Kenya’s economic backbone, like that of most sub-Saharan developing countries, is agriculture, contributing close to 20% of the nation’s GDP. Small-scale farmers produce much of the country’s agriculture, however total output is on the decline. Experts attribute this to many factors such as ever-changing weather patterns, poor roads, poor storage methods and sometimes the effect of unscrupulous middlemen in the agricultural supply chain.
With most of Kenya’s land mass being arid or semi-arid, only about 20% is suitable for farming. But about 80% of the country’s workforce engages in farming or food processing. Small-scale farmers often lack transport to bring their harvest to market, or to special buying points and payment to them is sometimes delayed by government agencies. Unofficial middlemen, who operate separately to organised agencies, represent themselves as helping the farmers. They provide them with immediate payment for their crops, but at much lower prices than those offered by the government.
“About 90% of the country’s agricultural output comes from small-scale farmers whose farms measure an average of five acres,”says Shem Odhiambo, the country manager for the Export Trading Group (ETG), a Kenyan company dealing with the trading of agricultural products and commodities.
These small farms are operated by about 3 million families. Although there are still important large-scale coffee, tea and sisal plantations, an increasing number of peasant farmers grow cash crops. Farmers who need to be paid quickly are sometimes not left with much choice than to deal with the unofficial middlemen.
48-year-old Francis Kyalo is one such farmer who grows a cash crop on a three and a half acre piece of land in Machakos County, eastern Kenya.
“For seven years now I have been growing cow peas on my piece of land. But nowadays the returns are much lower,” he says. “Now people with no land to till make much more money than the actual farmers.” Kyalo says that on average, half of expected revenues from his farm go to a middleman.
“He comes straight to the farm and buys everything for a fraction of the market value. It is either him or the crop rots in the fields since I have no means to move my produce from farm to market,” Kyalo says. On his own, Kyalo cannot afford to hire a truck to transport his produce from the farm to the nearest collection centre.
“The price of a 50 kilgramme bag of cowpeas at the collection centre is $35. Middlemen buy the same amount from us, directly from the farm at $19,” he says.
Odhaimbo, of ETG says a solution is within reach.
“The only way farmers can turn a profit is to organise themselves in groups and have a collective bargaining power. Instead of one farmer waiting for a middleman to come buy five sacks of grain, he can come together with 10 other neighbours and get their 50 bags collected by a miller at no extra charge,” he says. “This way they deal with transportation and storage overheads. Translating into a larger bottom line.”
But for this to happen, big corporations must be on board and be willing to deal directly with the farmer groups. Only this will lead to the role of the middlemen being diminished.
Across the border in Ethiopia, big corporations are stepping up. Diageo, one of the world’s biggest producers of alcohol, has actively encouraged the 6,000 farmers it works with across the country to organise themselves into cooperative groups. These groups agree on a price with the company for the quality of the grain and represent the concerns of the farmers to the company.
David Cutter, president global supply and procurement at Diageo says, “Economically, socially and environmentally sustainable supply chains are the backbone of our business. Many of our African beer brands use local crops like sorghum and cassava. We buy sorghum in Ghana, Uganda, Nigeria, Kenya and Tanzania, where we are working with local farmers and government agencies to increase local supply. Projects include providing training and technical assistance to small-scale farmers, improving access to better varieties of crops and promoting access to finance and clearer business contracts.”
Diageo’s sorghum farming programme in Kenya supports over 30,000 farmers who grow sorghum to brew the company’s local beer brands like Tusker and Senator Keg. This programme offers “grain to glass” support for the farmers, providing them with training to help them farm their land, materials like seeds and fertlisers and the all-important transport of the grain to the brewery so the harvest is not lost.
ETG is also helping farmers like Kyalo in Kenya get as much as possible from their crop, year in year out.
“We cannot get rid of the middlemen overnight. These are people who have, over the years, built trust and a relationship with the farmers who might see us as a faceless corporation. But with time we shall win them over,” Odhaimbo says.
Already, his company is working with more than 3,000 small-scale cowpeas growers in eastern Kenya by providing certified seeds and extension services and a ready market for their produce upon harvest.
“We have had success in similar programs in Malawi and we hope to replicate the same in other countries. This will guarantee us a near all year supply of quality grain as well as guarantee farmers under our program an outlet for their produce.”
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