ESFIM National Project Proposal [KENYA ]

Transcription

1 KENYA NATIONAL FEDERATION OF AGRICULTURAL PRODUCERS (KENFAP) ESFIM National Project Proposal [KENYA ] Submitted To AGRICORD [MAY 2009] [ESFIM National Project Proposal is a collaborative action research based on participatory identification and prioritization of constraints hindering smallholder farmers access to markets. It draws inputs from ECART, IFAP, KENFAP and local experts to undertake research on issues identified by farmers and stakeholder to develop practical solutions and proposition for lobby and advocacy to address the constraints. 5 key research issues and 4 case studies have been identified and prioritized for research and it is estimated to costs 100,000 Euros within 2 years period. The study will be conducted through KENFAP structure and targets 1.4 million farm families at 50 Area branches, 23 commodity association and 8 cooperative societies spread all over Kenya.]

2 Contents PROJECT SUMMARY...4 List of abbreviations INTRODUCTION Market trends Role of agriculture in Kenya Smallholder farming characteristics in Kenya Role of farmers organizations in assisting smallholder farmers access to markets Role of farmers networks in ESFIM Role of National platforms in ESFIM Need for action research CONTEXT OF THE RESEARCH PROJECT Research issues and the scope of the research Government intervention which is anti-competitive behavior Value chain analysis Market risks management approaches including agricultural insurance Mechanism for coordination of information dissemination to the farming community Value addition of products Case studies and scope Taxes and levies; Appropriate financial packages for farmers Storage facilities; Certification and standardization RESEARCH OBJECTIVES GENERAL ACTIVITIES Specific activities under each research issue and case studies Government intervention anti- competitive behavior;

3 Value chain analysis Mechanism for coordination of information dissemination to the farming community Mechanism for coordination of information dissemination to the farming community Value addition of products Role of ECART/IFAP THE STUDY AREA METHODOLOGY Implementation strategy WORK PLAN BUDGET...18 REFERENCE

4 PROJECT SUMMARY Project Title Subject of proposal Total project cost Project period Project submitted to Project submitted by Empowering Smallholder Farmers in the Market Action research on constraints hindering smallholder farmers access to markets 100,000 Euros Two years AgriCord Kenya National Federation of agricultural producers (KENFAP) Key contact Dr. John Mutunga CEO KENFAP 4

5 List of abbreviations KENFAP- Kenya national federation of agricultural producers ECART-European Consortium of Agricultural Research in Tropics IFAP- international federation of agricultural producers CEO- chief executive officer NGOs- Non Governmental Organizations GDP Gross Domestic Product FOs- Farmers Organizations NFOs- National Farmers Organizations NCPB-National Cereals and Produce Board SME- Small and Micro Enterprise FFP-Farmers Fighting Poverty 5

6 ESFIM National Project Proposal-KENYA 1.INTRODUCTION Empowering smallholder farmers in markets (ESFIM) programme is a collaborative action research aim at developing a National Proposal on farmers driven demand to address constraints that hinder smallholders farmers in accessing markets. The process entails reflection and policy generation based on participatory identification and prioritization of the identified constraints. The programme is aligned to KENFAP lobby agenda and market strategies to empower and enhance smallholder farmers participation as well as influencing input and products markets. The programme draws qualified inputs from ECART researchers and collaborates with local expert to utilize local capacities and customize approaches in conjunction with national research systems using KENFAP structure and expertise. It is a farmer demand driven initiative and the methodological set-up complements the approach proposed by AgriCord to create the conditions via the Participatory Research for Policy Formulation (PIPGA) under work area No.12 in Farmers Fighting Poverty (FFP) programme. 1.1 Market trends The economic and political context of agricultural markets in developing countries has undergone profound changes over the last few years. Government policies are moving away from the direct management of agricultural markets, and focus more on indirect regulation for markets to work for the poor (WDR 2001). These policy initiatives define the context within which farming business can be done, as well as the framework within which smallholder farmers economic organizations and institutions can be developed. In addition, globalization and liberalization of markets in 1990s have led to the emergence of new players in the value chains for agricultural products. Demographic factors, particularly rapid population growth rate, urbanization and land tenure system have influenced production systems and consumer preferences, which in turn have impacted on domestic markets and supply chains in Kenya. Supermarkets and large-scale retailers have become increasingly important in both developed and developing countries. Marketing boards have been replaced by multinationals and local private traders in the agricultural export trade and input distribution. The role of other players such as service providers, NGOs and community based organizations has also grown. 6

