Professional Documents
Culture Documents
Agri Inputs Case Study 1
Agri Inputs Case Study 1
TRANSFORMING KENYA’S
AGRICULTURAL INPUTS SECTOR
Agri
inputs
CASE STUDY
2
The undertaking and production of this work was made possible through funding from the UK’s
Department for International Development (DfID) and Gatsby Africa.
The contents of this report are solely the responsibility of Kenya Markets Trust and do not necessarily
reflect the views of DfID or Gatsby Africa.
For more information on this report or Kenya Markets Trust, please get in touch:
Kenya Markets Trust,
14 Riverside Drive, Cavendish Block,
2nd Floor, Suite B,
P.O. Box 44817 – 00100,
Nairobi, Kenya
Tel: +254 20 2588343
+254 722 201233
Email: info@kenyamarkets.org
Copyright © 2019
This research work was undertaken to inform relevant policies, actions and stakeholders. All or certain
parts of this material may be used for relevant work, provided that the necessary references and
acknowledgements are made back to Kenya Markets Trust.
Correct citation:
Kenya Markets Trust (August 2019). Transforming Kenya’s Agricultural Inputs Sector. KMT Agri-Inputs
Case Study 01. Nairobi, Kenya.
www.kenyamarkets.org
3
Kenya Markets Trust (KMT) is a Kenyan not-for-profit organisation that
specialises in market transformation. We work to stimulate inclusive and
resilient growth that will lead to a step-change in the livelihoods of millions
of Kenyans. We take a long-term approach, staying true to our vision while
adapting to the forces that are shaping the markets we operate within such
as climate change and access to emergent technologies.
Acknowledgements
The publication of this case study was made possible through the support and
collaboration with many stakeholders.
A special thank you goes to Market Share Assosicates who performed the ground work
and drafting of this report, and ThreeSixty for developing the design and layout of this
case study.
We are grateful for the support and collaboration we received from Kenya’s national
and county governments, various market actors mentioned in this report, all
interviewees, and all Kenya Markets Trust (KMT) staff.
In collaboration with
4
Table of Contents
Executive Summary 6
Section 2: Tackling underperformance – KMT’s vision for transforming the agri-inputs sector 18
2.1 KMT’s vision for a reformed agricultural inputs sector 19
Endnotes42
List of Acronyms 43
Annexes44
5
EXECUTIVE
SUMMARY
6
Executive Summary
SCENARIO
What could we see?
• Low and inappropriate consumption of inputs
(fertilisers, chemicals and seeds) per hectare of
arable land, resulting in low productivity
• Less diversification of crop production (60% of
total crops produced in MT was maize
• Low incomes of farmers
SYMPTOMS/EFFECTS
What was the market suffering from?
• Lack of product-specific knowledge transfer from
manufacturers/suppliers to the downstream actors
• Uncompetitive market system characterised by
dominance of parastatal companies in distribution of
fertilisers and maize seeds
• Increased sales of counterfeit seeds and fertilisers
CONTRIBUTORY FACTORS
Why did those symptoms exist?
• Transaction oriented supply chain focused on
maximising short-term gains rather than a
long-term customer-driven business practice
• Seed sector governance and regulation not
fit-for-purpose, with public bodies lacking
capacity and private sector lacking representation
7
Executive Summary
While several factors have affected productivity, the structure of the agricultural inputs market has
been a major cause of poor performance. This stems from two main issues:
8
Executive Summary
KMT believes that through the right support and facilitation, transformational change is possible
within the agri-inputs sector, delivering higher agricultural productivity, long-term growth, and better
value to farmers.
To achieve its vision, KMT has developed two main strategies focused on
the two key challenges outlined above.
