Agricultural Markets

Leveraging the Buy Kenya, Build Kenya Strategy to Promote Sustainable Agro-processing

Agro-processing is one of the sectors expected to promote industrialisation, food security and creation of job opportunities in Kenya. However, agro-processing is facing high competition in both the domestic and international markets and its sustainability is threatened by rapid climate change. The Buy Kenya, Build Kenya (BKBK) strategy is one of the major policy measures being pursued by the government to improve the competitiveness and consumption of locally-produced goods and services. This study provides insights on how the BKBK strategy can be leveraged to promote climate aware, food security enhancing and trade driven agro-processing in Kenya. It sheds light on the key barriers to development of agro-processing and provides policy options for tapping into the BKBK strategy to support the sector.

That agro-processing is a catalyst for industrialisation and economic transformation in Kenya cannot be gainsaid. The agro-industrial sector is the main source of manufacturing value added and plays a key role in creation of job opportunities through backward and forward linkages. Yet the sector continues to face several challenges including high competition in the domestic and foreign markets. The Buy Kenya Build Kenya (BKBK) strategy is expected to support agro-processing among other industries through measures geared towards improving the competitiveness and consumption of local products.

The objective of this study was to shed light on the policy measures that should be considered to enhance competitiveness and consumption of local agro-processed products in the context of the BKBK strategy. Taking into account the fact that sustainable agro-processing should be trade driven, food security enhancing, and climate aware, the study focused on five areas. These include: constraints to competitiveness and consumption of local products; reservation of 40 percent of government procurement budget for local goods proposed under the BKBK; promoting climate aware agroprocessing under BKBK; consistency of the BKBK strategy with Kenya’s trade commitments; and market access challenges in banana and cassava value chains as case studies. These crops were selected due to their potential to address food insecurity and promote creation of job opportunities through value addition.

For the BKBK strategy to work for agro-processors, it is necessary to address infrastructural bottlenecks, climate change, inadequate financing, technological challenges, and limited access to distributional channels. Other constraints to be addressed include: low income among consumers, strong taste and preference for imports, and lack of trust in the quality of local products. Addressing these constraints requires concerted effort aimed at improving the quality, affordability, and consumer confidence in local products. Whereas several policies and legislations have already been enacted, policy coherence and implementation challenges abound.

Reserving 40 percent of government procurement for local goods is a great opportunity to increase consumption of local agro-processed products in the public sector. However, an effective legal and institutional framework has to be created to facilitate successful implementation of this proposal. Of particular concern in promoting sustainable agro-processing is the limited capacity of agroprocessors to adapt to climate change owing to financial and technical constraints. Further, a legal and policy framework should be created to implement sustainable consumption measures such as green procurement in the public and private sector.

Cassava and banana value chains have great potential for promoting food security. The micro and small agro-processors in these value chains face market access challenges attributed to difficulties in obtaining product certification, information asymmetry concerning market requirements/ needs, difficulties in meeting requirements set by retailers and limited investment in marketing activities. Deliberate efforts have to be made to address these challenges, as well as to build the capacity of agro-processors to meet market needs.