7 1.2 Role of agriculture in Kenya In Kenya, agriculture has continued to be the backbone of the national economy contributing directly 24% of Gross Domestic Product (GDP) and 65% of the export earnings. The National Development plan; the Vision 2030 has identified agriculture as one of the key sectors to deliver the 10 per cent annual economic growth rate envisaged under the economic pillar. The plan envisages transformation of small holder agriculture from subsistence to an innovative, commercially-oriented, and modern agriculture. This will be accomplished among other strategies through improving market access for smallholders through better supply chain management and adding value to farm and livestock products before they reach local and international markets. 1.3 Smallholder farming characteristics in Kenya Most of the farming activities are carried out by smallholder farmers with small parcels land and characterized by lack of market for their products and weak representation in policy decision making processes. Generally, they have limited access to market outlets especially supermarket chains due to poor road network and market infrastructure among others. These make production and distribution of farm produce unreliable to meet customer demand and supply. The individual small holder farmers lack cooperation among them and are heavily exploited by middlemen, have no access to markets and suffer enormous losses through damages and delayed delivery of fresh produce to the market. The products are marketed in raw form and they are perishable in nature. In an effort to empower the farmers to have influencing voice and drive agricultural productivity, they need strong cohesive farmers organizations as means to pool resource and collectively market their produce hence economies of scale. 1.4 Role of farmers organizations in assisting smallholder farmers access to markets Farmers Organizations (FOs) have a big role to play in assisting agricultural producers to improve market access and to enhance their bargaining position vis-à-vis suppliers and customers has received increasing national and international attention. Already in its World Development Report of 2001, the World Bank emphasized on the need for institution building for markets, and stressed the importance of agricultural cooperatives and formal business associations for market supporting functions (policy development and advocacy) and marketcomplementing and substituting functions (setting up factor markets, developing alternative marketing channels, engaging in supply chains). Moreover, the 2008 World Development Report stresses the need for investments in agriculture and particularly in small scale farmers to reduce poverty and hunger. It also clearly highlights the importance of stakeholders to enhance the effectiveness of the participation of FOs in consultative policy processes. 7

8 1.5 Role of farmers networks in ESFIM IFAP is the world farmers organization, representing 600 million family farmers grouped in 120 national organizations in 80 countries. It is a global network in which farmers from industrialized and developing countries exchange concerns and set common priorities. IFAP wants to stimulate learning and sharing of experiences between FOs on key international policy issues. Structured and analyzed information is necessary for this learning and policy development. In its strategic plan , the IFAP Executive Committee has identified as a priority the need to increase its capacity to contribute to effective and pro-active policy making and to strengthen the link between farmers and their organizations and action research institutes in the north and the south. 1.6 Role of National platforms in ESFIM Kenya National Federation of Agricultural Producers (KENFAP) is a member of IFAP and National platform in Kenya. KENFAP is a registered non-political, non-commercial, democratic federation of Kenyan farmers. It is the umbrella organization representing farmers in all the sectors of the Kenyan agriculture. As the legitimate voice of the Kenyan farmers, its key role is to articulate issues specifically affecting farmers and the general agricultural sector in Kenya. KENFAP enjoys national, regional and international relations in networking and collaboration mainly in joint programmes. Majority of its membership are smallholder farmers. 1.7 Need for action research The National proposal will build on the existing KENFAP micro projects initiative under Farmers Fighting Poverty (FFP) programme taking up real research issues based on learnt lessons and experiences. Research on identified and prioritized issues will offer practical and exemplary answers to most urgent challenges hindering smallholder farmers in accessing markets hence unlock the productive potential of smallholder farmers making their production systems competitive and enhance factor productivity. The results of the research and case studies coupled with lessons learnt will be used for improvement and success stories will be replicated within and without the country. The latest joint evaluation mission on micro projects involving (KENFAP, Farmer Group, Agriterra and an Independent Evaluator) was conducted in November Results of the evaluation indicate that the micro project concept provides credible information as an important source to draw lessons, therefore conducting more in-depth research on the identified and prioritized research issues and case studies during the national workshop will further clarify the concept. The approach will trigger and elicit realistic solutions and avoid theoretical research and discussions about enabling policies and innovative institutional mechanisms for smallholder access to markets which take place in academic and policy circuits. 8

