BY GAD WESONGA
According to David Anderson and Daniel Hanselka in their article Adding Value to Agricultural Products published by the US basedAgriLife Communications of Texas A&M System, value added is improving a raw product by taking it to at least the next stage of production.
Value addition is achieved through processing, cooling, pasteurization, drying, packaging, extracting or any other process that changes raw agricultural commodity into new product.
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David and Daniel argue that Value-added agriculture generates several billion dollars in economic impact for the state of Texas annually and that agricultural producers receive a much smaller portion of the consumer’s dollar than do food processors.
Therefore, harnessing that extra revenue by adding value to farm or ranch products is a goal of many agricultural enterprises. Other benefits of value addition include increased profit margins, new markets, job creation along the agricultural value chain, reduction of losses due to product quality deterioration, reduction of post-harvest loss, increased product storability and shelf-life, ease of packaging and transportation and agricultural waste management.
Value addition will transform the lives of Kenyans across counties with the potential of roaring sleepy, poverty stricken villages into a nation of healthy, wealthy, happy people now and for posterity
Miraa
The current global health pandemic has had adverse effects on the Miraa business due to travel and handling restrictions that come with Covid-19 protocols. In response, some enterprising Kenyans seem to have discovered the magic of value addition and are subsequently taking a plunge into this alluring enterprise.
Mr Maore Ithula of Rek East Africa Ltd has invented a novel way of enjoying the popular miraa stimulant without having to chew the leaves and twigs by turning it into chewing gum instead. Sold under the brand name Marqan, this value addition not only makes chewing miraa easier but also more stylish and hygienic. Rek East Africa Ltd is also working on more miraa-based inventions, including miraa fudge and toffee.
This value addition approach offers a ray of hope for the herb’s farmers whose market has been shrinking rapidly and is worst hit by the disruptive and the destructive Covid-19 pandemic. Travel restrictions and a diminishing international market had seen farmers incur huge losses, especially because of the highly perishable nature of the herb.
This invention highlights the power of value addition approach in agribusiness that is usually lacking in many agricultural practices in Kenya, which is predominantly rural peasantry. According to Mr Bryan Cuthbert, chairman of Kenya Association of Manufacturers North Rift Chapter in Kenya, the global imagination of rural is mainly a depiction of low-income communities who rely primarily on agricultural activities for their livelihood.
Agriculture and industry, he says, have long been tied in a symbiotic relationship that sees the former provide raw material such as hides, skins, cotton, fresh fruit, tree barks among others towards the creation of final products. Industry on the other hand, incorporates many agribusinesses into the numerous value and supply chains that drive it. This catalyzes the growth and productivity of Agriculture.
According to Mr Cuthbert’s analysis in reference to the 2018 Kenya Economic Survey, the Kenyan agricultural sector made the highest contribution to GDP with 31.5% in 2017. The total value of marketed production increased by 8.2% to Sh446.9b from Sh413.3b in 2016.
Mr Cuthbert avers that these figures are compelling especially considering that as a country we have barely scratched the surface with regards to the potential in this sector. He emphatically concludes that we need to start thinking agro-based manufacturing. Meaning we should renew our commitment towards increased value-addition.
One of the major challenges associated with food scarcity in Kenya is the massive post-harvest losses that occur due to low-value addition. In Mr Cuthbert account, Food Agriculture Organization’s (FAO 2014) report on food loss assessments approximates that Kenya losses between 20% – 50% of its agricultural production due to post-harvest losses.
This can be mitigated with value addition thinking approach to minimize wastage and improve the quality of products and their shelf life. There is therefore need for efforts by county governments and other stakeholders to set structures in place towards this endeavor for value addition in the country.
Value addition also promotes the growth and in the process creates jobs, which increase the purchasing power of citizens. Increased purchasing power means increased demand for locally made products. In turn, it will raise the local market share of manufactured products. As demand for locally made products increases, so does the demand for agricultural products to cater for the new markets. Ultimately, demand for farm inputs such as fertilizers and better machinery will also lead to the expansion of the agricultural ventures.
It provides additional foreign exchange earnings through export of agro-processed products. According to MrCuthbert the world chocolate market, for instance, is worth $100b annually, however, the two largest cocoa growing countries, Cote D’Ivoire and Ghana, only earn $5b since all the value addition is done outside those countries.
The same applies to products such as tea, coffee, hides and skins amongst others. If we are to add value to these products, he says, we would realize up to five times the earnings we currently have and in the process, create more direct and indirect jobs along the value chains.
Makueni County
In 2017, the value addition genius landed in Makeni County when Governor Professor Kivutha Kibwana unveiled Makueni Fruit Processing Plant at Kalamba and Kikima.
