KENYA VALUE CHAIN ROADMAP FOR PULSES

Transcription

1 KENYA VALUE CHAIN ROADMAP FOR PULSES

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3 KENYA Value Chain Roadmap for Pulses

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5 KENYA Value Chain Roadmap for PULSES

6 This value chain roadmap was developed on the basis of the process, methodology and technical assistance of the International Trade Centre ( ITC ) within the framework of its Trade Development Strategy programme. ITC is the joint agency of the World Trade Organization and the United Nations. As part of the ITC mandate of fostering sustainable development through increased trade opportunities, the Trade Development Strategy programme offers a suite of trade-related strategy solutions to maximize the development payoffs from trade. ITC-facilitated trade development strategies and roadmaps are oriented to the trade objectives of a country or region and can be tailored to high-level economic goals, specific development targets or particular sectors, allowing policymakers to choose their preferred level of engagement. The views expressed herein do not reflect the official opinion of ITC. Mention of firms, products and product brands does not imply the endorsement of ITC. This document has not been formally edited by ITC. The International Trade Centre ( ITC ) Street address : ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland Postal address : ITC Palais des Nations 1211 Geneva, Switzerland Telephone : Postal address : ITC, Palais des Nations, 1211 Geneva, Switzerland itcreg@intracen.org Internet : http :// Layout: Jesús Alés

7 v Acknowledgments This value chain roadmap was elaborated as a component of the ITC Supporting Indian Trade and Investment in Africa ( SITA ) project, a south-south trade and investment initiative that aims to improve the competitiveness of select value chains through the provision of partnerships by institutions and businesses from India. SITA is funded by the United Kingdom Department for International Development ( DFID ). The formulation of the value chain roadmap was led by the Ministry of Industrialization and Enterprise Development and EAGC with the technical assistance of ITC. This document represents the ambitions of the private and public sector stakeholders for the development of the sector. Stakeholders commitment and comprehensive collaboration have helped build consensus around a common vision that reflects the realities and limitations of the private sector, as well as of policymakers and trade-related institutions. The document benefited particularly from the inputs and guidance provided by the members of the sector team. Name Organization Position Mr. Gerald MASILA EAGC Executive Director Mr. Samwel RUTTO EAGC Regional Manager, Structured Trading Systems Mr. Peter GITHINJI EAGC Regional Programs Coordinator Ms. Davine MINAYO EAGC Program Officer Mr. Wainaina KUNG U Independent Consultant Dr. Ganga RAO ICRISAT Senior Scientist Mr. Oswald MIRITI CGA Project Officer Technical support and guidance from ITC was rendered through Rahul Bhatnagar, Aman Goel, Bharat Kulkarni, Carlos Griffin. Nzuki Waita provided valuable support as National SITA coordinator. [ KENYA Value Chain Roadmap for PULSES ]

8 vi forewords Mr. Julius Korir Principal Secretary, Industrialisation Ministry of Industrialisation & Enterprise Development The Ministry of Industrialization and Enterprise Development ( MoIED ) takes particular pleasure in welcoming the SITA Pulses Sector Strategy Roadmap and its detailed Plan of Action. Pulses are an important source of supplementary protein to daily diets based on cereals and starchy food for predominantly vegetarian populations like the Indian sub-continent. They provide energy, essential minerals, vitamins and several compounds considered beneficial for good health. In Sub-Saharan Africa as well as India, pulses play a vital role by being a source of livelihood for millions of people; and offer tremendous potential to contribute to the alleviation of malnutrition among resource-poor farmers. Kenya is the seventh largest world producer of common beans and ranks fourth in terms of world production of pigeon pea after India, Myanmar and Malawi. Besides this, the country has recently popularized the production and consumption of green grams. However, despite Kenya s growing exports of pulses in recent years, it still remains a small player in the global market only ranking 26 th in world exports with a little under US $ 50 million worth of pulses exported in Kenyan pulses exports have been characterized by high volatility over the past decade, with sharp variations observed over short periods of time. The Pulses Sector Roadmap responds to these constraints by providing Kenya with a detailed Plan of Action ( PoA ) that will facilitate growth in the sector within the next 5-year period. Through the steps outlined in the PoA, pulses stakeholders in Kenya will improve their capability to offer competitive products. The roadmap also supports the implementation of Kenya s Industrial Transformation Program ( KITP ) that has identified Agro-processing and respective value chains as priority sectors for further development given the country s comparative advantage. The Pulses Sector Roadmap has exceeded our expectations, not only in the successful mobilization of sector stakeholders, but also in facilitating extensive and fruitful discussions between public and private sectors. Some 35 representatives attended two successive consultations, allowing for a realistic evaluation of the challenges and opportunities the sector currently faces and extensive debates as to define the best way forward. This inclusive approach ensured that all stakeholders were committed to the process and left with a clear understanding of each actor s role. Market led strategic orientations prioritized by the pulses sector stakeholders and embedded into a detailed implementation plan, provide a clear road map that can be leveraged to address constraints to trade, maximise value addition and support regional integration. This roadmap is articulated around three strategic objectives : 1. Strengthen the production base of the pulses sector in Kenya 2. Promote FDI and develop processing capacity in Kenya. 3. Develop markets and improve access to market side information and branding for the pulses sector. In order to maintain the momentum sparked by the consultations, the Ministry is taking steps towards establishing an Apex Body for the Kenya pulses sector which will support the implementation of the operational objectives defined in this Plan of Action.

9 vii forewords Mr. Gerald Makau Masila Executive Director eastern AFRICA GRAIN COUNCIL The Eastern Africa Grain Council ( EAGC ) is proud of its role as the Implementing Partner for the pulses value chain sector in the Supporting Indian Trade and Investment for Africa ( SITA ) project in Kenya and Tanzania. EAGC is a regional, not-for-profit, membershipbased organisation for the grain sector in Eastern and Southern Africa. The Council objective is to facilitate efficient, structured and profitable trade in grain commodities and products for optimal benefits for all stakeholders from producers to consumers. In pursuit of our mandate, we provide a range of service and interventions aimed at developing and promoting structure grain trade including policy advocacy to create and enabling environment for the grain sector to thrive, provision of market information through the regional agricultural trade intelligence network training and capacity building of stakeholders on structured trading systems through our specialized training and capacity building division the Eastern Africa Grain Institute ( EAGI ), grains post-harvest management, quality and safety assurance, warehousing, warehouse receipt systems and trade facilitation through the recently launched EAGC GSoko grain trading system. As such, we are delighted by the SITA project which is bringing in the increased attention being afforded to the pulses sector in East Africa. Indeed, we see the pulses sector as a sleeping giant that once awoken, will play a significant role in socioeconomic development in Kenya, particularly in the context of Vision The facts truly speak for themselves ; global demand for pulses has been growing rapidly over the years and is forecasted to remain strong for the foreseeable future, driven by growing populations, rising incomes and increased awareness of the nutritional value of pulses amongst consumers. India which accounts for a quarter of all global imports of pulses, the European Union, the Middle East and North Africa region and China represent lucrative markets for pulses. Despite these opportunities in the global pulses market, Kenya accounts for just 0.5 % of global exports as recently as 2014, notwithstanding the increased domestic production. Limited awareness of the potential value of pulses in global markets, relatively weak domestic market linkages, low adoption of good agricultural practices and limited value addition are just some of the stumbling blocks that will need to be addressed henceforth. Given the need for clear strategic orientation for the pulses value chain in Kenya, the Kenya Value Chain Roadmap for Pulses has therefore been developed at an opportune moment. This Roadmap is the product of extensive consultations with public and private sector stakeholders, leading to unprecedented levels of cooperation among sector operators. Key private sector stakeholders and leading institutions facilitated an exhaustive analysis of the sector. Market-led strategic interventions that have been prioritized by stakeholders are embedded into a detailed implementation plan, ensuring that this Roadmap can be leveraged to address constraints to trade, maximize value addition and support regional integration, and eventually transform Kenya into a major player in the global pulses market. EAGC has been privileged to participate in the development of this Roadmap and reaffirms its full commitment to spearhead its implementation in close collaboration with the Government of Kenya, ITC and other strategic partners. With the Roadmap in place, we urge all stakeholders to join forces and revamp the Pulses Sector in Kenya.

10 viii CONTENTS Acknowledgments Executive summary v xii Global pulses value chain 17 Grown in many areas but dominated by a few large supply countries 17 Larger number of exporters dominated by a small number of leading suppliers 19 Dry peas, kidney beans and lentils dominate the trade of pulses 21 Switch of import markets from the West to the East 22 Strong Indian demand keeps prices remunerative 25 An evolving value chain in need of support 27 Competitive constraints affecting the value chain Supply-side issues 43 Business environment issues 46 Market entry issues 47 Development issues 47 The way forward 49 Strategic objectives Leveraging product diversification and market opportunities Leveraging Investment to scale up operations and climb the value addition ladder Pulse trading and processing 56 Agribusiness inputs and services 56 Identified opportunities for investment Moving to action 61 Priority Actions Roadmap Plan of Action 65 Appendix: Kenya s policies and trade agreements in a nutshell 74 References 81 Annex 1: List of Invited Participants 83

11 ix FIGURES Figure 1 : Strategic objectives of the roadmap and related impact xvi Figure 2 : Global pulses production and area harvested, Figure 3 : Pulses production by region, average Figure 4 : Share of pulse varieties in global production ( %) 2004 and present 18 Figure 5 : Exports of pulses, ( US $ billions ) 19 Figure 6 : Exports of pulses by region or regional group, ( US $ billions ) 20 Figure 8 : Kenyan production of pulses, Figure 9 : Production of pulses in Kenya, Figure 10 : Production of pulses in Kenya by subsector, ( thousands of tons ) 29 Figure 11 : Kenyan production of dry beans, Figure 12 : Kenyan production of cowpeas, Figure 13 : Kenyan production of pigeon peas, Figure 14 : Current value chain 34 Figure 15 : Trade support network 35 Figure 18 : Kenyan exports of pulses to selected markets, ( US $ millions ) 38 Figure 19 : Kenya s export basket of pulses, ( US $ thousands ) 39 Figure 20 : Pulse production, Ethiopia, Kenya and the United Republic of Tanzania, ( tons ) 40 Figure 21 : Pulses exports, Ethiopia, Kenya and the United Republic of Tanzania, ( tons ) 41 Figure 22 : Export to production, Ethiopia, Kenya and the United Republic of Tanzania, ( %) 41 Figure 23 : Future value chain 60 [ KENYA Value Chain Roadmap for PULSES ]

12 x TABLES Table 1 : Top 10 exporters of pulses ( Harmonized System ( HS ) 0713 ), Table 2 : Pulse varieties with international supply >US $ 1 billion, Table 3 : World-leading importers of pulses ( HS 0713 ) 22 Table 4 : Pulse production, trade and consumption of India, to January 2015 ( tons ) 23 Table 5 24 Table 6 : Production of pulses by varieties, Ethiopia, Kenya and the United Republic of Tanzania, 2013 ( tons ) 40 Table 7 : The investment climate in Kenya and possible competitors for pulse investment 42 Table 8 : Product diversification and market opportunities 52 Table 9 : Value chain segments needing FDI and likely sources 57 Table 10 : The priority actions to kick-start implementation 61

13 xi Acronyms The following abbreviations are used : AFFA AGMARKNET CAGR CGA EAC EAGC EPC EPZ EPZA EU FAO FDI ha HaNPV hg HS ICAR icrisat IPGA ITC Agriculture, Fisheries and Food Authority Agricultural Marketing Information Network Compound Annual Growth Rate Cereal Growers Association East African Community Eastern Africa Grain Council Export Promotion Council Export Processing Zone Export Processing Zones Authority European Union Food and Agriculture Organization of the United Nations Foreign Direct Investment Hectares Helicoverpa armigera Nucleopolyhedrosis virus Hectograms Harmonized System Indian Council of Agricultural Research International Crops Research Institute for the Semi-Arid Tropics India Pulses and Grains Association International Trade Centre KALRO KEBS KENAff KenInvest KEPHIS KEPSA KNCCI KRA MAlf MENA MoIED PoA PPP RATIN SITA SMS STAK UAE Kenya Agricultural & Livestock Research Organization Kenya Bureau of Standards Kenya National Farmers Federation Kenya Investment Authority Kenya Plant Health Inspectorate Service Kenya Private Sector Alliance Kenya National Chamber of Commerce and Industry Kenya Revenue Authority Ministry of Agriculture, Livestock and Fisheries Middle East and North Africa Ministry of Industrialization and Enterprise Development Plan of Action Public Private Partnership Regional Agricultural Trade Intelligence Network Supporting Indian Trade and Investment in Africa Short Message Service Seed Trade Association of Kenya United Arab Emirates [ KENYA Value Chain Roadmap for PULSES ]

14 xii Executive summary The goal of Kenya s Pulses Value Chain Roadmap The goal of Kenya s Pulses Value Chain Roadmap is to set the sector on the course of strategic development by addressing constraints in a comprehensive manner and defining concrete opportunities that can be realized through the specific steps detailed in its Plan of Action ( PoA ). Kenya s pulses sector has recently shown signs of development, with booming exports in recent years as well as promising signs of diversification. While they were traditionally grown for sustenance, pulses have now become an important source of income for small Kenyan farmers. Nonetheless, the sector is still largely underdeveloped and exports are currently characterized by high volatility and a low level of survivability of trade relationships. Efforts to address persistent constraints along the value chain must be made if the country is to compete on the international stage. The industry must build stronger linkages across the value chain, develop its knowledge base and attract investment in order to reach a higher and sustainable growth path and value addition. This will require addressing gaps in input supply, skills, market structure and institutional support. The PoA responds to these requirements by setting three strategic objectives. 1. Strengthen the production base of the sector. a. Develop a baseline for the sector and encourage information sharing among sector stakeholders. b. Ensure a reliable and consistent supply of certified seeds. c. Enhance the availability and adoption of quality ( non-seed ) inputs. d. Improve adoption of best practices in the sector. 2. Promote foreign direct investment ( FDI ) and develop processing capacity in Kenya for processing and export of value added pulses. a. Promote investment in the pulses processing sector. b. Facilitate technology transfer and equipment upgrade in the sector. c. Improve essential infrastructure in the sector. d. Improve access to finance in the sector. 3. Develop markets and improve access to market-side information and branding for the sector. a. Support market development efforts, both domestic and international. b. Develop new tools for provision of timely and relevant market intelligence. c. Build and promote the Kenyan pulses brand. Usually intercropped with maize, sugar cane and coffee, and grown entirely by smallholder farmers, pulses have historically received little attention from support institutions in Kenya, which tended to focus more on cash crops such as maize. Due to their hardiness and resistance to drought, which makes them ideal for Kenya s often sporadic rainfall, and also being an important food source due to their high protein content and relatively low cost when compared with meat, pulses have gained in popularity among farmers. In 2013, Kenyan farmers were cultivating pulses on 1.47 million hectares ( ha ) of land, involving roughly 1.8 million households and producing 1 million tons of pulses. Domestic production is largely dominated by the production of dry beans ( 715,000 tons ), followed by pigeon peas ( 166,000 tons ), and cowpeas ( 134,000 tons ). Despite periods of fluctuation the volume produced, as

15 xiii well as the area harvested and yields, has progressed over the past decade, making Kenya the fourth top producer of pulses in Africa after Nigeria, the United Republic of Tanzania and Ethiopia, and number 17 in the world ( Food and Agriculture Organization of the United Nations ( FAO ) ). Despite these recent positive developments, the sector remains largely underdeveloped, in particular compared with other African producers such as the United Republic of Tanzania and Ethiopia, and vertical and horizontal business linkages tend to be undeveloped and informal because trade is based on temporary relationships with limited use of contracts. More generally, the industry appears to be relatively unstructured and poorly organized, partly resulting from low levels of cooperation among the different actors and a lack of trust among the different stakeholders operating in the sector. Farmers groups and cooperatives in the pulses sector also appear to be weak or non-existent, in turn contributing to the overall lack knowledge of the potential of pulses in Kenya. Photo: (CC BY-SA 2.0) CCCCCCCCCCCCCCCCCCC, AAAAAAAAAAAAAAAAAAAAAAAAAA The most significant challenge at the moment is achieving adequate dissemination of improved seed varieties because most farms use their own beans for seed or buy from local markets. Lack of such dissemination has severely limited productivity gains and has greatly hindered the development of the supply chain, further complicated by farmers reluctance to pay the high cost of certified seeds. Improved bean varieties could, for example, yield from 1,500 to 2,500 kg / ha, whereas the majority of farmers use seeds that yield approximately 400 kg / ha. In addition to the low quality of seeds, other inputs such as fertilizers, insecticides and pesticides appear to be used by only a small proportion of the sector s farmers. The low adoption of improved agricultural practices also significantly hinders the performance of the sector. In particular, postharvest practices suffer from a number of problems including inappropriate handling, inadequate storage methods and facilities, and common pest infestation, resulting in a higher than necessary incidence of spoilage. These factors are further complicated by slow transport caused by an inadequate road system. International buyers have also highlighted the uneven quality of Kenyan products which is a major limiting factor for the export of pulses from Kenya due to a lack of quality certification and standardization mechanisms as well as a lack of knowledge about specific markets requirements in terms of quality standards. [ KENYA Value Chain Roadmap for PULSES ]

16 xiv Another key issue affecting the capacity of the industry is the limited knowledge base of pulse producers and exporters. Market information appears to be a major constraint for Kenyan producers and exporters because very little information is available on issues such as pulse varieties and types, the calendar of different pulses globally, market requirements, and price fluctuation and movements, among others. This lack of knowledge impacts the development of pulse exports in Kenya. Building capacity on these issues will allow the industry to identify international business opportunities while mitigating some of the costs and risks for new market development, ultimately resulting in greater competitiveness. The current stage of maturity of the sector is hindering Kenya s ability to fully capitalize on the industry s strong global growth. Driven by rising incomes and population, and greater awareness of the health properties of pulses, the global pulses sector is projected to see stable demand and consumption trends in the long term. In line with the upward trend in global production, the growth path of pulse exports globally has been significant : pulse exports doubled in 2003 in comparison with the previous 20 years. 1 The major importers of this commodity are concentrated in South Asia, China, Europe, and the Middle East and North Africa ( MENA ) region, India alone capturing nearly a quarter of the world imports. In such favourable circumstances, and despite Kenyan s booming exports of pulses in recent years, the country remains a small player in the global market, only ranking 26 in world exports, with US $ 49.8 million worth of pulses exported in Kenyan exports have been characterized by high volatility over the past decade, with sharp variations observed within short periods of time, also reflecting the low level of survivability of export relationships. Besides, the sector is extremely vulnerable to imports from India and Pakistan, which together account for 82 % of the pulses exported by Kenya. This also highlights the fact that Kenyan firms are not taking advantage of the preferential market access Kenya benefits from in many countries 2 as these markets remain largely untapped. Although South Asia, China, Europe and the MENA region offer the maximum potential for pulse exports, market characteristics and sensitivities vary from one region to another, forcing exporters to be fully aware of market requirements while exploring these opportunities. Although signs of product diversification have recently been observed, it appears to be difficult, at this stage of maturity of the sector, to add value to pulse products in Kenya. More than half of Kenya s pulse exports are comprised of kidney beans and white pea beans, with most exports of pulses consisting of raw products with extremely limited value added by processors. Kenya s product diversification is nevertheless promising, providing that concerted actions are taken to expand further and promote long survival rates. Extra efforts also need to be made to penetrate new markets and to unlock the production of more pulse varieties. Kenya has to catch up with its competitors to become a major player in the global pulses market. In order to achieve a greater level of competitiveness, the sector must build stronger linkages across the value chain with the view to structuring the 1. Food and Agriculture Organization of the United Nations ( 2005 ). Pulses : Past Trends and Future Prospects. Summary of paper contributed by FAO to the 4th International Food Legumes Research Conference, New Delhi, October. Available from http :// org / fileadmin / templates / est / COMM_MARKETS_MONITORING / Pulses / Documents / PulsesStudy.pdf. 2. Kenya is a signatory state of the Common Market for Eastern and Southern Africa Free Trade Area, a Member State of the East African Community ( EAC ), and has recently signed the EU EAC Economic Partnership Agreement.

17 xv sector and alleviating difficulties in production, promoting FDI in the pulse processing sector, and ensuring structured export development and promotion efforts. The roadmap responds to these needs by providing Kenya with a detailed PoA that will facilitate growth in the sector within the next five-year period. Through the steps outlined in the PoA, stakeholders will improve their ability to offer competitive products. To this end, improved competitiveness must be tied to further penetration of current markets in the short term, expansion into new markets in the medium term, and the development of new products in the longer term. Particularly promising prospects for sectoral development may lie within the following market opportunities and products. Target market Product Distribution channel India and Pakistan China Europe ( including the United Kingdom of Great Britain and Northern Ireland ) North Africa ( Algeria, Morocco, Egypt ) and MENA region ( United Arab Emirates ( UAE ), Qatar, Israel ) United States of America and Canada Regional markets Pigeon peas Chickpeas ( yellow gram ) Kidney beans Green gram ( green mung ) Processed dhal Dry peas Green gram ( green mung ) Dry beans, processed dhal, pigeon peas, chickpeas ( yellow gram ) kidney beans & green gram ( green mung ) Processed dhal Pigeon peas Chickpeas ( yellow gram ) Green gram ( green mung ) Processed dhal Processed dhal Mixed beans Sugar beans Processed dhal Wholesalers Processors Wholesalers Processors Wholesalers Processors Distributors Wholesalers Distributors Wholesalers Distributors Wholesalers Distributors The roadmap was the result of extensive consultations with public and private sector stakeholders, leading to unprecedented levels of cooperation among sector operators. Key private sector stakeholders and leading institutions facilitated an exhaustive analysis of the sector. Market-led strategic orientations, prioritized by stakeholders and embedded into a detailed implementation plan, provide a clear roadmap that can be leveraged to address constraints to trade, maximize value addition and support regional integration. In addition, the inclusive approach ensured that all stakeholders were committed to the process and left with a clear understanding of each actor s role. [ KENYA Value Chain Roadmap for PULSES ]

18 xvi The roadmap is articulated around three strategic objectives. Figure 1 : Strategic objectives of the roadmap and related impact

19 17 Global pulses value chain Pulses play an important role in farming systems worldwide. They have proved to be ideal crops for achieving improvements in nutrition and health conditions, reducing poverty through higher food security and enhancing ecosystem resilience, particularly in developing countries. Trade trends for this crop are determined by importing countries local production and by production in exporting countries, both of which are affected by weather conditions, disease management, price increases of other crops ( as farmers can be compelled to move towards a higher rent crop ) and countries trade policies ( such as export incentives ). The following trends characterize the sector. Grown in many areas but dominated by a few large supply countries Fuelled notably by increasing demand from India and other developing countries, annual global production of pulses has seen unprecedented growth over the past decade with an average of 70 million tons produced yearly since Production grew at a sustainable average annual growth rate of 2.1 % over the period , from 59.5 million tons in 2003 to 73.2 million tons in 2013 ( FAO ), indicating the excellent health of the sector ( see figure 2 ). According to the FAO Statistics Division, about 74 % of pulses are used for human consumption and 20 % for feed use, with the remainder being used as seed. Increasing cultivated area but weak productivity growth The progression of global production goes hand in hand with a significant increase in the area cultivated over the past five years. The average area under cultivation has gone up to 80 million ha since 2010, an encouraging sign considering that the area under cultivation stagnated at approximately 70 million ha between 1990 and 2003 ( see figure 2 ). Yields also continuously increased globally over the past decade, from 0.82 tons / ha in 2003 to 0.9 tons / ha in 2013, but significant discrepancies between developed and developing countries have been observed. For example, Canada reported yields well above 1.5 tons / ha, whereas the largest producer, India, is producing less than 1 ton / ha. This gap can be explained by differences in input use, technology and infrastructure. Owing to low and stagnant yields in developing countries, pulse production did not grow as rapidly as that of cereals and oilseeds. Figure 2 : Global pulses production and area harvested, US$, millions Area cultivated Production Hectares, millions Source : Food and Agriculture Organization of the United Nations ( 2015 ). [ GLOBAL PULSES VALUE CHAIN ]

20 18 Figure 3 : Pulses production by region, average Europe 9% Oceania 4% Africa 22% Asia 45% Americas 20% Source : Food and Agriculture Organization of the United Nations ( 2015 ). Figure 4 : Share of pulse varieties in global production ( % ) 2004 and present Dry beans Dry peas Chickpeas Dry broad beans Cow peas Lentils Pigeon peas Others 2004 Present Source : FAOSTAT ( 2015 ). In spite of their relatively low yields, developing countries are the largest producers of pulses, accounting for around 70 % of global production, with India leading the way. With its large vegetarian population that is largely dependent on pulses, wheat and milk as its major sources of protein, India remains by far the largest producing country, alone accounting for 25 % ( or 18.3 million tons ) of world production in 2013 ( FAO ). It is followed by Canada ( 8.3 % ), Myanmar ( 7.1 % ), China ( 6.1 % ) and Nigeria ( 4.1 % ), which together account for more than half of global output. Pulses of African origin have gained significant importance in recent years, from 12.2 million tons produced over the period , or 20 % of global production, to 15.4 million tons between 2009 and 2013, or 22 % of total production ( see figure 3 ). [ KENYA Value Chain Roadmap for PULSES ]