9 2. CONTEXT OF THE RESEARCH PROJECT The proposed research study will cover 50 KENFAP area branches at district level undertaking economic activities (micro projects) and 23 commodity specific activities undertaken by commodity Associations and 8 cooperatives societies within KENFAP membership. The target group is 1.4 Million Smallholder farmers in organized groups and associations spread all over the country. The national ESFIM workshop held on 25 th -26 th March, 2009 in Nairobi, Kenya identified and ranked key constraints related with the policy and regulatory environment of smallholder farmers that limit their access to markets. In a participatory manner, the ESFIM national workshop identified and prioritized 5 researchable issues and 4 case studies to be undertaken in addressing smallholder farmers constraints in the markets. The researchable issues prioritized and elaborated in the workshop wrap up meeting include: Government interventions which is anti-competitive behavior Value chain analysis Price risk management approaches including agricultural insurance Value addition Coordination of information dissemination The case studies prioritized include: Taxation benefit to farmers Appropriate financial packages for farmers Storage facilities Certification and standards The above researchable issues and case studies prioritized were further elaborated during the wrap-up meeting held on 27 th March 2009 by ESFIM coordination team and KENFAP experts as follows: 2.1. Research issues and the scope of the research Government intervention which is anti-competitive behavior The research will seek to understand response mechanisms and the effects of government intervention, regulatory boards and prices & monopolies commission for example the recent Maize crisis in Kenya where millers aimed to minimize the cost and maximize profits while the farmers strive to recover the cost of production in a situation where inputs were very expensive especially fertilizers and agrochemicals. Government intervention was seen as anti competitive behavior in a liberalized market where market forces determines prices of commodities. The functions of regulatory boards together with Prices & Monopolies Commission in Kenya were seen as ineffective in such a scenario. Based on the above example a policy framework is necessary. The research will explore to identify the causes, working of regulatory authorities, what needs to be changed and sources of data. 9

10 2.1.2 Value chain analysis The study will carry out value chain analysis on selected commodities to establish the extent of farmers exploitation by middle men and proper modes of marketing that can be adopted to counter the cartels/syndicates. Analyze the various agents and their contribution, evaluate value add at each stage, identify core cost centers, levies, taxes charge including administrative and other charges costs of traditional export crops (coffee, tea, and pyrethrum) as well as cereals, root crops and livestock commodities. There is need to understand the entire chain of each of the commodities and examine the Pricing of agricultural commodities. The research will explore to establish multiplicity of the taxes and utilization Market risks management approaches including agricultural insurance The research will identify models that will support agricultural insurance. Establish whether farmers would like to be insured. Need to know the possibility of agricultural insurance from insurance companies. Establish strong linkage with ECART and IFAP have farm risk project and ongoing initiatives in livestock insurance coordinated by ILRI. Identify reliable data sources that facilitate computing of insurance premiums. Explore the feasibility and implications of small holder farmers participating in warehouse receipt system. Establish the status of existing warehouses, their location, cost per square unit and their capacities for hire by organized groups for collective marketing. Explore the GMR concept focusing on existing and potential of output marketing regimes (GMR is a pricing mechanism since it promotes production, also include contract farming schemes). Examine and evaluate the application of GMR within the liberal market framework Mechanism for coordination of information dissemination to the farming community There are several initiatives and efforts undertaken by different actors in the information dissemination domain to the farming community. The farmers are bombarded by various forms of information leading to confusion in the process in the process of information generation, packaging and dissemination pathways in a very dynamic and growing sophistication by day. There is need to have a coordinated effort to avoid duplication and conflicts. The research question is how feasible is it to bring together all the information sources for consolidation under one umbrella information provider? Explore possibilities on how to harmonize agricultural information providers to have a forum to coordinate national agricultural information system. Identify existing gaps and evaluate options of adopting standard information management system in agriculture sector and how it can be done focusing on sustainability of the systems. 10

