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KENYA ROAD MAP FOR DEVELOPING & STRENGTHENING THE PROCESSED MANGO SECTOR DECEMBER 2014 TRADE IMPACT FOR GOOD The designations employed and the presentation of material in this document do not imply the expression of any opinion whatsoever on the part of the International Trade Centre concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. This document has not formally been edited by the International Trade Centre. ROAD MAP FOR DEVELOPING & STRENGTHENING THE KENYAN PROCESSED MANGO SECTOR Prepared for International Trade Centre Geneva, december 2014 ii This value chain roadmap was developed on the basis of technical assistance of the International Trade Centre ( ITC ). Views expressed herein are those of consultants and do not necessarily coincide with those of ITC, UN or WTO. Mention of firms, products and product brands does not imply the endorsement of ITC. This document has not been formally edited my ITC. The International Trade Centre ( ITC ) is the joint agency of the World Trade Organisation and the United Nations. Digital images on cover : © shutterstock Street address : ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland Postal address : ITC Palais des Nations 1211 Geneva, Switzerland Telephone : + 41- 22 730 0111 Postal address : ITC, Palais des Nations, 1211 Geneva, Switzerland Email : [email protected] Internet : http :// www.intracen.org iii ACRONYMS AND ABBREVIATIONS Unless otherwise specified, all references to dollars ( $ ) are to United States dollars, and all references to tons are to metric tons. The following abbreviations are used : AIJN European Fruit Juice Association BRC British Retail Consortium CPB Community Business Plan DC Developing countries EFTA European Free Trade Association EPC Export Promotion Council EU European Union FPEAK Fresh Produce Exporters Association of Kenya FT Fairtrade G.A.P. Good Agricultural Practices GMP Good manufacturing practices HACCP Hazard Analysis and Critical Control Points HCDA / HCD Horticultural Crops Development Authority, newly HCD ( Horticultural Crops Directorate ) HS code Harmonized system code IQF Individually Quick Frozen ISO International Organisation for Standardisation ITC International Trade Centre KAM Kenya Association of Manufacturers KARI Kenya Agricultural Research Institute KEBS Kenya Bureau of Standards KENAFF Kenya National Farmers Federation ( KENAFF ) KEPHIS Kenya Plant health inspectorate Service KHCP The Kenya Horticulture Competitiveness Project KIRDI Kenya Industrial Research and Development Institute KOAN Kenya Organic Agriculture Network NaHMIS National Horticulture Market Information system PCPB Pest Control Products Board PMO Production and Marketing Organization PSDA Private Sector Development in Agriculture RA Rainforest Alliance SME Small and medium enterprises TSI Trade Support Institutions T Ton / tons SACCO Savings and Credit Co-operative SPS Sanitary and Phytosanitary USA United States of America USAID United States Agency for International Development USD United States Dollar VC Value Chain iv DEFINITIONS EPC Export Promotion Council : Kenya’s premier institution in the development and promotion of export trade. FPEAK Fresh Produce Exporters Association of Kenya : The Fresh Produce Exporters Association of Kenya ( FPEAK ) is Kenya’s premier trade Association representing growers, exporters and service providers in the horticulture industry. GIZ German Federal Ministry for Economic Cooperation and Development : past project on private sector development in Agriculture ( PSDA ) on potato, meat and mango HCDA / HCD Horticultural Crops Development Authority : The Horticultural Crops Directorate is mandated to regulate the horticulture industry through registration of produce dealers as prescribed under the Agriculture, Fisheries and Food Authority Act of 2013. HCD also provides specialized advisory and marketing services to the stakeholders in the industry for planning purposes. IFDC International Fertilizer Development Centre ITC International Trade Centre KAM Kenya Association of Manufacturers : is the representative organization for manufacturing value- add industries in Kenya. KARI Kenya Agricultural Research Institute : is a premier national institution bringing together research programmes in food crops, horticultural and industrial crops, livestock and range management, land and water management, and socio-economics. KEBS Kenya Bureau of Standards : is a government agency responsible for governing and maintaining the standards and practices of metrology in Kenya. KEPHIS Kenya Plant health inspectorate Service : is the government parastatal whose responsibility is to assure the quality of agricultural inputs and produce to prevent adverse impact on the economy, the