Bringing back Smallholder farmers to the value chain where they belong

Bringing back Smallholder farmers to the value chain where they belong

Valued at KES 2.3 trillion (22 billion USD) in 2016, the agricultural sector is the backbone of the Kenyan economy with a great potential for growth and transformation. The sector contributes an estimated 33% of total Gross Domestic Product (GDP) plus a further 27% to GDP through linkages to other sectors such as manufacturing, distribution, and services.

While economic numbers like 2.3 trillion KES are eye-popping, the question we have to ask ourselves is what percentage of that trickles down all the way to the small-holder farmers? Or are they isolated from the entire value chain?

Challenges in the Sector

Brokers and middlemen play a vital role in the value chain, solving logistics, cash flow and market linkages problems for many farmers. However, just as it applies in different areas, “too much of a good thing is usually a bad thing.” The more middlemen there are, the more they eat up the market value that could have gone to smallholder farmers. They do that when they bulk produce and sell it onward to wholesalers who then forward it to large-scale millers or supermarkets.

When you break down the parts that work, the following are the key challenges facing smallholder farmers, those are:

  • Small farm sizes: At an average of 1.2 acres, individual farmers simply don’t produce enough for large supermarket contracts and export.
  • Knowledge asymmetry: Middlemen and brokers are known to eat the lion’s share of the crop’s market value simply because farmers don’t always know what their crop is worth.
  • Lack of physical access to market: Poor infrastructure and communication network within the rural communities also hinder farmers from being informed.
  • Lack of knowledge: Standards for export and international sales are unknown to the farmers.

This is where disruptive technology platforms like Kuza can enter the scene and streamline the value chain by harnessing the power of communities through connectivity and information to smoothen market linkages.

How Kuza works

Kuza works by having a young person from the community evolve into a Agri-preneur (AE). An AE is equipped and empowered by the Kuza IoT Backpack — inside of which the content sits within an offline Ruka device, which can be accessed by smartphones in the vicinity, even in remote areas. This Agri-preneur is in charge of managing up to 200 farmers. Through the propagation of nugget-sized micro-learning content, farmers are able to gain Agro-related knowledge on-demand. They also have access to about 5000 micro modules of Crop Advisory content that has been developed in five regional languages across forty crops and livestock videos catering to multiple archetypes of Agripreneurs.

The AE also provides other Agri-related services to the smallholder farmers such as access to quality inputs and fertilizers. This enables them to expand their portfolio of work and opens up multiple streams of revenue so they become a one-stop shop for the farmer.

Entering the farm and produce details onto the platform allows for aggregation, which makes the production volume large enough to enable contract farming by large supermarkets whose supply needs are usually continuous and large-volume. This community of farmers also become appealing to agro-related services such as credit and inputs providers.

Why the Kuza Platforms Matter

The platform strives to be a gateway for the market, so the farmers are no longer isolated from the value chain by brokers and middlemen. Also, by standardizing trading and farming practices, it would be possible to ensure standards and regulations are maintained and followed for selling to international markets and exports. With a clearer value chain and direct linkages between the markets and the smallholder farmer, a larger percentage of the market value shifts from middlemen to smallholder farmers.

Rather than think of smallholder farmers from rural communities as being the last mile of connectivity, we need to switch that narrative to them being the first mile of value in various forms; data, crop production and supply.

The final result is the actual increase of the smallholder farmer, which is Kuza’s ultimate goal, which is what had been shown through impact assessments where more than 24 % of smallholder farmers show an increase of 30 % in their income levels in the comprehensive program being run in partnership with Syngenta Foundation for Sustainable Agriculture.