21 19 The medium-to-long term outlook is promising Supported by an anticipated growth in yields to reach an average of 1.6 tons / ha by 2050 ( Alexandratos and Bruinsma, 2012, p. 121 ), pulse production is expected to grow in the long term and is forecast to reach 100 million tons by Driven by rising incomes and population, and greater awareness of the health properties of pulses, the sector is projected to see stable demand and consumption trends in the long term. The FAO ( Alexandratos and Bruinsma, 2012, p. 47 ) further anticipates that for the future, no major changes are foreseen in per capita consumption of pulses, with the average of the developing countries remaining at 7-8 kg. Shift in consumption patterns Significant changes have been observed in global consumption, and therefore production, of pulses over the past decade. Dry beans, which include Phaseolus species ( kidney beans, lima beans and tepary beans ) and Vigna species ( adzuki beans, mung beans and black gram ) used to be the largest category of pulses grown globally until 2004, contributing about 31 % of total pulse production. The share of dry beans has gone down significantly and now represents 17 % of global pulse production. This variety has progressively been replaced by dry peas as the leading variety over the past decade, going up from 20 % to 24 % of global production. One major reason that can be identified is the significant reduction of production of black beans in China. Chickpeas, representing 16 % of global production, stand as the third-largest grown variety, followed by cowpeas ( 9 % ) and broad beans ( 9 % ) ( see figure 4 ). Larger number of exporters dominated by a small number of leading suppliers In line with the upward trend in global production, the growth path of global pulse exports has been impressive over the past three decades. As early as 2004, an FAO study observed that exports of these crops doubled in 2003 in comparison with the previous 20 years. 3 The trend continued along the same path in subsequent years with exports growing at a sustained Compound Annual Growth Rate ( CAGR ) of 22.5 % between 2004 and Pulse exports reached a record high of US $ 10.1 billion in Such trends can be explained by increased yields ( notably in developed countries ), the surge in cultivated areas ( chiefly led by developing countries ) and, from the demand side, by the increasing world population and by greater importance being given to pulses nutritional value across the globe. Looking specifically at the supply side, trade data show that the sector has seen a larger number of exporters over the past five years : from 63 in 2001, the number of countries with export values above US $ 1 million reached 85 in Despite this dynamism of the pulses market and the multiplication of suppliers, the supply side remains concentrated in a limited number of exporters. Five countries were responsible for 65 % of global exports over the period , with Canada taking the lion s share, alone accounting for 28.9 % of global exports. Myanmar approaches double-digit market share ( 9.7 % ), followed by the United States and China, each of whom supplied 9.2 % of the market that year. 3. Food and Agriculture Organization of the United Nations ( 2005 ). Pulses : Past Trends and Future Prospects Summary of paper contributed by FAO to the 4th International Food Legumes Research Conference, New Delhi, October. Available from http : // / fileadmin / templates / est / COMM_ MARKETS_MONITORING / Pulses / Documents / PulsesStudy.pdf. Figure 5 : Exports of pulses, ( US $ billions ) US$, billions Exports Source : ITC calculations based on United Nations Comtrade statistics ; International Trade Centre ( 2015 ). [ GLOBAL PULSES VALUE CHAIN ]

22 20 Table 1 : Top 10 exporters of pulses ( Harmonized System ( HS ) 0713 ), 2014 Exporters HS 0713 Dried vegetables, shelled Exports ( US $ millions ) CAGR CAGR ( % ) Average ( % ) Share in world exports Average ( % ) World Canada Myanmar United States China Australia India Argentina Ethiopia Turkey Egypt United Republic of Tanzania Kenya Source : International Trade Centre ( ITC ) calculations based on United Nations Comtrade statistics ; International Trade Centre ( 2015 ). Figure 6 : Exports of pulses by region or regional group, ( US $ billions ) US$, billions America Asia Europe Africa Oceania Source : International Trade Centre ( 2015 ). Pulses of African origin are gaining market share The African continent produces several varieties of pulses that are in high demand in consuming countries, chief among which is India. Pulses like mung beans, chickpeas ( yellow gram variety ), pigeon peas and kidney beans are already being exported to India from Africa, with major exporters including Ethiopia, the United Republic of Tanzania, Malawi, Kenya, Mozambique, Madagascar, Uganda and, more recently, Sudan. African origin pulses were first introduced by the State Trading Corporation of India. Subsequently, some private players have entered the market and are exporting to the South Asia region. Further, Indian buyers and processors are increasingly looking at [ KENYA Value Chain Roadmap for PULSES ]

23 21 African origin due to logistical convenience, availability of raw materials for processing and low processing costs. Indian importers have also been trying to look for alternative origins to diversify the import from Myanmar. Pulses of African origin are gaining market share. Among the top 20 exporters of pulses, Ethiopia and the United Republic of Tanzania achieved significant growth rates in exports between 2010 and 2014, with a CAGR of exports in value of 20.4 % and 17.8 %, respectively. With US $ 50 million worth of pulses exported over the period , Kenya s share in world exports is roughly 0.5 %, a significant progression compared with the 0.2 % share the country reported for the period The major African origin pulse category imported in South Asia is Tanzanian pigeon peas, imported to the level of 22 % of the total imports of pigeon peas in India. In addition to pigeon peas, the United Republic of Tanzania also exports chickpeas to India. To a lesser extent, Mozambique, Malawi and Sudan are also supplying the Indian market with this variety of pulse. Mung beans of African origin are also being exported to India from the United Republic of Tanzania, Kenya and Mozambique. Finally, Ethiopia appears to be a major supplier of kidney beans to the Indian market. These imports are expected to continue growing in the long term given shortfalls in domestic production. Dry peas, kidney beans and lentils dominate the trade of pulses While all varieties experienced strong growth over the past five years, the expansion of dry peas and kidney beans & white pea beans exports is especially notable, with a CAGR of 10 % over the period Canada is by far the top exporter of dry peas and lentils, whereas Myanmar and Australia are the most important exporters of urd, mung, black / green gram beans and chickpeas, respectively. China still largely dominates exports of kidney beans & white pea beans but its market share is declining. Table 2 provides information on pulse varieties whose international supply, on average for , was above US $ 1 billion. Table 2 : Pulse varieties with international supply >US $ 1 billion, 2014 Dry peas ( HS ) Kidney beans & white pea beans ( HS ) Lentils ( HS ) Exporter Average ( US $ millions ) CAGR Exporter Average ( US $ millions ) CAGR Exporter Average ( US $ millions ) CAGR World % World % World % Leading and growing Leading and growing Leading and growing Canada % Argentina % Canada % United States % United States % Australia % Russian Federation % Ethiopia % United States % Australia 73 3 % Egypt % Sri Lanka 15 8 % Ukraine 46 7 % Canada % Egypt % Leading but declining Leading but declining China 577-5% Turkey 181-3% UAE 34-17% Urd, mung, black / green gram beans ( HS ) Chickpeas ( HS ) Exporter Average ( US $ millions ) CAGR Exporter Average ( US $ millions ) CAGR World % World % Leading and growing Leading and growing China % Australia % Indonesia % Mexico % Egypt % Russian Federation % United States 9 6 % United States 48 3 % Malawi % Argentina % Leading but declining Leading but declining Myanmar 588-3% India 264-1% Australia 48-22% Canada 44-10% Ethiopia 34-3% [ GLOBAL PULSES VALUE CHAIN ]

24 22 Table 3 : World-leading importers of pulses ( HS 0713 ) Importers Imports ( US $ millions ) 0713 Dried vegetables, shelled CAGR CAGR ( % ) Average ( % ) Share in world imports Average ( % ) World India China Egypt Bangladesh United States Turkey Pakistan Italy Spain Algeria Source : ITC calculations based on United Nations Comtrade statistics ; International Trade Centre ( 2015 ). Switch of import markets from the West to the East The dynamic of pulse imports has dramatically changed over the past 10 years. The major importers of this commodity are now concentrated in South Asia, China, Europe and the MENA region. Europe, once the major importer of pulses, has reported a significant decline in its imports over the years, while China, Central Asian countries, and most importantly India, are gaining importance in world markets. The South Asia region, which includes India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan, accounts for the largest consumption and is the fastest-growing pulseconsuming region, with an increase in imports of than more than 250 % growth in the past 10 years. The market for pulses appears to be a vibrant one, with an annual growth of imports of 6.6 % between 2010 and 2014, driven by booming Indian demand that reported an impressive CAGR for imports of 9.5 % over the period. In 2014, the global market for the commodity was valued at approximately US $ 10.3 billion of imports, India alone capturing nearly a quarter of world imports. Other important markets, but far behind India, include China, Egypt, Bangladesh and the United States, each accounting for approximately 4 % to 5 %. With double-digit CAGRs for imports of pulses between 2010 and 2014, it is to be noted that China, the United States, Turkey and Italy have experienced strong expansions as target markets. Despite being the world s largest producer of pulses, India has emerged as the largest importer of pulses in the world Indian imports increased dramatically over the past decade, from US $ 446 million in value in 2004 to US $ 2,685 million in Domestic production of pulses has proven insufficient to supply booming demand fuelled by an increasing population, sustained economic growth and rapid urbanization. The situation has forced the country to import increasing quantities of pulses from the rest of world to bridge this widening gap ( see table 4 ). India imported more than 4 million tons of pulses in 2014, including chickpeas, pigeon peas, mung beans, lentils and dry peas, with major imports coming from Canada ( accounting for 37.4 % of India s imports of pulses in 2014 ), Myanmar ( 29.8 % ), Australia ( 7.1 % ) and the United States ( 6.3 % ) ( ITC Trade Map Database, 2015 ). India s high import dependency led the Government of India to ban the export of pulses ( except kabuli chana ( chickpeas ) ), including processed pulses, in This has led to some structural changes, and processing plants are being relocated to places such as Dubai and Singapore, mostly to ensure supply to the large South Asian diaspora that had been importing processed dhal from India. Indian authorities have also permitted duty-free import of pulses into the country, contributing to the sharp increase in imports. With a growing population expected to reach 1.7 billion by 2030 from the current 1.2 billion the Indian pulse requirement for the year 2030 is estimated at 32 million tons, implying that India would have to increase its production by an unlikely 80 % in order to meet domestic demand. Indian import dependency for pulses is consequently expected to rise significantly, offering a long-term opportunity for international suppliers. [ KENYA Value Chain Roadmap for PULSES ]

25 23 Table 4 : Pulse production, trade and consumption of India, to January 2015 ( tons ) January 2015 Production Import Total availability Export Domestic availability Source : Indian Directorate of Economics and Statistics. Significant contraction of European demand Once the most important market for pulses with about 45 % of the world s pulse imports handled in 2004, Europe has now slipped to second position, standing at approximately 22 % of total imports with an average import of about 2.2 million tons every year ( FAO ). Several factors can explain this fall in imports, including an inadequate level of product innovation adapted to modern life, a small home supply of pulses and competition from cheaper low-quality imports. An important factor when it comes to the European market for pulses is that pulses are consumed in many different ways in the various European Union ( EU ) countries, due to different regional food habits and traditions, and to differences in the supplies of grain legumes. Although dry beans are the most consumed pulse in the EU, it is important to keep in mind that preferences between varieties vary from one country to another. A significant amount of pulse imports were for animal feed because the production of meat and dairy products in most EU countries is to a large degree dependent on protein feed imports. However, a shift from pulses to soybeans, mainly imported from Latin America, has been observed during the past several years. Despite the recent loss of market share, pulse demand could rebound in Europe with recent increases in preferences for vegan and gluten-free diets, offering exciting export opportunities. As discussed above, pulses have significant nutritional and health advantages for consumers and their cultivation has a positive impact on agriculture and the environment. If Europe is a slow market, trends in consumption of pulses could change, especially if awareness-raising campaigns about the benefits of pulses are improved and if the food industry and professional organizations take up the challenge to incorporate grain legumes in novel, convenient and healthy food products. Pulses are seeing an increase in demand from the non-traditional processed food sector, namely with an increasing drive towards gluten-free diets The pulses industry is estimated to be worth over US $ 100 billion at the retail level. With greater awareness of coeliac disease and gluten sensitivity, the demand for gluten-free products is on the rise, resulting in a significant change in dietary patterns in the past few years. Benefiting from these developments, pulses such as yellow peas, lentils and chickpeas are gaining recognition as the new and improved heart of healthy foods and new processed products made from lentils and chickpeas such as pasta, noodles and chips have been developed. Change in consumption patterns in China With a growing population of 1.35 billion, China has recently shown an impressive rise in demand for pulses to become the second major importer in Asia and the third-largest market in the world. China reported a CAGR of imports of 11.8 % between 2010 and 2014, its share in world imports rising from less than 1 % ( average for the years ) to 5.5 % ( average for ) over the past decade. Once a net exporter of cheap, low quality pulses such as black beans, China, with its economic resurgence and growing middle class, is now importing some of those very same commodities, the result of shifting demands and a rapidly changing society. Increasing production costs in local agriculture have led to a loss of competitiveness of the pulses sector, resulting in a contraction of production and exports. The 2013 flooding that partially destroyed crops has also contributed to the drop in black bean exports from China. The country is importing significant quantities of dry peas, consumed in various forms including starch, vermicelli and snack food. The increasing influence of Western culture and food habits in China has contributed to this change in consumption patterns with a new demand for processed pulses that were not traditionally consumed. Recent investments in processing factories confirm this trend, resulting in [ GLOBAL PULSES VALUE CHAIN ]

26 24 a sharp increase in imports of dry peas by China in recent years. Although the carry-over stock kept imports to a level of 700, ,000 tons in 2014, imports are expected to rebound to an average of 1 million tons every year. The MENA region is a traditional importer of pulses, which feature prominently in regional cuisine The MENA region has high population growth rates and many countries are seeing sustainable growth in food service and retail sales. Consumers in the MENA region are increasingly using supermarkets for food purchases, which has in turn led to an increase in demand for processed pulses such as canned pulses and pulse flours. The extraordinary growth in the hospitality industry in countries such as Morocco, Egypt and Israel, and the city of Dubai ( UAE ), coupled with the introduction of new cuisines, is also pushing demand for pulses such as chickpeas, lentils, peas and beans to new levels. Demand for pulses is on the rise among both traditional consumers and new markets in this region. Demand and consumption growth driven by the Indian market As noted above, the Indian market is key in terms of driving consumption. Table 5 provides information on pulse varieties whose international demand, on average for , was above US $ 1 billion, namely, dry peas ( HS ), kidney beans & white pea beans ( HS ), lentils ( HS ), urd, mung, black / green beans ( HS ) and chickpeas ( HS ). All but one of the five categories are largely dominated by Indian demand, kidney beans & white pea beans being the exception. European countries, including Italy, the United Kingdom, Spain and France, constitute the top importers of this specific category of pulses. Table 5 Dry peas ( HS ) Kidney beans & white pea beans ( HS ) Lentils ( HS ) Importer Average CAGR Importer Average CAGR Importer Average CAGR World % World % World % Leading and growing Leading and growing Leading and growing India % Italy % India % China % United Kingdom % Turkey % Bangladesh % India % UAE % Pakistan % Venezuela % Spain 67 0 % United States % Leading but declining Pakistan 59 4 % Brazil 200-2% Mexico 113-6% Leading but declining Sri Lanka 113-2% Bangladesh % Urd, mung, black / green gram beans ( HS ) Chickpeas ( HS ) Importer Average CAGR Importer Average CAGR World % World % Leading and growing Leading and growing Japan 91 4 % India % Indonesia % Bangladesh % Viet Nam % Algeria % United States 31 2 % Spain 80 1 % Leading but declining Leading but declining India 528-1% Pakistan 38-30% Malaysia 21-2% Saudi Arabia 27-8% [ KENYA Value Chain Roadmap for PULSES ]

27 25 Strong Indian demand keeps prices remunerative The increasing international demand for pulses has driven up the price of the commodity. Average prices have been rising, suggesting a shortfall of supply. India being the largest importer of pulses, the Indian market situation and crop positions significantly affect global prices. Importantly, consumption patterns in India indicate a strong preference for Photo: (CC BY-SA 2.0) CC0 Public Domain, beans jpg low-cost varieties and the use of substitutions as prices go up ( e.g. if the price of chickpeas goes up, the import shifts to yellow peas ). Further, the major demand for pulses is generated from countries that have higher population growth rates. Countries like India, with its high population growth rate and rising per capita income, is keeping the prices of pulses up. If the average price of imports by India is generally lower than the global average, Indian demand nevertheless plays a major role in keeping prices remunerative. Box 1 : Global trends World demand for pulses is reaching an all-time high, exacerbated by nutritional demand for a substitute protein across the world as people shift from traditional sources like meat due to dietary needs and preferences. Production of pulses has seen unprecedented growth over the past decade. Global production of pulses reached 73.2 million tons in Although the area cultivated has significantly increased, productivity remains low, especially in developing countries. South Asia is the biggest pulse producing region in the world, accounting altogether for 25 % of world pulse production. Pulses of African origin have gained significant importance in recent years, currently accounting for roughly 20 % of global production. Dry peas constitute 24 % of the world s pulse production, followed by dry beans ( 17 %), chickpeas ( 16 %), dry broad beans and cowpeas ( 9 % each ), lentils and pigeon peas ( 6 % each ), and others. Pulse exports are dominated by a small number of leading suppliers. The major exporter of pulses in 2011 was Canada ( 28.9 % share of world exports ), followed by Myanmar ( 9.7 %), China and the United States ( with approximately 9.2 % share of world exports each ). The total value of Canada s pulse exports in 2014 amounted to about US $ 2.8 billion. Pulses of African origin are gaining market share. Switch of import markets from the West to the East. International demand and consumption growth are now driven by the Indian market, which in turn keeps pulse prices remunerative. Pulses of African origin are gaining market share. Significant contraction of European demand, once the lead importer. Other key markets include China and the MENA region. Dry peas, kidney beans and lentils dominate the trade in pulses. [ GLOBAL PULSES VALUE CHAIN ]

28 Photo: Kiyo (CC BY-NC 2.0), Kidney Beans.jpg

29 An evolving value chain in need of support 4 Box 2 : The sector s socioeconomic importance to Kenya Endowed with over 569,000 square kilometres of land, Kenya boasts a wide range of ecological regions and plant life. The country straddles the equator, it enjoys areas of both temperate and tropical climate, and its 475 endemic plant species include a variety of pulses.* Production of pulses began to increase following Kenya s independence. From 1960 to 1982, output more than doubled to 568,000 tons per year, due in large part to the growth of dry bean production.** Continuing to grow through 1993, production fell off in the mid-1990s. Nevertheless, growth has picked up again in recent years. Today, pulses are an important food source for the Kenyan population due to their nutritional value, high protein content and relatively low cost when compared with meat.*** Pulses are gaining in popularity among farmers due to their hardiness and resistance to drought, which makes them ideal for Kenya, where rainfall is sporadic because it is governed by the erratic movement of the intertropical convergence zone.**** Further complicating the matter, weather has been particularly unpredictable in recent years due to climate change. This has led many farmers to abandon wheat production in favour of pulses, which mature quickly and can thrive with limited rainfall.***** Figure 8 : Kenyan production of pulses, Tons, thousands Source : Food and Agriculture Organization of the United Nations ( 2015 ). * Wambugu P.W. and Muthamia Z.K. (2009). Country Report on the State of Plant Genetic Resources for Food and Agriculture: Kenya, p. 19. Kenya Agricultural Research Institute; National Genebank of Kenya. ** Food and Agriculture Organization of the United Nations (2015). Statistics database. Available from Accessed 5 August *** Katungi, E., Farrow. A., Chianu. J., Sperling. L., and Beebe. S. (2009). Common Bean in Eastern and Southern Africa: A Situation and Outlook Analysis. International Centre for Tropical Agriculture. **** Pereira, Charles (1996). The role of agricultural research in the development of Kenya before independence. In Review of Kenyan Agricultural Research, Vol. 1, p. 9. ***** Njagi, Kagondu (2013). As wheat yields fall in Kenya, farmers turn to beans. Thomson Reuters Foundation, 25 April. 4. Information source for the value chain consultations and desk research, prominently using the following source : Dalipagic, Ian and Elepu, Dr. Gabriel ( 2014 ). Agricultural Value Chain Analysis in Northern Uganda : Maize, Rice, Groundnuts, Sunflower and Sesame. Action Against Hunger / ACF International.

30 28 A wide array of actors works together throughout the sector in order to produce and sell pulses on both domestic and international markets. Vertical business linkages tend to be undeveloped and informal. 5 Trade is based on temporary relationships and most actors do not use contracts. Research and development The pulses sector had historically received little attention from research and support institutions, which tended to focus more on crops such as maize. In recent years, institutions including the Kenya Agricultural and Livestock Research Organization ( KALRO ), local universities, nongovernmental organizations and other local research organizations have begun to engage more with the sector, producing higher-yield crop varieties that cater to local conditions. Regional institutions such as the Association for Strengthening Agricultural Research in Eastern and Central Africa and its Eastern and Central Africa Bean Research Network have also played a role. In the bean subsector, a number of disease- and pestresistant varieties have been developed. KALRO, the International Crops Research Institute for the Semi-Arid Tropics ( ICRISAT ), the University of Nairobi and Winrock International meanwhile have developed a number of highyielding varieties of pigeon pea that are adapted to local conditions and resistant to diseases. ICRISAT in particular has been actively promoting the use of enhanced pigeon pea varieties in Eastern province. Inputs The value chain s main inputs are labour and seeds, which are mainly domestic. Most farms use their own beans for seed or buy from local markets ; improved varieties are generally only used where there is Government or donor intervention. It is estimated that 75 % of cowpea seeds and 95 % of pigeon pea seeds come from farm retention or neighbouring households. Certified and improved seeds, where used, may come from local businesses supplied by the Kenya Seed Company Ltd ( cowpeas ) and ICRISAT ( pigeon peas ), the latter of which contracts local farmers to generate the certified seeds. Supplying certified pulse seeds is perceived as quite risky, as self-pollinated seeds can easily be retained and used to achieve similar yields. 6 This limits greater development of the supply chain, which is further complicated by farmers reluctance to pay the high cost of certified seeds. 7 Additionally, there is only a limited commercial market for minor crop seeds, making it difficult for suppliers 5. Ibid. : p Ibid, : p Ibid, : p, 153. to achieve economies of scale. Where there is a shortage of seed due to a poor harvest, supplies are either bought from neighbouring regions at markets or supplied by the Government or donors. 8 Other inputs such as fertilizers, insecticides and pesticides are only used by a small proportion of the sector s farmers. Some farmers do use manure. Production The next step in the value chain is production, which is undertaken on smallholder farms and characterized by ploughing, planting and weeding. 9 Planting and harvesting are accomplished by manual labour, while oxen ploughs and hoes are often used in ploughing and weeding. Beans are grown during both the short and long rains periods ( September / December and February / June respectively ). 10 Pigeon pea is planted at the beginning of the short rains. 11 The short- and medium-duration varieties are harvested as fresh vegetable from February to April, while the long duration variety is usually harvested as dry grain between August and September. Kenyan farmers currently cultivate pulses on 1.47 million ha of land. All three metrics area harvested, production volume, and yield have grown between 2000 and 2013, despite periods of fluctuation. According to the FAO, Kenya is the seventeenth top producer of pulses worldwide and number four in Africa after Nigeria, the United Republic of Tanzania and Ethiopia involving roughly 1.8 million households in the production of pulses in general. Kenyan farms produced more than 1 million tons of pulses in 2013, including dry beans ( 715,000 tons ), pigeon peas ( 166,000 tons ), and cowpeas ( 134,000 tons ). As illustrated in figure 10, production growth since the turn of the century ( 6.2 % CAGR from 2000 to 2013 ) has been driven largely by increased cultivation of dry beans, pigeon peas and cowpeas, which have grown by a CAGR of 6.1 %, 7.4 % and 10.1 % respectively over the past decade. The production of lentils, while small, has grown by 8.0 % per annum. 8. Ibid. : p, Ibid. : p Ibid. : p Ibid. : p [ KENYA Value Chain Roadmap for PULSES ]

31 29 Figure 9 : Production of pulses in Kenya, Tons, thousands tons Hectares, thousands Area harvested (ha, lhs) Production (tons, lhs) Yield (hg/ha, rhs) Source : Food and Agriculture Organization of the United Nations ( 2015 ). Figure 10 : Production of pulses in Kenya by subsector, ( thousands of tons ) Tons, thousands Beans, dry Pigeon peas Cowpeas, dry Chickpeas Lentils Pulses, nes - hg/ha [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

