Country context

Kenya is part of the realization and fact that sixty (60%) per cent of the world’s uncultivated land remains in Africa. This is over and above the very poorly exploited land under highly un-intensive agriculture. Indeed much of this land is quickly becoming desert under aggressive subsistence mining and lacking conservation practices. This is as other developing parts of the world like China have seen yields increase 4-5 times. In Brazil by adopting conservation agriculture practices, the country has managed to increase food production by 228% while land under cultivation has only increased by 31%.

Agriculture is the mainstay of Kenya’s economy, contributing about 25 per cent of Gross Domestic Product (GDP) and employing 75 per cent of the total labour force (Institute of Development Studies, 2006). Over 80 per cent of the Kenyan population live in rural areas and derive their livelihoods directly or indirectly from agriculture. The agriculture sector holds an important key to poverty reduction through increased productivity, value addition and improved marketing.

In November 2011 the world population hit the 7 billion mark. By 2050 world population is exepcted to rise to 9.3 billion, the majority of this happening in developing countries. Food production must double by 2025 to feed sub-Saharan Africa. It must increase by 70% Globally by 2050 (FAO). This translates to increased demand for investment by firms to transform crops to food. Investors need to complement the pure agricultural explosion with innovations in rural logistics and lean value chain managemnt to cut down on waste and fatten margins.

In 2000 world urban population was 2.3 billion. In 2030 it will double to 4.6 billion. Rapid urbanisation in Kenya and demand for fresh, high quality, agricultural products in international markets has opened new income opportunities for farmers, rural food processing industries and transport companies.

Arising new world markets represent an interesting opportunity for rural smallholders to increase income from agricultural production and thus escape the poverty trap (Reardon 2007, p28-46). Kenya’s vegetable and fruit exports have grown substantially in the past and national survey data from Kenya says that “almost all farmers, large and small, rich and poor, participate in some form of horticultural production” (Minot and Ngigi 2003).

In Kenya, three quarters of the fruit and vegetable export production is coming from smallholders. Participation in modern markets can increase farmer income by 10 to 100%, as examples from this country as well as Guatemala and Indonesia show (WDR 2008, p.127).

However the smallholder farmer is increasingly being asked to compete in markets that demand much more in terms of quality and food safety. The upcoming and enlightened farmers find themselves increasingly under the sway of supermarkets, processors and large export traders; hence more international competition.