In his account, the plant has capacity to process 5 metric tons of raw mangoes producing 3,000 liters of Puree (Mango concentrate) per hour. A litre of the concentrate fetches Sh150 at the market place.
He lamented thatpreviously, farming optimism and dreams turned intodespondencyand cursesduring the peak seasons when mango prices dipped to three shillings per piece .The factory provides opportunities for local farmers and investors to own a stake and grow wealth, learn new technologies and learn about value addition to increase farm incomes.
Farmers are the primary stakeholders of the plant with the Makueni County Government Department of Agriculture, Livestock and Fisheries tasked with enhancement of the quality of fruits, control of the fruit fly and farmer education to ensure the fruits processed in the plant are compliant with export standards such as the European Union (EU) markets.
Later in 2018, Makueni County Government received a grant of Sh110 million from the European Union to support the expansion of Kalamba plant to enable it turn into a multi-processor and to create a packaging line. These include construction of markets, abattoirs, fruit and milk processing factories, food storage, dairy, seed production and multiplication and fish processing.
Reports indicate that the Kalamba Fruit processing plant is set to begin making ready to drink fruit juices by this July with capacity of up to 8,000 liters per hour. This will enhance value addition of mangoes from the County, as it will produce ready to drink juices unlike before where they have been producing puree and selling it to juice making companies such as Delmonte Kenya.
These plants are versatile with capabilities to make other fruit juices such as oranges, avocados, tomatoes and many more. The farmers can determine the minimum cost of their produce due to market availability associated with agribusiness value addition approach.
Busia County
The collapse of Cotton, Tobacco, Sugar, and industries in Busia county, a struggling fish harvesting from lake Victoria, rudimentary farming practices and massive wastage due to lack of value addition approach has exposed the inhabitants of the County to rampant poverty.
Value addition agribusiness approach in Busia would create wealth and employment, conserve environment, curb rural urban migration and achieve food security in line with President Uhuru’s Big 4 Agenda.
Among others, some of the challenges faced by poultry and dairy farmers in Busia are lack of local feeds. As result they have to turn to Uganda, an overreliance that comes with its own hurdles especially with current border closure due to the health pandemic restrictions.
Value addition initiatives such as establishment of maize milling enterprises would fill the void. The machinery would need to have capabilities of shelling maize, processing a variety of maize flour grades, processing of animal feeds such dairy, pig and poultry feeds from byproducts of maize such as cobs and stocks with nothing from a maize crop going to waste.
Dairy, sheep, goat, pig and poultry farmers all need animal feeds which makes feeds production absolutely profitable especially with the use of locally available material like maize stalks and cobs, beans barn, Lucerne.
Busia is also littered with hills that provide an opportunity to engage in bee keeping that would lead to production of honey and other associated products for both local and international markets.
How about bamboo on the hills? This would set the stage for processing of bamboo products such as toothpicks, bamboo beverages, fuel chips, furniture and production of dairy feeds from bamboo leaves.
The Busia hills also provide a great opportunity for goat and sheep farming. Sheep are kept for their meat and wool while goats are kept for their milk and meat. Furthermore, animals also produce manure, which can be utilized in agribusiness enterprise. Goat meat, lamb, hogget, and mutton fetch more in the market than beef.
Fruit processing is yet another opportunity. Some of the fruits that do well in Busia include oranges, pineapples, mangoes, passion, bananas, avocado, guavas and pawpaw. Just like Makueni of the past, massive wastage is usually experienced during harvesting due to lack of ready market and high rate of perishability.
Cassava and potato processing to multiple products are yet another opportunity. These are usually very plenty in the Busia region but its economical potential is not felt due to peasantry and rudimentary handling practices.
Several swamps are also to be found across the county with crocodiles, hippos and multiple types of fish. Enterprising value addition can be put in place for optimal gains.
Challenges facing Agribusiness value
There is inadequate capacity building across Kenya, which leaves many with lack of knowledge that would help towards this approach. Fear of the unknown, especially on new products, cultural concerns, inadequate finances since some innovations require huge funding also contribute hugely.
There are also marketing challenges. A lot of product awareness is required.
To realize and enjoy the massive benefits of agribusiness value addition, it is critical that we have policies in place that encourage the competitiveness and growth of local industries. Furthermore, it is important that we challenge land policies especially on subdivisions that are continually reducing the amount of land available for agriculture.
Value addition will transform the lives of Kenyans across counties with the potential of roaring sleepy, poverty stricken villages into a nation of healthy, wealthy, happy people now and for posterity.