32 Tons, thousands Beans, dry Chick peas Cow peas, dry Pigeon peas Lentils Pulses, nes Source : Food and Agriculture Organization of the United Nations ( 2015 ). Figure 11 : Kenyan production of dry beans, Tons, thousands hectares, thousands Area harvested (ha, lhs) Production (tons, lhs) Yield (hg/ha, rhs) Source : Food and Agriculture Organization of the United Nations ( 2015 ). Dry beans The common bean is the most widely farmed pulse in Kenya ; it accounts for nearly 70 % of Kenya s total pulse production 12 and Kenya is the eighth-largest producer of dry beans in the world ( 2.3 % of global production ). 13 Beans - Hg/ha are one of the most important staple foods and sources of protein for Kenyans and they are critical to food security. 14 Nevertheless, while they were historically grown for sustenance, beans have become an important source of income for small Kenyan farmers. They are usually intercropped with maize, sugar cane and coffee, and they are grown entirely 12. Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http ://faostat3.fao.org/ download / T /*/ E. Accessed 5 August Ibid. 14. United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report Kenya, p USAID. [ KENYA Value Chain Roadmap for PULSES ]

33 31 by smallholder farmers. 15 Roughly 1.5 million households are engaged in bean cultivation. Farmers cultivated dry beans on over 1 million ha in 2013, up from 770,000 in Dry beans are produced mainly in the Rift Valley ( 33 % ), Eastern province ( 24 % ), Nyanza ( 185 ), Western province ( 12 % ) and Central province ( 12 % ). 17 While production has been unsteady due to reliance on the variable rainfall, consumption has been growing in double digits since the turn of the century. As such, Kenya often imports beans in order to fill the deficit and meet domestic demand. It should also be noted that while yields have improved by 20 % since 2000, they are still well below the levels achieved throughout the rest of the world ( 2013 : 7,850 hectograms ( hg ) / ha ). 18 Cowpeas Cowpeas account for roughly 16 % of Kenya s pulse production. Less critical to the national food supply, cowpeas are still an importance source of food for subsistence farmers, as well as being used for fodder. 19 Indeed, they are grown 15. Ibid. : p Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report Kenya, p USAID. 18. Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August United States Agency for International Development ( 2010 ). Staple Foods mainly by women for household consumption, although commercial production is becoming more prevalent. The average female grower cultivates cowpeas on a small plot measuring 0.25 to 1 ha in size. They are generally intercropped with maize, millet and sorghum. Farmers grow cowpeas on 192,000 ha of land, up nearly 100 % since the turn of the century. 20 They do well in dry climates and 90 % of them are produced in Eastern province, mainly in Mwingi, Makueni, Kitui, Mbeere and Tharaka. 21 Minor volumes are also produced in Coast province ( 3.7 % ), Nyanza ( 2 % ), Rift Valley ( 1.6 % ), and North Eastern ( 0.78 % ), Central ( 0.6 % ) and Western ( 0.3 % ) provinces. Although production has increased at a steady pace, it is still unable to fully meet domestic demand. Officials estimate that production can only meet between 60 % and 75 % of demand and, as with dry beans, additional supplies are imported to fill the gap. 22 As illustrated figure 12, production has increased due to the growth of area harvested as well as improvements in yield. After growing over the last decade, the yield of Kenyan farmers ( 6,378 hg / ha ) surpassed the world average of 5,219 hg / ha in Value Chain Analysis, Country Report Kenya, p USAID. 20. Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http ://faostat3.fao.org/ download / T /*/ E. Accessed 5 August United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report Kenya, p USAID. 22. Ibid. : p Figure 12 : Kenyan production of cowpeas, Tons, thousands Hectares, thousands Area harvested (ha, lhs) Production (tons, lhs) Yield (hg/ha, rhs) Source : Food and Agriculture Organization of the United Nations ( 2015 ). Hg/ha [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

34 32 Figure 13 : Kenyan production of pigeon peas, Tons, thousands Hectares, thousands Area harvested (ha, lhs) Production (tons, lhs) Yield (hg/ha, rhs) Source : Food and Agriculture Organization of the United Nations ( 2015 ). Pigeon peas Pigeon peas accounted for 9.7 % of total pulse production in The peas are rich in protein and can be eaten fresh or dry ; the leaves and hulls can be used to feed livestock ; and the stems can be used for firewood. 24 In addition, pigeon peas are able to fix atmospheric nitrogen into the soil, especially pertinent given that soils in semi-arid regions tend to be deficient in nitrogen. Pigeon peas are grown by smallholder farms ranging in size from 0.2 to 1.4 ha for both sustenance and income. 25 It has been estimated that they are cultivated by up to 100 % of farming families in certain areas, and roughly two-thirds of these sell a portion of their produce. They are intercropped with both grains and other legumes such as beans, green gram and cowpeas. All varieties of pigeon pea are grown in Kenya, including those of short ( days to mature with determinate growth habit ), medium ( days with indeterminate growth habit ) and long duration ( more than 200 days with indeterminate growth habit ) maturities. Pigeon peas are cultivated on 144,000 ha of land. 26 This is a decline of 16 % from the area under cultivation in They are grown in arid and semi-arid climates, and 99 % of Kenyan cultivation occurs in Eastern province, 27 with 80 % 23. Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report Kenya, p USAID. 25. Ibid. : p Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report Kenya, p USAID. Hg/ha concentrated in Machakos ( 33 % of national production ), Makueni ( 25 % ) and Kitui ( 22 % ). Despite a decline in area under cultivation between 2000 and 2013, production has increased by 12 % over the same period due to a 33 % increase in yield. 28 Even so, and despite these improvements, yields remain well below the world average of 7,509 hg / ha in Chickpeas At 25 %, chickpeas have the highest protein content of any pulse. 29 Nevertheless, they are a relatively less important crop in Kenya, accounting for only 0.01 % of total pulse production. They are grown in the same areas as cowpeas and pigeon peas ( Eastern province ). 30 Collection and distribution Once harvested, the majority of pulse crops are retained for consumption at home or sold to other households or locally at markets. The remainder is sold to both local and regional wholesalers, assemblers, brokers, agents and traders. While similar, each of the three main subsectors is characterized by slightly different distribution mechanisms in which the goods are assembled and sold throughout wholesale and retail channels. 28. Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report Kenya, p USAID. 30. Ibid. : p [ KENYA Value Chain Roadmap for PULSES ]

35 33 Dry beans Photo: (CC BY-SA 2.0) CIAT (CC BY-SA 2.0), bean market5.jpg It is estimated that 60 % of the beans produced are consumed by the household and the remaining 40 % are sold. 31 While some are sold directly by the producers to wholesalers, retailers and households, beans are also consolidated by farm gate agents ( either farmers or local traders ) and regional traders who transport the goods to traders and wholesalers in urban centres. Wholesalers include both individuals and institutions such as the National Cereals and Produce Board, and they tend to be present at multiple levels of the value chain. Most wholesalers do not operate fulltime, instead engaging in parallel activities or moving away from beans during off-seasons. Wholesalers sell the goods to domestic retailers while also engaging in export. Retailing meanwhile is conducted by local traders in markets and shops. Mixed wholesaling and retailing is quite common. Pigeon peas Pigeon peas can be sold as fresh vegetables, dry grain or dhal. Roughly 60 % of the crop is used for dry grain while 40 % is used as a vegetable. 32 While 62 % of dry grain 31. Ibid. : p Ibid. : p harvests are sold, that percentage falls to only 10 % for vegetable peas. The high level of household consumption is due to pigeon peas relative sweetness and cheapness when compared to alternatives, as well as the fact that they are harvested during times of staple food shortage. Most farmers sell dry grain at farm gates, distributing pigeon peas to rural wholesalers, rural assemblers, rural open-air retailers, rural retail shopkeepers, and directly to rural consumers and farmers. 33 The rural assemblers, in turn, sell the peas to rural retailers and wholesalers. Rural wholesalers sell to rural open-air markets, urban wholesalers and urban exporters / processors. Urban wholesalers and processors sell to urban supermarkets, open-air retailers and retail shopkeepers, who in turn sell the goods to urban consumers. Lastly, exporters add value through processing such as the production of dhal before selling their goods on foreign markets, namely to India and Europe. 34 Vegetable pigeon peas meanwhile are typically purchased by rural assemblers / brokers who buy and bulk peas in the pod before selling them to rural open-air retailers, rural wholesalers, urban wholesalers and urban exporters. 35 It should be noted that farmers do sell the peas directly to rural open-air retailers, rural consumers, rural wholesalers and urban exporters. Urban exporters are considered to be a very important outlet for farmers because they often purchase vegetable pigeon peas directly from the producers. Exporters generally collect peas at designated points throughout the week according to flight schedules. Physical attributes are tested and pesticide residue tests may be performed if required. Fresh vegetable exports depend on close collaboration and planning between farmers and export agents. Cowpeas Cowpeas are grown as both grain and vegetable. 36 The majority of green vegetable is consumed at home, while up to 70 % of dried grain is sold to rural assemblers / brokers / wholesalers at local markets and farm gates, and to rural consumers, open-air retailers and shopkeepers. Regional brokers and wholesalers may sell the goods to posho mill processors in urban areas, to urban wholesalers, or directly to urban retail shopkeepers. Local traders meanwhile sell to either rural posho mill processors or urban wholesalers. Urban posho mill processors sell to both urban supermarkets and regional markets, while rural processors sell to rural retail shops and local household consumers. Urban wholesalers sell to urban retail shopkeepers and urban supermarkets, who in turn sell to the final consumers. 33. Ibid. : p Shiferaw B. and others ( 2008 ). Unlocking the Potential of High-Value Legumes in the Semi-Arid Regions : Analyses of the Pigeonpea Value Chains in Kenya, p. 17. Nairobi, Kenya : International Crops Research Institute for the Semi-Arid Tropics. 35. Ibid. : p Ibid. : p [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

36 34 Figure 14 : Current value chain Legend National component International component Inputs Water Labour (qualified/technical) Seeds Production: smallholder farms Dry beans 529 kt cowpeas 122 kt Pigeon peas 73 kt 17th globally 1.8 million households Assembly/bulking Local wholesalers Regional wholesalers Processing Pigeon pea (Nairobi, Mombasa) De-hulling Splitting Wholesaling Small local/regional traders 60% household retention National market Beans Institutions Local markets United Arab Emirates Manure (less than 25% of farmers) Land Farm equipment Chemical fertilizers (in small proportion) Pesticide and insecticide (in small proportion) Import: 78,600 tons 1.4 million Ha Ploughing Planting Weeding Spraying Harvesting Drying Bagging Record keeping Assemblers Intermediate traders Bulking agents Traders Cleaning Sorting Polishing Packaging Dry grain cowpeas Rural posho mill processors Urban posho mill Processors Private wholesalers National Cereals and Produce Board Urban supermarkets Rural/urban retail shopkeepers Cowpeas 30% household retention Rural open-air Rural retail shop Pigeon pea Local markets (schools/hospitals) Urban supermarkets (dry, dhal) Urban Urban open air retailers consumers (vegetable and dry) Urban retailer shopkeepers (dry, dhal) household retention International transporter USD 58 million Mainly kidney bean and white pea bean India South Africa Pakistan EAC Indonesia External competition - kidney beans, - white pea beans - dry peas Chickpeas & Navy bean sub-sectors are underdeveloped but with high potential United States Uganda Uganda (46.8 %) United States (30.6 %) United Republic Research and development National component of the value chain Support services of Tanzania (14.5%) Ministry of Health Department of Public Health Ethiopia County Government / Ministry of Agriculture, Livestock and Fisheries / Ministry of Industrialization and Enterprise Development ICRISAT/KALRO Universities Non-governmental organizations United Republic of Tanzania Canada SPS Services, Seed Certification, Analytical Chemical Laboratory: Kenya Plant Health Inspectorate Service (KEPHIS) Food Safety and quality regulations : Kenya Bureau of Standards, KARI., Weights and Measures Dept., Government Chemist s Dept., Dept. of Veterinary Services, Kenya Dairy Board, Horticultural Crops Development Authoriy / KRA Eastern and Central Africa Bean Research Network Market price information : EPC/KENinvest Extension services Financial services including formal (banks) and informal lending sources Eastern Africa Grain Council [ KENYA Value Chain Roadmap for PULSES ]

37 35 Institutional support to the value chain The efficiency of the pulses sector value chain is also determined by the function and roles of the trade and investment support institutions involved in supporting sector development. These institutions can be grouped in four main categories : Policy support network : These institutions represent ministries and competent authorities responsible for influencing or implementing policies and regulations. Trade services network : These institutions or agencies provide a wide range of trade-related services to both Government and enterprises. Business services network : These are associations, or major representatives of commercial service providers used by exporters to effect international trade transactions. Civil society network : These institutions are not explicitly engaged in the sector s trade-related activities. However, they are opinion leaders representing specific interests that have a bearing on the sector s export potential and socioeconomic development. Figure 15 : Trade support network Policy support network Trade services network Business services network Civil society network Ministry of Agriculture, Livestock and Fisheries ( MALF ) KALRO KALRO Food Crops Research Institute Agriculture, Fisheries and Food Authority ( AFFA ) Ministry of Industrialization and Enterprise Development ( MoIED ) Kenya Industrial Research and Development Institute Micro and Small Enterprises Authority Ministry of Foreign Affairs & International Trade Ministry of Commerce, Tourism and East Africa Region Department of Public Health National Treasury Kenya Revenue Authority ( KRA ) Ministry of Transport and Infrastructure County governments Eastern Africa Grain Council ( EAGC ) Cereal Growers Association ( CGA ) Kenya Agricultural Commodity Exchange Export Promotion Council ( EPC ) Kenya Investment Authority ( KenInvest ) Kenya National Chamber of Commerce and Industry ( KNCCI ) Kenya National Farmers Federation ( KENAFF ) Kenya Private Sector Alliance ( KEPSA ) Seed Trade Association of Kenya ( STAK ) Kenya Plant Health Inspectorate Service ( KEPHIS ) Agrochemicals Association of Kenya National Cereals and Produce Board Export Processing Zones Authority ( EPZA ) Kenya Bureau of Standards ( KEBS ) Kenya Industrial Property Institute Indian Council of Agricultural Research ( ICAR ) India Pulses and Grains Association ( IPGA ) Kenya Ports Authority Exim Bank of India Commercial banks International Centre of Insect Physiology and Ecology ICRISAT Jomo Kenyatta University of Agriculture and Technology [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

38 36 Policy support network MALF is responsible for formulating, implementing and monitoring agricultural legislation, regulations and policies. It is the institution responsible for regulation and quality control of inputs, produce and products from the agricultural sector, and is in charge of managing and controlling pests and diseases. The Ministry is also tasked with supporting agricultural research and promoting technology delivery as well as collecting, maintaining and managing information on the agricultural sector. KALRO, a corporate body under the aegis of MALF, was created to establish a suitable legal and institutional framework for coordination of agricultural research. AFFA, a state corporation, is the successor of former regulatory institutions in the sector that were merged into Directorates under the Authority, including a Food Crops Directorate. MoIED is responsible for the promotion of industrialization and enterprise development in Kenya. This Ministry is tasked with the formulation and implementation of industrialization and cooperative policy, implementation of the industrial property rights regime, and elaboration of private sector development policy and strategy. Quality control, including industrial standards development, also falls under the competence of this Ministry. Under the aegis of MoIED, the Kenya Industrial Research and Development Institute was established as a multidisciplinary institution to undertake industrial research, technology and innovation, and disseminate findings that will have a positive impact on national development. The Micro and Small Enterprises Authority is a state corporation established for the promotion, development and regulation of the micro and small enterprise sector in Kenya. Its mandate is to formulate and review policies and programmes for the sector. In addition to managing Kenya s foreign policy and international trade affairs, the Ministry of Foreign Affairs and International Trade manages Kenya s missions and embassies abroad as well as joint commissions and joint trade committees with other countries. The Ministry also has a trade representative function. The Department of Public Health under the Ministry of Health is tasked with overall responsibility for food safety in Kenya. In addition to its main function of formulating financial and economic policies, the National Treasury is also responsible for developing and maintaining sound fiscal and monetary policies that facilitate socioeconomic development. The Treasury therefore plays a key role in creating an enabling environment in which economic sectors can operate effectively and efficiently. The Treasury also regulates the financial sector on which all other sectors depend for investment resources. The core mandate of the KRA is to assess, collect and enforce laws relating to revenue. The Authority also promotes compliance with Kenya s tax, trade and border legislation and regulations. The Ministry of Transport and Infrastructure is responsible for roads development policy management, and maritime and rail transport management. The Ministry has two departments, namely the State Department of Transport and the State Department of Infrastructure. County governments will be instrumental in supporting the Supporting Indian Trade and Investment in Africa ( SITA ) Initiative as they oversee at county level agricultural matters, including crops, and plant and animal disease control, as well as trade development and regulation, including market regulations, trade licences and cooperative societies. There are 47 counties in Kenya, which are geographical units envisioned by the 2010 Constitution of Kenya as the units of devolved government. Trade services network EAGC is a membership-based organization offering detailed market information services to its members. The Council is charged with developing and promoting a structured grain trading system in East Africa. It also strives to improve the policy and trading environment in the region with respect to the grain trade, strengthening market connections and reducing constraints along the value chain. The Eastern Africa Grain Institute was launched in 2012 as a specialized division of EAGC to institutionalize capacitybuilding interventions. The Institute operates as a strategic business unit offering practical grain post-production and marketing courses for a fee. CGA is a national member-based farmers organization whose mission is to bring small and large commercial cereal farmers together in addressing industry challenges in Kenya. CGA works with industry stakeholders such as agricultural input suppliers, financial institutions, insurance companies, output buyers, development partners, non-governmental organizations and others to provide services to its members. The EPC is tasked with coordinating and harmonizing export development and promotion activities in the country, providing leadership to all national export programmes. EPC is the focal point for export development and promotion activities in the country. KenInvest is a statutory body established with the main objective of promoting investments in Kenya. It is responsible for facilitating the implementation of new investment projects, providing aftercare services for new and existing investments, and organizing investment promotion activities both locally and internationally. The core functions of KenInvest include policy advocacy, investment promotion and investment facilitation. KNCCI is a non-profit, autonomous, private sector institution and membership-based organization. KNCCI [ KENYA Value Chain Roadmap for PULSES ]

39 37 promotes, protects and develops the commercial, industrial and investment interests of its members. The Chamber also aims at influencing development policies, strategies and support measures so as to achieve the best economic climate for the business community s varied interests. KENAFF is a non-political, non-profit, member-based umbrella organization of all farmers in Kenya. It represents their interests with the objective of articulating issues affecting them through focused lobbying and advocacy, targeted capacity-building, and promotion of sector stakeholders cohesiveness in dispensing and progressive uptake of agricultural innovations for enhancing the socioeconomic status of farmers. KEPSA, a limited liability membership organization, is the private sector apex and umbrella body set up to bring together the business community in a single voice to engage and influence public policy for an enabling business environment. KEPSA is a key player in championing the interests of the Kenyan business community in trade, investment and industrial relations. STAK was formed to represent the interests of the seed sector and to promote the development of formal seed trade. STAK is an organization of seed companies which are registered by KEPHIS to produce, process and / or market seeds in Kenya, including service providers in the seed industry. KEPHIS is the Government parastatal whose responsibility is to assure the quality of agricultural inputs and produce to prevent adverse impacts on the economy, the environment and human health. Its mission is to provide a science-based regulatory service by assuring the quality of agricultural inputs and produce to promote food security and sustainable development. The Agrochemicals Association of Kenya is the national representative of the international agrochemical industry represented worldwide by CropLife International ( formerly International Group of National Associations of Manufacturers of Agrochemical Products ). This membership-based association is the umbrella organization in Kenya for manufacturers, formulators, repackers, importers, distributors, farmers and users of pest control products ( pesticides ). Its objectives include promoting public education on the safe use of pesticides and working with the Government towards the regulation and importation of pesticides into the country and exports out of the country. The National Cereals and Produce Board procures, manages and distributes the country s strategic grain reserves and famine relief stocks. It undertakes market stabilization of grain through various interventions and trades commercially in grains and related products. Additionally, it distributes farm inputs ( fertilizers ) at subsidized prices to enhance agricultural productivity. EPZA is a state corporation under MoIED. The Authority is responsible for the development of Export Processing Zones ( EPZs ), including the provision of advice on the removal of impediments to, and creation of incentives for, export-oriented production in EPZs. EPZA is also responsible for the regulation and administration of approved activities within EPZs. KEBS is the Government agency responsible for governing and maintaining the standards and practices of metrology in Kenya. The KEBS Board of Directors is known as the National Standards Council and is the policymaking body for supervising and controlling the administration and financial management of the Bureau. The Kenya Industrial Property Institute is a parastatal under MoIED. Its functions encompass the administration of industrial property rights, the provision of technological information to the public, and the provision of training on industrial property. ICAR is an autonomous organization under the Department of Agricultural Research and Education, Ministry of Agriculture and Farmers Welfare, Government of India. The Council is the apex body for coordinating, guiding and managing research and education in agriculture in the entire country. Business services network The Kenya Ports Authority is a state corporation under the Ministry of Transport and Infrastructure, with the responsibility to facilitate and promote global maritime trade through provision of competitive port services. IPGA is the apex organization of import and export traders of pulses and grains in India. It acts as a facilitator for the pulses trade in India on behalf of its 400 members and pivotal associations who represent a cross-section of over 10,000 stakeholders in the supply chain. The Exim Bank of India provides financial assistance for Indian exports, Indian imports, pre-shipment credit, and promoting India s foreign trade. Civil society network ICRISAT is a non-profit, non-political organization that conducts agricultural research for development in Asia and sub-saharan Africa with a wide array of partners throughout the world. The Institute works towards increasing dryland farmers crop productivity and incomes, while improving the resilience of their lands and livelihoods, by applying scientific innovations backed up with adequate policy, marketing and other support services. ICRISAT mandate crops include chickpeas and pigeon peas. The Jomo Kenyatta University of Agriculture and Technology offers training, research and innovation in the fields of agriculture, engineering, technology, enterprise development, built environment, health sciences, social sciences and other applied sciences. [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

40 38 Kenya : ( currently ) a small trading player globally in pulses Driven by a strong 30 % annual growth in value of pulse exports between 2010 and 2014, thereby outperforming the 7 % global import growth over the same time period, Kenya is continuously increasing its world market share, though from a low base. Despite Kenya s booming exports of pulses in recent years, the country remains a small player in the global market, only ranking 26 in world exports with a global share of 0.44 % in Kenya exported an estimated 62.2 million tons of pulses in , with an export value of US $ 49.8 million. Notwithstanding this remarkable growth, trade trends have not been stable, and high volatility has characterized the sector s exports over the decade, with sharp variations observed within short periods of time, notably falling below US $ 10 million in 2009 before rebounding to reach a record high of US $ 59 million in This high volatility of pulse exports is reflected in the trade balance for the commodity. Apart from the good results observed in 2010, it is only since 2013 that the trade balance for pulses in Kenya became positive, standing at US $ 12.3 million in 2014, boosted by the impressive growth of the sector s exports during the past two years. However, this surplus is fragile because the country continues to import large quantities of pulses, importing approximately 81,000 tons of pulses in to meet domestic demand ; imports which consisted primarily of kidney beans & white pea beans, and dry peas ( the country remains a net importer of these products ). Its main suppliers include the United States ( 26.6 % of Kenya s imports of pulses in 2014 ), Ethiopia ( 22.4 % ), the United Republic of Tanzania ( 13.9 % ) and Uganda ( 13.0 % ). 37 While the United States exports al- most exclusively dry peas to Kenya, Ethiopia provides the Kenyan market with kidney beans & white pea beans, while Uganda and the United Republic of Tanzania mainly export black / green gram beans. Export partners Looking at Kenya s main export partners, trade flows depict a sector vulnerable to purchases by a few countries and very unstable trends. As indicated in figure 17, Kenya s exports are highly dependent on the Asian market, and more specifically on the Indian and Pakistani markets. These two countries together accounted for 82 % of the pulses exported by Kenya in , indicating a high degree of concentration of the country s exports. Kenya s vulnerability to India s demand was evident in 2011, when exports to India fell by 89 % compared with 2010 levels, resulting in Kenya s total exports plummeting by 51 %. Market concentrations have worsened since Overall, export growth was primarily driven by further market penetration in existing markets for existing products. While the share of total pulse exports from Kenya into the Asian market has increased since 2011, the reverse trend was observed for the African continent as a target market, the latter only attracting about 10 % of Kenya s total exports of pulses in Kenyan exports have not yet reached the demanding markets of Europe where exports have been very meagre ( not exceeding US $ 1 million ) and North America, with virtually non-existent flows. 37. International Trade Centre ( 2015 ). Trade Map Database ( mirror data ). Available from http : // / Index.aspx. Accessed 28 October Figure 18 : Kenyan exports of pulses to selected markets, ( US $ millions ) US$, millions Africa America Asia Europe World Sources : ITC calculations based on United Nations Comtrade statistics until January 2011 ; ITC calculations based on data from the Kenya National Bureau of Statistics from January 2011 until January 2013 ; and ITC calculations based on United Nations Comtrade statistics since January Note : Data covering the years 2012 and 2014 are mirror data ( i.e. data reported by Kenya s trade partners ). [ KENYA Value Chain Roadmap for PULSES ]

