Abstract:
Kenya’s agricultural based economy is currently faced with challenges related to the
salability of it’s agricultural produce and products. These challenges are will shape
investments in agriculture, returns to these investments and ultimately the country’s
economic growth. It is not just enough to produce, today these commodities must
compete to find a market internationally, in the region and even at home. This simply
means that Kenya has to shift away from it’s traditional supply-driven strategies and
policies to a more demand driven sector. While providing incentives to producers
remains an important strategy for the sector growth, it is equally important to cater for the
consumer side. Consumers who form the larger majority must be protected not only from
food of poorer quality but also policies that avail food that is costlier than world prices.
The rules in the market place have changed and have become very dynamic. Consumer
preferences are increasingly more complex than they were in the past. They are also the
more important players in the market, getting what they want, from any supplier who is
able to meet their requirements for timeliness, quality and even growing practices. There
is increased competition due to the lifting of preferential treatment, lowering and
harmonization of tariff barriers and the institution of new technical barriers. Farmers also
are increasingly demanding a bigger role in marketing of their produce than has been
traditional in the past, and in setting the legislative and regulatory environment necessary
to keep them competitive in the New World marketplace.
Challenges facing the agricultural sector may be summarized as;
· Increasing, or maintaining access to both local and international markets
· Redefining marketing channels
· Post-farm costs and efficiency in marketing
· value addition to raw produce
· the financing of marketing activities
This paper uses one or two commodities to illustrate each of these issues and areas that
may need intervention.
The paper begins with a discussion of marketing costs and their influence s on farm level
as well as retail prices of commodities and inputs. Horticulture and fertilizer marketing
are used as examples. The next section discusses issues of market access and market
concentration where beef and horticulture are used to highlight this challenge.
Challenges brought about by globalisation ang regionalisation are also discussed here.
The following section uses coffee, dairy and pyrethrum examples to illustrate why it may
be necessary to explore alternative marketing channels. The role of farmer organisations
in marketing is also discussed here. Challenges in processing and value addition form the
following section where dairy and cotton are used as illustrations. The later sections of
the paper discuss issues on legislation and regulation and how they impact on the
agricultural sector’s growth.