STRATEGY 1 STRATEGY 2
The major interventions under these strategies - and the impact achieved to date - is
summarised in the table on the next page:
9
Executive Summary
STRATEGY 1
Fostering long-term customer-oriented business strategies along the chain
Last Mile Distribution Impacts to date
The Issue KMT Response • 376,000 farmers have benefitted from
The short-term, transactional KMT tested different models KMT and its partners working along the
relationships along the chain aimed at changing business inputs supply chain through two different
weakened knowledge transfer relationships along the chain. models that have been adapted and
and demand. Downstream actors They learned from pilots and
(agro-dealers and farmers) adapted models, ultimately
refined over time.
particularly suffered. Those seeking changes in farmer • Significant learning has also taken place
farmers that did buy inputs were behavior and the improved
often uninformed about how best distribution of quality inputs in
about the relative costs and benefits
to use them. the ‘last mile’ of the chain. of these different models – and about
the contexts where they might be most
successfully scaled-up.
Soil testing services • In 2016, KMT expanded its partnerships to
include Toyota Tshusho, who commissioned
The Issue KMT Response
the first full-scale fertiliser blending pant
A farmer’s understanding of the KMT partnered with large in Kenya and introduced crop-specific
nutrient mix in their soil and its lime and fertiliser producers fertilisers to the market, giving farmers
impact on productivity levels is to demonstrate the benefits
a major determinant of whether of soil-testing services to
the opportunity to increase production
they will buy inputs and whether farmers. This involved exploring without depleting the soil.
they will buy the right inputs. different funding models
However, soil testing is not a to make the service both
• 186,000 farmers have increased their
widespread practice in Kenya. affordable and enticing to the income by at least 10% by using crop-
average smallholder. specific fertiliser.
STRATEGY 2
Improving seed industry governance and regulation
10
Executive Summary
All of this has led to improved linkages along the supply chain, with
stakeholders at the top increasingly seeing the value of focusing on
smallholder farmers as customers. These changes have also gradually
trickled down to farmers, who have increasingly begun to access
improved seed and fertiliser, adopt good agricultural practices, and
diversify crop production. This indicates that the inputs market is
gradually shifting towards more customer-oriented distribution
practices, allowing farmers to make more informed choices about what
products to purchase.
First movers are beginning to see significant benefits from the improved
regulation. Major seed company Monsanto has established a laboratory
and been authorised for the seed self-certification process by KEPHIS.
Monsanto has already begun to see benefits in terms of cost savings,
improved efficiency and shorter timelines. Simlaw, another seed
manufacturer, is currently establishing its laboratory.
Farmers complained constantly about low productivity and continued to purchase large quantities of DAP and
CAN. They were not aware that the excessive use of these fertilisers was increasing the level of soil acidity. I, along
with a few other agro-dealers in Kisumu, reached out to Magos for soil testing services. We created awareness on
the product … demonstrated to farmers on how to read soil testing results. Through support from Homa Lime, we
encouraged use of lime and this increased the yield. Now farmers enquire about different fertilisers; they are aware
of the different names of companies and the products they provide. Farmers also use Whatsapp to send photos
and seek advice. I believe that customer management is essential for customer retention.
BEATRICE OKELLO,
AGRO-DEALER SHOP OWNER, KISUMU
11
Executive Summary
The improved regulatory environment and increased public-private dialogue should also drive further
investment and innovation in the Kenyan seed industry. KMT will work with other seed manufacturers
to enable more of them to follow Monsanto’s example on seed self-certification, while also working
with partners to further increase farmers’ uptake of certified seed. This work aims to see 2.7 million
smallholder farmers accessing quality crop seed by 2022.
12
SECTION 1
AGRICULTURE IN KENYA
WHY CHANGE IS NEEDED
13
Section 1: Agriculture in Kenya why change is needed
In Kenya, 1% of agricultural growth is estimated to drive 1.6% overall GDP growth1. Agricultural
transformation is therefore critical to improving food security and nutrition, creating employment, and
reducing poverty for millions of Kenyans.
Average yields for major crops remain below those of other comparable nations.
For example, in 2003, Kenya had similar average maize yields to Uganda and
Zambia. But by 2012, average maize yields in Zambia and Uganda were 1.4 to
1.5 times those in Kenya. Over the period, Kenyan maize yields increased 6%,
compared to Uganda’s 39% and Zambia’s 58%3.