41 39 Export product basket The majority of Kenya s pulse exports are comprised of kidney beans & white pea beans ( 51 % of exports in ), and leguminous vegetables, dried ( 18 % ), which were, in 2013, primarily dominated by exports of pigeon peas, the later accounting for 96 % of total exports within this category. 38 The next most exported category urd, mung, black / green gram beans accounted for 15 % of Kenya s pulse exports. Product concentration represents a serious issue in the sector, as the top three products listed above comprise 84 % of the country s pulse exports. Some signs of product diversification were observed over the past decade, driven by the progression of pulse exports. From only three varieties of pulses valued above US $ 0.1 million and only five registered export flows in 2004, Kenya reported exports for 8 to 10 varieties in , including four varieties valued above US $ 1 million. Overall, trade statistics show that Kenyan pulse exports are very volatile, with no evidence of clear trends. Exports 38. The 2012 version of the harmonized system nomenclature modified the category Leguminous vegetables dried, it excluded Pigeon peas.. and created a single HS 6 code for this product. Hence trade data specific to this product are only available since Note that Beans dried, was also amended and since 2012 cowpeas have their own HS code. of kidney beans & white pea beans and urd, mung, black / green gram beans grew significantly over the past five years, albeit from a very low base ( CAGR of 236 % and 259 % between 2010 and 2014, respectively ), while the trends for other varieties are less certain, reflecting the low level of survivability of Kenyan pulse exports. Of particular concern, however, is the decline in exports of peas, dried While this used to be an important product whose exports were valued at more than US $ 13 million in 2010, exports of this product plummeted to US $ 0.6 million in From an international perspective, paradoxically, urd, mung, black / green gram, one of Kenya s most vibrant export products, is the variety of pulses for which world imports have grown the least, i.e. 1 %, over the period However, prospects are bright for the kidney beans & white pea beans segment, Kenya s leading export product, with international demand for this category of pulses growing at an average of 8 % between 2010 and Kenya s product diversification is nevertheless promising, providing that concerted actions are taken to expand further and promote long survival rates. Extra efforts also need to be made to penetrate new markets and to unlock the production of more pulse varieties. Figure 19 : Kenya s export basket of pulses, ( US $ thousands ) US$, millions Other Lentils (071340) Leguminous vegetables, dried (071390) Peas, dried (071310) Beans, dried (071339) Pigeon peas (071360) Urd, mung, black/green gram beans (071331) Kidney beans & white pea beans (071333) Total Sources : ITC calculations based on United Nations Comtrade statistics until January 2011 ; ITC calculations based on data from the Kenya National Bureau of Statistics from January 2011 until January 2013 ; and ITC calculations based on United Nations Comtrade statistics since January Note : Data covering the years 2012 and 2014 are mirror data ( i.e. data reported by Kenya s trade partners ). [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

42 40 Regional benchmarking ( Kenya, United Republic of Tanzania, Ethiopia ) Figures 20 to 21 and table 6 provide some important details that assist in benchmarking Kenya s position in the broader pulses sector vis-à-vis key regional competitors, namely the United Republic of Tanzania and Ethiopia. Ethiopia has largely dominated regional production of pulses over the past decade, increasing its volume produced from approximately 1 million tons in 2003 to roughly 2.7 million tons in However, a severe drop in Ethiopian production was reported in 2013 with a produced volume less than half that of 2012, resulting in the country losing its leadership position to the United Republic of Tanzania. Tanzanian production has followed a steady upward trend in recent years, reaching a record high of 1.9 million tons in Despite a steady increase since 2008, the volumes produced in Kenya were significantly below that of its regional neighbours, with 1 million tons produced in There is considerable similarity between the varieties grown in Kenya and the United Republic of Tanzania. In both countries pulse production is highly concentrated on beans, this variety accounting for 73 % and 65 % of the total production of pulses in Kenya and the United Republic of Tanzania in 2013, respectively. To a lesser extent, cowpeas and pigeon peas also represent an important share of their production. As the two countries have very similar product baskets, competitive advantage in terms of price and quality in particular will be of utmost importance when it comes to selling pulses across borders. The production of pulses in Ethiopia presents very different characteristics, with peas being half of total production, followed by chickpeas ( 31 % ) and beans ( 19 % ). As a consequence, Ethiopian exporters do not operate in the same market segments as their Kenyan and Tanzanian peers. Despite a drop in production in 2013, Ethiopia remains the undisputed leader in pulse exports with approximately 330,000 tons exported in 2013, more than the exports of the United Republic of Tanzania ( 175,000 tons ) and Kenya ( 65,000 tons ) combined. Ethiopian exports have increased more than threefold since Pronounced oscillation has characterized the export sector for Kenya and the United Republic of Tanzania over the last decade. This trend indicates low export survival rates, meaning that export relationships are fluctuating, confirming some of the challenges identified below concerning the difficulty faced by Kenya in supplying consistently adequate volume or quality of pulses to global buyers. The Ethiopian export sector, on the other hand, has reached a higher level of maturity. Similarly, the export to production ratio presents pronounced variations in Kenya, oscillating between 0.5 % and 9 % over the last decade, once again highlighting low export survival rates in the country. In the United Republic of Tanzania and Ethiopia, export to production ratios have followed similar trends, stabilizing at around 10 % between 2007 and The significant increase of the ratio reported for Ethiopia in 2013 can be explained by the drop in domestic production that same year, indicating that the country has managed to maintain, and even increase ( see Figure 21 above ) its level of pulse export volumes, in turn indicating the strength of its relationships with international buyers. Figure 20 : Pulse production, Ethiopia, Kenya and the United Republic of Tanzania, ( tons ) Table 6 : Production of pulses by varieties, Ethiopia, Kenya and the United Republic of Tanzania, 2013 ( tons ) Kenya United Republic of Tanzania Ethiopia Beans 714,492 1,113, Chickpeas , ,733 Cow peas 133, ,717 n/a Pigeon peas 165, ,387 n/a Peas n/a ,831 Source : Food and Agriculture Organization of the United Nations ( ). EthiopiaSource : Food and Agriculture Organization of the United Nations ( 2015 ). [ KENYA Value Chain Roadmap for PULSES ]

43 41 Figure 21 : Pulses exports, Ethiopia, Kenya and the United Republic of Tanzania, ( tons ) Figure 22 : Export to production, Ethiopia, Kenya and the United Republic of Tanzania, ( % ) % Ethiopia United Republic of Tanzania, (tons) Source : Food and Agriculture Organization of the United Nations ( ). United Republic of Tanzania Kenya Source : ITC calculations based on Food and Agriculture Organization of the United Nations ( 2015 ) data. The role of investment in the current pulses value chain The Kenyan business environment for the pulses sector The national-level investment climate Table 7 presents several indicators of the attractiveness of Kenya s business environment, particularly as it compares with those of other likely destinations for pulse FDI. In terms of the ease of doing business and economic freedom, Kenya is in the same ballpark as India, Pakistan and the United Republic of Tanzania. Myanmar, which is the source of 90 % of India s pulse imports, lags significantly in both indicators, giving Kenya and the United Republic of Tanzania a relative selling point among Indian and Pakistani investors. Kenya rates below only India in the Global Competitiveness Index, wherein the World Economic Forum ranks Kenya fiftieth in the world for innovative capacity. This is a factor which may play out in the ability of public and private research institutes to develop better pulse varieties and, eventually, more innovative pulse-based food products. However, Kenya is at the back of the pack, along with Bangladesh and Myanmar, in terms of the perception of corruption, and the United Nations Conference on Trade and Development ranks Kenya last among these seven countries for realization of its FDI potential. In terms of FDI policy specifically, Kenya meets the fundamental needs of FDI projects in that FDI is given national treatment. There are standard guarantees against expropriation ; there are no foreign exchange controls ; profits may be remitted freely ; and there are very few sectors in which FDI is prohibited ( i.e. telecoms, insurance and fishing ). Although foreigners and foreign-controlled companies may not own land, 99-year leases are available. Bilateral investment treaties with 14 countries ( five in force ; nine ratified but not yet in force ) and Kenya s membership in the International Centre for the Settlement of Investment Disputes provide investors with additional confidence that they will be treated fairly by the Kenyan Government. Export-oriented pulse processors are likely to establish within the country s EPZs, where tenants are afforded a package of incentives and support, including : 10-year corporate tax holiday and 25 % tax rate thereafter 10-year withholding tax holiday on dividend remittance Duty and value added tax exemption on all inputs except motor vehicles 100 % investment deduction on capital expenditures for 20 years Stamp duty exemption Exemption from pre-shipment inspection Availability of on-site Customs inspection Work permits for senior expatriate staff [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

44 42 Table 7 : The investment climate in Kenya and possible competitors for pulse investment International benchmark India United Republic of Tanzania Pakistan Kenya Bangladesh Ethiopia Myanmar Average of six major rankings Ease of Doing Business ranking ( World Bank Group, 2015 ) Competitive Industrial Performance ranking ( United Nations Industrial Development Organization, 2010 ) Not ranked Global Competitiveness Index ( World Economic Forum, 2014 ) Inward FDI Performance Index ( United Nations Conference on Trade and Development, 2010 ) Corruption Perception Index ( Transparency International, 2014 ) ( tie ) 145 ( tie ) Source: World Bank Economic Freedom Index ( Heritage Foundation, 2015 ) Sector specifics Agro-industry is one of six national priorities for development under Kenya s main development programme, Vision Concrete implementation of the Government s prioritization of agribusiness is evident in a new law, regulatory streamlining and financial support. The Crops Act of 2013 aims to increase competitiveness, crop and market diversity, and private investment through a reduction of regulation, bureaucracy, taxes and institutional overlap. For example, AFFA consolidates and streamlines eight public bodies for the regulation and promotion of agriculture. In addition, a new Commodities Fund provides financial support to growers for farm inputs and operations. However, the Seed and Plant Varieties Act remains an obstacle to the upgrading of quality and volume. Primary producers are now supported by a one-stop land registration process and a 100 % industrial building allowance on agricultural land, which plans to increase sevenfold the total land area under irrigation. Processors, who depend on low electricity rates to be competitive, can look forward to new generation projects underway that are expected to lower electricity tariffs by between half and twothirds, making Kenyan electricity cheaper than the United Republic of Tanzania s. One of the sector characteristics which may be most problematic for investors is the dominance of smallholder farmers in Kenyan pulse production. Scattered and smallscale production impedes consistency of product quality and quantity, tailoring of product characteristics to buyers, and efficient marketing. However, as this is a characteristic of regional agriculture generally, Kenya is not at a relative disadvantage and it could in fact achieve a significant competitive advantage by making progress in the organization of pulse markets. The success of Kenya in attracting investment to pulses and agribusiness depends on exploitation of Kenya s position as the most important hub for global business in East Africa, with relatively good logistics and better international distribution channels. Several additional initiatives for logistics bode well for this goal, including the following. 4. Major developments in transportation infrastructure, allowing commodities to get to market more quickly and vastly more cheaply. The Mombasa Nairobi leg of a broad-gauge railway that will eventually extend to Kigali is due to be completed within about a year, cutting transportation costs by an astounding 80 % and giving pulse processors in Kenya better access to Rwanda, the tenth-largest producer of dry beans in The broadgauge railway will also cut time to port from as many as 12 hours by truck to only six hours. This development is important for the tandem objective of doubling the tonnage handled by Mombasa s port to 2 million containers in the next two years. 5. Drastic reduction of electricity costs, enabling more competitive agroprocessing. The geothermal electricity generation project at Naivasha, about 100 km from the major pulse producing regions of clusters of Nairobi, has the potential to reduce electricity costs from US $ 0.14 or US $ 0.15 per kilowatt-hour down to US $ Creation of a Government industrialization fund that would provide loans for start-ups and machinery upgrades in light manufacturing industries where unreliable, technologically outdated machines are in wide use. By providing internationally competitive interest rates of 5 % to 6 % instead of the 14 % to 18 % available now and imposing less onerous equity requirements, the Government would add to the competitiveness of pulse processors. [ KENYA Value Chain Roadmap for PULSES ]

45 43 Competitive constraints affecting the value chain Traditionally, the scope of export strategies and roadmaps has been defined in terms of market entry, such as market access, trade promotion and export development. This ignores several important factors in a country s competitiveness. For an export strategy to be effective it must address a wider set of constraints, including any factor that limits the ability of firms to supply export goods and services, the quality of the business environment, and the development impact of the country s trade, which is important to its sustainability. This integrated approach is illustrated by the four gears framework schematic on the right. Supply-side issues affect production capacity and include challenges in areas such as availability of appropriate skills and competencies, diversification capacity, technology and low value addition in the sector s products. Business environment constraints are those that influence transaction costs, such as regulatory environment, administrative procedures and documentation, infrastructure bottlenecks, certification costs, Internet access and cost of support services. Market entry constraints are essentially external to the country ( but may also be manifested internally ), such as market access, market development, market diversification and export promotion. Social and economic concerns include poverty reduction, gender equity, youth development, environmental sustainability and regional integration. Supply-side issues Unreliable and inconsistent supply of certified seeds negatively impacts yields and quality and quantity consistency. The availability of certified seeds of certain varieties for farmers is not guaranteed, due notably to a deficient seed multiplication system and, more generally, to poor regulation of the seed propagation sector, as well as a lack of knowledge transfer between seed producers and farmers. In addition, controls to fight against the use of non-certified, or fake, seeds appear to be insufficient. In particular, companies engaged in dry bean production are reluctant to engage in bean seeds because of the high risks associated with the genetic nature of the crop. Value chain segment Inputs Severity Highlight Seed producers have not identified pulses as a priority crop for the development of seeds. PoA reference to Low use of improved pulse varieties prevents the sector from achieving high yields and consistent supply quantities. The introduction of adapted hybrid / higher-yielding varieties, which have different specificities such as high adaptability in different climatic conditions and rapid maturity dates, has been limited in Kenya. Important reasons include the low availability of seeds caused by the lack of a large-scale seed multiplication and distribution scheme for hybrid varieties, and limited interaction between seed companies, exporters, farmers, research institutes such as ICRISAT and public actors. Pigeon pea producers are notably constrained by limited access to high-quality seeds. Border-In Issues Developinig skills and Entrepreneurship Regional Development and Integration Capacity Development Poverty Alleviation and Gender Issues Capacity Diversification Environmental Sustainability and Climate Change Development Issues Border Issues Infrastructure and Regulatory Reform National Promotion and Branding Cost of Doing Business Market Access and Policy Reform Trade Facilitation Trade Support Services Border-Out Issues Value chain segment Inputs Severity Highlight Producers tend to retain seeds from their production for replanting the following season. PoA reference 1.1.4, to and There is lack of knowledge about international market requirements for pulses. If it is agreed that the industry would benefit from higher-yielding varieties ( see above ), seed selection should also be made according to international market demand. It will therefore be important to identify varieties and characteristics of pulses within the broad types such as pigeon peas, chickpeas ( yellow gram ) and green grams ( mung beans ) that are suitable for the identified cultivation areas and for which there is significant demand, notably targeting the Indian market. Seed production and multiplication should also be oriented towards those varieties. [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

46 44 Photo: (CC BY-SA 2.0) CIAT (CC BY-SA 2.0), Bean plant assessments.jpg Value chain segment Severity Highlight Inputs Pulse producers have limited access to information on market requirements that would help them identify the varieties to be grown. PoA reference 1.1.2, 1.1.4, and The use of appropriate pesticides and fertilizers is insufficient, preventing the sector from achieving higher yields. This is mainly due to the limited knowledge of producers on soil characteristics and important diseases, and the type and quantity of fertilizers and pesticides needed for their crops. Value chain segment Severity Highlight Inputs There is a lack of awareness on the importance of fertilizers and pesticides. PoA reference 1.3.1, and The supply of fertilizers is not adapted to needs of the pulses industry. Like most sub-saharan African countries, Kenya depends on international markets for its fertilizers because local production is non-existent or limited. The Kenyan Government imports fertilizers and ensures distribution to farmers at subsidized costs. However, the quality and suitability of the fertilizers used is questionable, and voices are being raised to involve the private sector in supplying fertilizers in order to improve accessibility and productivity while simultaneously reducing prices by avoiding international price fluctuations. Preliminary discussion with the private sector would be needed to create awareness about the opportunity that the pulses industry represents. Value chain segment Inputs Severity Highlight The supply of fertilizers should be reconsidered and the participation of the private sector encouraged. PoA reference and Low level of pest and disease control in the production of pulses and limited surveillance of common pests such as Helicoverpa armigera and pod fly that can severely affect the production of pulses. In particular, there is a high incidence of pest attacks ( e.g. nematodes ) and diseases encountered in dry pea and cowpea production. Without proper storage, a pest called the cowpea weevil can consume nearly all the cowpeas stored on farms. In general, the use of chemicals against pest infestation is insufficient. Value chain segment Inputs Severity Highlight A plan for integrated pest management process for pulses would be needed. PoA reference to Another major constraint currently hindering the performance of the sector in Kenya is the low adoption of improved agricultural practices. The relatively low productivity of the domestic pulses sector can be partly explained by the low adoption of improved farming ( including existing production technologies ), harvesting and postharvest techniques ( see below ). Two reasons can be given to explain this situation : the limited training of the majority of smallholders and farmers organizations and the low level of research and development in the sector. The sector would also benefit from better technological transfer. [ KENYA Value Chain Roadmap for PULSES ]

47 45 Value chain segment Severity Highlight All segments The industry has limited knowledge of best practices. PoA reference to Poor postharvest capacities and technologies result in significant losses in the sector. A recent study conducted by the Alliance for a Green Revolution in Africa estimates that the percentage loss of crops of grain legumes during postharvest handling in Kenya reaches 25 %. 39 Postharvest losses stem from the limited use of existing warehouses and certified storage facilities, or lack of them, as well as other physical postharvest facilities such as cleaning, sorting, grading, drying, polishing and bagging. The study further indicates that at smallholder levels, suitable technologies for harvesting, transportation, drying, storing and primary processing of grain legumes are still underdeveloped. 40 This situation leads to farmers / collectors selling at open markets or roadsides with little hygiene, which in turn affects the quality of the product at the processor level. In particular, because of the lack of storage facilities and due the fact that this crop is very sensitive to pest attacks, producers of cowpeas are often forced to sell their cowpeas at harvest, when prices are at their lowest levels. As indicated above, poor handling and postharvest techniques and limited knowledge of best practices also contribute to the situation. Value chain segment Severity Highlight Postharvest / collection Fostering the use of existing aggregation centres and warehouses and making other services like cleaning, sorting, grading and packaging available at warehouses would contribute to reducing postharvest losses. Further, EAGC indicated that these aggregation centres could be instrumental for the development of the pulses sector as they could also be used as trading hubs for pulses. PoA reference 1.4.1, 2.2.1, 2.2.2, 2.4.3, and Limited knowledge of the potential of pulses in the country, as the sector receives little attention from support institutions, which tend to focus more on crops such as maize. Areas with high potential for pulse production are yet to be defined. Value chain segment Production Severity Pulse production has triggered little interest from farmers Highlight and is usually intercropped with maize, sugar cane and coffee. PoA reference 1.1.1, 1.1.2, 1.4.1, and Alliance for a Green Revolution in Africa ( 2013 ). Establishing the Status of Post-Harvest Losses and Storage for Major Staple Crops in Eleven African Countries ( Phase I ), p. xviii. Nairobi, Kenya : AGRA. 40. Ibid. : p.51. Limited product quality is the major limiting factor for the export of pulses from Kenya, and sub-saharan Africa in general. Quality, a major concern for the Asian market, appears to be uneven in the Kenyan pulse industry, especially at the grass-roots level. Because quality certification and standardization mechanisms are not very widespread in the sector, buyers find it difficult to trust suppliers as there is a risk that the required quality will not be provided. In addition, suppliers need to be knowledgeable about the specific quality requirements of each destination country and have a structure that should be adapted to meet the specific needs of buyers, conditions that are not and currently cannot be met. As this has proven to be difficult in Kenya and in other sub-saharan African countries, buyers in international markets prefer to buy from transnational companies because they offer a better assurance of quality. Value chain segment All segments Severity Quality issues need to be addressed along the entire Highlight pulses value chain from production to processing and exporting. PoA reference to 1.2.5, and to Most pulses are exported in raw non-value added / limited value added form by processors. It is difficult, at this stage of maturity of the sector, to add value to pulse products in Kenya due to a lack of adequate processing equipment ; limited knowledge of client needs and of value addition opportunities ; absence of support mechanisms ; uncertain supply of inputs ; limited access to technology for smallholders ; and challenging production infrastructures. Looking specifically at cowpeas, there is limited availability of diversified product value addition. Value chain segment Production / processing Severity One of the key objectives of this roadmap is to develop processing capacity in Kenya for processing and Highlight export of value added pulses, notably through fostering technology transfer. PoA reference and to Weak extension services stem from a shortage of extension service workers, limited investment in extension services, and limited field presence of public extension service employees. In addition, extension services are often generic and not crop-specific. A study published by the International Food Policy Research Institute in 2011 further indicates that out of the 5,470 staff members the Kenya public extension comprised that year, only 103 had a Master of Science degree, and four were trained at the PhD level, indicating the [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

48 46 relatively low level of qualification of public extension service employees. 41 The involvement of extension workers engaged in seed production, seed storage, seed testing and seed certification would benefit the sector by achieving the objective of quality seed production and distribution. Value chain segment Severity Highlight Inputs / production Capacity-building programmes for private sector extension services, involving seed companies and agrochemical companies, will be needed to support pulse production in the field. PoA reference Business environment issues Logistical challenges remain a major limitation to smooth and cheaper export to target markets and act as a barrier for buyers to access the Kenyan markets. For pigeon pea producers, for example, the geographical dispersion of farmers and farms, complicated by poor transport infrastructure, results in high assembly and transports costs, hampering the propensity to exploit export markets, particularly for dhal. The high cost of transport stems from the high cost of diesel and the poor condition of roads, particularly in rural areas. Value chain segment Severity Highlight All segments The poor transportation infrastructure results in high assembly costs and significant postharvest losses. The rail / road network should be further developed for cheaper transport to the port of Mombasa. PoA reference and to Lack of harmonization of agricultural policies at county and national level. As counties also have their own policies, the recent devolution process initiated by the 2010 Constitution of Kenya has generated some confusion regarding the implementation and enforcement of policies as well as the distribution of responsibilities and functions between the different governing and administrative bodies. Value chain segment All segments Severity The rapid and ambitious decentralization process Highlight has generated a certain level of complexity associated with the distribution of roles and responsibilities, in particular in the agricultural sector PoA reference and International Food Policy Research Institute Worldwide Extension Study ( 2011 ). Extension and advisory services in Kenya : a brief history of public extension services policies, resources and advisory activities in Kenya. Available from http : // / africa / kenya / s-kenya. Photo: (CC BY-SA 2.0) Tanzania Pulses, 5126-chana-daal.jpg The markets are not properly structured and organized, partly resulting from low levels of cooperation among the different actors, poor horizontal and vertical linkages, and a lack of trust among the different stakeholders operating in the sector ( farmers, traders, assemblers and wholesalers ). This lack of coordination among stakeholders leads to inefficient sector development and implementation of policies. In addition, farmer groups and cooperatives in the pulses sector appear to be weak or non-existent. Value chain segment All segments Severity It is believed that farmers organizations at county level could play a key role in structuring the markets, Highlight developing stronger networks and building trust among the different actors operating alongside the supply chain. PoA reference 1.1.1, 2.2.2, 2.4.3, and to There is limited access to finance for smallholder farmers and exporters in the pulses sector. Farmers, especially resource-poor smallholders, are often unattractive credit candidates for financial institutions because of the unpredictable, fragmented and unstructured nature of their agricultural activities. There is a lack of suitable and affordable finance for smallholders operating in the pulses sector. Value chain segment All segments Severity Solutions are being developed, such as the new Highlight Commodities Fund that provides financial support to growers for farm inputs and operations. PoA reference to [ KENYA Value Chain Roadmap for PULSES ]

