AGRICULTURAL VALUe ChAIn FInAnCInG In KenYA

20 • AGRICULTURAL VALUE CHAIN FINANCING IN KENYA: ASSESSMENT OF POTENTIAL OPPORTUNITIES FOR GROWTH
Weight Explanation Score
1. Evidence that the GoK has interfered in the value chain resulting in domestic
b GoK intervention 6%
market distortions = 0%
6%
2. Otherwise = 6%
VI Complementary Ta and BDS 6% 5%
1. Strong evidence of complementary service provision, including BDS support, TA,
a Access to services 2%
2.
etc.= 2%
No evidence of complementary service provision = 1%
1%
3. Strong evidence of a complementary services gap = 0%
b Value chain service provision 4%
1.
2.
Evidence of service provision between value actors to facilitate supply = 4%
Otherwise = 0%
4%
VII Geographical spread 20% 20%
1. Strong evidence of production and processing concentration in over five tightly
defined geographical areas = 10%
2. Strong evidence of production and processing concentration in two to five tightly
a Concentration of clients 10%
3.
defined geographical areas = 5%
Strong evidence of production and processing concentration in one tightly
defined geographical areas = 2%
10%
4. No evidence of production and processing concentration in a tightly defined
geographical area = 0%
1. Strong evidence of existing infrastructure (roads, buildings, telecommunications,
b Access to minimum infrastructure 10%
power, etc.) in the regions where production and processing are concentrated =
10%
10%
2. Otherwise = 0%
5.2 FUNCTIONING SUPPLY aND DEMaND RELaTIONSHIPS
The literature provides evidence that inputs for egg production are available
countrywide for the egg value chain. Demand for feed is sustainable because,
farmers engaged in commercial farming must use supplemental feed to
enable eggs of competitive size and yolk colour. Layers mash comprised
30% (114,191 tons) of product generated from the feed milling industry in
2007. Egg production is higher during harvest time when larger volumes
of grain by-products (maize germ, wheat bran and rice bran) are available
demonstrating that further development of feed is possible for improved year
round production. Given these factors the egg value chain was awarded the
full two percent available for this rater.
The egg value chain scored well with respect to commercialised production
and received the full ten percent available for this rater. Like the poultry
industry, the egg industry is divided into 4 sectors:
Sector 1: 1 industrial integrated producer (KenChic Ltd.) with the capacity
of 100,000 layers and 400,000 egg hatchery. The company has a high
use of external inputs.
Sector 2: 7 commercial producers with moderate to high use of inputs
in the towns of Kikuyu, Nairobi, Naivasha, Webuye, Mombasa, Nakuru
and Kisumu.
Sector 3: There are estimated to be 23,611 broiler and 11,311 layer farms
that are semi-commercial producers. This sector on average has a low
use of inputs. Some of these are contract farmers that receive their day
old chicks, vet-care and market from Ken Chick Ltd. A typical farm may
keep an average of 100 - 4000 layers and 300 - 2000 broilers. Due to the
level of turnover and guaranteed market of the contract farmers that are
already receiving inputs and technical support from their client, financing
opportunities do exist with the segment of contract farmers.
Sector 4:
The literature indicates about 1.5 million households that are
subsistence oriented backyard/village set-ups and have little or no use
of inputs. Average flock size is 16 birds. Egg production performance is
low at 33 – 42 eggs per hen per year. This sector is not financeable due
to low turnover rates against the current costs of financing.