14
Section 1: Agriculture in Kenya why change is needed
Figure 2: Composition of crop production in Kenya (volume of production in MT) | Source: FAO
2003
62% 13% 8% 7% 1% 1% 8%
64% 10% 8% 6% 1% 2% 9%
2012
Source: Production (in MT) of Coffee, Maize, Rice, Tea, Vegetables, Wheat in 2003 and 2012; Production (in MT) of all crops in Kenya
in 2003 and 2012, Food & Agriculture Organisation (FAO) Statistics; Crop Production includes tea, coffee, cereals, pulses, vegetables
and fruits.
15
Section 1: Agriculture in Kenya why change is needed
The structure and organisation of the agricultural inputs market has also been a
major cause of underperformance6. There are two key challenges:
16
Section 1: Agriculture in Kenya why change is needed
Agro-dealers have set prices high, maximising profit per sale but resulting
in lower sales overall – furthermore, without the knowledge of how to apply
products properly, farmers have not realised the expected return on their
investments, lowering both their ability and their incentives to reinvest in the
next season.
The high prices combined with farmers’ low incomes and lack of knowledge
about potential benefits mean farmers are already purchasing and
applying fewer inputs than needed to maximise productivity, while seeking
out cheaper but poorer quality (i.e., out-of-date, counterfeit, uncertified)
products.
This further lowers their productivity and therefore lowers the returns they
have to reinvest in inputs. The decreasing profitability of this segment of the
market further disincentivises input suppliers from engaging with actors to
build the long-term relationships needed to reverse this cycle.
17
SECTION 2
TACKLING UNDERPERFORMANCE –
KMT’S VISION FOR TRANSFORMING
THE AGRI-INPUTS SECTOR
18
Section 2: Tackling underperformance – KMT’s vision for transforming the agri-inputs sector
KMT believes that through the right support and facilitation, transformational change is possible within
the inputs and seeds market, delivering better value to farmers, higher agricultural productivity and
ensuring long-term growth in Kenya’s agricultural sector.
STRATEGY 1
STRATEGY 2
19
Section 2: Tackling underperformance – KMT’s vision for transforming the agri-inputs sector
STRATEGY 1
Fostering long-term customer-oriented business strategies along the chain
Last Mile Distribution Impacts to date
The Issue KMT Response • 376,000 farmers have benefitted from
The short-term, transactional KMT tested different models KMT and its partners working along the
relationships along the chain aimed at changing business inputs supply chain through two different
weakened knowledge transfer relationships along the chain. models that have been adapted and
and demand. Downstream actors They learned from pilots and
(agro-dealers and farmers) adapted models, ultimately
refined over time.
particularly suffered. Those seeking changes in farmer • Significant learning has also taken place
farmers that did buy inputs were behavior and the improved
often uninformed about how best distribution of quality inputs in
about the relative costs and benefits
to use them. the ‘last mile’ of the chain. of these different models – and about
the contexts where they might be most
successfully scaled-up.
Soil testing services • In 2016, KMT expanded its partnerships to
include Toyota Tshusho, who commissioned
The Issue KMT Response
the first full-scale fertiliser blending pant
A farmer’s understanding of the KMT partnered with large in Kenya and introduced crop-specific
nutrient mix in their soil and its lime and fertiliser producers fertilisers to the market, giving farmers
impact on productivity levels is to demonstrate the benefits
a major determinant of whether of soil-testing services to
the opportunity to increase production
they will buy inputs and whether farmers. This involved exploring without depleting the soil.
they will buy the right inputs. different funding models
However, soil testing is not a to make the service both
• 186,000 farmers have increased their
widespread practice in Kenya. affordable and enticing to the income by at least 10% by using crop-
average smallholder. specific fertiliser.