49 47 Market entry issues Limited use of contract farming to secure long-term business agreements with international buyers. One of the reasons why international buyers find it easier to buy from transnationals in Kenya and other African countries relates to the issue of contract management. In order to better manage contract defaults and buyers risk, international buyers and processors tend to acquire commodities from reputed companies in the ports, as the risk default is more manageable. Another way of minimizing this risk is to send a representative from the buying company to the seller s location to ensure that the terms of the contract are well understood and delivered. However, this practice pushes the cost of procurement to a higher level. Value chain segment All segments Severity The market structure is not mature enough to manage Highlight contract defaults and buyers risk management systems do not allow them to participate in such markets directly. PoA reference and Lack of information exchange among value chain actors leads to inefficiencies along the value chain, with farmers having little understanding of market and buyer requirements and often engaging in suboptimal contract arrangements. Weak capacities of farmers organizations, weak extension services and lack of specific market information services are partly responsible for this lack of information. Value chain segment All segments Severity Highlight There is little or no knowledge of international markets and export buyer requirements. PoA reference 1.1.2, ; and to Absence of export promotion and branding efforts. To build export competitiveness, the pulse products sector must have an established brand outside the country. Ensuring that the sector s products are of a minimum quality and supplied with consistency is a given prerequisite in this regard. Another important dimension is developing an effective brand promotion campaign, which is made difficult by the low level of organization in the sector and the small per capita size of smallholders. Limited investment promotion in the pulse processing sector. Investment promotion activities such as setting up an EPZ for pulse processing for export purposes, offering an incentive package for investors or offering financial support would be required to better promote investment in pulses and pulse processing in Kenya. Value chain segment All segments Severity Developing integrated pulse processing parks like the Special Economic Zones or EPZs for export purposes Highlight could also envisaged in the long term to promote FDI in pulse processing. PoA reference to Development issues Requirement to enhance productive engagement of women in the sector With roughly 1.8 million households involved in the production of pulses in Kenya, the development of the sector could have a high socioeconomic impact. The development of the industry could significantly boost job creation and generate indirect employment. Despite the lack of statistics on workers, it seems that women play a significant role in Kenya s pulses sector, notably as the majority of cowpea growers are women who grow the crop primarily for household food. 42 However, incomplete gender statistics provide an incomplete overview of the gender situation and quality gender disaggregated data would be needed to benchmark the country in terms of gender and women s empowerment. Photo: CC0 Public Domain Value chain segment Marketing and distribution Severity The sector would greatly benefit from outreach programmes that seek to promote interaction between Highlight Kenya s value chain actors and their foreign buyers and peers. PoA reference 2.2.1, to 3.1.5, and Value chain segment Severity PoA reference All segments All POA activities will have a gender component where applicable 42. United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report Kenya, p USAID. [ AN EVOLVING VALUE CHAIN IN NEED OF SUPPORT ]

50 Photo: CIAT (CC BY-SA 2.0), climbing beans.jpg

51 49 The way forward The previous section of this document delineates the sector s value chain and its operators, and it reviews its overall positioning within the global industry context in order to confirm its current performance. The following sections discuss the strategic development and positioning of the sector to increase its performance. In doing so, the sections discuss two questions where do we want to go? and how do we get there? In order to realize these goals, structural deficiencies along the four gears ( supply side, business environment, market entry and development side ) will be addressed and identified opportunities will be leveraged. The following is a delineation of the proposed vision and strategic approach in this direction. Through the definition of the specific strategic objectives, the roadmap sets the goals to be achieved in the next five years. The description of the future value chain will highlight focus areas for structural improvements of sector operations, define specific market opportunities and identify target areas for investment. These steps are then further detailed in a structured and prioritized manner within the PoA. Strategic objectives The roadmap provides Kenya with a detailed PoA to achieve growth in the sector within the next five-year period. The roadmap is articulated around the following strategic objectives. Strategic objective 1 : Strengthen the production base of the sector Strategic Objective 1: Strengthen the production base of the sector Operational Objective 1.1: Develop a baseline for the sector and encourage information sharing among sector stakeholders Operational Objective 1.2: Ensure a reliable and consistent supply of certified seeds. Operational Objective 1.3: Enhance availability and adoption of quality (non-seed based) inputs Operational Objective 1.4: Improve adoption of best practices in the sector The pulses industry in Kenya being largely underdeveloped, this first objective will be of utmost importance in order to build stronger linkages across the value chain, to structure the sector and alleviate difficulties in production. The starting point for the strategic development of the sector will be to undertake a comprehensive mapping study at the national level to identify the regions with high potential for pulses in Kenya, including an agronomic assessment of the topography of the land to measure the potential of different types of pulses. Logistical considerations, storage infrastructure, market structure and trading practices will also be taken into consideration in order to obtain a clear picture of the current pulses industry in Kenya. In order to strengthen the production base of the sector, it will be important to work hand in hand with previously identified farmers organizations. These groups will play a key role in relaying information and aiding understanding of the SITA action at grass-roots level, and will benefit from capacitybuilding activities aimed at developing their knowledge base on pulse production and handling. One of the most significant challenges faced by the pulse production industry in Kenya is achieving adequate dissemination of improved seed varieties. The lack of such dissemination has severely limited gains in productivity in recent years. Particular attention should therefore be paid to strengthening the seed supply in the sector, notably through [ THE WAY FORWARD ]

52 50 the identification and development of varieties of pulses that are suitable for the identified regions and that are in line with international market requirements. Improved seeds will then be distributed through farmers associations. A stronger involvement of the private sector will also be encouraged to ensure regular supply of the quality seeds necessary for the good development of the industry. Also related to enhancing the use of quality inputs, and in addition to seed supply, an important element under this strategic objective will be to ensure that the sector has access to a strong base of inputs, in particular pesticides and fertilizers that are suitable for specific soil characteristics and pulse varieties. A plan to improve availability of these products for pulse farmers will be developed. Pilot farm initiatives for production and harvesting of the identified pulses will also be established, providing a platform for the exchange of best practices with farmers organizations. Following this initiative, a vast programme to scale up production ( sowing and harvesting ) of the identified pulses will be undertaken in the previously identified regions. Finally, strengthening the sector will be achieved by improving postharvest management and ensuring that the crop is handled and stored properly. Strategic objective 2 : Promote FDI and develop processing capacity in Kenya for processing and export of value added pulses Strategic Objective 2: Promote FDI and Developing Processing Capacity in Kenya for processing and export of value added pulses. Operational Objective 2.1: Promote Investment in pulses processing sector Operational Objective 2.2: Facilitate technology transfer and equipment upgrade in the sector Operational Objective 2.3: Improve essential Infrastructure in the sector Operational Objective 2.4: Improve access to finance in the sector Promoting FDI in the pulse processing sector will be instrumental in achieving this objective. The ban on exports of processed pulses imposed in India since 2006 ( with minor exceptions ) has led Indian investors to establish processing plants abroad to supply the large South Asian diaspora across the world. Although Indian FDI has targeted countries like Nepal, Myanmar and the UAE, African countries and Kenya in particular could also take advantage of this market opportunity and become a preferred destination for pulse processors from India. However, although Kenya has a ready market for processed pulses, coupled with logistics infrastructure and the availability of cheap resources like labour, electricity and raw material ( pulse crops ), important efforts will have to be made for the country to become more attractive for foreign investors. It will be of utmost importance to incorporate specific policies for FDI in pulse production and processing in Kenya, something that can be achieved by advocating and making policy proposals and recommendations to provide incentives ( tax holidays, simplified licensing processes, etc. ) to foreign enterprises with the view to stimulating investment in the processed pulses sector. Developing integrated pulse processing parks like the Special Economic Zones or EPZs for export purposes could also be envisaged in the long term to promote FDI in pulse processing. Structured investment promotion efforts for sector development ( processing ) will also be organized as part of this strategic objective. An important step will be to promote technology transfers to allow Kenyan investors interested in pulse processing to develop their activities, namely through the setting up and supply of processing machinery such as dhal plants from India ( including cleaning, drying, splitting, polishing, etc. ). Developing the processing capacity for export of value added pulses in Kenya will also be encouraged by providing buyers with credit for the supply of technology from India. Finally, investment will be promoted by inviting investors, explaining the investment opportunities, providing sector information and matchmaking with local producers. The project will also support the organization of visits to foreign countries for investment promotion to explore new markets, new products and new business partners. Study visits will also be an opportunity for local market players to learn international practices in investment, to disseminate information about investment opportunities in Kenya, and to learn about modernization of the sector along the supply chain. Improvements in essential infrastructure are also a priority. Facilitating increased trade of pulses from Kenya will also be achieved by, first of all, raising awareness of the necessity of cold chains for specific pulse varieties such as green [ KENYA Value Chain Roadmap for PULSES ]

53 51 gram, and then by developing these cold chains to ensure that the quality of the crop is maintained. Promoting private investment in cold storage will be fostered in that regard through various incentive mechanisms. Activities falling under this strategic objective will also focus on developing access to finance instruments that will benefit the pulses sector, including the development of an export guarantee fund as well as the inclusion of the sector in existing instruments / policies. Strategic objective 3 : Develop markets and improve access to market-side information and branding for the sector Photo: (CC BY-SA 2.0) Paola Zaragoza (CC BY-NC-ND 2.0), Fresh pigeon peas.jpg Strategic Objective 3: Develop markets,build the Kenyan Pulses brand, and facilitate provision of market intelligence Operational Objective 3.1: Support market development domestic and international- efforts Operational Objective 3.2: Develop new tools for provision of timely and relevant market intelligence Operational Objective 3.3: Build and Promote the Kenyan Pulses brand Because the Kenyan pulses sector is still little-known internationally, a key step towards achieving this objective is to ensure structured export development and promotion efforts. Building the capacities of commercial attachés concerning pulses and their processed products will be conducted in this regard, and regular trade missions to selected target markets for business owners from the sector will be organized. Specific market development plans for these priority target markets will also be designed and implemented. In addition, and in order to enable local exporters to meet international buyers, participation in trade meets and international and bilateral trade fairs will be strengthened, notably through closer collaboration with international pulses sector agencies. Given the predominance of the Indian market, fostering knowledge sharing and business connections between Kenyan pulse producers and their Indian counterparts would benefit the industry and help better understand Indian and international market requirements. Regular study tours to India for visits to market yards and processors of pulses will also be organized for this purpose. In order to improve the visibility of the Kenyan pulses sector, the roadmap will support the organization of a branding initiative, notably through exploring new branding of pulses by designing a comprehensive branding strategy for the industry. In that regard, formulating a systematic sourced in Kenya campaign in envisaged to leverage cobranding opportunities for products in premium markets. The development of reliable market information systems will ensure the continuous growth and global reach of the sector. This objective will be achieved through providing timely and relevant trade information for value chain stakeholders, including detailed market reports. Following a needs assessment and based on existing market information systems, a network will be set up to collect, analyse and disseminate production, market, prices and trade information for the pulses sector. Information collection should cover domestic as well as key international target markets and be completed in collaboration with local businesses. For this purpose, the Regional Agricultural Trade Intelligence Network ( RATIN ) system will be upgraded to pull data from the Agricultural Marketing Information Network ( AGMARKNET ) in India and other free information sources. Once the market information system is operational, regular training to exporters on collection, analysis and use of trade information will be provided to facilitate market entry. New initiatives such as short message services ( SMS ) to deliver prices and other information to farmers and traders for pulses could also be envisaged. [ THE WAY FORWARD ]

54 52 Leveraging product diversification and market opportunities Table 8 : Product diversification and market opportunities Target market India and Pakistan China Europe ( including the United Kingdom ) North Africa ( Algeria, Morocco, Egypt ) and MENA region ( UAE, Qatar, Israel ) United States and Canada Regional markets Product Pigeon peas Chickpeas ( yellow gram ) Kidney beans Green gram ( green mung ) Processed dhal Dry peas Green gram ( green mung ) Dry beans, processed dahl, pigeon peas, chickpeas ( yellow gram ) kidney beans & green gram ( green mung ) Processed dhal Pigeon peas Chickpeas ( yellow gram ) Green gram ( green mung ) Processed dhal Processed dhal Mixed beans Sugar beans Processed dhal Distribution channel 2013 Kenyan exports to market ( US $ ) Average annual export growth in value ( % ) ( ) Wholesalers Processors 29,579, Gross domestic product growth forecast ( yearly % change ) India 7.5 % Pakistan 5 % Wholesalers Processors 976, China 6.3 % Wholesalers Processors Distributors 104,979, United Kingdom 2.2 % Wholesalers Distributors 6,502, UAE 3.5 % Wholesalers Distributors 909, Wholesalers Distributors 9,005, United States 2.5 % Canada 2 % Kenya 7 % Uganda 6 % South Asia India and Pakistan raw and processed pulses Pigeon peas, chickpeas ( yellow gram ), kidney beans, green gram ( green mung ), processed dhal The South Asian market is the largest consumer of pulses and most African pulses are consumed by these countries. Within South Asia, India and Pakistan are the major consumers. India started to import pulses from African countries in the 1970s through government companies. With popularity growing, private players also entered the market and the trade spread to the whole of the South Asian region. Pulses consumption is a part of the staple diet of subcontinental people. India alone imports more than 4 5 million tons of pulses every year. Apart from countries like Australia, Canada and Myanmar, imports also come from African countries. Rising population and incomes have put pressure on the pulse supply and it is estimated by the industry that by 2030 pulse demand will be 32 million tons annually. This will require an increase of production of 80 %. 43 As this seems unlikely, import dependency is expected to remain high. Hence, the Indian market offers long-term opportunity for international suppliers. Although the major African origin pulse category imported into South Asia is Tanzanian pigeon peas, Kenyan pulse exports to India are also increasing. India also imports some pigeon peas from Malawi and has recently begun to import from Sudan. India also imports green gram ( green mung beans ) from the United Republic of Tanzania, Kenya and Mozambique. Finally, chickpeas and kidney beans are imported from Ethiopia. India will remain a major importer of pulses in the coming years, especially chickpeas, mung beans, black mapte and pigeon peas, imports of which have skyrocketed in the past decade National Council of Applied Economic Research, India ( 2014 ). India s Pulses Scenario. New Delhi. 44. Ibid. [ KENYA Value Chain Roadmap for PULSES ]

55 53 In April 2014 the Government of India extended the ban on exports of pulses until further orders, but allowed outbound shipments of kabuli chana, organic pulses and lentils with some riders from the Directorate General of Foreign Trade: Prohibition on export of pulses has been extended till further orders. But, there are two exceptions to this. One is export of Kabuli Chana. Second is export of organic pulses and lentils, but with a ceiling of 10 million tons per annum and subject to certain conditions. Export of pulses was initially prohibited for a period of six months in 2006, which was extended from time to time. Pakistan imports various types of pulses from Australia, Canada, Ethiopia and a few other countries. For chickpeas, the major exporter from Africa is Ethiopia. Although domestic supply increased in 2012 / 13 and reduced imports, the trend has reversed and imports soared again in 2013 / 14. As per the Pakistan Bureau of Statistics, the import volume of pulses surged by 71 % to 61,738 tons in February 2015 from 36,175 tons in February has been another bad year for pulses in Pakistan, as production has gone down by nearly 40 %. Against its total requirement of around 1 million tons, the production has been 600,000 tons. 46 Kenya has an opportunity to increase its exports to India as it has already been exporting green gram ( mung beans ) and pigeon peas to India. Many Indian processors know Kenyan origin pulses. India imports roughly 3.5 % of its total imports of mung beans and 1.5 % of its pigeon peas from Kenya. This may be small but can be increased. However, for the medium term, opportunities for exports of processed pulses ( dhal ) to India are exciting. The Indian Government does not discourage processed imports and as the processing cost is lower in Kenya, the opportunity is high. Pulse processing should be a key component of the future value chain and its market development capacities to South Asia and beyond. Kenya is a new entrant in the pulses industry and has to compete with the United Republic of Tanzania and Malawi for the market. However, green gram ( mung beans ) is a type where Kenya has an edge. It is also ready to launch 45. Online Indus News ( 2015 ). Pulses import rises by 37 %, 24 March. Available from http :// / pulses-import-rises-by-37 /. 46. The Dawn ( 2015 ). Another dal crisis : Pakistan is jailing shopkeepers to combat pulse shortage, 20 October. Available from http ://scroll.in/ article / / another-daal-crisis-pakistan-is-jailing-shopkeepers-as-it-combats-pulse-shortage. improved varieties of pigeon peas. Since the volume of business is smaller, medium-sized pulse processors and distributors ( tons per day ) in India and Pakistan who had been importing pulses from East Africa have begun exploring the possibility of setting up trading offices in the region. The competition for them is lower in Kenya than in the United Republic of Tanzania and Malawi. The rising prices of pulses in India and the somewhat monopolistic approach of the large-scale traders from Africa has led Indian buyers and investors to look for alternatives and to cut out middlemen and directly source their inputs. Existing trade relations are helping them in this. These investors are looking for an investment opportunity in pulse processing and should be targeted for investment promotion. Investors look for cost advantage that can be obtained by exporting only dhal as opposed to raw pulses, which includes the parts of the pulses that will eventually become a waste by-product of processing. Therefore, most of the Indian and Pakistani traders planning to invest in Kenya can be expected to pursue processing at a later stage, once supply has been established, if they find the investment climate conducive. With the attractiveness of Kenya being superior to other competing countries in the region, attracting FDI to critical agribusiness sectors and services will need a focused approach to lay the groundwork for higher value added food processing in the longer term. The expansion of the market in India and Pakistan and the increased activities of traders in procurement and processing of pulses will expand the future value chain and introduce more traders, leading to marginally better prices for producers, better understanding of quality grades, and competitive pressure on other traders to secure supply through contracts. The broadening of the pulse processing base in Kenya is an important step towards making the processing of higher value added food products feasible in the country. In the future value chain, to further penetrate the Indian market with the export of raw pulses, it is essential to : improve seed quality and availability ; strengthen the input distribution network, including finance ; develop agribusiness services and enhance storage, warehouses and logistics ; and strengthen technical capacities of agencies like KEBS and EPC in investor targeting for the pulses sector. China : raw and processed pulses Types of pulses dry peas, green gram ( green mung ) China continues to play a unique and essential role in just about any global market imaginable, and pulses are no exception. After India, China is the second major player in the Asian market. China was a net exporter of pulses for years but recently, with its growing middle class, increasing income levels, changing dietary habits and expanding taste for pulses, it is expected that demand will outstrip supply in the future. China has now started to import pulses such as [ THE WAY FORWARD ]

56 54 dry peas. China was a major exporter of black beans in the world until the rising costs of production in Chinese agriculture posed a challenge. Also, the black bean producing area in southwest China was faced with some challenges in 2013 as a result of massive floods which significantly reduced production. Since then China has lost some market share and this loss looks irreversible. The new dynamics have led to increased imports of dry peas by China. Recently, China commissioned upgrading of new factories for the production of starch and vermicelli. This has resulted in huge imports of dry peas by China. The carry-over stock in 2014 kept imports low, to a level of 780,000 tons, 47 but in the long term this is expected to rise. Also, Chinese dietary habits are changing and dry peas are being increasingly consumed as snacks and other food. This will also keep increasing and as a result China is expected to emerge as a major importer. In addition to dry peas, imports of green gram are also increasing in China. As it is an expanding market, China is a viable export market for Kenyan pulses. Kenya has been exporting dry peas but has not exported to China. In addition, the market for green gram ( green mung beans ) is also expanding. This is an opportunity for Kenya. However, Kenyan exporters need support to establish this market as an export destination. Exporters may face challenges in dealing with administrative procedures on the Chinese side, as well as facing distribution challenges. A proper understanding of procedures will allow exporters to export greater quantities. In similarity with India, China is increasingly demanding pulses and becoming a source of investment as domestic Chinese producers face rising production costs and seek to offshore pulse purchasing, production and processing. The expansion of the market has created opportunities for collaboration with China s importers and processors. To expand this market, Kenyan producers will need to understand the details of the varieties and types of pulses demanded and the procedural aspects of the trade. Europe ( including the United Kingdom ) Beans, processed dhal, pigeon peas, chickpeas ( yellow gram ), kidney beans and green gram ( green mung ) Europe was a major importer of pulses, accounting for around 45 % of the world s imports of pulses until However, since then Europe s share has declined and now stands at about 22 % of world imports. Spain, France and the United Kingdom account for the majority of the consumption of pulses in Europe. The ways in which pulses are consumed are very different across Europe due to different regional food habits and traditions, and to differences 47. As per industry estimates by experts at various conferences. 48. Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August in the supplies of grain legumes. Canned products dominate pulse sales as opposed to pulses sold in packets. Dry beans are the most consumed but the preference between varieties varies according to country. Europe is showing a reversal of this trend and a recent increase in preferences for vegan and gluten-free diets can help restore growth in the demand for pulses in Europe. A major challenge for exports to Europe concerns the quality standards that must be reached, both at a technical regulation level and private standards set by supermarkets and distributors. While Kenya has been exporting pulses like dry peas and others to several European countries such as France, Spain, the Netherlands and the United Kingdom, quantities remain low. The increasing preference for gluten-free diets and the movement from animal protein to vegetable protein in recent years has opened up new opportunities for Kenyan exports with the gradual increase in demand for processed pulses. Further, the ban on export of processed dhal from India has also created opportunity for Kenya in the dhal industry. The Asian diaspora in the United Kingdom has a high demand for processed dhal, which can be exported from Kenya. However, challenges exist pertaining to standards compliance and quality requirements, particularly for processed dhal. MENA region Types of pulses green gram ( green mung ) pigeon peas, chickpeas ( yellow gram ) ( including processed dhal ) The MENA markets are a high potential market for pulses. Algeria is one of the largest importers of lentils. Pulses such as chickpeas, lentils, peas and beans feature prominently in the cuisine of MENA countries. In addition to traditional uses for pulses like soups, tagines, curries and hummus, pulses can also be added to processed meats, frozen prepared meals and salads for a nutritional boost. They can also be used to enhance baked goods, snacks, beverages and dairy products. This region has high population growth rates and many countries are seeing extraordinary growth in food services and retail sales. Its massive potential as a trading region is just beginning to be realized. Consumers in the MENA region are increasingly using supermarkets for food purchases, which has in turn led to an increase in demand for processed pulses such as canned pulses and pulse flours. There is also a boom in the hospitality industry, and as a result new cuisines are being introduced. Countries like Morocco, Egypt and Israel, and the city of Dubai ( UAE ) are showing extraordinary growth in the hotel industry. This is pushing the demand for pulses, as well as other food crops, to new levels. Algeria is already one of the largest consumers of lentils in the world. Hence, the demand for pulses is on the rise among both traditional consumers and new [ KENYA Value Chain Roadmap for PULSES ]

57 55 markets in this region. Further, with the large South Asian diaspora population in the Middle East, the demand for processed dhal is also high. Kenya has exported pulses such as dry beans, dry peas and mung beans to countries like Oman, Bahrain and Yemen. Nevertheless, export levels remain small. There is an opportunity to expand the quantities of exports to these countries. Also, there is an opportunity to export to processors that are establishing processing plants to continue the export of dhal following the ban in India. Photo: (CC BY-SA 2.0) CCCCCCCCCCCCCCCCCCC, bbbbbbbbbbbbbbbb United States and Canada Processed dhal The United States and Canada have large South Asian diaspora populations. The demand for processed dhal is high in these regions. Since exports from India discontinued in 2006, major processors have been exporting from newly established plants in Dubai. However, with the preferential duty system, easy availability of pulses as a raw material and cheaper electricity and labour, Kenya can be an exporter to this region. The establishment of EPZs and the proposed agro-industry park can play a big role in this. Regional markets Mixed beans, processed dhal Two of the five countries with the largest per capita pulse consumption in Africa are fellow East African Community ( EAC ) members ( i.e. Rwanda and Burundi ). Relatively nearby Ethiopia is another top consumer where a major portion of dietary protein comes from pulses. Pulses, and more specifically common beans, are a major source of protein in southern Africa. They have long been a part of staple diets in this region. The region offers a good market for beans. The target consumers in this region would be local populations, although ethnic South Asian communities in the region also provide a niche. Adding regional marketing of processed pulses to the sector s activities would provide the sector with reduced risk through diversification, greater economy of scale, and more options for efficient aggregation and distribution within the region. The region has a huge South Asian diaspora population. Their staple diet includes processed dhal and with the export ban from India there is scope to access this market. However, it will require investment in processing facilities. Once that is made, the regional market as well as the international market can be explored. Leveraging Investment to scale up operations and climb the value addition ladder As the global population grows and concern over food security with it, the fact that 60 % of the world s uncultivated arable land is in Africa is earning the continent considerable attention as a source of food commodities and agribusiness investment opportunities. The African population itself is projected to double between 2010 and 2050, many of whom will represent a new middle class, as six of the world s 10 fastest-growing economies are in Africa. As a consequence of these trends, Africa s food market is projected to grow from US $ 313 billion in 2010 to US $ 1 trillion in 2030, with a corresponding boom in investment. [ THE WAY FORWARD ]

