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