AGRICULTURAL VALUe ChAIn FInAnCInG In KenYA

18 • AGRICULTURAL VALUE CHAIN FINANCING IN KENYA: ASSESSMENT OF POTENTIAL OPPORTUNITIES FOR GROWTH
Chapter 5
EGGS VALUE CHAIN
5.1 BaCKGROUND
The egg value chain shares many of the same characteristics and many of the
same market actors as the poultry value chain. The egg industry is comprised
of both large commercial and semi commercial producers numbering about
11,000 though eggs are produced by 80% of Kenyan households on a limited,
non-commercial basis and serve mostly to provide some minor additional
liquidity to the household. Like poultry, the intensive egg producing regions
are: Kikuyu, Nairobi, Naivasha, Webuye, Mombasa, Nakuru and Kisumu
where both commercial and semi commercial farmers services basically urban
markets. Eggs contribute USD 75M or about 0.24% to Kenya’s GDP. Trends for
volumes of production and price were not available in the literature or through
other sources.
The value chain functions well with feed supply, wholesale marketing and
retail marketing being very competitive. Eggs further provided the greatest
percentage of terminal market price to the producer with 71% retained at farm
level. The semi commercial producers are relatively large in terms of investment
and income when compared to other value chains reviewed.
As a food security item, eggs improve nutrition at household level but are
rather more important as a source for cash. The Government of Kenya has
made statements prioritising the egg sector but has shown no real investment
of effort in proliferating egg production or improving existing operations.
There are strong relationships providing both credit and technical assistance
from large buyers to smaller producers. Formal, specialised financing was not
discussed in any of the literature reviewed but given the sophistication of the
market and the high intensity use of capital, specialised financing is probably
present to some degree.
Table 5: Key areas of interest and respective weighting - eggs value chain
Weight Explanation Score
I
Functioning supply and demand
relationships
34% 24%
1. Evidence that input supply is competitive = 2%
a Inputs 2% 2. No evidence than input supply is constrained = 1%
2%
3. Evidence that input supply is constrained = 0%
1. Evidence of high-input commercial yields and contract farming = 10%
b Commercialised production 10%
2.
3.
Evidence of high-input commercial yields only = 5%
Evidence of contract farming only = 5%
10%
4. Evidence of neither = 0%
c Marketing competition 10%
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%…).
10%
1. Evidence that wholesale marketing is competitive = 2%
d Number of wholesalers 2% 2. No evidence that wholesale marketing is competitive = 1%
2%
3. Evidence that wholesale marketing is not competitive = 0%
1. Evidence of many and diverse value adding processes = 10%
e Diversification of value addition 10% 2. No evidence of many and diverse value adding processes = 5%
0%
3. Evidence of no meaningful value addition = 0%
II Economic relevance 10% 2%
a Producers versus population 1%
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.
0%