58 56 A US $ 500 million investment announced by Syngenta across multiple African countries is an example of the sort of large-scale investment which is becoming possible and which Kenya could be targeting. Syngenta plans to make the investment over 10 years in local production, logistics, distribution channel development, recruitment, and training for seed and crop-protection products. Kenya s strengths in terms of attracting investment are its higher levels of industrialization, worker skills, connectivity with international commodity markets, a domestic trade deficit in pulses, and duty-free EPZs which allow 20 % of production to be sold domestically. Certain investments will become feasible only after the efficient organization of regional pulse markets and extension of financing to vastly more smallholder farmers. For international investors, Kenya may become attractive in the medium term as an export-oriented processing centre or as a regional trading hub for pulses produced throughout East Africa. However, full realization of this role as a market hub depends on the ability of Kenyan market actors and public stakeholders to organize the East African pulse market, which is characterized today by weak market information and inefficient marketing channels, simultaneously lowering farmer incomes and raising the price of pulses. Kenya s relative position in the region as a producer and consumer of white maize is similar, yet Nairobi has established itself as a price-setting exchange centre for East African white maize on the relative strength and organization of a few large traders and public agricultural institutions. Pulse trading and processing In the short term, trading in pulses is the main opportunity likely to attract foreign investors. Medium-sized pulse processors and distributors ( tons per day ) in India and Pakistan who had been sourcing pulses from East Africa have begun exploring the possibility of setting up trading offices in the region. This appears to be stimulated by the competitive threat of Export Trading Group expanding from Africa-based trading alone into processing and distribution in its South Asian markets. As such, these investors present very immediate opportunities for investment generation in the pulses sector and should be targeted for investment promotion as quickly as possible, before they choose to establish in the United Republic of Tanzania or elsewhere. Primary production of pulses on a large scale has not historically been an activity to attract FDI ; however, there is significant investment opportunity for existing domestic farmers to expand pulse production. Kenya is a global leader in pigeon pea production ( fifth in 2012 ) and dry beans ( eighth in 2012 ), with significant room for expanded production, especially considering the suitability of red and green gram as an intercrop with several of Kenya s major cash crops : maize, sugar and sorghum. At the same time, global demand is growing for pulses as a heart-healthy food and may be boosted further by the United Nations designation of 2016 as the International Year of Pulses. Traders and processors with experience in contract farming arrangements could have an important effect on total production and the organization of the Kenyan market, but such companies depend on tight control over inputs. Highquality imported seeds are a key input, and high-quality seed pulses are themselves a likely output for sale in premium markets. At the same time, the seed law in its current form may represent a sort of opportunity for investment promoters. Specifically, a seed company wanting to do business in Kenya would find more favourable treatment by incorporating an affiliate in the country than by trying to export seeds to it. Monsanto, for example, already has a vegetable seed division in Nairobi, which might be enticed to develop highquality seed pulses for Kenya if it saw a substantial market for them forming. Agribusiness inputs and services Perhaps the most attractive investments in the pulses sector are those that go beyond pulses specifically and have much larger markets in agribusiness generally, such as seeds, farm machinery and agrochemicals. Almost 75 % of Kenyans depend on agriculture in one way or another for their livelihoods, yet agriculture is largely conducted by smallholder farmers who make little use of the most modern inputs. Table 9 presents the group of companies which collectively control large majorities of the global markets in their given fields. These are not the only potential investors and smaller regional companies may be better poised to move quickly into Kenya given their proximity and knowledge of the country. However, world-leading companies wanting to retain that leadership are likely to consider expansion into Africa more and more as the continent is given increasing importance in global food strategies. Conversely, realizing full potential for agribusiness is more likely if the world s leading players are involved in the scaling up of its production. Furthermore, most of the companies in table 9 already have presences in the region. Future investment projects in Kenya might originate with headquarters or with these regional affiliates. For the companies with no presence currently in Kenya, a first venture would likely take the form of a sales office. Although this does not create the jobs, technology spillovers or skill spillovers of a manufacturing project, for example, the possibility of a sales office should not be dismissed by investment promoters as being of low value. A first sales office is an opportunity for a foreign company to make tentative entry into a new market, learning the business landscape and achieving a level of comfort. Of more immediate importance, it can provide Kenya s pulses sector with valuable access to more affordable, high-quality inputs that are essential to the strengthening of the sector. [ KENYA Value Chain Roadmap for PULSES ]

59 57 Table 9 : Value chain segments needing FDI and likely sources Value chain segments where FDI is needed and viable Seeds, fertilizers, and pesticides sales, distribution, manufacturing, and research and development Leading companies with foreign affiliates in Eastern and Southern Africa Source country Eastern and Southern African countries with an existing affiliate BASF Germany South Africa Bayer Crop Science Germany Mozambique, South Africa, Sudan, Zambia, Zimbabwe Dow AgroSciences United States South Africa Ethiopia, Kenya, South Africa, United Republic of Tanzania, DuPont ( Pioneer ) United States Zambia, Zimbabwe KWS ( seeds ) Germany Kenya, South Africa, Sudan Farm machinery and equipment sales, distribution, manufacturing, operation, maintenance and repair Monsanto United States Kenya, Malawi, South Africa, Zimbabwe Ethiopia, Kenya, Mozambique, South Africa, Sudan, United Syngenta Switzerland Republic of Tanzania, Zambia, Zimbabwe AGCO United States None CLAAS Germany None CNH Netherlands South Africa John Deere United States South Africa Kenya, Madagascar, Mozambique, South Africa, United Kubota Japan Republic of Tanzania, Uganda Animal feed manufacturing, and research and development SAME Deutz-Fahr Italy None Brasil Foods Brazil None Cargill United States Kenya, Mozambique, South Africa, Zambia, Zimbabwe Charoen Pokphand Thailand None New Hope Group China None Vertically integrated trading, including warehousing, transportation and risk management ( as well as agricultural consulting and manufacturing of biofuels and animal feed in some cases ) Tyson Foods United States None Archer Daniels Midland United States None Bunge United States Kenya, South Africa Cargill United States Kenya, Mozambique, South Africa, Zambia, Zimbabwe Louis Dreyfus Commodities Netherlands Kenya, South Africa Quality testing and certification Cotecna Switzerland South Africa Intertek United Kingdom Djibouti, Kenya, Mozambique, South Africa, United Republic of Tanzania, Uganda NSF United States South Africa SCS United States None ( only Ghana in Africa ) SGS Switzerland Burundi, Djibouti, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mozambique, South Africa, United Republic of Tanzania, Uganda, Zambia, Zimbabwe Sources : Shand, Hope ( 2012 ) ; Noealt Corporate Services ( 2013 ) ; Peter Best and Ken Jennison ( 2012 ) ; Murphy, S., Burch, D. and Clapp, J. ( 2012 ) ; and company websites. [ THE WAY FORWARD ]

60 58 Identified opportunities for investment The following opportunity areas for investment have been identified within the sector value chain. The activities are mostly sequential in the sector s development, although with some overlap. Target investor groups are italicized. 1. Processing of mostly imported pulses and their export to South Asia. Particularly as EAC integration deepens, raw pulses may be sourced from the United Republic of Tanzania, potentially Ethiopia, and perhaps eventually from within Kenya for processing and export to South Asia. Kenya s industrial capacity, EPZ framework, transportation infrastructure and established trade networks with India make pulse processing for export to India a likelier, profit-making enterprise than, say, primary production of pulses. These investors are likely to be domestic pulse processors from India or perhaps Pakistan. However, Export Trading Group s recent attempts to enter pulse processing and its large presence in Kenya make it another viable target for investment promotion in pulse processing. China, too, should increasingly demand pulses and become a source of investment, as domestic Chinese producers face rising production costs and seek to offshore pulse purchasing, production and processing. Primary production Processing Basic Higher value added Domestic distribution Export Regional Mass market, South Asia South Asian diaspora Niche markets 2. Import-substituting distribution of processed pulses in Kenya, and particularly to the ethnic South Asian market segment. With a production base in EPZs for processed pulses, and with EPZ regulations allowing 20 % of production to be sold within Kenya and the rest of the EAC, an export-oriented processor could also make major inroads in the domestic Kenyan market, which currently imports most of its processed pulses from India. With the recent trend to integrate processing and trading, many of the likeliest investors in this activity will be the same as in #1 above. This would also put competitive pressure on the Kenyan companies that currently distribute, within Kenya, processed pulses that have been imported from India. These domestic investors may in turn be stimulated to compete by investing in the scale, quality, and / or speed of their warehouses, trucks, packaging, marketing, etc. Primary production Processing Basic Higher value aded Domestic distribution Export Regional Mass market, South Asia South Asian diaspora Niche markets 3. Regional distribution of processed pulses to Ethiopia, Rwanda and Burundi. Three of the five countries with the largest per capita pulse consumption in Africa share a border with Kenya ( i.e. Ethiopia ) or are fellow EAC members ( i.e. Rwanda and Burundi ). Expanding marketing efforts from Kenya to this larger region is a natural step for the established producers in #1 and #2 above, especially Ethiopia because it falls outside of the EAC and is therefore not subject to the 20 % cap on EPZ production being sold to the domestic EAC market. Target consumers in this region would be indigenous populations rather than ethnic South Asian communities. Likewise, new investors in this broader regional distribution network for Kenyan pulse exports might include more non-ethnic Indian investors from Kenya, the United Republic of Tanzania, Ethiopia, Rwanda and Burundi. Although less immediately accessible and without the same tariff advantages, the large pulse-consuming countries of West Africa, Niger and Burkina Faso, could become second-phase regional targets for these investors and investors. [ KENYA Value Chain Roadmap for PULSES ]

61 59 Primary production Processing Basic Higher value added Domestic distribution Export Regional Mass market, South Asia South Asian diaspora Niche markets 4. Export of processed pulses to the South Asian diaspora in the Gulf States, North America, the EU, Malaysia, South Africa and Mauritius. Although considerably smaller markets than those of South Asia, these markets still comprise tens of millions of consumers, many offer higher margins, and leading brands may be less than a decade old. In addition to the investors in #1 and #2 above, members of the diaspora in target markets are likely sources of equity financing and possibly business networks, though probably not technical expertise. Primary production Processing Basic Higher value added Domestic distribution Export Regional Mass market, South Asia South Asian diaspora Niche markets 5. Higher value added processing for niche markets. Particularly in the EU and North America, there is a small but quickly growing demand for products that are gluten-free ( e.g. pasta, vermicelli, chips ), vegetarian, organic and fair-trade certified, for which pulses can be an important ingredient. These require more advanced technologies and processing facilities, and investors could be major or niche food producers with current facilities in India, China, or the target markets. Primary production Processing Basic Higher value added Domestic distribution Export Regional Mass market, South Asia South Asian diaspora Niche markets 6. Primary production. Kenya is not a significant producer of pulses today and it is unlikely to become one without the national Government providing farmers with significant encouragement, guidance and support of the sort detailed in this roadmap s PoA. If such activities are successfully undertaken, investment could become attractive in primary production of pulses or, likelier, contract farming arrangements by vertically integrated aggregators / processors / traders, as well as by domestic investors anywhere along the value chain. This should be an important source of the high-quality inputs ( seed, fertilizer, good agricultural practices, etc. ) that are needed to transform the sector s productivity. Note : Primary production is placed at the end of this list because it is much more challenging to get large numbers of farmers to start producing a consistently large and highquality supply of pulses where it has not existed before, than to import existing supply and set up pulse processors in EPZs. However, raw pulse production could be started much earlier in the above sequence, with adequate commitment and supervision by the Government. The earlier and more successful Kenya s entry into primary production, the more investment opportunities will be available to domestic entrepreneurs. Primary production Processing Basic Higher value added Domestic distribution Export Regional Mass market, South Asia Niche, higher value added [ THE WAY FORWARD ]

62 60 Figure 23 : Future value chain Legend National component International component Inputs Water Labour (qualified/technical) Seeds Enhanced avalability and adoption Manure (less than 25% of farmers) Land Farm equipment Chemical fertilizers (in small proportion) Pesticide and insecticide(in small proportion) Enhanced avalability and adoption Contract farming arrangements Production: smallholder farms Dry beans 529kt, cowpeas 122kt, Pigeonpeas 73kt 17th globally 1.8 million households 1.4 million Ha Ploughing Planting Weeding Spraying Harvesting Drying Bagging Record keeping Assembly/bulking Local wholesalers Regional wholesalers Assemblers Intermediate traders Bulking agents Traders Processing Pigeon pea (Nairobi, Mombasa) De-hulling Splitting Cleaning Sorting Polishing Packaging Dry grain cowpeas Rural posho mill Processors Urban posho mill Processors Thrust on spurring Investment Wholesaling Private wholesalers National Cereals and Produce Board Small local/regional traders Urban supermarkets Rural/urban retail shopkeepers Rural open-air Rural retail shop National market Beans Cowpeas Pigeon pea Institutions Local markets Local markets (schools/hospitals) Urban supermarkets (dry, dhal) Urban Urban open air retailers consumers (vegetable and dry) Urban retailer shopkeepers (dry, dhal) Marketing processed pulses to domestic market as an import-substitution mechanism Import: 78,600 tons - kidney beans, - white pea beans, - dry peas Chickpea & navy bean sub-sectors are underdeveloped but with high potential National component of the value chain Uganda (46.8 %) United States (30.6 %) United Republic of Tanzania (14.5%) Emergence of a new value chain branch: IMPORT->PROCESS-> EXPORT to South Asian markets Support services Development/enhancement of agribusiness services Ministry of Health Department of Public Health County governments / Ministry of Agriculture, Livestock and Fisheries / Ministry of Industrialization and Enterprise Development Increased collaboration with Indian research institutions, ICRISAT/KALRO Research and development Universities Non-governmental organizations SPS Services, Seed Certification, Analytical Chemical Laboratory: Kenya Plant Health Inspectorate Service (KEPHIS) Food Safety and quality regulations: Kenya Bureau of Standards, KARI., Weights and Measures Dept., Government Chemist s Dept., Dept. of Veterinary Services, Kenya Dairy Board, Horticultural Crops Development Authoriy / KRA Eastern and Central Africa Bean Research Network Market price information : EPC/KenInvest Financial services including formal (banks) and informal lending sources Extension services Eastern Africa Grain Council International transporter MENA - Pigeon peas - Chickpeas (yellow gram) - Green gram (green mung) - Processed dhal China - Dry peas - Green gram EU - Dry beans - Pigeon peas - Chickpeas - Kidney beans - Green gram - Processed dhal India - Pigeon peas - Chickpeas (yellow gram) - Kidney beans - Green gram - Processed dhal Pakistan - Pigeon peas - Chickpeas (yellow gram) - Kidney beans - Green gram - Processed dhal North America (United States and Canada) - Processed dhal EAC - Mixed beans - Sugar beans - Processed dhal Targeted marketing to diaspora in: Gulf States North America EU South Africa and Mauritius Focused marketing on specific high potential products as noted Improved and focused marketing of processed pulses to EAC [ KENYA Value Chain Roadmap for PULSES ]

63 61 Moving to action The development of the future value chain for the Kenyan pulses sector is a five-year project defined through a consultative process between public and private sector stakeholders in Kenya. Priority Actions Achieving the strategic objectives and realizing the future value chain depends heavily on the ability of sector stakeholders to start implementing and coordinating the activities defined in the Value Chain Roadmap s PoA. For this reason, a list of key priority activities has been identified in order to kick-start the implementation of the roadmap. Photo: (CC BY-SA 2.0) CC0 Public Domain, LoggaWiggler.jpg Table 10 : The priority actions to kick-start implementation Activities Lead implementer Undertake a feasibility study to identify the areas with high potential for pulses, particularly in areas that produce agricultural products all year round. Conduct a detailed agronomic assessment of the topography of the land to identify the potential for different varieties of pulses. Consider a feasibility study for other regions that can support high potential areas to allow for synchronization of pulse production. Conduct commodity demand and agroecological zones suitability assessments. EAGC Establish a seed bank through a partnership between ICRISAT and EAGC, to ensure availability of seeds at all times. Adopt a public private partnership ( PPP ) model between Government, farmers and other stakeholders, where capital expenditure would be public and operating costs would be private. The seed bank will maintain a certain level of stocks and ensure the availability of certified seeds of certain varieties to farmers. Under this component, quota requirements and specifications in terms of varieties will be defined every year for each participating farmers organization to ensure the sustainability of the bank. ICRISAT Develop a pilot project with ICRISAT and STAK for seed production and multiplication. EAGC to provide the overall facilitation wherein seed firms will be invited to invest in a seed multiplication programme by ICRISAT. EAGC will facilitate the interaction between seed companies, exporters, farmers and ICRISAT. EAGC to encourage members and other private sector players for investment in the form of a PPP to establish a large-scale seed multiplication and distribution scheme for hybrid varieties. EAGC and farmers organizations to work with ICRISAT to develop a number of demonstration plots f or farmers to understand the benefits of hybrid / higher-yielding varieties. STAK [ MOVING TO ACTION ]

64 62 Activities Lead implementer Identify, through detailed profiling, key farmers organizations ( identify an initial list of farmers organizations in high potential areas ) operating in the selected counties ( including organizations that are not yet involved in pulses ) to serve as a nucleus for select pilot initiatives. Evaluate the reach of the farmers organizations. Evaluate the past work done by the organizations in the pulses value chain ( or other commodities ). Evaluate the implementation capacity of the different organizations. Create a profile for each sector organization. CGA Implement a pilot farms initiative as a demonstrator initiative for the production of the identified pulses in the selected areas. The pilot farm will be a focused farm that will be used to cultivate pulses with the view to providing a showcase for best practices and the potential of pulses. Assistance will be provided in terms of : Access to quality inputs ( including seeds ), including pesticides and fertilizers ( including training on safe application ) ; Building capacities and knowledge on pulse production, including soil analysis and water management, sowing, and protection from diseases and pest attacks ; Developing the farmers organizations knowledge of the pulses market, including prices, market requirements and global outlook ( including national, local, market ) ; Training on farming and postharvest techniques ( cleaning, sorting, grading, drying, polishing, bagging, storage, etc. ) ; Showcasing different pulse varieties and existing production technologies through pilot farms with the support of scientists from KALRO and ICRISAT ; Increasing the participation of farmers organizations in awareness-raising campaigns on crop diversification and sustainability aspects ; Assistance with identifying markets and buyers for the harvest. CGA Develop and conduct a Training of Trainers programme ( four sessions of one week each ; two to four week courses ) with batches of trainers per county coming from previously identified farmers organizations. Training program curricula will be developed in collaboration with entities such as ICAR ( Indian Institute of Pulses Research ), KALRO, ICRISAT and other stakeholders, and will cover the following areas : Suitable pulse varieties and their diagnostic characteristics ; Exploring the possibilities of underutilized pulse varieties with the view to enhancing their production in different cropping systems ; Improved agro-techniques for enhancing production, including planting techniques and fertilizer application ; Identification and management of pests, disease control, fertilizers, and pesticides and their application. With the support of the trained trainers, disseminate information through on-site trainings with farmers at county level. EAGC Conduct an equipment study to assess the type of equipment needed in the future by pulse growers ( also looking at equipment that can be used for both pulses and other crops ). Assessment study should include the following information and criteria. Mapping of manufacturers of processing equipment in India and Kenya ( types, processing capacity, technical support and spares ). Type of equipment, including dhal plants from India ( including cleaning, drying, splitting, polishing, etc. ). Training requirements for local technicians to maintain the equipment. Cost of the equipment actual and associated costs including financing mechanisms. Capacity and diversity ( multipurpose during low seasons where other crops can be processed ) use of processing. Packaging range of equipment smaller / bigger packets etc. Specifications including machine productive life. Spare parts availability and support services. Compatibility to alternative sources of energy. Alternative sources of the same equipment outside India and Kenya ( e.g. Brazil, Italy, Japan, China, Viet Nam ) to feed into a comparative cost-benefit analysis ). Based on the equipment study, bring equipment manufacturers in India and distributors in the region to Kenya to meet face to face with farmers organizations, etc. so they see whether there is a business case for setting up shop in Kenya. Provide buyers with credit for the supply of technology from India and deploy affordable leasing options for equipment that farmers organizations can access through Exim Bank of India. EAGC Organize a study tour to India in collaboration with IPGA that will include visits to market yards and processors of pulses in India ( Indore / Delhi ). This study tour will be organized once a year for a group of market players ( including farmers, assemblers, traders, processors, financial institutions, research institutes and government officials ) identified jointly by EAGC and ITC. The visit will allow the participants to see the operations of the Indian industry and develop business linkages. IPGA [ KENYA Value Chain Roadmap for PULSES ]

65 63 Activities Lead implementer Undertake a pilot initiative to build capacity of, and to find a market for, the collective of 18,000 farmers ( Eastern and Coast regions ) that are brought together by the Kenya Red Cross. Build capacity for sorting, grading and packaging. Establish collection points and certified storage facilities with the required facilities ( cleaning, sorting, grading, etc. ). Assist in improving marketing of the crop. Link to buyers before the harvest so that proper quality and inputs are made available. EAGC Link existing market information platforms such as RATIN, National Farmers Information Service, M-Farm and CerealMart, to provide information on pulses. The existing RATIN system will be upgraded to pull data from AGMARKNET in India and other free information sources. The system will also subscribe to data vendors commercial services such as Reuters and Gro Ventures ( a Kenya-based information vendor ) to have access to additional sources of information to be distributed to the sector. In order to achieve this, the following steps will be will be carried out : Conduct a comprehensive study on existing market information systems, including a gap analysis ; Strengthen the database for the pulses value chain for farmers, traders, aggregators and technical experts ; Configure the system to receive and distribute information related to the pulses market ( including prices ) through external sources such as AGMARKNET ( India ) and Bloomberg. Configure the system to receive and disseminate information from the EAGC Structured Trading Platform. EAGC Photo: (CC BY-SA 2.0) CIAT (CC BY-SA 2.0), bean market4.jpg [ MOVING TO ACTION ]

66

67 Roadmap Plan of Action The PoA contains a detailed list of activities organized by operational objectives and strategic objectives. The PoA serves as an exhaustive framework for the implementation of the roadmap. Photo: (CC BY-SA 2.0) NH53 (CC BY 2.0), Bags of beans.jpg

68 66 Operational objectives Strategic objective 1 : Strengthen the production base of the sector. Activities Priority 1=high 2=med 3=low Starting period Target measures Lead Implementers Supporting Implementers Potential funding source Develop a baseline for the sector and encourage information sharing among sector stakeholders. 1.2 Ensure a reliable and consistent supply of certified seeds Undertake a detailed agronomic assessment across the country to identify the potential of different varieties of pulses, and in particular areas that produce agricultural products all year round. Consider a feasibility study for other regions that can support high potential areas to allow for synchronization of pulses production. Conduct commodity demand and agroecological zones suitability assessments. Assess the potential for pulse exports from the potential production areas, including assessments of logistics routes to ports and storage infrastructure in the regions Foster public private dialogue in the pulses sector through organization of sector development / matchmaking events. The aim is to understand projected supply and demand for processed pulses ; specifications for pulse export markets ; and investment opportunities in meeting pulse sector-specific demand for services such as equipment supply, aggregation, postharvest services, packaging, quality assurance and marketing. Events to be aimed at pulse processors, traders, farmers associations, agribusiness support service providers and relevant public institutions Bring Customs authorities and other authorities from India and Kenya face to face to discuss common challenges that exporters typically face in the actual exporting process, such as : Delays in clearance of goods in port Currency fluctuations Underdeveloped infrastructure Non-tariff barriers. This is to explore solutions to common issues and then make exporters and importers aware of the solutions Identify varieties and characteristics of pulses within the broad types such as pigeon peas, chickpeas ( yellow gram ) and green gram ( mung beans ) for the Indian market that are suitable for the identified cultivation areas ( through the feasibility study ) but also for which there is significant demand ( including colour, maturity period, ecological requirements ). For the identified varieties, formulate a five-year seed development rolling plan ( by category, variety, crop and region ) Establish a seed bank, through a partnership between ICRISAT and EAGC, to improve availability levels of seeds. Adopt a PPP model between Government, farmers and other stakeholders, where capital expenditure would be public and operating costs would be private. The seed bank will maintain a certain level of stocks and ensure the availability of certified seeds of certain varieties to farmers. Under this component, quota requirements and specifications in terms of varieties will be defined every year for each participating farmers organization to ensure the sustainability of the seed bank Develop a pilot project focusing on seed production and multiplication. Project to take the shape of a PPP wherein seed firms will be invited to invest in a seed multiplication programme for high-yielding varieties by ICRISAT. In return, seed firms will have a ready market with pulse farmers. EAGC and farmers organizations to work with ICRISAT to develop a number of demonstration plots for farmers to understand the benefits of hybrid / higher-yielding varieties. 1 X Feasibility study is completed by the end of X X X Event held every quarter starting Q X X X X X First roundtable held in mid-2016 and repeated annually 1 X Assessment completed by May 2016 Seed development plan completed by December X X X X Proposal for seed bank developed by the end of 2017 Seed bank established in X X X X X Proposal developed by the end of 2016 Pilot project initiated by mid-2017 Demonstration plots established ( dates to be determined ) EAGC MALF, KENAFF, county governments EAGC EPC, KENAFF, MALF, KEPSA, MoIED, KEBS KRA Kenya Ports Authority, Ministry of Foreign Affairs and International Trade, EPC, EPZA ICRISAT STAK, farmers associations, KALRO, KE- PHIS, MALF, EAGC ICRISAT / EAGC STAK, MALF, KALRO, KEPHIS EAGC STAK, ICRISAT, KE- NAFF, farmers organizations, MALF World Bank Group SITA ( Partnership Platforms ) SITA SITA [ KENYA Value Chain Roadmap for PULSES ]

