Sustainable Urban Economic Development Programme
Promoting Agri-Processing Industries in Kenya’s Intermediary Cities
Kenya is a major exporter of raw and processed fruits and vegetables with its export growing steadily in recent years. The agricultural sector generates a significant income for small-scale farmers who heavily contribute to Kenya’s food security. As such, the Kenyan Government prioritises its support for the sector and has invested in infrastructure and research to improve production and quality. In addition, the Government has created export incentives, such as dutyfree access to certain markets and has developed marketing campaigns to promote Kenyan produce overseas. With agriculture being the backbone of the Kenyan economy, contributing approximately 20% of Kenya’s GDP it remains the Country’s third largest foreign exchange earner. The sector still has a lot of export potential with only 4% of its production being exported. An increase in exports would benefit small scale farmers who produce over 90% of what’s grown and would increase their income as well as safeguard their livelihood.
The global tomato processing market is increasing as a result of existing businesses seeking to utilise the large supply of fresh tomatoes to meet the demand of the consumer market that is demanding other products such as sauces, juices, paste and ketchup in addition to the demand for fresh and processed tomatoes. In Kenya, the tomato processing industry is mainly composed of small and medium-sized enterprises that use manual or semi-automated processes. The sector has in previous years experienced sector-specific challenges such as
Figure 1: The Kirinyaga County Team and the Wakiba Investment Group discuss the location of the Tomato Processing Plant as they look at the zoning plans of Kirinyaga’s Industrial Park plans.
limited access to financing, inadequate infrastructure and limited technical expertise. As the leading vegetable produced in Kenya, the sector is largely fragmented and heavily reliant on rainfall which can be erratic and can lead to crop failures.
In Kirinyaga, agriculture is the largest contributing sector to the County’s economy with tomato production accounting for the second largest contributor to Kenya’s tomato produce. Out of 20 wards, 19 of them produce tomatoes, which are mainly planted on small scale and medium scale by 85% of the farmers. The county is the most productive area for tomato production due to the presence of many rivers which allow farmers to practice irrigation farming. In Kerugoya the adoption of good cultural practices along with the high demand for tomatoes is driving the market for both fresh and processes tomatoes. However, the progress is hindered by the lack of proper infrastructure, in adequate transport systems and poor storage facilities, which make it difficult for farmers to transport their produce to processing plants resulting in post-harvest losses. Additionally, most farmers and processors in Kirinyaga struggle to access affordable financing to support operations activities which hinder their capability to invest in modern equipment and technology that can help them improve processing efficiency and reduce waste. Further, the inefficient supply chain due to poor coordination between farmers, processors, and retailers results in inadequate supply and demand management which leads to further losses for the farmers.
To assist farmers to increase their production capacity to meet the demand for processed tomato in local and international markets, the UK funded Sustainable Urban Economic Development Programme (SUED), is supporting Wakiba Investments Limited to establish an integrated tomato processing facility in Kerugoya-Kutus Municipality in Kirinyaga County. The facility will process tomatoes into three key products; tomato paste tomato sauce and tomato juice. The facility is a response to the farmers who have in recent years experienced postharvest losses due to the lack of a ready market during peak season. In addition, the processing facility will have a cold chain facility which will maintain the quality and safety of the tomatoes.
Wakiba is investing £1.462m (Ksh 278m) into the project to set up the operations in Kerugoya and source tomatoes from the small scale and medium scale farmers in Kirinyaga County and wider Central Region Economic Bloc. The UK Government through SUED played a key role in unlocking this investment by providing technical assistance in the structuring of the deal and carrying out-prefeasibility studies as well as by providing £487.5K (93.37m) in seed fund support. Wakiba is working closely with the County to begin to provide technical support to the farmers by highlighting to them the best farming techniques for tomato farming as well as sharing with them the required seed for tomatoes that will ensure they get the highest grade and quality of tomatoes to ensure adherence to the export market.
Once complete the processing facility will have the capacity to process 16 tonnes of tomatoes per day with the production rate being sustained through the establishment of a reliable and sustainable supply chain with local and regional farmers. The facility will prioritise the inclusion of a captive cold chain facility. This is instrumental in maintaining the tomatoes’ quality, freshness and safety from harvest to processing. By controlling the temperature and humidity of the produce, they will be in optimal condition when being produced ensuring that the quality standards are maintained.
To ensure the facility receives a continuous supply of tomatoes, the processing plant along with the County will provide extension services to farmers. The extension services will provide
guidance and training on best agricultural practices, covering aspects such as seed selection, crop management, pest control and post-harvest handling. In empowering the farmers with the necessary knowledge, the quality of tomatoes that they produce is enhanced. Working closely with farmers ensures that as they begin to integrate best agricultural practices, they are able to promote soil health as well as prioritise water conservation. These combined efforts will lead to enhanced agricultural productivity and long-term profitability for farmers increasing their incomes across the years.
With SUED’s support, the establishment of the tomato processing plant represents a transformative approach towards the enhancement of the tomato value chain in the region. The combined unique sourcing strategy, cold chain facility, extension services and commitment to sustainable practices will positively impact the lives of the farmers and the local community. In working with the local county Government to bring in agri-business, SUED is advancing the regions prosperous and sustainable future.