STRATEGY 2
Improving seed industry governance and regulation
20
SECTION 3
21
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
KMT subsequently contracted Dot Matrix – a • The creation of outdoor kiosks in select towns and
marketing and strategy consulting firm– to re- villages of Kisumu County during the pre-harvest
develop Magos’ retail strategy and to work with season to attract local agro-dealers and farmers;
a select few agro-dealers in Kisumu County. This
• Collaboration with agro-dealers and stockists
support included:
to create a database of farmers and the use of
• The design of its logo and shop banner; SMS to share information on new products and
discounts;
• The creation of Magos-branded merchandise such
as stationary to distribute amongst agro-dealers; • Training of agro-dealers to prevent sales of expired
and fake products to farmers; and
• The introduction of early-bird discounts on sales
of fertilisers and chemicals offered to agro- • The implementation of a customer-management
dealers; system through which farmers could reach out to
Magos to resolve issues pertaining to the use of
• Rewards for frequent customers with small certain fertilisers.
discounts and free sales on samples of new;
22
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
As a result of these initiatives, Magos quickly increased Through these groups, farmers placed joint orders with
the value and volume of its sales, expanded its agro- TIVA Agrovet, who in turn was extended a credit line
dealer network from less than 20 to 100, and increased from Magos to service these groups. Early successes
the number of farmers that it reached to 10,000 (as of have resulted in the formation of 75 such groups and
February 2019 7). Furthermore, while most agro-dealers TIVA’s owner won the National Farmers Award for Agro-
tend to operate only during peak agricultural seasons, Dealers in 2018 in recognition of its achievements.
Magos’ partners have begun selling year-round to keep
up with demand. This has had an impact up the chain This pilot programme led to the development
as well, as agro-dealers started procuring nearly 70% of a ‘preferred stockist model’, in which KMT’s
of their products from Magos, which meant Magos has implementation partners would first work with a
had to purchase items frequently and in large quantities distributor to build a strong network of agro-dealers,
from suppliers. before strategically selecting the most well-networked
agro-dealers to train in modern retail practices.
Building on this pilot, Dot Matrix, with support from
Magos, trained 35 of its agro-dealers in ‘modern’ retail
practices similar to those outlined above, leading to
several (with the financial resources and business
acumen) to take these practises on in a serious way.
For instance, on the back of training, TIVA Agrovet
organised demonstration workshops for farmers on use
of fertilisers and lime as well, and formed buyer clubs of
15-20 farmers that produced the same crops and had
similar interests in learning good agriculture practices.
23
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
24
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
Implementation of Implementation of
Franchisee Distribution Model. Franchisee Distribution Model.
25
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
7
Partnerships formed between
suppliers and manufacturers
9
9 Exhibitions
1,451
56 Farm
demonstrations
Rural agro-dealers
concerted into franchisees
26
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
As the complexity and scale of KMT’s work in the inputs sector evolved, a few
interventions did not result in expected outcomes. KMT learned from these experiences
and the inputs team has been able to reflect on key lessons learned along the way.
For example,
1. Moving up the supply chain and 2. The franchisee model has been more
engaging all actors in the distribution effective in transforming retail practices
channel has been instrumental in of agro-dealers than the preferred
promoting the use of appropriate inputs stockist model but relies heavily on donor
by farmers. funding.
KMT’s efforts to build the capacity of distributors While outreach numbers were high under the preferred
and agro-dealers has resulted in increased inputs stockist model, training workshops less frequently
sales. However, there has been mixed results in terms resulted in agro-dealers adopting new retail practices
of whether farmers are purchasing the right inputs due to a lack of funds. As a result, KMT also co-funded
and using them appropriately. KMT realised that not joint activities such as farm demonstrations, field days
all distributors and agro-dealers understood good and exhibitions for a select group of distributors and
agricultural practices and were often not able to provide agro-dealers. Through these efforts, most distributors
accurate guidance to farmers on fertiliser and pesticide have been able to increase their sales, expand their
use. Hence, it was necessary for KMT to engage with customer and supplier networks as well as generate
actors at the top of the supply chain (manufacturers profits. A few distributors - such as New Down Town,
and importers) to transfer this information downstream. Farmers Centre, Moiben and Magos - have been able to
KMT has now partnered with Toyota Tshusho, Athi River continue these activities after KMT’s support ended.
