The agriculture sector plays an extremely important economic role in Kenya.
It employs more than 40 per cent of the total population and contributes 30 per cent to the Gross Domestic Product (GDP). In 2020, the World Bank reported a significant rise in new challenges while important investment opportunities arise. This has contributed significantly to an increased interest by youths to invest in the sector.
Youngsters have started to see agriculture as a source of income while tackling the rising youth unemployment rate, which currently stands at 6.6 per cent. In doing so, they contribute to the attainment of food and nutrition security in the country. Despite interest in the sector, there is still a myriad of challenges that hinder maximum profitability and return on investment. These challenges range from physical to environmental and to the ability to do business in a conducive environment.
However, many of these challenges can be linked to missing data and information that may influence decision making at policy level as well as activities by food system actors. Knowledge on what to produce, how to produce, which stage of the value chain to support, what the market orientation of a value chain is, can be improved by access to relevant market information. Thus, information asymmetry is a major impediment to market penetration.
The agriculture sector in developing and emerging economies, including Kenya, consists of smallholder farmers with poor access to extension and market information. Farmers are thus faced with high transaction costs and constraints on information that limit optimal production and marketing choices. Limited information has also resulted in farmers facing challenges such as limited knowledge on where the markets are, what the prevailing prices are and what are the best seasons to produce. This is the situation faced by tomato farmers in Kitui County.
According to a Food and Agriculture Organisation (FAO) report in 2018, these farmers experienced high tomato waste due to limited market access. Last year, research ranked tomato as the second most important vegetable crop in Kenya after potato, accounting for 14 per cent of total vegetable produced and 6.72 per cent of entire horticultural crops. Kirinyaga, Kajiado, Bungoma, Migori, Murang’a and Homa Bay counties are the top producers and are steadily exploring ways to improve production and marketing.
Kitui faces challenges. An engagement with the Kitui County Department of Agriculture revealed that although farmers are supported to improve their production, there is inadequate support for market penetration. This support is to strengthen and support the food systems in Kitui. A food system is a complex web involving production, processing, transport and food consumption. It is concerned with governance, economics of food production, its sustainability, levels of food waste, and effects of production to the natural environment and the impact of food on health.
The food system is a complex web of production, processing, transport and consumption. Kitui farmers have been captured in this web and their situation has been compounded by these challenges. These producers are faced with limited pricing and market information. This leaves them vulnerable to exploitation by marketing agents. The commissioning of the tomato and fruit processing plant in Kitui in 2021 is indicative that the county is set to increase tomato production and subsequently require sound marketing strategies.
We are confident that Agricultural Market Information Services (AMIS) will be an important tool for integrating farmers with their markets efficiently, thus reducing information asymmetries. This will enhance their sales and profit margins. A 2016 research on the impact of MIS on household income showed that beneficiaries of Mviwata Market Information System sold more tomatoes and achieved a higher gross margin than those who were non-beneficiaries. Kitui County should give farmers sufficient, reliable and timely market information.
This can be possible through establishing a system that would have real time information on available markets, their locations, promotions, and prices. With this information, the farmers can compare prices and available markets. Additionally, a 2019 study on AMIS in sub-Saharan Africa found that a market information system possesses great diversity in structure and stakeholder conduct design issues. Therefore, AMIS can be applied in different contextual set-ups.
The government is implementing the Kenya Agricultural Market Information Systems (KAMIS) to document and assess the significance of different actors as potential uptake/dissemination pathways for technologies, and to consider ways to improve the performance of market knowledge and information. KAMIS has information on various farm produce, markets in the 47 counties and their corresponding wholesale and retail prices.
We propose to contribute towards the development of a policy brief on market information system for a market environment evolving in terms of availability and usage of ICT and market actors. Policies define organisational goals and provide guidance in achieving objectives and ensures processes do not deteriorate over time. Therefore, it’s important that Kitui County is directly involved in the formulation and implementation of a market information system service as a policy.
An effective market information system is an entry point for an improved coordination and linkages among food system actors.
Tom Ogweno, Winnie Yegon, Elizabeth Gathogo and Charles Muteithia are fellows at the African Food Fellowship