69 67 Operational objectives Strategic objective 1 : Strengthen the production base of the sector. Activities Priority 1=high 2=med 3=low Starting period Target measures Lead Implementers Supporting Implementers Potential funding source Ensure a reliable and consistent supply of certified seeds. 1.3 Enhance the availability and adoption of quality ( nonseed ) inputs Reinforce the implementation and enforcement of the Seed and Plant Variety Act ( 1975, amended in 2012 ), aiming at ensuring proper availability of certified seeds. Steps include the following. Conduct a quick assessment on the level of implementation and coverage of this Act, and the expected impact of devolution on the implementation of the Act. Harmonize policies at national level and county level and suggest steps to improve coordination with counties for enforcing the policies. Advocate for the implementation of a policy for systematic seed controls to fight against the use of noncertified seeds. Consider revising the policy supporting seed development by research institutes to authorize partnerships with seed breeders on a contractual basis. Create awareness of the Act, disseminate information Establish a finance mechanism ( scheme ) to promote private sector investment in seed development. The scheme will involve, through donor assistance / budgetary allocation from the Government, the setting up of a fund by STAK that will support investment in developing infrastructure for seed development, i.e. creation of infrastructure facilities relating to seed cleaning, grading and processing ; seed treating, packaging and storage units ; as well as for seed testing facilities. Private companies, individual entrepreneurs, seed cooperatives and partnership farms will be eligible for soft loan subsidies. This finance mechanism will be implemented through pre-identified banks and will involve a credit-linked back-ended capital subsidy to be provided at the rate of 50 % for newcomers, and 25 % for established companies, of the project cost subject to a maximum limit of US $ 50,000 per unit on seed infrastructure development Increase coordination between ICAR ( Indian Institute of Pulses Research ) and KALRO and KEPHIS ( in charge of clearing seed imports ) to develop an action plan to foster knowledge transfer to seed producers and farmers ( including introduction and training on improved varieties of the seeds ), and improve institutional collaboration Develop a model for private sector engagement in the sale of pesticides and fertilizers. Discuss the value proposition of the pulses market with key suppliers. In a multi-stakeholder setting, develop a plan for sale of environmentally friendly, affordable fertilizer and pesticides to producers ( including distribution model ) Identify, through detailed profiling, key farmers organizations operating in the selected counties, including organizations that are not yet involved in pulses, to serve as a nucleus for select pilot initiatives. Evaluate the reach of the farmers organizations and the past work done by each organization in the pulses value chain ( or other commodities ). Evaluate the implementation capacity of the different organizations and create a profile for each organization. 3 X Assessment and recommendations provided to MALF by the end of X X X X Proposal for fund developed by mid-2017 Scheme deployed at the end of 2017 as a pilot 2 X X X X X Initial roundtable meeting to discuss approach held in 2016, resulting in a medium-to-long term coordination approach 2 X X X Distribution model developed by early X Ten to fifteen farmers organizations in high potential areas identified and approached for involvement in pilot initiatives by mid-2015 MALF County governments, KENAFF STAK EAGC, MALF, National Treasury, MoIED, Savings and Credit Cooperative Societies KALRO ICAR, KEPHIS, ICRI- SAT, STAK, KENAFF, county governments Agrochemical Association of Kenya MALF, EAGC, KENAFF, county governments KENAFF EAGC, CGA, KEPSA, county governments SITA [ ROADMAP PLAN OF ACTION ]

70 68 Operational objectives Strategic objective 1 : Strengthen the production base of the sector. Activities Priority 1=high 2=med 3=low Starting period Target measures Lead Implementers Supporting Implementers Potential funding source Improve adoption of best practices in the sector Implement a pilot farms initiatives as a demonstrator initiative for the production of the identified pulses in the selected areas, involving identified farmers organizations. Specifics on assistance : Access to quality inputs ( including seeds ), including pesticides and fertilizers ( including training on safe application ) ; Build capacities and knowledge on pulse production, including soil analysis and water management, sowing, and protection from diseases and pest attacks ; Develop the farmers organizations knowledge of the pulses market, including prices, markets requirements and global outlook ( including national, local, market ) ; Training on farming and postharvest techniques ( cleaning, sorting, grading, drying, polishing, bagging, storage, etc. ) ; Showcase the different pulse varieties and the existing production technologies through pilot farms with the support of scientists from KALRO and ICRISAT ; Increase the participation of farmers organizations in awareness-raising campaigns on crop diversification and sustainability ; Assistance with identifying markets and buyers for the harvest Develop a pilot processing centre where processing equipment could be established as a shared facility for farmers organizations to use. Location would be close to the pilot farms activity ( demonstrator farms discussed above ). Privately operated and managed facility so that there is an interest in maintaining the equipment and recovering costs. An operator can be chosen through an Expression of Interest. Private companies will be involved to come and demonstrate equipment. There is a possibility that the equipment can be sourced by farmers organizations in other counties Develop and conduct a Training of Trainers programme. The training programme curricula will be developed in collaboration with entities such as ICAR ( Indian Institute of Pulses Research ), KALRO, ICRISAT and other stakeholders and will cover the following areas : Suitable pulse varieties and their diagnostic characteristics ; Exploring the possibilities of underutilized pulse varieties with the view to enhancing their production in a different cropping system ; Improved agro-techniques for enhancing production, including planting techniques ; identification and management of pests ; disease control ; and fertilizers and pesticides and their application ; With the support of the trained trainers, disseminate information through on-site trainings with farmers at county level Develop a plan for integrated pest management for pulses through the following activities. Surveillance of common pests such as Helicoverpa armigera and pod fly. Identify a pilot area for pheromone traps distribution linked to existing activity on developing demonstration plots. Develop bio-formulation production units for production of quality Helicoverpa armigera Nucleopolyhedrosis virus ( HaNPV ) in adequate quantity in potential cultivation areas. Promote HaNPV use. Conduct integrated pest management demonstrations and training ( through a Farmer Field School model ) with farmers organizations in cultivation areas. Identify documentation and validate appropriate farmers indigenous technical knowledge for scaling up. 1 X X X X X Identification of the farm to be completed by early January 2015 Pilot farms to be ready by next sowing season April / May / June X X X X Expression of Interest launched by mid-2017 Operator selected and processing centre operational by the end of X X X X X Initial batches of trainers per county coming from previously identified farmers organizations identified in mid-2016 Pilot course of four sessions of one week each, two to four week courses, initiated by end X X Project conceived and planned by early 2016 Pilot implementation to begin mid-2016 in parallel with existing project on demonstration plots EAGC KENAFF, KEPSA, CGA, county governments, ICAR, IPGA, ICRISAT SITA MALF EAGC, MoIED, KEBS Agro-industrial park developed by MoIED EAGC ( Grain Institute ) KALRO, KENAFF, ICAR, ICRISAT, county governments, MALF KEPHIS International Centre of Insect Physiology and Ecology ( African Insect Science for Food and Health ), EAGC, MALF, KENAFF, county governments, ICRISAT, ICAR, Jomo Kenyatta University of Agriculture and Technology [ KENYA Value Chain Roadmap for PULSES ]

71 69 Operational objective Strategic objective 2 : Promote FDI and develop processing capacity in Kenya for processing and export of value added pulses. Activities Priority 1=high 2=med 3=low Starting period Target measures Lead Implementers Supporting Implementers Ongoing / future development programmes + international partners Promote investment in the pulses processing sector Develop an incentive package for investors, featuring the following. Dual tax holidays for investors in pulses processing tax holiday on profits from business and tax holiday for import of capital goods and other inputs for processing. Review of policies to support local investors through EPZA. Simplify licensing for processors by offering procedural incentives and setting up a one-stop shop to reduce bureaucracy ; Provide infrastructural incentives, e.g. factory shells, road building and land for lease at affordable rates. Advocate for preferential non-tariff barriers to trade. Develop policies for promoting contract farming. Offer financial support for promoting investment in processing by offering low interest rate loans and raising the loan ceiling for borrowers who want to invest in pulses Develop integrated pulses processing parks like the Special Economic Zones ( bill currently being discussed in parliament ) to promote FDI in pulse processing, including the following. Set up EPZs for pulse processing for export purposes. Make logistics for export available at Special Economic Zones / EPZs through port facilitation, and Customs inspection and documentation at the zones, by offering procedural incentives. Advocate for the implementation of tax and non-tax incentives for pulse processing and export from the Special Economic Zones / EPZs. Invite Indian processors with international market access to set up processing plants ( currently being undertaken by EPZA ). Sign a Memorandum of Understanding with financial institutions such as, but not limited to, Kenyan commercial banks, Exim Bank of India and PTA Bank for making project financing available. Sign a Memorandum of Understanding with technology providers to set up plants for investors on a turnkey basis EPZA should ( i ) dedicate additional space and facilities ( warehouses, equipment and services for hire, etc. ) at the Mombasa EPZ to facilitate pulse imports for processing and re-export ; and ( ii ) establish a new agroprocessing-focused EPZ where the output of pulse-growing regions could be efficiently consolidated for processing.* Make pulse sector development an explicit priority among the agribusiness opportunities promoted by KenInvest ( and EPZA ), with the attendant activities of : a. Preparing and maintaining up-to-date business information and promotional material for target investors, both online and in hard copy ; b. Dedicating time and attention to the presentation of pulse sector opportunities and the most relevant trade shows and investor conferences, such as the Global Pulse Confederation s annual World Pulse Convention and IPGA s annual Pulses Conclave ; c. Conducting agribusiness-specific investor-targeting campaigns, in which investor interest in pulse processing, trading and contract farming is given significant weight in target selection. 2 X X X X Incentive package developed and finalized by mid X X X X Feasibility analysis for setting up EPZs focusing on pulses completed by mid-2016 Requisite clearance from authorities received by mid-2017 Memorandums of Understanding with financial institutions and technology providers signed on a rolling basis EPZ functional by early X X X X Feasibility assessment for expansion completed by the end of 2017 Recommendations integrated by mid X X X X Investment-led campaigns initiated by the end of 2017 KenInvest EPZA, KEPSA, MALF, EPC, KRA, county governments EPZA MALF, MoIED, KenInvest, county governments, KE- NAFF ( currently chairing the agriculture sector board of KEPSA ), KNCCI, Kenya Ports Authority, KRA EPZA KenInvest, MALF, MoIED KenInvest EPZA, EAGC, MALF, KENAFF, KNCCI * Pulse output across the western regions of Nyanza and Western Province could converge along route A4 on the way to Nairobi, possibly in the Naivasha area, taking advantage of the cheap electricity generated by the hydroelectric project under development there now. As the eastern regions of Embu, Kitui, and Makueni converge at the junction of routes B7 and A109 on the way to Mombasa, this could be a good candidate location for a processing centre, although the population density of Kitui might provide a readier workforce. [ ROADMAP PLAN OF ACTION ]

72 70 Operational objective Strategic objective 2 : Promote FDI and develop processing capacity in Kenya for processing and export of value added pulses. Activities Priority 1=high 2=med 3=low Starting period Target measures Lead Implementers Supporting Implementers Ongoing / future development programmes + international partners Promote investment in the pulses processing sector. 2.2 Facilitate technology transfer and equipment upgrade in the sector. 2.3 Improve essential Infrastructure in the sector Add operation, maintenance and repair of common agribusiness processing machinery ( mills, polishers, hullers, splitters, mixers, etc. ) to the training programmes of the EPZA Vocational Training Institute. Link Institute administrators with new and existing investors to understand their skill requirements, which can be fed back into the Institute s curriculum Conduct an equipment study to assess the type of equipment needed in the future by pulse growers ( also looking at equipment that can be used for both pulses and other crops ). Assessment study should include the following information and criteria. Mapping of manufacturers of processing equipment in India and Kenya ( types, processing capacity, technical support and spares ). Type of equipment, including dhal plants from India ( including cleaning, drying, splitting, polishing, etc. ). Training requirements for local technicians to maintain the equipment. Cost of the equipment actual and associated costs including financing mechanisms. Capacity and diversity ( multipurpose during low seasons where other crops can be processed ), and use of processing. Packaging range of equipment smaller / bigger packets etc. Specifications including machine productive life. Spare parts availability and support services. Compatibility to alternative sources of energy. Alternative sources of the same equipment outside India and Kenya ( e.g. Brazil, Italy, Japan, China, Viet Nam ) to feed into a comparative cost-benefit analysis. Based on the equipment study, bring equipment manufacturers in India and distributors in the region to Kenya for face-to-face meetings with farmers organizations etc. so they see whether there is a business case for setting up shop in Kenya. Provide buyers with credit for the supply of technology from India and deploy affordable leasing options for equipment that farmers organizations can access through the Exim Bank of India Collaborate with county governments or other institutions such as cooperatives to foster the use of existing warehouses as shared facilities for pulse farmers. Use certified storage by EAGC ( and expand certification if necessary ). Identify warehouses suitable for storage. Discuss with county governments / other institutions the assignment of warehouses. Create awareness among farmers of availability of storage and other services ( sorting, grading, etc. ) Connect the food science departments of universities with the Ministry of Agriculture and value added pulse processors ( pasta, vermicelli, chips, etc. ) to understand how Kenyan pulses could be adapted for such use Address logistical challenges for smooth and cheaper export to target markets by : Developing the rail / road network for cheaper transport to the port. The existing project of Northern corridor will be leveraged as the rail network essentially comprises a single line, overland rail track from Mombasa through Nairobi, Nakuru and Kisumu / Eldoret, which are within the pulse-producing areas of Taita Taveta. Kitui, Makueni.and Machakos Developing the new port rail and road from Lamu to pass through pulse- growing areas through the Lamu Port Southern Sudan Ethiopia Transport Corridor project. 2 X X X X Curriculum updated and integrated by mid X X X X Mapping of equipment manufacturers completed by mid-2017 Business-to-business event organized in Kenya in late-2017 Financing instruments developed 2 X X X X Warehouses identified by mid X X X X X Memorandums of Understanding signed by mid X X X X X Feasibility analysis through position paper for extension of existing rail infrastructure projects submitted to the Ministry of Transport and Infrastructure by the end of 2016 EPZA KEBS, universities EAGC Exim Bank of India, Ministry of Foreign Affairs & International Trade, MALF, Kenya Industrial Research and Development Institute, National Treasury, State Department of Trade, EAGC, KENAFF EAGC County governments, National Cereals and Produce Board, KE- NAFF, EAGC MALF Jomo Kenyatta University of Agriculture and Technology, other universities to be included as per defined scope Ministry of County governments, Transport and Kenya Railways Infrastructure Northern Corridor project ( Lamu Port Southern Sudan Ethiopia Transport Corridor ) [ KENYA Value Chain Roadmap for PULSES ]

73 71 Operational objective Strategic objective 2 : Promote FDI and develop processing capacity in Kenya for processing and export of value added pulses. Activities Priority 1=high 2=med 3=low Starting period Target measures Lead Implementers Supporting Implementers Ongoing / future development programmes + international partners Improve essential Infrastructure in the sector. 2.4 Improve access to finance in the sector Develop cold chains for green gram to ensure the preservation of colour ( and other quality parameters ) which is the main criteria used to determine the value of this particular variety. Promote private investment in cold storage facilities through the following : 1. Advocate for an enabling policy framework by the Government ; 2. Advocate for enabling fiscal policies to encourage private investment by offering low interest rate loans ; 3. Launch tender for a shared cold storage facility near select demonstration farms ; 4. Integrate knowledge sharing and training on the importance of cold storage facilities related to green gram crop with existing Training of Trainers initiatives Direct the National Treasury s PPP Unit to prioritize the completion of its first irrigation PPP7 in an area with high pulse output. PPP Unit and KenInvest to collaborate on getting maximum exposure for the tender Establish an export guarantee fund to be set up under the National Treasury with quotas to specifically address the pulses sector. This fund will be a strategic business unit and will offer credit risk insurance cover to exporters, banks, etc. This fund will also provide trade finance through refinancing the commercial banks, based on a product developed for this purpose. The primary objective of the fund will be to promote the country s exports by covering the risk of export on credit. Provisions will include : A range of insurance covers to Kenyan exporters against the risk of non-realization of export proceeds due to commercial or political causes ; Different types of guarantees to banks and other financial institutions to enable them to extend credit facilities to exporters on a liberal basis Finalize the low-interest industrialization fund under development by MoIED, which would be used to provide manufacturers with loans at internationally competitive interest rates in the single digits, and assure its coverage of agro-processors Assess options to incorporate pulses in the pilot project for structured commodity trade finance. Identify financial institutions ( including microfinancing ) for participation and financing. Banks to support farmers with postharvest solutions by financing acquisition of postharvest handling technologies. Identify warehouses for participation in the pilot. Define quality parameters as well as develop a proper grading and certification mechanism. Establish a structured commodity trade financing mechanism. 2 X X X X Position paper as an advocacy mechanism ( for #1 and #2 ) ) submitted by the end of 2016 Tender for cold storage facility launched by mid X X X Prioritization completed and pulse-related project initiated by mid X X X Fund set up and operational by X Fund finalized and operational by the end of X X X X Project launched by the end of 2017 MALF MoIED, EAGC, KENAFF, National Treasury National Treasury National Treasury KenInvest EAGC, EPC, Exim Bank of India ( as adviser ), commercial banks, MoIED, MALF, KEPSA MoIED Commercial banks EAGC KEBS, National Cereals and Produce Board, MALF World Bank [ ROADMAP PLAN OF ACTION ]

74 72 Operational objective Strategic objective 3 : Develop markets and improve access to market-side information and branding for the sector. Activities Priority 1=high 2=med 3=low Starting period Target measures Lead Implementer Supporting Implementers Ongoing / future development programmes + international partners Support market development efforts, both domestic and international Develop a mechanism for leveraging EAGC s Structured Trading Platform for pulses. Develop a national ( wholesale ) market through a network of warehouses and traders. It may also be a virtual market. Foster the use of existing aggregation centres which could also be used as trading hubs for pulses and ensure that clean handling facilities are available Set up a comprehensive in-market support programme for the sector, with main focus on the Indian market. Regional markets within the EAC and the Common Market for Eastern and Southern Africa regions will also be included. This activity aims to : Build capacities of EPC staff and trade attachés at Kenyan missions abroad on the potential of pulses, their processed products, and the importance of pulses as an export crop. A mechanism will be developed to ensure the knowledge gained at EPC flows to other agencies ; Create an overseas market introduction service through EPC and Kenyan missions in target countries. ( EPC representatives will work with exporters to develop an export plan, followed by commercial attachés in the missions in the target markets who will assist exporters in networking and business development ) ; Organize training sessions for exporters on procedures and documentation for export Organize a study tour to India organized in collaboration with IPGA that will include visits to market yards and processors of pulses in India ( Indore / Delhi ). This study tour will be organized once a year for a group of market players ( including farmers, assemblers, traders, processors, financial institutions, research institutes and Government officials ) identified jointly by EAGC and ITC. The visit will allow the participants to see the operations of the Indian industry and develop business linkages Organize structured trade meets to enable previously identified ( and prospective ) Kenyan exporters to meet global buyers. For this purpose, close collaboration will be sought with international pulses sector agencies. This activity includes the following. Organize trade meets that will be leveraged to promote pulse exports. Promote Kenyan pulses through international trade fairs such as Gulfood, which is attended by major exporters and importers in the world. Organize bilateral trade facilitation forums to develop market linkages. Participation of a Kenyan delegation in CICILS World Pulses Convention ( the Global Pulse Confederation ), another flagship programme of the pulses sector. Promotion of Kenyan pulses through FOODAGRO, a Kenyan event on food and agriculture Undertake a pilot initiative to build the capacity of, and to find a market for, the collective of 18,000 farmers ( Eastern and Coast regions ) that are brought together by the Kenya Red Cross. Build capacity for sorting, grading and packaging. Establish collection points and certified storage centres with the required facilities ( cleaning, sorting, grading, etc. ). Assist in improving marketing of the crop. Link to buyers before the harvest so that proper quality and inputs are made available. 2 X X X X X Mechanism planned and implemented by early X X X X In-market support programme in place by early X X X X X Fifteen to 30 companies identified, with the first study tour organized in 2016 X X X X X Trade meets organized, with the first one starting in X X Pilot initiative launched in early 2016 EAGC County governments EPC Ministry of Foreign Affairs & International Trade, county governments, MALF, EAGC, KENAFF, KEPSA EAGC KENAFF, KEPSA, MALF, EPC EPC Ministry of Foreign Affairs & International Trade, EAGC, KEPSA, county governments Kenya Red Cross EAGC, MALF, county governments, Ministry of Foreign Affairs and International Trade Existing programmes such as TradeMark East Africa and the East Africa Trade Hub SITA SITA [ KENYA Value Chain Roadmap for PULSES ]

75 73 Operational objective Strategic objective 3 : Develop markets and improve access to market-side information and branding for the sector. Activities Priority 1=high 2=med 3=low Starting period Target measures Lead Implementer Supporting Implementers Ongoing / future development programmes + international partners Develop new tools for provision of timely and relevant market intelligence. 3.3 Build and promote the Kenyan pulses brand Link existing market information platforms such as RATIN, National Farmers Information Service, M-Farm and CerealMart, to provide information on pulses. The existing RATIN system will be upgraded to pull data from AGMARKNET in India and other free information sources. The system will also subscribe to data vendors commercial services such as Reuters and Gro Ventures ( a Kenya-based Information vendor ) to have access to additional sources of information to be distributed to the sector. In order to achieve this, the following steps will be will be carried out. Conduct a comprehensive study on existing market information systems, including a gap analysis. Strengthen the database for the pulses value chain for farmers, traders, aggregators and technical experts. Configure the system to receive and distribute information related to the pulses market ( including prices ) through external sources such as AGMARKNET ( India ) and Bloomberg. Configure the system to receive and disseminate information from EAGC s Structured Trading Platform Set up a virtual networking platform for buyers in India and sellers in Kenya through a networking platform and interactive website, with required central control for security features with a validation mechanism to eliminate fake offers Develop an SMS facility aimed at sharing valuable information on pulses with farmers. Information about prices will be a push service, while information about production technology, sowing, harvesting and storage will be a pull service Train farmers on the use of market information system tools and make information about pulses more easily available. Training will also focus on interpretation of market information. Leverage existing platforms such as SMS services for dissemination of prices and other information to farmers and traders operating in the pulses sector in Kenya Formulate a systematic Sourced in Kenya campaign / brand to leverage co-branding opportunities for products ( targeting end consumers ) in premium markets. Develop a branding communication strategy for the Kenyan and Indian pulses sectors that defines cobranding terms of reference. Synchronize with Buy Kenya, Build Kenya. 2 X X X X Gap analysis conducted by the end of 2016 Systems integration completed by the end of X X X X Networking platform in place by early X X SMS facility in place by mid X X X X X First batch of training provided in 2016, with planning for an annual event 3 X X X Communication strategy initiated by early 2018 EAGC KEPSA, commercial information providers EPC EAGC SITA EAGC Technology providers RATIN EAGC Technology Providers Existing initiatives include M-Farm, Esoko, G Soko. M Soko EPC EAGC [ ROADMAP PLAN OF ACTION ]

76 74 Appendix: Kenya s policies and trade agreements in a nutshell Beyond the description of the different actors in the pulses value chain in Kenya, it is important to review the policy and regulatory framework that contributes to structuring the sector s development. The following section provides an overview of national plans, policies and initiatives directly or indirectly supporting the pulses sector s development. The Kenyan Constitution 2010 The recently adopted Constitution is the backbone of the country s policies and provides for two levels of Government : at national and at county level. It recognizes distinct and interdependent functions for each level of government but mandates the two to cooperate, support, consult and liaise with each other for the purpose of exchanging information, coordinating, and enhancing policies and administration. 49 National plan Kenya Vision 2030 Kenya Vision 2030 is the country s long-term development blueprint covering the period and implemented through successive five-year Medium Term Plans. Based on three pillars, i.e. economic, social and political, the Vision aims to transform the country into a newly industrializing, middle income country providing a high quality of life for all its citizens by the year Under the economic component, agriculture was one of six sectors 50 identified on the basis of their potential to contribute to the Vision s objective of achieving an average gross domestic product growth rate of 10 % per annum beginning in The long-term goal of the agriculture sector, which also comprises livestock and fisheries, is the attainment of food security and increased incomes through value addition by in-country processing of primary agricultural and livestock products something that will be achieved through an innovative, commercially oriented and modern agriculture. The specific strategies identified for the sector under Vision 2030 are also very much in line with the objectives set under the SITA Initiative for the pulses sector in Kenya, notably aiming at : Increasing the productivity of crops through better yields Promoting household and private sector agricultural growth Improving market access for smallholders through better marketing Increasing use of uncultivated land. Several flagship projects of interest to the pulses sector were implemented during the First Medium Term Plan ( ), including the enactment of three Acts : the Agriculture, Fisheries and Food Authority Act, the Crops Act and the National Agricultural Research Act ( see below ). A Fertilizer Cost Reduction Strategy was also implemented, as well as programmes aimed at expanding irrigation coverage, improving delivery of extension services, and seed improvements. 49. Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2015 ). National Irrigation Policy, Other sectors include tourism, wholesale and retail trade, manufacturing, information and communications technology and business process outsourcing, and financial services. [ KENYA Value Chain Roadmap for PULSES ]

