by Mathew Mue, Retail Analyst, Planet Retail. Retail Bulletin Issue 212
29 November 2007.

With more than 30 million inhabitants, Kenya is a comparatively affluent market in East Africa and is likely to experience faster growth in the modern retail sector as the economy continues its upward trend. In fact, Kenya's modern grocery retail sales are forecast to more than double by the end of the 2008 trading period thanks to the government's continued effort to improve the country's business environment. Even though the retail sector is dominated by traditional retail channels and independent supermarkets in the countryside, the development of modern grocery chains has taken root in urban areas. Domestic players such as Nakumatt are beginning to open stores in smaller towns outside the capital city Nairobi, whilst pan-African player Shoprite has been rumoured to be considering market entry through the acquisition of struggling local player Uchumi. In this Perspectives, Mathew Mue, Planet Retail's Nairobi-based analyst, uncovers the emerging retail sector in Kenya.

 by Isaac K. Ngugi, Raphael Gitau and James K. Nyoro, Tegemo Institute, Egerton University

This case study describes collective action by small-scale farmers in Githunguri area (Central Kenya) where a development agency, Family Concern, organized the groups into Business Support Units (BSUs) with a commercial orientation. These efforts led to linking the BSUs to Kenya's leading supermarket chains, Uchumi and Nakumatt. While the farmers deliver direct to Uchumi, the supply of indigenous vegetables to Nakumatt is done through traders who supply to its subsidiary company, Fresh ‘n' Juici. As a result of all these efforts, the supply of the African indigenous vegetables to the major supply chains has increased dramatically.

Photo: Planet RetailSource: The Monitor (Kampala), OPINION, 10 July 2007 by Katherine Roubos

Ugandan farmers are missing out on a huge market for fresh produce each month because they are not selling to supermarkets like Uchumi and Shoprite.

Supermarkets are one of the fastest expanding businesses in East Africa, with South Africa's Shoprite leading the pack in Uganda. According to business executives, supermarkets in Uganda are set to double in number in the next two years as both Shoprite and Uchumi plan to open new stores.

It is critical that Ugandan farmers find a way to access this burgeoning market, rather than shrug their shoulders as Uchumi imports mangos from South Africa and Shoprite imports watermelons from Kenya.

Mr David Njenga, the country manager of Uchumi Supermarkets Ltd., insists there is a "huge potential to increase local sourcing for fresh produce". Uchumi currently deals with 50 produce suppliers; the five major suppliers are from Kenya and South Africa, the rest are local producers or traders.

Linking small-scale producers and processors to dynamic and restructured local, regional and international markets for high value products

The Regional Resource Centre for Rural Development (RRD)-Sida together with the Swedish Ministry of Foreign Affairs, Zambia, hosted a working meeting 15-17 May 2007, in Zambia. The meeting shared experiences from the Regoverning Markets programme, the agri-standards programme and other relevant initiatives in the Southern Africa region with Sida regional and country teams on the theme of Linking small-scale producers and processors to dynamic and restructured local, regional and international markets for high value products in East and Southern Africa.

Amongst the resource persons were the authors of five country information sheets and the information sheet on standards for export which had been prepared through RRD-Sida funding. The workshop report and the supporting presentations offer possible policy and intervention entry points that can remove barriers and increase access to dynamic markets for small-scale producers in SSA.

Country Information Sheets can be downloaded here

Workshop Presentations can be downloaded here

Building bridges between processors and smallholders in Africa: are contracts an answer?

Sautier, D.; Vermeulen, H.; Fok, M.; Biénabe, E. / Latin American Center for Rural Development (RIMISP) , 2006

This paper presents specific experiences in Africa, involving small and medium farmers and agri-processors. It illustrates the capacity of farmers and food processors to leverage agricultural growth , take advantage of untapped sources of growth and generate pro-poor development through adequate institutions.