11 2.1.5 Value addition of products The research will identify policy gaps to support irrigated agriculture. Identify appropriate technology innovations to reduce transaction cost and take into consideration effectiveness and affordability by the smallholder farmers. Also cover investment options on commodity specific lines. How can farmers link up add value to their collective product and benefit through creation of own brands and promotion. Investigate to establish whether it is more profitable to outsourcing of processing or doing it themselves? Explore options of linking outsourcing with collection centres. Explore the availability and feasibility of small scale value addition technologies at farm level to reduce post harvest losses that can be adopted by farmers for increased income. Determine the number of enterprises. Evaluate economic viability and market potential of alternative source of energy for value addition focusing on cheaper sources that are ecologically friendly 2.2 Case studies and scope Taxes and levies; The study will establish how can the taxes best benefit the farmers/ local community and identify levies, taxes charge including administrative and other charges costs associated with regulatory and legislative requirement Appropriate financial packages for farmers The study will identify current agricultural financing models and promotion of venture capital (partnership between lender and borrower in financing of the investments, the South African example to be explored. Explore the possibility of business advisors)- the most appropriate model for financing agriculture- farmers to define what is appropriate to them for negotiation with financial institutions. Coverage of the available products/packages and align with farmers requirements/expectations along the value chain. How can the interest rates reduced for farmers without the groups Storage facilities; Small holder farmers incur losses in the farm and at post harvest through poor handling in the farm, transit and in the store. The farmers lack capacity and facilities to prevent losses. The study will explore to establish what capacities are needed. Evaluate the cost and benefits of the household vs. central storage facilities establishment. Investigate post harvest losses as well as ensuring food security in the country. The example of grain borer (OSAMA) which eats both the grain and infrastructure (traditional store). How many people are interested in centralized storage facilities at designated points- possibilities and requirements of optimal size of structures? with a view of lobby for establishment of NCPB facilities across the country. Checking availability of reliable facilities in rural areas and making concrete proposals for establishment of new ones where they do not exist. Also include the cold storage facilities to increase the shelf life of the commodities. Evaluate the existing NCPB facilities to establish their capacity, availability, accessibility, usefulness and acceptability 11

12 2.2.4 Certification and standardization; The study will seek to understand the process of mainstreaming SME concept, focus on smallholder farmers and how they can benefit. Identify whether enough information is available (how many products, which standards developed, which areas need to be addressed, use of advocacy groups to disseminate the information to the farmers). Check the list of agricultural products covered under KEBS. Evaluate awareness among the smallholder farmers on certification and standardization. 3. RESEARCH OBJECTIVES The goal of this research project is to generate policy evidence that will strengthen the capacity of KENFAP to empower its small holder members (farmers) in markets. The research aims at obtaining, organizing and analyzing data on constraints faced by farmers in the market place, including their causes, effects, and how they can be addressed. 3.1 GENERAL ACTIVITIES Review literature relevant to each research issue and case study identified Development of a appropriate methodology to examine the each research issue and case study identified Identify and contract local teams to undertake the study and finalize the methodology Undertake a critical study of the identified two farmer organizations including key success factors, drivers, the process of development of the organization including cost and time frame, nature of membership, mode of operation, governance, etc., which may offer insights for lesson learning and scaling up of business orientated FOs. Prepare a detailed report of findings Prepare a short policy and information note on processes for the promotion of farmer organizations engaged in economic activities 12

13 3.2 Specific activities under each research issue and case studies Government intervention anti- competitive behavior; Gathering information on government interventions; develop inventory of regulatory boards or institutions, identify the causes of government intervention, identify gaps and evaluate the effects of the intervention and develop lobby proposal Value chain analysis Analyze the various agents and their contribution, evaluate value added at each stage, and identify core cost centers, levies, taxes charge including administrative and other charges costs Mechanism for coordination of information dissemination to the farming community Identify the types of risks, Identify existing marketing models, Gather information, on farmers wiliness to pay for insurance, evaluate farmers capacity and ability to participate in risk management, develop inventory of companies and stakeholders interested and are involved in risk management, establish the types of pricing mechanism and develop inventory of risk tools development initiatives Mechanism for coordination of information dissemination to the farming community; Indentify information sources; evaluate the feasibility of consolidation of efforts and options of adopting standard information management system in agricultural sector and evaluate possibilities of establishing expert working group to harmonization information dissemination Value addition of products Identify policy gaps to support irrigated agriculture,identify appropriate technology innovations to reduce transaction cost and take into consideration effectiveness and affordability by the smallholder farmers. 3.3 Role of ECART/IFAP Through and telephone comment and add to the literature review, Share ideas on methodology and Provide comment on draft report 13

14 4. THE STUDY AREA The study will cover the entire KENFAP 50 fully formed branches which are being transformed into autonomous district federations undertaking innovative economic activities, 23 Commodity Associations and 8 Cooperative Societies spread over the Kenya. Recruitment is in progress in various parts of the country and the federation is keen to establish networks to have branches to cover the entire country. The district ear marker for future branches are covered by KENFAP commodity associations 14

