AGRICULTURAL VALUe ChAIn FInAnCInG In KenYA

6 • AGRICULTURAL VALUE CHAIN FINANCING IN KENYA: ASSESSMENT OF POTENTIAL OPPORTUNITIES FOR GROWTH
Chapter 3
BEEF VALUE CHAIN
3.1 BaCKGROUND
The beef value chain is poorly commercialised overall. The majority of the
production comes from pastoralist sales and culling of dairy herds. Simply
collecting data from the literature sources for this value chain was difficult given
that poor performance correlates to poor organization and documentation of
the industry.
The beef value chain is significant in that it covers a wide geography including
arid and food insecure regions. 363,563 MT of beef was marketed in 2008
with a value of USD 650M. This equated to 2% of Kenya’s GDP for the period
under consideration. This notwithstanding, the growth in beef marketing is
I
Functioning supply
and demand
relationships
Table 3: Key areas of interest and respective weighting – beef value chain
Weight Explanation Score
34%
a Inputs 2%
b
Commercialised
production
10%
c Marketing competition 10%
d Number of wholesalers 2%
e
Diversification of value
addition
10%
II Economic relevance 10%
a
Producers versus
population
1%
1.
2.
3.
1.
2.
3.
4.
Evidence that input supply is competitive = 2%
No evidence than input supply is constrained = 1%
Evidence that input supply is constrained = 0%
Evidence of high-input commercial yields and contract farming = 10%
Evidence of high-input commercial yields only = 5%
Evidence of contract farming only = 5%
Evidence of neither = 0%
For each value chain divide the farm-gate price over prevailing terminal market price or export
price. Allocate percent scores from 10% to 0% on the basis of this ratio with 10 % going to
the highest value and 0% going to the lowest value with results in between rounded to the
nearest whole number (1%, 2%, 3%…).
1.
2.
3.
1.
2.
3.
relatively slow (3% annually) and the development of the chain is significantly
hampered by factors including: a ban on Kenyan beef products by the EU and
neighbouring countries, extreme deterioration of marketing infrastructure,
drought and monopsonistic behaviour on the part of buyers taking advantage
of pastoralists during drought periods.
Policymakers prioritise livestock husbandry for food security and achievement
of the millennium development goals. Nonetheless cattle keepers are
reluctant to slaughter or eat beef for cultural reasons and commercial cattle
keepers are not food insecure.
Evidence that wholesale marketing is competitive = 2%
No evidence that wholesale marketing is competitive = 1%
Evidence that wholesale marketing is not competitive = 0%
Evidence of many and diverse value adding processes = 10%
No evidence of many and diverse value adding processes = 5%
Evidence of no meaningful value addition = 0%
For each value chain, divide the number of producers over Kenya’s population (39,000,000).
Allocate percent scores from 1% to 0% on the basis of this ratio with 1% going to the highest
value and 0% going to the lowest value. Round to 1% or 0% to produce score.
2%
0%
5%
1%
5%
1%