4 Key Factors That Affect the Export Value Chain of Beans from Kenya

Statistics for 2012 from the United Nations’ Food and Agricultural Organization (FAO) show that a substantial volume of fresh Kenya beans come from family growers. Around fifty-thousand small-scale farmers accounted to KSH0.6million, yearly, per farmer, worth of green beans. With each having an acreage of below 2 acres, the main work happens through the agency of family members especially when children are out of school. In total, the end of 2016 saw Kenya earn KSH101.5 billion from the larger horticultural sub-sector, with the majority also being courtesy of smallholder farmers.

The first factor that enhances the market value chain of local beans, and thus give importers a basis that they will import from natural sources, is a growing youth participation. Supplementary work like digging arable land is done by young men who double as laborers at farms. Thus, the first factor that affects the bean value chain in Kenya is the proliferation of family growers who use manual labor and employ natural Good Agricultural Practices, like low use of fertilizer and pesticides. They not only feed the country but provide cheap labor readily for themselves and thus increase cash returns.

Secondly, bean farming in Kenya gains and loses either way during brokered collection and handling. For example, green beans attract brokers who opt to fetch sackfuls of these from different small farmers at low prices. This creates high price fluctuation. For example, an average 3-kilogram packet can cost from around KSH10 to KSH110, showing an appreciation rate of over 1000 percent. To remove this huddle, farmers join cooperatives or involve themselves with one exporter, like an SME, with whom they have a contract not to sell elsewhere. Such an exporter usually pays good prices at wholesale as he also has an import agent abroad who offers competitive prices.

The third factor that affects bean value chain is the diversity of export agents. There are two types, including brief and SME exporters. Brief exporters only come up during the height of the peak season and normally offer fair prices to family growers due to their short-term temporary appearance. SMEs, on the other hand, are available year-round whenever there are beans, peas and French beans. They not only help farmers grade but they do packaging and shipping themselves. In total, they ship anything between 400 to more than 1500 tons each year, a rate that has increased recently with the lifting of the ban on French beans in the EU market June 2017.

Finally, there are large-tonnage exporters who can carry up to more than ten thousand tons of beans. These operate for various multinationals and have ready markets abroad. They also deal with canned end products made from legumes. They may influence the value chain such as prices by seeking political interference from the government. No only do they control prices, due to owning farms but they deal mainly with large-scale farmers.

In short, the export sector of Kenya fresh beans has a range of logistical factors that affect the prices and returns. These range from brokers who lower prices for family growers, to SMEs that offer farmers contracts for sourcing from them at fair prices. The other big influence on the value chain are the large-scale exporters who influence prices politically and macro-economically, such as, owning large farms.

Kenya Fresh Beans is proud to support farmers with fair prices to encourage value return.