Acknowledging that small and medium size farmers in Africa face unique and difficult market constraints, the paper highlights the potential of contractual arrangements in governing relationships farmers and agroprocessors. Although the effectiveness of contracts can vary, the case studies in this document show ways through which contractual arrangements can support the market participation of small and medium farmers and foster agricultural growth for poverty alleviation.

New Report: Recommendations for improving horticultural marketing in Ethiopia  Emana, B.; Gebremedhin, H. / Drylands Coordination Group (DCG), Norway , 2007  

What are the major opportunities and constraints to improving horticultural production and . marketing in Ethopia? Using questionnaire-evidence and Participatory Rural Appraisal (PRA) tools, this study examines the marketing channels and organisations in horticultural inputs and products in selected districts of Ethiopia.

World Bank, April 2007

Over the last 10 years, the main sources of growth in Ugandan agriculture-which are expansion of area under cultivation and improvement of incentives for farmers to produce-have been played out, meaning that Uganda must look to such alternatives as increasing productivity of land and labor and shifting production patterns from low-value staples to higher value commodities.

Approach 

According to the Bank, low productivity of Ugandan farmers is attributed to research and extension services that are not adequately demand-driven and low use of new technologies by farmers even when they are available. Uganda's Plan for the Modernization of Agriculture assigns first priority to agriculture extension and research, focusing on achieving greater relevance in both the research and extension programs. This effort is supported by a multi-donor National Agricultural Advisory Services Project (NAADS)-designed to make poor farmers aware of and equipped to adopt, improved technology and management practices.

Photo: FAOBy Elijah Wachira, International Gender and Trade Network (IGTN) (2006)

Abstract (c/o Eldis)

This article examines the impact of the Agreement on Agriculture on the ability of developing countries to achieve food security and sustainable livelihoods for their farmers, using the dairy industry in Kenya as a case study.

The author concludes that Kenya's dairy industry faces a gloomy future, a situation that threatens the livelihood of 600,000 or more small holders and their families. The author argues that Kenya's locally processed milk and milk products stand little chance, faced with competition from cheaper imports. Women stand to suffer the most if the industry was to collapse, through massive job losses and malnutrition at family level due to loss of income and rising prices of milk. To save the industry from collapse the government should strengthen the dairy industry to protect it from international competition and so help the poor generate income and raise their standards of living. This may include tariff protection e.g. introduction of added suspended duties on milk imports.

KIT BookKIT | Faida MaLi | IIRR |

This is a book of hope for Africa's smallholder farmers. It shows how they can earn more from their crops and livestock by taking control over the value chains they are part of - chains that link them with consumers in Africa's towns and cities, as well as in other countries.

The book describes two basic strategies that groups of farmers can use to improve their incomes: vertical and horizontal integration. Vertical integration means taking on additional activities in the value chain: processing or grading produce, for example. Horizontal integration means becoming more involved in managing the value chain itself - by farmers' improving their access to and management of information, their knowledge of the market, their control over contracts, or their cooperation with other actors in the chain.

This book contains 19 case studies showing how groups of farmers throughout Africa have adopted one or both of these strategies to improve their incomes. It shows how development organizations have helped them do this - how they have succeeded, and how they have sometimes failed. It shows the need to invest in improving the quality of existing products, developing new products, establishing market linkages, and building farmer organization and capacity.

The book provides numerous insights for those striving to empower smallholder farmers to develop markets. It will be of particular interest to government policymakers and staff involved in agricultural development, non-government organizations, university faculty and students, trainers, evaluators, and donors seeking ways to promote agriculture in Africa and elsewhere in the developing world.

The book is written in easy-to-understand language and is richly illustrated with line drawings.

Paper by Denis Sautier, Hester Vermeulen, Michel Fok, Estelle Biénabe. RIMISP, November, 2006

Abstract (c/o Eldis)

This paper, part of a series of contributions by RIMISP to the preparation of the World Development Report 2008, presents specific experiences in Africa, involving small and medium farmers and agri-processors. It illustrates the capacity of farmers and food processors to leverage agricultural growth , take advantage of untapped sources of growth and generate pro-poor development through adequate institutions.