Overview
Many interventions are directed towards economic investment by actors engaged in various commercial value chains. Value chain analysis (VCA) is a detailed exploration of these systems including product flow of raw and finished materials, through manufacturing, processing, distribution and delivery to final consumption points and disposal. VCAs describe the exact the nature of the chain, actor relationships and their functions, and benefit profiles. The information is used by many clients (resource providers, the VC actors themselves, or governments) to structure the chains in ways that support specific interests. Programs and projects design their support to VCs to serve development or business objectives. The results are used to advise on who should be engaged and how; as part of the supply/distribution chain (micro-level functions) or as enablers (providing meso-level support services such as financing, policy and infrastructure).
Market studies are a related analysis of demands for specified commodities, the actors are involved, exchange and transaction processes, enabling and constraining factors of any related functions. Right Track Africa (RTA) has been commissioned by projects wishing to understand the exact nature of particular value chains and markets and how best they can support rural community participation.
RTA’s value chain analysis and market studies
Mapping animal feed manufactures and ingredient suppliers (Aug, 2016)
In August 2016, RTA (Julius Nyangaga, Charles Nduhiu, Sarafina Nyaga, Grace Njoroge) and Martin Kinoti (from Nutrimix Limited) carried out a market study for Kenya Market Trust (KMT) titled “Animal feed study: Mapping animal feed manufactures and ingredient suppliers”. The study aimed at establishing factors that affect feed costs and quality and limit their utilization at farm level. The study also sought to establish the total population of feed manufacturers and raw material suppliers in the country, their location, infrastructural capacity and volumes of product handled. The analysis used data from all the feed dealers and a survey of a selected sample. Key informants and relevant literature was also collected from institutions and organizations, including the Association of Kenya Feed Manufacturers (AKEFEMA), the Kenya Bureau of Standards (KEBS), the Ministry of Agriculture and Livestock, KARLO, ILRI and ICRAF, Egerton University, and the University of Nairobi. The team also collected information from farmers using focus group discussions along the routes, including Nairobi city and its environs, central Kenya and upper Eastern, Rift Valley, Western and Nyanza, and lower Eastern and Coastal.
The total population of the feed operators encountered was 305, consisting of 115 who only manufactured feed, 96 who supplied raw materials (or ingredients) and 94 who did both. Hence a total of about 210 feed millers, which more than twice the number established in a 2008 survey by the Ministry of Livestock Development. A revelation that emerged as soon as the study got underway was that a large number of raw material suppliers did not have fixed physical addresses. They (the suppliers) worked by connecting ingredient sources to ordering customers (manufacturers, distributors and even retailers) through their distribution and transport systems.
The study was carried out between August and October 2016. The report described findings and recommendations in pertinent areas such as populations and distribution, ingredient demand and supply, quality control (internal and policies), supply chain and pricing models.
Livestock Value Chain of SNV’s Mau Mara Serengeti (MaMaSe) Basin (Feb 2016)
SNV Kenya implemented a MaMaSe Sustainable Water Initiative to improve water safety and security in the Mara River Basin (MRB). The goal of the program was structural poverty reduction, sustainable economic growth, and conservation of the basin’s forest and rangeland ecosystems. In March 2016, SNV commissioned a value chain analysis (VCA) to map the actors, the flow of demand and supply of livestock and livestock products (meat, hides and skins), assess the inputs and support services with focus on markets, value addition and commercial oriented production.
The study was carried out by a team from RTA. The study followed a value chain and market analysis approach. This entailed a mapping and analysis of livestock production from the Mara Region, related trading and processing functions in order to understand the primary actors and systemic conditions that could be addressed to achieve higher levels of performance. The study also analysed market constraints and opportunities for the various livestock products that could be maximized, locations, quantities, quality management, linkages with end markets and barriers to competitiveness.
The study provides a detailed synthesis of the Mau Mara livestock value chain and recommendations to improve the Mau Mara communities’ participation in the livestock production value chain through sustainable use of their land.
Camel Milk Demand Study (Nov 2015)
In 2015, a team from RTA (Julius Nyangaga, Charles Nduhiu, Sarafina Nyaga, Grace Njoroge) carried out a camel milk demand study for SNV’s Kenya Rural Development Project (KRDP CfP Lot1), funded by the European Union. The study was to describe the institutional and policy environment for production and marketing of commercial camel milk in Kenya, providing a detailed analysis of marketing and consumption patterns in selected urban centres. The overall objective was to determine the existing and potential demand of the milk in Kenya.
The study focused on seven urban centres known to be important markets for camel milk supplied from pastoral areas in Kenya. These were Nairobi, Mombasa, Nakuru, Marsabit, Garissa, Wajir and Isiolo. Data was drawn from most of the actors in the camel milk supply chains in the areas of interest, with emphasis on the market end frameworks. The study combined key informant interviews, focus group discussions and consumer surveys. Among the interviewed consumers, 7% in Marsabit, 14% in Mombasa 78% in Nakuru and 9% in Nairobi’s Eastleigh and South C markets are not familiar with camel milk.
The study established that Kenya had (in 2015, the study year) a camel population of 2,970,911. In addition to the traditional camel keeping areas in Mandera, Wajir, Garissa, Tana River, Marsabit, Turkana and Isiolo. Camel keeping was emerging in counties such as West Pokot, Kajiado, Samburu, Baringo and Laikipia. The total annual milk production in Kenya was estimated at 1.1 billion litres valued at KES 54 billion. Generally, cow and goat milk are the main competing products across the urban centres studied. The potential demand was way too high to be met by the estimated supply. This meant, to meet the huge demand, requires investing through introducing new supply chains to existing ones. The value of estimated potential demand was estimated at 10 billion in Nairobi, 3 billion in Nakuru and 2 billion in Mombasa. The value of milk supplied through existing supply chains however was estimated at KES 5 billion, 1 billion and 0.8 billion in Nairobi, Nakuru, Mombasa respectively.
Analysis of SNV’s Livestock Marketing Co-Management Model (Oct, 2015)
Between 2002 and 2004, SNV Kenya, in partnership with the Samburu Integrated Development Programme (SIDEP), the Kenya Livestock Marketing Council (KLMC) and Samburu County Council (SCC) explored a business model that would reduce high transaction costs and the interfering roles of intermediaries in pastoralist livestock markets. This participatory approach was piloted by KLMC in Samburu County in the Suguta Marmar livestock market in 2002, leading to the development of the public-private partnership market co-management model (CMM). Through the model, resident communities were expected to make their markets more functional in return for a share of the revenue generated from transaction taxes for their own social needs.
In October 2015, SNV Kenya commissioned RTA (Julius Nyangaga, Charles Nduhiu) to analyse, document the development of CMM, and articulate its value proposition in livestock marketing by demonstrating its effectiveness and efficiency. The study was also to identify a policy framework that would anchor and legalize the model for its successful establishment, replication and scaling up to other livestock markets in the country.
The study found that, from the time the model was initiated and the time of the study, there was tremendous growth in market participation and tax collection. CMM resulted in increased market-buyer participation with growths of 18%, 23% and 50% reported in Merillle, Lolkuniani and Nginyang, respectively, between 2013 and 2014. This growth was the result of the model giving all market actors (buyers and sellers) greater access and roles in a well-facilitated market. Adoption of the CMM has also contributed to a peaceful co-existence among pastoralists communities after the benefits were found to be fairly enjoyed by all participants. Due to its success, the CMM approach was being replicated in more than 40 livestock markets and several ASAL county governments were integrating the model in their strategic plans.