Mining, Homa Lime and Syngenta East Africa to deploy
field workers and train farmers and agro-dealers through Stakeholder feedback suggests that the franchisee
farm demonstrations, exhibitions, field days and an model has been highly successful. Farm Shop, another
SMS-based system for resolving grievances and queries. KMT partner, has franchised 32 agro-dealers to date and
has received funding from the Mastercard Foundation
to franchise more, particularly in rural areas. Surveyed
agro-dealers report an increase in sales of up to 30%.11
Additionally, Farmers Pride has franchised four agro-
dealers in Makueni County and has 125 agro-dealer
partners, of which 12 stockists are gold members (i.e.
they are ready to be converted into franchisees).
27
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
At the time of writing this case study, Farmers Pride had the model more effective in implementing better retail
secured funding from a venture capital fund and the practices.
UK’s Department for International Development (DfID),
to develop these new franchisees. However, replicating the franchisee model is a challenge
due to its cost. Both Positive International and Farmers
The franchisee model creates a strong business Pride are dependent on continuous funding from other
partnership between the distributor and agro-dealer, sources to remodel new agro-dealers’ shops into
with the distributor assuming much of the risk and costs franchises.
associated with establishing the franchise, making
Financial Model • Distributor sells products to agro-dealer on cash/credit. • Franchisor finances the revamping of the agro-dealer shop;
• Franchisor practices a revenue-sharing model with the
franchisee to recover its investment;
• Donor provides initial funding.
Potential to Sustain Easy to scale as the workshops conducted require minimal Challenging to scale as franchisors are using donor funding to
the Model investment rehabilitate agro-dealer stores
3. Training has to be tailored to rural Likewise, the initial workshops conducted by KMT
advocated for modern retail practices with prominent
agro-dealers’ business environment
display units that customers could browse through.
Through both the preferred stockist and franchisee Such practices are not applicable to rural agro-dealers,
models, distributors were able to expand their networks however, who fear that their products may be stolen.
with agro-dealers located in urban areas. However, They prefer to interact with customers through a sealed
uptake by rural agro-dealers has been lower and window rather than an entrance that allows a customer
KMT has had to make some changes to the training to walk into the shop and explore the available products.
and workshop model to tailor it to the needs of rural
businesses. For example, trainings are now held closer to
the agro-dealers’ shops and are often in the evenings to
enable business owners to travel without having to close
their shop for the entire day.
28
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
After several successes, and notable failures, the team is adjusting by engaging directly
with suppliers/manufacturers to drive transformational change in the industry. Some
signs of change throughout the industry include:
OWNER
NEW DOWN TOWN, KIRINYAGA
29
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
Farmers complained constantly about low productivity and continued to purchase large quantities of DAP and
CAN. They were not aware that the excessive use of these fertilisers was increasing the level of soil acidity. I, along
with a few other agro-dealers in Kisumu, reached out to Magos for soil testing services. We created awareness
on the product … demonstrated to farmers on how to read soil testing results. Through support from Homa Lime,
we encouraged use of lime and this increased the yield marginally. Now farmers enquire about different fertilisers;
they are aware of the different names of companies and the products they provide. Farmers also use Whatsapp to
send photos and seek advice. I believe that customer management is essential for customer retention.
