Although small holder farmers still remain the backbone of Kenya’s food security, their impact has largely been confined to subsistence production by family households despite the fact that agriculture contributes approximately 25 percent of the country’s gross domestic product (GDP).
Data from the Kenya National Bureau of Statistics (KNBS) shows that farmers, who make up 5.6 million of the farming segment in the country, desperately need access to quality inputs, tailored advisory services and affordable technologies, to transform their agricultural ventures into profitable enterprises.
The small scale farmers, who have deeply entrenched traditional agricultural practices, seem to have surrendered to living from hand to mouth in successive seasons where surplus produce goes to waste due to lack of marketing outlets.
However, this vicious circle that has rendered the farmers perpetually poor, may soon be a thing of the past if a proposal by the German Development Cooperation (GIZ) to integrate the peasants into an Inclusive Contract Farming (ICF) business model comes to fruition.
The model envisages incorporating the farmers into supply chains of competitive SMEs through the ICF, that offers a huge potential to make smallholder farming systems modern and professional to spur growth and higher productivity in their ventures.
It is increasingly difficult to meet consumer demand under more traditional open market based procurement strategies but thanks to the GIZ which came up with the trust based mutually beneficial ICF business models.
And the concept is fast picking in Western Kenya where at least 75 percent of vegetable farmers have gradually overcome production and marketing challenges for their highly perishable produce after embracing the GIZ model.
The farmers, grouped under the SMEs were offered advisory services on the best practices and linked with producers and other related value addition outlets, particularly those run by the youth and women organized groups, to ensure they had a sustained market for their produce.
Arianda Farms Africa Limited, a youth-led enterprise that focuses on African Leafy Vegetables (ALVS), is one such SME out of seven that underwent training under the Agri-Jobs 4 youth project 2020- 2025 whose investment was 15 million Euros.
Mordoch Otieno, Director at Arianda, says they have been collaborating with local farmers to facilitate safe cultivation of vegetables with focus on enhancing the expertise of farmers through a comprehensive training programme designed to improve production and market demand by expanding their supplier base through informal contracting.
He explained that Arianda’s core business is aggregating ALVs from farmers and reselling to end consumers, with a deliberate target on female and young small scale farmers for training on commercial ventures to boost their earnings.
“GIZ helped our company bring the youths together, trained them and thanks to the project, we were able to enlist at least 3,500 youth and women onboard across the counties, who are supplying us with the African Leafy Vegetables (ALVs) on a regular basis,” he said.
The supply, from the six counties of Kisumu, Siaya, Bungoma, Kakamega, Vihiga and Busia, he said, guarantees them market for their produce through a unique model in ICF.
Through the platform, he explained that they have increased their output since farmers now have a guaranteed market and when they sell their produce to them, they are paid instantly.
He added that the new approach had stabilized the company’s fortunes as they could comfortably supply the market constantly and make fresh business deals with prospective buyers
“This kind of arrangement has helped the youths come on board our program, because they were looking for a quick payout, and ALVs is offering that because the sales were paid on weekly basis,” Otieno said.
Otieno said the input of the youth came in handy as they were able to market through online platforms which had proven to be really working in pushing the surplus produce to the markets.
He added that their system comprises a traceability platform, where they can show the consumer exactly where the produce is coming from, and how fresh it was with a promise of reaching their destination within nine hours after harvest onto your table, anywhere in Kenya.
“Currently, we are moving two tonnes of vegetables a day and earning Sh500,000 every week which is the turn over ,but come January, we are aiming to do four tonnes a day, expanding to Nakuru and probably some Nairobi markets,” Otieno said.
He highlighted that to ensure supply even during the dry period, they have built a pack house where they store produce for about two to three days, just to make sure they are sustainable and consistent in their supply to customers
Otieno said the six months’ contracts signed twice every year is binding adding “penetration of the vegetables is very low despite the good weather for the crop and so targeting youth who do not have a lot of income it was an easy buy as they could earn,” Otieno said.
Emily Atieno, a 25-year-old college student, and a beneficiary of Arianda farms says, she was introduced to the farm by a friend four months ago and comfortably sold between 300, and 350 kgs of vegetables in daily sales.
“One sack of 150kgs goes for Sh1500 and in a day depending on how much you sell, one can benefit with on average Sh3,500,” she said, explaining that with the ready market by Arianda it is easy.
Atieno says that four months ago, she was struggling to raise fees at the Young Men Christian Association (YMCA) where she is pursuing hospitality course, but now she is able to attend classes comfortably having paid her fees, she has also been able to employ two young people working for her and is able to pay her bills and even assist her parents
“On a good week I can earn up to Sh10,000,” she quips thanking GIZ for coming up with the ICF model which has transformed their farming especially on the African Leafy Vegetables which did not have a proper system to market.
According to Otieno, the Trust that they have been able to build with farmers and consumers has opened up opportunities, a network and a brand with a good reputation in the market.
The GIZ methodology to promote inclusive contract farming as an inclusive business model has enabled over 5,000 farmers to be able to access markets across the seven enterprises, and the informal agreements based on trust is expected to grow to 40 to 50 percent due to the projects progress.
By Wangari Ndirangu
