Kenya: Can Avocado Exports Bring Prosperity to Kenya's Smallholder Farmer?

Kenyans are known for their legendary love for avocados.
press release

Exporting avocados to the high-value European market can raise incomes of smallholder avocado farmers in Kenya by nearly 39 percent [it is correct] and fetch better prices for their produce, according to a new study by researchers at the International Food Policy Research Institute (IFPRI)and partner institutes.

“International agricultural markets generally offer higher price and demand higher quality as compared to the local markets in Kenya. Producing for these markets could raise smallholder farmers’ incomes,” said the lead author and senior researcher at IFPRI, Mulubrhan Amare.

The study, “The impact of the smallholder farmers’ participation in avocado export markets on the labor market, farm yields, sales prices, and incomes in Kenya,” co-authored by IFPRI’s Amare, Partnership for Economic Policy’s Jane Mariara; and Vrije Universiteit Amsterdam’s Remco Oostendorp and Menno Pradhan, was recently published in the journal of Land Use Policy. Using data from a survey of large avocado farmers in Kenya, the study examined determinants and impacts of smallholder farmers’ participation in avocado export markets on labor inputs, farm yields, sales prices and incomes.

Participating in avocado export markets raises incomes, revenues and fetches higher prices for the small holder farmers. It also impacts labor inputs: cost of hired labor increases by almost 1,300 Kenyan Shillings (US $ 13) a year, and family labor inputs increase by about 15 days, of which the largest share comes from increases in female labor. Avocado prices increase as well but the yields are negatively impacted. “These lower yields could be explained by the stricter quality requirement of export markets,” said Amare.

A dozen avocados of Haas variety that sell for nearly 3.5 in domestic markets can fetch almost 6 Kenyan Shillings in export markets.

The survey revealed that farmers who participated in the export markets, as compared to those who didn’t, were older, had larger farms (size 1.09 ha), had received more training, and owned more avocado trees of Haas variety, the type favored in international markets. Additionally, farmers who exported had higher likelihood of living near a well-functioning avocado farmers’ group.

Avocado exports from Kenya, world’s third largest avocado producer, as a share of its total production have been declining. It currently stands at 10 percent, significantly lesser than other exporting nations such as South Africa that exports nearly 60 percent of its total avocado production and Chile that exports 55 percent.

Currently, only a few small-scale farmers, mostly in Murang’a County in Central Kenya, are linked to exports markets through contract farming. “Realizing the underexploited export opportunities offered by the country’s sizable production, the Kenyan government has been supporting smallholder farmers by linking them to exporters through grower schemes,” said Amare.

Typically, small farms are unable to access export markets due to factors such as insufficient capital, poor infrastructure, and high costs of participation on account of stringent export quality standards, linking up with exporting firms, and additional labor costs.

“Smallholder farmers can greatly benefit from participation in avocado export markets and other supply chain activities. Providing households access to foreign markets and up-to-date information on farm technology, along with the dissemination of simple and domestically invented technologies, could achieve higher farm incomes, revenues and sales prices,” said Amare.

The study recommends that any existing or new government programs should focus on increasing productive capacity by improving access to seedlings and building technical knowledge through training programs in avocado cultivation. The policymakers should also focus on making export markets inclusive by enhancing participation of small farm holders.

Download the full study here: https://doi.org/10.1016/j.landusepol.2019.104168

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