15 5. METHODOLOGY In line with IFAP aim to stimulate learning and sharing of experiences between farmers organizations on key international policy issues, the proposed study will be undertaken by KENFAP in collaboration with ECART intends to obtain data on important bottlenecks that prevent small-holder farmers in Kenya from participating in local, regional and international markets. The study will entail preparatory work, development of research instruments, and 15

16 review of the existing secondary information, sampling design, data collection & processing, analysis and reporting. There will be a number of validation sessions, peer review, exchange visits, study tours and workshop in consultation with ECART/IFAP Preparatory work; This stage will involve specifying information needs in consultation with ECART/IFAP to dialogue on the research instruments and agreeing on data collection methods and resource availability. Sampling design; In consultation with ECART/IFAP the local consultant will design a sampling procedure using a complete list of KENFAP farmers organizations sampling frame. The sampling unit will be individual farmers organizations in the in the country. A representative sample will be obtained using an agreed sample size calculation formula. Literature review; The local consultant will review the existing secondary information, identify gaps, assess effectiveness of the existing structure, identify needs, assess degree of engagement and design an appropriate approach in consultation with ECART/IFAP. Data collection and processing; The study will involve both secondary and primary data collection. The main data gathering techniques that will be used in the process include review of written documents and other existing relevant materials. Primary data for the study will be generated by means of structured interviews guides to be orally self administered to representative sample of FOs. The tool (interview guide/schedule) will be use to elicit information from individual key-informants or by organizing groups of informants for panel interviews. Data processing will be done using appropriate techniques. The descriptive statistical summaries and preliminary report submitted to ECART/IFAP for refining and adoption of the analytical framework and methodology. Descriptive and quantitative analyses are desired in this study. Results and discussions; The local consultants will employ appropriate quantitative and qualitative techniques to analyze the data, interpret, develop scenarios and recommend appropriate strategies as earlier describe in consultation with ECART/IFAP. Learning teams will formed to share experience, exchange visits will be organized in the course of the study period and participation international workshop to share lessons learnt as well as enriching policy positions in global debates. 5.1 Implementation strategy The implementation strategy of the study will adopt KENFAP membership organizational structure. The structure provides an effective interaction and consultation fora with linkages and feedback framework of smallholder farmers under four categories including Farmers Groups, District Federations, Commodity Associations and Cooperative Societies. The network 16

17 stems from the famer, location, district and national levels and interest represented in the structure Source: KENFAP, 2009 Linkages will be establish with National research system and follow KENFAP 5 step lobby and advocacy strategy to obtain farmers resolutions on the issue. National level lobby cases will be channel through Kenya Private Sector Alliance (KEPSA) National business Agenda under Prime Minister Round Table. Global issues will be channel through IFAP expert working groups 6. WORK PLAN The following table indicates the milestones in the work of the project and their time frame. 17

18 S. No Result Description Preparatory work and development of research instruments Sampling design and procedures Finalization of methodologies, including sharing with IFAP/ECART researchers Desk reviews and data collection Validation workshops and reviews Regional exchange visits and study tours Writing strategy paper and policy position papers Mid-term learning review End of the project learning review Year 1/ Qtr 1 X X X Year 1/ Qtr 2 X Year 1/ Qtr 3 X Year 1/ Qtr 4 X X Year 2/ Qtr1 Year 2/ Qtr2 Year 2/ Qtr 3 X X X X Year 2/ Qtr 4 X X 7. BUDGET Budget for National Project Proposal for Research on issues related to ESFIM 18

19 S.No. Tasks/Head Unit description Units Rate in Euros Amount 1 Preparatory work and 1 day local consultancy for ,250 development of research instruments each of the research issue and case studies 2 Sampling design and procedures 5 days local consultancy ,250 3 Finalization of methodologies, including sharing with IFAP/ECART researchers 4 Desk reviews and data collection) 10 day local constancy , days local consultancy ,500 5 Validation workshops and reviews 9 validation workshops each 20 participants 180 pax ,000 Local transport, stationery, hotel accommodation & logistics lump sum ,000 Workshop preparation and reporting 5 local consultancy days per workshop ,250 6 Regional exchange visits and study tours 7 Learning and peer review workshops (Mid-term and End of project) 8 Preparation and development of position paper for lobby 1 regional exchange visit 20 participants for 5 days of travel (@ 50 per diem, accommodation 150 and transport 50) 1 day of meeting with attendance of 15 persons At least on position paper per research issue and case study 20*5 250*20*5 25,000 15* , ,525 Total 100,025 REFERENCE 19

20 1. World Development Report (WDR) 2000/2001: Attacking Poverty. World Bank 20