environment and human health. KHCP The Kenya Horticulture Competitiveness Project : will increase incomes for 200,000 small farmers and strengthen the businesses network around them by improving and creating local, regional and global market opportunities. This project will help Kenyans feed themselves by building a countrywide horticulture distribution network that provides a year-round supply of high-quality, nutritious products grown by Kenyan farmers. KIRDI Kenya Industrial Research and Development Institute : is a national research institute established in 1979 under the Ministry of Trade and Industry and mandated to undertake multidisciplinary research and development in industrial and allied technologies. NaHMIS National Horticulture Market Information system : a proposed national Platform for providing production and marketing information on horticulture ( HCD and USAID-KHCP PCPB Pest Control Products Board : provide an efficient and effective regulatory service for importation, exportation, manufacture, distribution, transportation, sale, disposal and safe use of pest control products and mitigate potential harmful effects to the environment. PM Production and Marketing Organisation SCOPE Insight Dutch organisation with a methodology to assess and train farmer organisations on access to Insight finance SNV Netherlands Development Organization / long track record of support to farmer organizations and horticulture. v FOREWORD Agriculture is the leading economic sector, accounting for 25 % of the gross domestic product ( GDP ) directly and 27 % indirectly. The sector also accounts for 65 per cent of Kenya’s total exports and provides more than 18 per cent of formal employment. The horticulture sub sector in Kenya is among the most vibrant in the Agriculture sector after Tea and Coffee contributing to the Agriculture GDP at 33 % and has had an annual average growth of between 15 and 20 % per year. In 2013, the sector excluding flowers contributed KES 177 Billion to the economy while the export earned the Country KES 94 Billion during the same year. The sector has been key to creating employment directly to the rural folk, earning foreign exchange and source of raw material to local industries among others. In order to grow the sector further, the government has identified the sector among the economic pillars as a means of spurring growth in the Kenya Vision 2030 docu- ment, Agriculture Sector Development Strategy and the National Horticulture Policy. Therefore, products that have the potential for investment into value addition and hence create employment have been given attention and support. It is for this reason that the government is collaborating with development partners, private sector players and other stakeholders in realising this potential. ITC has been a key collaborative partner in enhancing market access for Kenyan Horticultural products through capacity building of trade support institutions and pro- viding market intelligence. Under this project, ITC is collaborating with HCD ( formerly HCDA ), Export Promotion Council, Mace Foods and relevant county governments with two commodities ( processed mango and ABE Chillies ). The processed Mango value chain has been identified to create employment among the Kenyan youth by providing a key service of produce aggregation, ensuring food safety and will form an important link between processors and farmers. In addition, the project will enhance the access of this product to the regional and international markets as well all attracting investment into the business. The rise in middle class population in the country has created demand for healthy and nutritious products. Already, a large portion of the Mango consumed locally is fresh and there is a rise in the population that is consuming processed Mango products. However, we recognise the challenges facing the production and marketing aspects of mangoes that need to be addressed. The quality of the crop is poor due to poor production practises making them unsuitable for processing. In addition, the bulk of the varieties available are not suitable for processing. Over a long time, the Country has relied on the traditional fresh market domestically and internationally with little attention given to processed products. Processing offers a solution to the high post-harvest losses experienced in the main production areas and a market for the second grade fruits. In this regard, it is project has ensured direct linkages between the farmers and the processors to reduce the supply chain thereby ensuring farmers’ benefit from price incentive and market and product diversification. vi EXECUTIVE SUMMARY The purpose of this road map is to outline the opportunities
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