77 75 The Second Medium Term Plan ( ), that is currently being implemented, also comprises programmes and projects for the agriculture, livestock and fisheries sector. Several activities envisaged under this Plan are in line with the objectives of the roadmap for value chain optimization developed under the SITA Initiative for the pulses sector. These flagship projects and programmes include the following. Implementation of the Consolidated Agricultural Reform Legislations, including setting up institutions such as AFFA and KALRO proposed in the new Acts ( see below ). The Fertilizer Cost Reduction Strategy to address issues of access to and affordability of fertilizers, namely through establishing a local, privately owned fertilizer plant. Investors have already been identified and several plants are currently being established. Agricultural development along the Lamu Port South Sudan Ethiopia Transport corridor, involving feasibility studies and providing investment incentives to actors interested in investing in agriculture in the region. The National Agricultural Sector Extension Programme aimed at improving access to agricultural extension by farmers and further strengthening agricultural research and development. The Agri-Business Development Programme, geared towards improving access to markets by all agricultural value chain players as well as improving and modernizing market facilities. It is anticipated that the programme will ensure the creation of local, regional and international marketing opportunities for agricultural commodities, which was identified as a significant need for the Kenyan pulses sector. Accelerated Agricultural Inputs Access Programme to improve access to agricultural inputs such as fertilizers, agrochemicals and certified seeds. Agricultural Credit and Financial Services Access Programme aimed at improving access to agricultural credit and insurance for agricultural value chain players. Agricultural Programme for Schools to train pupils in primary and secondary schools in agricultural skills and engage them in irrigated agriculture. Agriculture Sector Development Strategy ( ) This Strategy was drafted following the revision of the Strategy for Revitalizing Agriculture ( ) and aims to support Vision The Agriculture Sector Development Strategy lays the foundations of Kenya s agriculture policies and strategies, with the main objective of transforming the country into a food-secure and prosperous nation. More specifically, it strives to increase and provide the basis for equitable incomes, employment and improved food security as a result of improved production and productivity in the rural smallholder farm and off-farm sectors ( Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries, 2011, p. 29 ). In this context, the strategy endeavours to achieve an agricultural growth rate of 7 % per year over the period Its areas of intervention are structured in three components : Sector-wide coordination ( i.e. enabling institutional environment ) Natural resource management ( i.e. ensure sustainability and adaptation ) Value chain development ( i.e. long-term gains through equitable commercialization of agricultural sector produce ) Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2011 ). Agricultural Sector Development Support Programme. [ ROADMAP PLAN OF ACTION ]

78 76 The pulses subsector is governed by the Strategies for the Crops and Land Development Subsector under the Agriculture Sector Development Strategy, which lays down the pillars for the formulation and implementation of policies within the subsector, namely : Improvement of agribusiness and market access Strengthening of research, extension and training Improvement of land use and crop development Enhancing accessibility of affordable inputs and credit to farmers Enhancing institutional efficiency and effectiveness in implementation and service delivery ( Republic of Kenya, 2009, p.40 ). 52 Key national regulations As stated above, three pieces of legislation were crafted against the backdrop of the proposal by Kenya Vision 2030 of consolidating agricultural policy reform legislation and the Agriculture Sector Development Strategy. The three Acts, namely the Agriculture, Fisheries and Food Authority Act ( 2013 ), the Crops Act ( 2013 ) and the Kenya Agricultural and Livestock Act ( 2013 ) are detailed hereafter, together with other key Acts and regulations. Agriculture, Fisheries and Food Authority Act ( 2013 ) This Act of Parliament provides for the consolidation of laws on the regulation and promotion of agriculture generally, and makes provisions for the respective roles of national and county governments in agriculture, excluding livestock, in line with the provisions of the Fourth Schedule of the Constitution of Kenya. 53 AFFA, a state corporation, was established as a new overarching regulatory agency under the Agriculture, Fisheries and Food Authority Act of AFFA is the successor of former regulatory institutions in the sector that were merged into Directorates under the Authority with the commencement of the Crops Act, 2013 on 1 August In the context of devolution of competencies from Nairobi to county governments, this legislation will be of utmost importance for the development of the pulses sector as it clearly defines the roles and responsibilities of county governments, a key element in the implementation of the SITA Initiative s activities. Crops Act ( 2013 ) The Crops Act aims to consolidate and repeal various statutes relating to crops ; to provide for the growth and development of agricultural crops and for connected purposes. Through promotion of the production, processing, marketing and distribution of crops in suitable areas of the country, the objective of this Act is to accelerate the growth and development of agriculture in general ; enhance productivity and incomes of farmers and the rural population ; improve the investment climate and efficiency of agribusiness ; and develop agricultural crops as export crops. 52. Republic of Kenya ( 2009 ). Agriculture Sector Development Strategy Republic of Kenya, Agriculture, Fisheries and Food Authority. Website. Available from http ://agricultureauthority.go.ke/. 54. Ibid. [ KENYA Value Chain Roadmap for PULSES ]

79 77 The Act comprises provisions to : Circumvent unnecessary regulatory bureaucracy in the crops subsector ; Reduce unnecessary levies, taxes or other barriers to free movement of crop products and provide for a rationalized taxation system ; Reduce unnecessary regulation or over-regulation of the crops subsector ; Reduce duplication and overlap of functions among institutions involved in the regulation of crop agriculture ; Promote competitiveness in the crops subsector and develop diversified crop products and market outlets ; Attract and promote private investment in crop agriculture. Broad in scope, the Act nonetheless provides for the development of export crops and comprises incentive provisions for the promotion of the production and marketing of such crops. The pulses sector could therefore benefit from the provisions of the Act, its objectives being in line with some of the activities envisaged under the present SITA Initiative. Awareness-raising campaigns will also be needed to disseminate information to all interested parties in the pulses sector, as the industry has little knowledge or understanding of this Act. Kenya Agricultural and Livestock Act ( 2013 ) This Act provides for the establishment and functions of KALRO. The legislation provides for organs of KALRO and for the coordination of agricultural research activities in Kenya, activities which are of utmost importance for the development of new pulse varieties and seeds in the pulses sector. Seeds and Plant Varieties Act ( 1975, revised 2012 ) The Seeds and Plant Varieties Act came into force in This legal text aims to regulate and control the production, processing, testing, certification and marketing of seeds. The Act is comprehensive in scope and encompasses crucial provisions for ensuring the supply of quality seeds for the agricultural sector as a whole. As per the Act, such regulations may in particular be made for the following purposes : Ensuring that reliable and adequate information is afforded as to the nature, condition and quality of seeds intended for sale ; Preventing the sale of seeds which are deleterious ; Requiring the registration of persons growing any specified crop for the main purpose of seed production, or of persons selling any seed ; Preventing the spread of plant disease by the sale of seeds ; Regulating, controlling or prohibiting the export of seeds ; Regulating the containers in which seed may be sold. Regarding seed testing, the text provides for the establishment of one or more official seed testing stations and makes provisions for the regulation and control of the certification of the test results by an authorized officer. The Act also includes provisions to restrict the introduction of new varieties and provides guidelines for the establishment of an index of names of plant varieties. [ ROADMAP PLAN OF ACTION ]

80 78 In addition, the text makes provisions to control the importation of seeds in order to prevent imports of potentially deleterious seeds and to authorize measures to prevent injurious cross-pollination, thereby guaranteeing a certain quality of seeds for the pulses sector. Seeds which are unsuitable for use in Kenya can therefore be denied access to Kenya. Finally, the Seeds and Plant Varieties Act provides for the grant of proprietary rights to persons breeding or discovering new varieties and grants plant breeders in plant variety exclusive rights to produce reproductive material of the variety for commercial purposes. Although the Act seems comprehensive, the question remains as to whether the provisions are being properly implemented and whether the controls and sanctions are applied. For example, it appears that the official seed testing stations contemplated by the Act have not been established. Further, it appears from the consultations held thus far that the industry is largely unaware of this Act and the provisions it encompasses, highlighting the need to raise awareness of the importance of such legislation. National Irrigation Policy ( 2015 ) The National Irrigation Policy 2015 aims to stimulate and guide irrigation and drainage development through targeted technical support, intensified investment in the sector, improved research and technology, extension services, and capacity-building for both staff and farmers organizations to ensure development and sustainability of the subsector. 55 Small and Medium Enterprise Parks This Initiative aims at providing basic infrastructure to small and medium-sized enterprises that do not have the capital or access to it to invest in infrastructure but that do have the financial capacity to pay for it. The specific objectives outlined by the Government are : 56 To promote the development of small and medium industries To enhance value addition to natural and agricultural resources To attract local and foreign investment To create an enabling environment through improved infrastructure To facilitate transfer of technology To promote productivity and competitiveness of enterprises. Micro and Small Enterprises Act ( 2012 ) The purpose of this Act is the development, promotion and regulation of micro and small enterprises in Kenya. It specifies the following actions : 57 Authority to advise on zoning of land Development of infrastructure Capacity-building programmes for micro and small enterprises Development of markets and provision of marketing services Technology transfer, acquisition, etc. Creation of a Micro and Small Enterprises Development Fund Management of the Fund. 55. Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2015 ). National Irrigation Policy, Republic of Kenya, Ministry of Industrialization ( n.d. ). Brief on Vision 2030 Manufacturing Sector. 57. Government of Kenya ( 2013 ). The Micro and Small Enterprises Act, 2012, Kenya Gazette Supplement No. 219 ( Acts No. 55 ). [ KENYA Value Chain Roadmap for PULSES ]

81 79 The Micro and Small Enterprises Authority, a state corporation, was also established under this Act to formulate and review policies and programmes, promote and develop the micro and small enterprises sector, monitor and evaluate implementation policies, programmes and activities related to micro and small enterprise development. 58 Export Processing Zones Act This Act of Parliament provides for the establishment of export processing zones and the Export Processing Zones Authority ; to provide for the promotion and facilitation of export-oriented investments and the development of an enabling environment for such investment and for connected purposes. As for incentives the Kenyan Government provides to investors aiming to participate in Kenya s export expansion, the following are granted to EPZ companies : 59 Ten-year corporate tax holiday and 25 % tax rate on profits thereafter ( except for commercial activities ) Ten-year withholding tax holiday Duty and value added tax exemption on inputs Stamp duty exemption Operation under essentially one licence issued by EPZA No minimum level of investment Rapid project approval ( under 30 days approval on application ) One-stop-shop service by EPZA for set up, facilitation and aftercare ( work permits, labour relations, port, utilities, etc. ) On-site Customs documentation and inspection. The Investment Promotion Act ( 2004 ) The Investment Promotion Act of 2004, ratified on 31 December 2004, streamlined administrative and legal procedures to create a more attractive investment climate by assisting investors in obtaining the licences necessary to invest and by providing other assistance and incentives. The Act also created some new barriers with more restrictive entry regimes for FDI, namely introducing a mandatory investment threshold and restrictive screening procedure for all foreign investments. The text makes a formal distinction between domestic and foreign investors, and requires the latter to apply to KenInvest for an Investment Certificate. 60 The conditions under which KenInvest is allowed to issue an Investment Certificate to a foreign investor are restrictive, initially requiring that the amount invested be at least US $ 500,000. The Government later revised the minimum foreign investment threshold to US $ 100,000 as an amendment to the Act. In contrast, domestic investors are not required to obtain Investment Certificates ( even if their investments have to be registered with KenInvest ), with a lower minimum capital investment set at KES 5 million ( US $ 65,000 ). These restrictive screening procedures for foreign investments can be a significant impediment to FDI inflows, in particular for investors with limited financial capacities. In addition, the investment must be deemed by KenInvest to be to the benefit of Kenya, including at least as a result of : the creation of employment for Kenyans, the acquisition of new skills or technology by Kenyans, and the contribution to tax revenues or other government revenues. The Investment Promotion Act also comprises incentive provisions, which are obtained through 58. Republic of Kenya, Micro and Small Enterprises Authority ( 2015 ). Website. Available from http : // United States Agency for International Development ( 2014 ). Strengthening the Cotton, Textile and Apparel Value Chain in East Africa : An Assessment ( draft ). 60. An amendment later made this foreign investment certificate requirement optional. [ ROADMAP PLAN OF ACTION ]

82 80 Photo: (CC BY-SA 2.0) CC0 Public Domain, PDPics.jpg the granting of an Investment Certificate by KenInvest. These provisions include the granting of temporary business licences and the entitlement to entry permits for expatriates. Importantly for foreign investors willing to invest in the agriculture sector in Kenya, the Land Control Act of 1967 forbids non-citizens and private companies from acquiring or leasing agricultural land. However, presidential exemptions can be granted and are thus the main channel through which foreign investors can acquire agricultural land. Also of importance for potential investments ( foreign or domestic ) in the processed pulses sector, is the development of EPZs, regulated by the Export Processing Zones Act ( 1990, with subsequent amendments ). In addition to procedural incentives and the higher quality of infrastructure, fiscal incentives are provided for enterprises operating in EPZs such as the exemption from all existing and future taxes and duties payable under the Customs and Excise Act and Value Added Tax Act on all export processing zone imports for use in the eligible business activities of the EPZ enterprise and exemption from the payment of income tax for the first 10 years from the date of first sale, followed by a rate of 25 % for the subsequent 10 years and the standard rate thereafter. Finally, to encourage the transfer of technology and skills, the Government allows foreign investors to acquire up to 49 % of local stockbrokerage firms and up to 70 % of local fund management companies. 61 In addition, and of utmost importance for the pulses industry, the ability of foreigners to own or lease land classified as agricultural is restricted by the Land Control Act ( 1967 ), constituting an impediment to any agroprocessing investment that may require land. The development of EPZs, however, offers a tangible alternative for the development of the processed pulses industry. 61. United States Department of State ( 2012 ). Investment climate statement Kenya. Available from http : // / e / eb / rls / othr / ics / 2012 / htm. [ KENYA Value Chain Roadmap for PULSES ]

83 81 References Alexandratos, N. and Bruinsma, J. ( 2012 ). World agriculture towards 2030 / 2050 : The 2012 revision. ESA Working Paper No , June. FAO. Alliance for a Green Revolution in Africa ( 2013 ). Establishing the Status of Post-Harvest Losses and Storage for Major Staple Crops in Eleven African Countries ( Phase I ), p. xviii. Nairobi, Kenya : AGRA. Dalipagic, Ian and Elepu, Dr. Gabriel ( 2014 ). Agricultural Value Chain Analysis in Northern Uganda : Maize, Rice, Groundnuts, Sunflower and Sesame. Action Against Hunger / ACF International. Food and Agriculture Organization of the United Nations ( 2015 ). Statistics database. Available from http : / /faostat3.fao.org / download / T / * / E. Accessed 5 August Food and Agriculture Organization of the United Nations ( 2005 ). Pulses : Past Trends and Future Prospects. Summary of paper contributed by FAO to the 4th International Food Legumes Research Conference, New Delhi, October. Available from http : // / fileadmin / templates / est / COMM _ M A R K E TS _ MONI TOR ING / Pulses / Documents / PulsesS tud y.pdf. Government of Kenya ( 2013 ). The Micro and Small Enterprises Act, 2012, Kenya Gazette Supplement No. 219 ( Acts No. 55 ). International Food Policy Research Institute Worldwide Extension Study ( 2011 ). Extension and advisory services in Kenya : a brief history of public extension services policies, resources and advisory activities in Kenya. Available from http : // / africa / kenya / s-kenya. International Trade Centre ( 2015 ). Trade Map Database. Available from http : // org / Index.aspx. Accessed 28 October Katungi, E., Farrow. A., Chianu. J., Sperling. L., and Beebe. S. ( 2009 ). Common Bean in Eastern and Southern Africa : A Situation and Outlook Analysis. International Centre for Tropical Agriculture. Murphy, S., Burch, D. and Clapp, J. ( 2012 ). Cereal secrets : The world s largest grain traders and global agriculture. Oxfam Research Reports, August. National Council of Applied Economic Research, India ( 2014 ). India s Pulses Scenario. New Delhi. Njagi, Kagondu ( 2013 ). As wheat yields fall in Kenya, farmers turn to beans. Thomson Reuters Foundation, 25 April. Noealt Corporate Services ( 2013 ). Annual Strategy Dossier 2013 World s 6 Leading Agriculture Equipment Manufacturers Key Strategies, Plans, SWOT, Trends & Strategic Outlook. Oloo, Jeo ( 2010 ). Food safety and quality management in Kenya : an overview of the roles played by various stakeholders. African Journal of Food, Agricultural, Nutrition and Development, Vol. 10, No. 11. Online Indus News ( 2015 ). Pulses import rises by 37 %, 24 March. Available from http : // www. onlineindus.com / pulses-import-rises-by-37 /. Pereira, Charles ( 1996 ). The role of agricultural research in the development of Kenya before independence. In Review of Kenyan Agricultural Research, Vol 1. [ ROADMAP PLAN OF ACTION ]

84 82 Peter Best and Ken Jennison ( 2012 ). Special report : top feed companies , 31 August. WattAgNet.com. Available from http : // / articles / special-reporttop-feed-companies Republic of Kenya ( 2009 ). Agriculture Sector Development Strategy Republic of Kenya, Agriculture, Fisheries and Food Authority. Website. Available from http : / / agricultureauthority.go.ke /. Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2015 ). National Irrigation Policy, Republic of Kenya, Ministry of Agriculture, Livestock and Fisheries ( 2011 ). Agricultural Sector Development Support Programme. Republic of Kenya, Micro and Small Enterprises Authority ( 2015 ). Website. Available from http : // Republic of Kenya, Ministry of Industrialization ( n.d. ). Brief on Vision 2030 Manufacturing Sector. Shand, Hope ( 2012 ). The big six : a profile of corporate power in seeds, agrochemicals, & biotech. The Heritage Farm Companion ( Summer ), pp Shiferaw B. and others ( 2008 ). Unlocking the Potential of High-Value Legumes in the Semi-Arid Regions : Analyses of the Pigeonpea Value Chains in Kenya, p. 17. Nairobi, Kenya : ICRISAT. The Dawn ( 2015 ). Another dal crisis : Pakistan is jailing shopkeepers to combat pulse shortage, 20 October. Available from http : / /scroll.in / article / / another-daal-crisis-pakistan-is-jailingshopkeepers-as-it-combats-pulse-shortage. Thurston, Anne ( 1987 ). Smallholder Agriculture in Colonial Kenya : The Official Mind and the Swynnerton Plan. Cambridge African Monographs 8. United States Agency for International Development ( 2010 ). Staple Foods Value Chain Analysis, Country Report Kenya. USAID. United States Agency for International Development ( 2014 ). Strengthening the Cotton, Textile and Apparel Value Chain in East Africa : An Assessment ( draft ). United States Department of State ( 2012 ). Investment climate statement Kenya. Available from http : // / e / eb / rls / othr / ics / 2012 / htm. Wambugu P.W. and Muthamia Z.K. ( 2009 ). Country Report on the State of Plant Genetic Resources for Food and Agriculture : Kenya, p. 19. Kenya Agricultural Research Institute ; National Genebank of Kenya. World Bank ( 2016 ). Doing Business 2016 : Measuring Regulatory Quality and Efficiency. Washington, D.C. : World Bank Group. [ KENYA Value Chain Roadmap for PULSES ]

85 83 Annex 1: List of Invited Participants 1st consultation May 19, Institution / Organization Invitee Title Location Machakos County Government Sheila Mueni Mukunya Chief officer Dept of Trade, Economic Planning and Industrialisation Machakos Trans Nzoia County Government Veronica Okoth Minister for Economic Planning, Commerce and Industry Nanyuki Kenya Bureau of Standards Mugambi Michubu Nairobi Kenya National Farmers Federation ( Kenaff ) Dr John Mutunga CEO Nairobi Eastern Africa Farmers Federation ( Eaff ) Steven Muchiri CEO Nairobi Kilimo Biashara Initiative Florence Mbugua Nairobi Kamili Packers Ltd Sunil Shah Nairobi Spiceworld Ltd Beju Shah Nairobi Export Trading Kungu Wainaina Nairobi Nafics Grain Trading Isaac Chege Nairobi Kings Commodities Bonface Kagechu Nairobi Shree Sai Enterprises Bina Patel Nairobi Food Chain Millers Anthony Ndirangu Nakuru Chase Bank Sam Donga Nairobi Kenya Red Cross Suada Ibrahim Manager, Disaster Risk Reduction Nairobi Bunda Cakes Dipti Sethia Nakuru Meru County / Kenya Agricultural Productivity Project Dr. Gilbert Muthee Mwoga Project Coordinator Meru Silden International Mr. Paresh Patel Mwailu Enterprises Limited Johnson Gachuhi Makueni Export Processing Zones Authority Michael Ngaruiya Project Executive Athi River Export Trading Kungu Wainaina Nairobi [ ROADMAP PLAN OF ACTION ]

86 84 2nd Stakeholders Consultation Aug 6, Institution / Organization Invitee Title Location Ministry of Agriculture, Livestock and Fisheries Annastacia Kivuva Nairobi Machakos County Government Sheila Mueni Mukunya Chief officer Dept of Trade, Economic Planning and Industrialisation Machakos Trans Nzoia County Government Veronica Okoth Minister for Economic Planning, Commerce and Industry Nanyuki Embu County Government Dr. Francis Nyaga Kathuri Chief officer Agriculture Embu Kitui County Government Charles Muthui Kang e County Minister for Agriculture, Water & Irrigation Kitui Makueni County Government Mr.jacobus Mutuku Kiilu County Minister for Agriculture, Livestock and Fisheries Makueni Meru County Government Severino Kinge Manene County Minister for Agriculture, Livestock and Fisheries Meru Export Processing Zones Authority Margaret Waithaka GM Business Development Athi River Export Processing Zones Authority Michael Ngaruiya Project Executive Athi River Export Promotion Council Ruth Mwaniki Chief Executive Nairobi Kenya Bureau of Standards Mugambi Michubu Nairobi Kepsa Daniel Ndung u Nairobi National Cross Border Traders Association David Erulu Awilie Nairobi Cereal Growers Association Antony Kioko CEO Nairobi Eastern Africa Farmers Federation ( Eaff ) Steven Muchiri CEO Nairobi Kilimo Biashara Initiative Florence Mbugua Nairobi Kamili Packers Ltd Sunil Shah Nairobi Spiceworld Ltd Beju Shah Nairobi Tesamco Traders Theresia Mugore Nairobi Export Trading Kungu Wainaina Nairobi Namutech Enterprises Cleophas Namusiule Nairobi Pisu & Co. Ltd Amos Okasido Nairobi Mjengo Ltd Anne Ndunda Thika Phoenix Procurement John Mungo Nairobi Nafics Grain Trading Isaac Chege Nairobi Kings Commodities Bonface Kagechu Nairobi Winnies Pure Health Tarah Gitau Nairobi Seaboard Overseas Fadhil Haji Mombasa Capital Reef Kirit Kanabar Mombasa Nakumatt Holdings Jackson Ndegwa Nairobi Cargill Alex Dietz Nairobi Combic Limited Monica Ndegwa Nairobi Shree Sai Enterprises Bina Patel Nairobi Agritrade Moses Gichuru Nairobi Amani Flour Mills Njoro Mathew Nairobi Food Chain Millers Anthony Ndirangu Nairobi Kenya Institute of Food Science Technology Joyce Kiio Kiambu Kephis Esther Kimani Kenya Agricultural Research Institute Dr. Mulinge Nairobi [ KENYA Value Chain Roadmap for PULSES ]

87 85 Institution / Organization Invitee Title Location Consultative Group For International Agricultural Research ( Cgiar ) Joseph Karugia Nairobi Tegemeo Institute ( Egerton University ) Francis Karim Nairobi Jomo Kenyatta University of Agriculture & Technology Dr. David M. Nburu Dean, Faculty of Agriculture Nairobi Kenya Agricultural & Livestock Research Organisation David Karanja Nairobi Chase Bank Sam Donga Nairobi Equity Bank George Macharia Nairobi Kenya Commercial Bank Betty Maloba Nairobi Transnational Bank Sammy Langat Nairobi Agricultural Finance Corporation Andrew Tuimur Managing Director Nairobi Unaitas Sacco Society Ltd Jadiel Kinyua Chief Manager, Credit Nairobi Kenya Red Cross Suada Ibrahim Manager, Disaster Risk Reduction Nairobi Kenya Red Cross Elijah Muli Advisor, Disaster Risk Nairobi Photo: (CC BY-SA 2.0) CIAT (CC BY-SA 2.0), bean market3.jpg [ ROADMAP PLAN OF ACTION ]

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