Market Opportunities for African Agriculture - International Food ...

The emergence and growth of the Kenyan cut flower industry was predominantly
due to private sector initiative. The role of the Kenyan government has wavered between
one of facilitation and constraint. The international market environment (especially the
EU) for cut flower suppliers has become more challenging over time. While the market
was previously supply driven, it is now driven by demand and increasingly specific
consumer preferences (Thoen et al., 2001). Quality, largely determined by vase life, and
environmental standards (such as SPS) have become important concerns for European
consumers. With the recent entry of many other new exporters, market supply is expected
to outstrip demand, at least for the most common flower varieties. Average annual prices
of cut flowers register a slow but steady decline. Moreover, there exist short term and
seasonal price fluctuations. Thus, the sustainability of the cut flower sector depends upon
improved efficiency, consistent quality, reliability, market innovation, and positioning
oneself strategically in the supply chain.
Smallholders, however, face particular constraints in the production of cut
flowers. In general they lack adequate credit, inputs, and technical capabilities, and suffer
from logistical constraints related to limited transport, haulage, air-freight and cold
storage facilities. This makes it difficult for smallholders to achieve the quality standards
of the European market. Both HCDA and FPEAK have recently supported the
development of smallholder schemes by providing inputs, training on crop management,
pesticide application and quality control. Nevertheless, the requirements of the European
market such as product consistency, quality, and compliance with health and safety
requirements pose serious problems for exporters wishing to source from smallholders
(Thoen et al., 2001).
The Kenyan experience well illustrates the dynamic nature of the industry and the
ever-changing challenges to maintain international competitiveness. Kenya possesses a
number of basic competitive factors, including a favorable climate, intra-annual
consistency in daylight hours, and inexpensive and reasonably skilled labor (Thoen et al.,
2001). Following Kenya, other countries with similar competitive advantages, have
started commercial floriculture. Uganda started exporting flowers in 1992, and by 1999
the volume of its cut flowers exports reached 1.52 thousand tons earning more than 7
million US dollars (Table 10). The country is competitive in terms of capital and
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