BEATRICE OKELLO,
AGRO-DEALER SHOP OWNER, KISUMU
30
Section 3: The Evolution of KMT’s Last Mile Distribution Strategy
Figure 10: Summary of Results achieved by KMT through Last Mile Distribution, Soil Testing &
Promotion of Agriculture Inputs Interventions
266,092
266,092 3.53.5
bags
bagsbags
per
per acre
bags per
per acre
acreacre
farmersfarmers
accessing
accessing increaseincrease
in maizeinproduction
maize production
farmersfarmers
accessing
accessing increaseincrease
in maizeinproduction
maize production
crop-specific
crop-specific
fertilisers
fertilisers per farmer
per using
farmer crop-specific
using crop-specific
crop-specific
crop-specific
fertilisers
fertilisers per farmer
per using
farmer crop-specific
using crop-specific
fertilisers
fertilisers
fertilisers
fertilisers
OF WHICH
OF WHICH RESULTING
RESULTING
IN IN
OF WHICH
OF WHICH RESULTING
RESULTING
IN IN
186,477
186,477 £62.5
£62.5
per
per acre
per
per acre
acreacre
farmersfarmers
increased
increased
income income as addtional
as addtional
income income
earned earned
farmersfarmers
increased
increased
income income as addtional
as addtional
income income
earned earned
by at least
by at
10%
least 10% by thosebyfarmers
those farmers
by at least
by at
10%
least 10% by thosebyfarmers
those farmers
10 10
bags
bags
bags per
per acre
bags per
per acre
acreacre
increaseincrease
in maizeinproduction
maize production
increaseincrease
in maizeinproduction
maize production
per farmer
per using
farmerlime
using lime
per farmer
per using
farmerlime
using lime
RESULTING
RESULTING
IN IN
84,914
84,914
RESULTING
RESULTING
IN IN
farmers
farmers
farmers accessing
farmers accessing
accessing lime
lime and
accessing lime
lime and
and and
£160
£160
per
per acre
per
per acre
acreacre
as addtional
as addtional
income income
earned earned
soil-testing
soil-testing
services
services as addtional
as addtional
income income
earned earned
soil-testing
soil-testing
services
services by thosebyfarmers
those farmers
by thosebyfarmers
those farmers
31
SECTION 4
32
Section 4: Seeds Self-Certification and Scratch-Off Labels
1. Kenyan seeds and plant variety regulations had not been updated since 1991. As per
these regulations, KEPHIS was authorised to inspect and certify all seeds in Kenya, both
those produced locally as well as imported. Due to a lack of staff and resources within
KEPHIS, the seed inspection and certification process had become increasingly lengthy
and costly for private players.
2. As a result, the distribution of low quality and counterfeit seeds was becoming
increasingly common. The regulations also only allowed seed packets of more than 10
kilograms to carry certified labels and details of the supplier. Hence, uncertified seeds
were sold in smaller volume packets that were typically purchased by smallholders.
33
Section 4: Seeds Self-Certification and Scratch-Off Labels
The purpose of making these documents publicly available was to raise awareness amongst small
and medium seed companies on out-dated regulations and encourage them to participate in on-
going public-private dialogues. For the remainder of 2014 and most of 2015, key stakeholders from the
private and public sectors continued to debate on amendments to the regulations through meetings
organised by AE. The two parties struggled to reach common conclusions, however, mainly due to a
lack of strong representation from STAK.
Although some developments were made in seed labelling, these were ultimately unsuccessful. Due
to a lack of input from STAK, KEPHIS carried out the procurement process to hire a third party to
create new labels. Financial evaluation of bids was based on the lowest cost of production. However,
the chosen vendor suggested a cost of KES 15 per label, which was strongly opposed by most seed
companies as it would increase the cost of packaging, which would then be passed on to farmers. As
such, the chosen third-party company was not engaged.
On December 30, 2016, the Seeds and Variety Evaluation and Release Regulations was revised, paving
the way for the private sector to play a greater role in the industry. These regulations also included
the requirement that labels must be affixed to all seed packets, including those weighing under 10
kilograms.
34
Section 4: Seeds Self-Certification and Scratch-Off Labels
Additionally, a trainers’ handbook was also prepared in collaboration with the Seed Control and
Certification Institute of Zambia. KEPHIS staff would provide training to inspectors and analysts from
private companies and, upon completion of the coursework, the latter would be licensed to carry out
inspections on behalf of those private companies.
