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SCFCU success is based on vertical integration through: producer–buyer linkages, direct export
of members’ coffee, provision of warehouse services, and provision of saving and credit
services for members. Coffee quality has been improved by education and training to ensure
quality production and processing from seedling production to export, with SCFCU committed
at every step in the chain.
Emerging or unresolved challenges. Production problems including pests and diseases,
especially coffee wilt disease affects both yield and quality and requires ongoing research and
improved management practices. Although the volume of coffee exports and its quality is high,
coffee sold locally is often of lower quality.
The use by Ethiopia of a number of coffee trademarks requires resolution with international
corporations.
Lessons learned for scaling up. Vertical integration along the value chain has ensured that
producers obtain a fair share of the final value. SCFCU involvement in production, processing
and marketing has ensured good quality at reasonable prices with the whole sector being
owned and managed by farmers and their employees.
Kenya’s dairy sector
The dairy industry in Kenya is largely based largely on intensive smallholder production
supported by free-market processing, transport and marketing. Technologies that have
supported growth of the industry include improved breeds, zero-or semi-zero grazing
and feeding regimes, and market liberalisation that enabled smallholders to participate
in formal milk markets. The industry evolved from an initially open market system in
the first half of the 20 th century to a near monopoly industry for much of the second
half, before being liberalised during the 1990s. During this latter period rapid upward
trends in milk production have occurred with over 70 percent of farm households and
600,000 smallholder farmers producing over 75 percent of national milk production.
The country’s per capita dairy production is ranked the highest in sub-Saharan Africa
(SSA). A broad array of support institutions, both public and private, has played key
roles at different stages in the country’s dairy development. Government regulation has
driven many of the key policy changes while donors, NGOs and the private sector have
supported smallholder production and marketing initiatives.
Kenya was selected as a Dairy Centre of Excellence in 2011.
Initial context. Kenya’s dairy industry emerged during the first half of the 20 th century with
the introduction of improved breeds of cattle by white settlers. At that time dairy production
was mainly a large-scale commercial farmer activity supported by public sector quarantine
laws, veterinary and artificial insemination (AI) services. The dairy industry evolved from a free
market during the first half of the 20 th century to a monopolistic and finally a liberalised industry
from 1992 (EPZA, 2005). The drivers of innovation in the dairy industry have been multifaceted,
24 Agricultural Innovation in Sub-Saharan Africa