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Advancing urban value chain development to help millions of people work their way out of poverty

VIP Kenya

VIP Kenya uses the strong local and growing global market for passion fruit to increase income in HIV affected communities throughout the region. By targeting these communities in their efforts to increase the volume and quality of passion fruit produced, as well as improve trading networks that link to domestic and international markets, AMPATH seeks to relieve the economic and social stress of vulnerable workers in underserved, conflict-affected, and HIV and AIDS-impacted areas.

    

Project at a Glance | Background | Strategy | Results | Photos | More Information

Project at a Glance

Implementing Agency  AMPATH (Academic Model to Promote Access to Health) – Rift Valley and Western Province, Kenya
Partners  FINTRAC (an agribusiness consulting firm) and the Kenya Export Promotion Council (a para-statal)
Sector  Horticultural, passion fruit and juice
Strategy  Target domestic and juice processing markets
Targeting  7,000 ME owners and workers, HIV impacted communities, range of vulnerability levels
Social Challenges   HIV, political/ethnic violence, low education, gender barriers
Social Services  Health awareness, treatment and care, gender equity
Business Challenges  Low volume, limited input, technology, and market linkages, low capital
Business Services  Input/technology/market linkages (farmer package), capital/technology/training (processor package), capital/training (trader package)

Background

As a partner of the Value Initiative program in Kenya (VIP-Kenya), AMPATH expanded its public  health focus to include value chain development and help vulnerable populations and microenterprise owners and workers in agriculturally-based small towns and cities in the Rift Valley (and Western Kenya) increase their incomes. These small semi-rural and semi-urban communities are chronically underserved, conflict-affected, and impacted by HIV and AIDS. AMPATH’s program primarily works to expand passion fruit (a high-value crop of increasing demand that grows well in this region of Kenya) cultivation. This VIP pilot offers an integrated, graduated approach to better link the passion fruit value chain to export markets and customize services to help individual and small enterprise producers. The VIP Kenya program works at the community level, but seeks to engage and channel benefits to people impacted by HIV. 

AMPATH launched its pilot value-chain intervention in three Rift Valley locations (Kaptaget, Turbo, and Iten), with a medium-term view of extending the work to Western Kenya. The original intention was to explore rural-urban linkages and urban value chain development in towns and cities that are fundamentally agriculturally-based. However, the project evolved into more of a rural initiative, focused on value chain development to strengthen vulnerable communities and design “graduation” models of agricultural enterprises, especially targeting HIV-impacted populations.

Strategy

AMPATH’s primary goal for VIP-Kenya is to enhance and increase the income for individuals and microenterprises in HIV-affected communities, who are (or become) active participants in the horticultural value chain. It also aims to strengthen the excluded, poor, and HIV-affected communities by helping them increase their agricultural productivity and gain access to export, regional, and local passion fruit markets.

The broad strategy is to respond to the large, unmet demand for passion fruit in the high-value export, regional, and local markets by increasing volume and quality of the produce, introducing marketing efficiencies, and expanding market benefits to the excluded poor and HIV-impacted populations. VIP-Kenya’s market-based interventions were designed to address priority constraints in the passion fruit value chain.

Intervention area

Specific interventions or business model

Fruit output and quality

  • Technical assistance
  • Tailored financial services
  • Inputs and equipment package

Micro-processing and value-added products

  • Quality control system
  • Tailored financial products
  • Technical and business training
  • Infrastructure services

Market linkage: Farmer to trader

  • Market information market
  • Business skills and management training

Market linkage: Trader to formal markets

Promotion and market services


Results

VIP Kenya reached over 3,300 enterprises, of which 188 experienced financial benefit of between $46 and $2,540 annually over similar enterprises. For passion fruit farmers in particular this gain is significant, representing 117% increase relative to other farmers. For African Leafy Vegetable (ALV) farmers, this relative increase is 62%. In total these gains were over $320,000 across these 188 enterprises annually. Workers in both types of enterprises also experienced significant results relative workers in other enterprises, earning 76% (passion fruit) and 83% (ALVs) more. By December 2013, it is estimated that almost 600 enterprises will experience financial benefits resulting in a net annual income gain of nearly $1 million.

Introduction of improved marketing and embedded supporting services. VIP Kenya observed significant changes in the business activities of traders as a result of the project. Three traders engaged directly through the program began at the inception of VIP Kenya as a disparate, unorganized group of individual, small-time entrepreneurs. By the conclusion of the project, these traders created a formal network of traders and formed a registered company named Equatorial Hortifresh to aggregate and market passion fruit cultivated around Eldoret. Under the Equatorial Hortifresh umbrella, these traders began entering into contract farming arrangements with passion fruit farmers and began implementing embedded-service arrangements in their transactions with farmers, such as business and agronomic management skills. These practices have enabled to better aggregate farmers’ production, engage regional and international buyers, and increase demand and subsequent profits for all upstream actors in the value chain, including the nurseries who supply inputs to the farmers. Before they formed the company, the traders were handling and selling 1 ton of passion fruits per week before but sold 5 to 15 tons of fruit per week by December 2011, depending on the season.

Production shift toward passion fruit. There is an evidence of a paradigm shift from other broad farming activities (e.g. maize and wheat farming e.t.c.) to the more lucrative passion fruit farming as a main source of income for the households. For every 0.25 acre of land cultivated, 109 Kg more of passion fruit were harvested at the follow up survey compared to the baseline.  Employment opportunities increased in passion fruit farms commensurate with production increases.

Information is driving shift toward passion fruit. Adoption of good agronomic practices by the farmers as a result of the technical assistance they received through VIP Kenya influenced increasing passion fruit production. Project-related farmers demonstrated greater knowledge than other farmers and consequently expressed greater interest in achieving access to quality inputs especially seedlings and agrochemicals.

Strengthened horizontal linkages. Lead farmers proved to be particularly important to link target enterprises to proper skills, inputs, and output markets. Lead farmers expressed a strong social status incentive to continue providing their services. Their strong linkages with nurseries and traders increases the likelihood they will remain profitable and able to continue providing supporting services as lead farmers. Lead Farmers’ incentives were broadly to maintain a ‘teacher status’ in the community and to enable improved socio-economic status of the community around them through passion fruit farming. They planned on continuing to offer technical assistance for as long as the farmers were willing to meet the cost of their transport to and from their farms. Furthermore, they realized that with many farmers cultivating passion fruits, they were better able to aggregate larger volumes of product to market to traders and obtain better prices.

Business and farming capacities in the communities significantly improved. It is with this that business and agronomic skills were imparted to microenterprises, market linkages and employment opportunities were created and the recognition that each value chain actor must play his/her role to trigger success. The revenue from passion fruit sales were reported to have helped boost the overall cash savings of target enterprise households.

Photos

 

Below, please find supplemental documents that further explain the Value Initiative's Kenya Program. 

VIPKenyaPDFAug2010.pptx

VIPInterventionplan5TechandBiztrainingProviderForMicroprocessors.pptx

VIPInterventionplan4TailoredFinancialproductsforMicroprocessors.pptx


 
  
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