Improving the banana 'value chain' in East Africa
Until recently, dessert banana had never been properly marketed in Kenya. Traditionally grown in small quantities as a subsistence crop, with any surpluses sold to brokers or wholesalers, few farmers believed it could be fully commercialised. As a result they only received a tiny fraction of the market price, which in turn ensured they were unable to invest in improving and increasing production.
"In the beginning, most of the farmers didn't think it was possible to turn banana into a cash crop," explains Henry Kinyua, business manager of TechnoServe, an organisation that promotes business solutions to rural poverty. "But there were a few innovators who said 'Wow, let's try it.'" In 2003, TechnoServe began looking at ways to transform the country's banana sector and changing the fortunes of banana farmers by reforming the market chain.
Initially farmers were sceptical: many had little trust in the fresh produce market, having lost money to traders and brokers in the past. "They were really struggling," continues Kinyua. "They were not able to irrigate and they had no money for fertiliser or other inputs. If they wanted loans to invest in their farms, the banks would say 'you guys have gone bananas!'"
The first, crucial step was to encourage farmers to establish producer groups and work together, rather than as sole traders. TechnoServe and its partners then trained member farmers in simple techniques for improving production, harvesting and handling. For example, banana bunches used to be cut from the plant and left to drop to the ground, bruising the fruit. By handling the bananas more carefully and placing them on leaves in wheelbarrows, farmers were able to protect the fruit and maintain quality.
Then 'bulking' was introduced, where bananas from many farms are taken to one collection point before being loaded onto trucks and driven to the market. This saved on transport costs to the capital, Nairobi, for example, by up to 70 per cent. Another simple practice, of weighing bananas by the kilogramme, doubled farmers' incomes overnight: previously they had to accept the prices that buyers demanded, with little or no bargaining power.
The organisation also helped flush out the middlemen from the banana value chain. "From the farmer to the consumer there could be up to six or seven intermediaries," Kinyua explains, "the majority of whom were opportunistic and had no long-term view of the industry." By linking the producer groups directly to banana wholesalers, farmers were able to take a larger share of the returns. For the end-consumer, however, there was little to suggest the extent of the reforms taking place behind the scenes since TechnoServe had determined that it was essential that the final price of banana in the markets did not rise.
As well as ongoing training and the establishment of demonstration plots for new farmers, tissue culture plantlets have been introduced on many farms to assist the cultivation of disease-free crops. Through being part of producer groups farmers have also enjoyed easier access to credit and have been able to invest in their farms. To-date, TechnoServe has trained over 11,000 farmers, who have sold over 3,000 tonnes of banana. "The farmers' confidence has been boosted," says Kinyua. "They understand the value chain and they know not only their rights, but their responsibilities too. And, the banks are now ready to listen to them."
With smallholder banana production now on the increase in Kenya, the initiative has been so successful there is even the danger of a banana surplus, with fresh produce markets unable to absorb all the extra production. To make the most of this possible banana boom, TechnoServe is looking to the private sector to lead the way in developing new higher-value products, such as dried banana for use in breakfast cereals, and pureed banana for baby food and 'smoothie' drinks.
The TechnoServe model has also proven successful in Uganda, where the matooke cooking banana has been commercialised. "It's amazing," says Erastus Kibugu of TechnoServe in Kampala, speaking of the changes he has seen in the country. "For the first time people are earning real incomes out of their bananas: children are going to school; houses are being built; diets are improving." Kibugu believes that this success with banana means there are exciting opportunities to commercialise other staple crops in the country, such as kidney bean and groundnut.
Back in Kenya, Henry Kinyua is clear about the reasons for success. "Smallholders will never, ever make it if they don't come together and form a formidable, viable marketing organisation," he argues. "But also, they must be engaged as partners in development, not as victims."
Date published: January 2009
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