Around 38 inspectors and 10 analysts have been trained since mid-2017, of which 20 inspectors and
five analysts were licensed. One seed company (Monsanto) has established its laboratory and has been
authorised by KEPHIS to start the lab-inspection process. One other company, Simlaw Seeds is currently
in the process of establishing its own lab.
It is envisaged that once companies carry out field and lab inspections in-house, there will be significant
reductions in cost and time. Currently, companies usually have around 10 days between seed production
and start of the harvest season and KEPHIS takes between 4-6 weeks to inspect seeds and certify
them. The new system would mean companies could have their inspectors ready immediately after seed
production.
KEPHIS simultaneously carried out a new procurement process to select a firm to create new seed labels.
This time, STAK’s executive director was present to open and evaluate bids to ensure transparency in the
process. mPedigree was identified as the preferred company and new labels would cost KES 2.
35
Section 4: Seeds Self-Certification and Scratch-Off Labels
Over the course of KMT’s engagement in the crop seed industry, several key
lessons have emerged.
1. Farmers are now aware of certified seeds, but STAK and KMT need to
provide additional information and support to ensure uptake
While farmers in urban areas are aware of the new scratch label system,
they often purchase multiple seed packets of one variety and scratch
only one label. Based on this, they assume that the remaining seed
packets of the same variety are also certified. STAK and KMT will need
to make continuous efforts to provide more information to farmers on
certified seeds and track data through mPedigree on the number of
scratch labels sold versus number of labels scratched. These efforts are
ongoing and such data will help determine the effectiveness of scratch
labelling in reducing the prevalence of counterfeit seeds.
2. STAK and KMT need to facilitate roll out of the seed self-certification
process
36
Section 4: Seeds Self-Certification and Scratch-Off Labels
Supporting effective collaboration between the public and private sector to resolve
binding constraints in Kenya’s crop seeds sector has been a major achievement of KMT.
Some highlights include:
There have been significant reductions in costs and time for companies that have
been able to adopt seed self-certification processes
The estimated time and costs savings for companies who employ the seed self-
certification process as opposed to relying on KEPHIS for this service are significant.
Early adopter Monsanto has already begun to see benefits from implementing the new
process. The impact of this new process on the system will continue to grow as more
firms adopt it.
Monsanto participated in the public-private dialogues right from the beginning. KMT has done a good job in
bringing about changes in seeds regulations. We have seen an improvement in STAK, yet a lot needs to be
done to engage medium and small-scale seed companies.
Following the seed self-certification process, we established our laboratory last year. Initially we sent 60
batches of maize seeds per week to KEPHIS for inspection and certification. For this, we waited for 1-3 months
and sometimes could not certify seeds before the season started. With the establishment of the lab, we have
the opportunity to fully own the process; the intervention has created significant cost savings, and improved
efficiency and timelines in terms of delivering certified seeds. We are dependent on KEPHIS only to inspect and
certify vegetable seeds. Much of the reduction in our workload of maize certification should have benefited
KEPHIS and other companies waiting to get their seeds certified.
EVERLYNE MUSYOKA,
MONSANTO
37
Section 4: Seeds Self-Certification and Scratch-Off Labels
STAK’s representation in the re-tendering process for a third-party label provider meant that the
process was transparent and the outcome fair. STAK also effectively negotiated on the price of labels
on behalf of medium and small-scale seed players, saving about KES 100 Million to the industry15.
Likewise, STAK represented members in the revision of the Seeds and Varieties Regulations which
were gazetted in December 2016. About 70% of the feedback provided by private sector players was
incorporated in the final document. The revisions made to the regulations led to an enabling business
environment for the seed industry in Kenya that is expected to drive further private sector investments
in upcoming years.
38
Section 4: Seeds Self-Certification and Scratch-Off Labels
39
SECTION 5
40
Section 5: The Way Forward
KMT plans to increase agricultural lime availability from the current 10,000 MT
to 26,000 MT by 2022 and 33,800 MT by 2027. This will be achieved by engaging
with the Kenya Association of Manufacturers (KAM), KEPSA, and the Ministry of
Agriculture to convene thematic industry learning workshops and identify ways
to promote the replication of commercial models for agricultural lime.
