1.1 Objectives of the Study
The present study analyses the value chains (VC) of tomatoes and onions on domestic markets in Kenya and Tanzania. The value chain approach is applied to fresh (i.e. not processed) vegetables from production via transport, trade and marketing to the consumption level. The first objective is to describe in detail how these domestic chains function and who the actors are – the poor actors in particular.
Secondly, it identifies bottlenecks the actors face. Thirdly, opportunities are determined to reduce poverty within the chains. Further information provides the chains’ comparison by country. Additionally, the study considers cross-border trade of onions from Tanzania to Kenya. This regional trade is subsumed under domestic trade and not as export business.
GTZ-BEAF (Beratungsgruppe Entwicklungsorientierte Agrarforschung) commissioned the SLE-team to carry out this study. The two international agricultural research centres, the African Insect Science for Food and Health (icipe) in Nairobi/Kenya and the World Vegetable Center – Regional Center for Africa (AVRDC-RCA) in Arusha/Tanzania are the cooperation partners in the respective countries. Additionally, GTZ Programme for Agricultural Policy Promotion of Private Sector Development in Agriculture (PSDA) in Kenya has played a supportive role, as well as the Kenyan Ministry of Agriculture (MoA).
1.2 Structure of the Report
Chapter 2 (“Mapping the context”) classifies the report within the context of poverty reduction within a market-driven development and describes the report’s relevance in the horticultural sector. Chapter 3 (“Understanding the Map”) describes the methodological approach the study team applied. The main findings are presented in chapter 4 (“Mapping the Value Chains”) beginning with the similarities of all VCs reviewed in this study. The following sub-chapters are distinguished according to the crops and the countries. The cross-border trade for onions from Tanzania to Kenya is a very special issue of concern and highlighted in chapter 5. Chapter 6 (“Conclusions”) refers to the previous results in order to compare the value chains by country and to identify the chains’ opportunities and bottlenecks. The recommendations (chapter 7) at the end are addressed to the research institutes and other actors involved.
1.3 Study Concept
The study project is carried out by a team of junior professionals participating in this year’s training course of the Centre for Advanced Training in Rural Development (SLE) at Humboldt University Berlin. The SLE is committed to professional training, research and consultancy in the field of international development cooperation. The one-year course includes the study of communication techniques, as well as methods of analysis and management approaches. The training content is divided into topics and based on the concept of learning by experience. Thus, the three-month overseas projects are a key component of the training course. The participants work in small groups for international projects and organisations and in the process put their knowledge into practice. The interdisciplinary team carrying out this study in Kenya and Tanzania consists of 5 team members and the team leader.
After a preparatory phase of six weeks in Berlin, the team arrived in Kenya on the 24th of July 2007 and started working directly. The project period is fixed at three months. The time schedule in the annex indicates details of the time spent in Kenya and Tanzania (Annex III).
Both partners in the host countries, icipe and AVRDC, carry out a range of economic research activities in the horticulture sector in East Africa. icipe activities have concentrated on the economic impact of biocontrol strategies in the domestic sector as well as the impact of international standards at the production level; AVRDC activities include value chain analysis of indigenous vegetables. However, the centers feel that due to a growing domestic demand for vegetables this part of the sector also warrants detailed research. At the same time the centers realise that constraints to meeting this increasing (urban) demand go beyond the farm-gate level.
According to the Terms of Reference and the research centres’ mandates the study’s scope is to investigate in horticulture to reduce poverty. The focal points of this study are:
• Who are the poor?
It is essential to define who the poor in the value chains are. Chapter 3 (Understanding the Map: Methodology) describes how the study tackles this issue.
• How is profit distributed along the value chains’ actors?
Relating to the question above it is necessary to know who profits from the economic activities in the value chain and who earns how much and how do prices and margins change along the chain.
• How is power distributed along the value chains?
Poverty is not solely defined according to economic conditions but also in terms of
the bargaining power or the possibility to choose between various economic activities.
• How market-driven are the value chains?
As the study focuses on market-driven development consumer demand is a crucial aspect to be considered. What influence do customers have on other steps in the value chain, particularly on production? Are producers aware of these demands and how are they able to react to them?
• What relevance do legal regulations and standards in particular have on the chains?
Bearing in mind that the value chains operate within a widely unregulated, liberalised market, it is assumed that legal regulations have an impact on the chains. What is the frame set by the authorities? Which standards in terms of measuring commodities or food quality do exist and which are implemented?
• In addition, two other aspects are reviewed in the study:
• Examination of cross-border trade between Tanzania and Kenya as a part of the domestic market
• Comparison of the product specific chains by country
The two commodities, tomatoes and onions, were selected for the study because of their domestic as well as regional importance in terms of production volume and value. Based on this the study develops recommendations about potential channels to improve the respective value chains in order to achieve improved distribution of revenues for decreasing poverty among the value chain actors.