limited access to market information, underdeveloped production systems, delayed payments, and difficulties meeting export quality standards. (OECD, 2018; Shiferaw, 2018)

Kenya’s growing avocado value chain offers great promise for sustainable economic development, enhanced livelihoods, and support for global food security. This growth is driven by increasing demand worldwide owed to the fruit’s health benefits, and its burgeoning  popularity for both its taste and nutrition density.

*****

Amanda Namayi

Please note: I had to cut, edit and omit some parts of my assignment to suit a blog-style type of narration. Therefore, what you have read is only a small part of the original assignment I submitted for assessment. Kindly make appropriate references when quoting any of the works cited; including those that are my own.