To achieve all of this, KMT will need to work very closely with industry players
such as STAK, AAK, KEPHIS, KALRO and County Governments.
41
ENDNOTES
2. FAO Statistics (2003 and 2012), ‘Production of maize, other cereals, tea, coffee, and other crops in Kenya (in MT)’
3. FAO Statistics (2003 and 2012), ‘Yield (in 100 grams per hectare) for Kenya, Zambia and Uganda’
4. (2018) Agri Experience Ltd.,‘Crop Seed Sector Project July 2013 – July 2018, Implemented by Agri Experience Ltd
through Funding from Kenya Markets Trust’
5. (2015) ‘Agriculture Inputs Sector Strategy; Implemented by Kenya Markets Trust and Funded by UKAID, Gatsby and
Kingdom of the Netherlands’, 27 May
6. The definition of the agriculture inputs & seeds market, for the purposes of this case study, includes use of seeds,
fertilisers and chemicals while excluding equipment, machinery, animal feed, vaccinations and any other inputs
used for livestock.
8. Mavuno fertiliser contains 11 essential plant nutrients such as nitrogen, phosphorous and potassium, among
others key nutrients. The mineral elements are combined in various formulations and blends that create ‘tailor-
made’ fertilisers that have been proven to give superior crop yields by over 40 per cent. Other than yields, the
fertilisers improve soil fertility, rectify acidity and improve soil pH for higher crop production. Micro-nutrients
present in Mavuno improve color, taste, texture and nutrient value of produce.
9. Agri-Inputs Bi Annual Report for April to September 2017, prepared by Kenya Markets Trust.
10. Agri-Inputs Bi Annual Report for April to September 2017, prepared by Kenya Markets Trust.
13. Agri-Inputs Bi Annual Report for April to September 2017, prepared by Kenya Markets Trust.
15. (2018) Agri Experience Ltd.,‘Crop Seed Sector Project July 2013 – July 2018, Implemented by Agri Experience Ltd
through Funding from Kenya Markets Trust’
42
LIST OF ACRONYMS
AE Agri-Experience
EA East Africa
MT Metric Tonnes
43
ANNEXES
A.1. Methodology
The case study was developed by applying a structured methodology comprising document review and stakeholder
consultations. The phases involved in carrying out research and documenting the case study are presented in the
following table.
Phase Activities
Phase 1: • Initial telephone conversations with KMT’s agricultural inputs and seeds team to
Preliminary understand KMT’s role and strategy for sector.
Meetings &
Document Review • Review of documents received from KMT which included strategy note, case studies, bi-
annual reports, and monitoring dashboards
Phase 2: • Identification of stakeholders or beneficiaries that directly and indirectly benefitted from
Consultations with KMT’s program. These included suppliers or manufacturers, distributors, agro-dealers,
Stakeholders farmers, service providers, government agencies and KMT’s prior consultants
• Design of questionnaires for each stakeholder with the objective to understand the
following:
1. Partnership with KMT
2. Situation before KMT intervention
3. Description of intervention and its evolution
4. Challenges in implementation, any changes and course corrections
5. Impact achieved
6. Lessons learnt, success and failure factors
7. Systemic changes (i.e.; ability of the stakeholder to adopt, adapt, expand and respond)
8. Upcoming trends in Kenya’s agricultural inputs and seeds sector
9. Additional support needed from donors
10. Constraints in scalability and sustainability
• Conducting meetings with stakeholders in Nairobi, Kisumu, Kirinyaga, Meru and Machakos
Phase 3: Analysis • Analysis of inputs from literature review and primary research
& Filling Gaps in
Research • Development of the case study outline and review of the same by KMT and Gatsby
44
A.2. List of stakeholders interviewed
The following stakeholders were interviewed for documenting the case study.
45
14 Riverside, Cavendish Block, 2nd Floor, Suite B, Riverside Drive.
P. O. Box 44817 - 00100 GPO, Nairobi, Kenya.