Market Survey Report
on
Market Opportunities for Fruits and Vegetables Processing in Ukambani, Eastern Kenya

Project Supported by
USAID funds through the FOODNET competitive grants scheme.

By
Frederick M. Kiilu (Kamumo Products), Lutta Muhammad (Kenya Agricultural Research Institute) and
Samuel M. Wambugu (Kenya Industrial Research and Development Institute).

Acknowledgements

We wish to record our debt of gratitude to the many individuals and institutions that contributed to successful planning and implementation of this study but are not mentioned here. At the FOODNET Co-ordinating office, we wish to thank Dr Shaun Ferris and John Jagwe for ensuring smooth flow of funds. We specifically mention the FOODNET Co-ordination Office (located in Kampala, Uganda) who provided the funds to meet the operational costs of the study. These funds were drawn from a USAID competitive grant administered by FOODNET.

Mr Kyalo Mulinge, Mr Thomas Katua, Mr David Mutinda, Mr Stephen Kituku, Mr Silas M’Ragwa and Mr Mutuku Nthuli conducted Field interviews with farmers and traders of fruits and vegetables as well as intermediate consumers of processed products. Ms Carol Wafula gave valuable assistance with data management. To the lady and the gentlemen, our gratitude.

We also wish to thank company officials who assisted us but remain anonymous. Last, but not least we thank all respondents who generously spent their time answering questions they sometimes thought were not important, and for the lessons learnt from them.

1. Introduction

The agriculture sector plays the leading role in the economy of Kenya. Agriculture fulfills this role by providing export earnings, internal self sufficiency in basic foods, employment supply of raw materials for the processing industry. Kenyan agricultural production is dominated by cereals, grain legumes, root crops and several industrial crops. Many of the horticultural crops have a dual subsistence as well as cash function. The importance of the horticulture sub-sector within the Kenyan agriculture sector has been widely acclaimed. Talking to journalists in Nairobi recently, the chairman of the Fresh Produce Exporters Association of Kenya said `Horticulture is the last bastion of growth in an economy which shrunk by 0.4 per cent during the year 2000. It is Kenya's second foreign exchange earner. In the year 2000, foreign exchange earnings from horticulture alone totaled KShs 14 bilion accruing from the sale of 99,000 tons, up from KShs 4 bilion from the sale of 70,000 tons in 1995 (Akumu 2001).' Ukambani area (Machakos, Kitui, Makueni and Mwingi Districts) is a major player in horticulture production for the export as well as the domestic consumers. Although impressive gains in numbers of farmers, hectarage, tonnage and value have been achieved, many factors still constrain exploitation of the development potential offered by the sub-sector. First, transport and communication, storage and processing infrastructure is not well developed in much of the area. Since production and marketing of fruits and vegetables are chacterised by seasonality, there are periods of surplus and scarcity during the year and ensuing wastage and low income. Increased capacity for processing could ease this constraint by utilizing surplus production by transforming these into high value shelf stable products. Following the liberalization of the economy a decade or so ago, some entrepreneurs have set up small to medium scale processing concerns. Such businesses need information about the markets for fresh produce and other raw materials, availability of skills and intermediate inputs as well as the market for final products. There is a need for a market study addressing this need.

2. The Agro-ecological, socio-economic, infrastructure and Institutional Environment in Ukambani

2.1       Agro-ecological Conditions

Rainfall patterns in the four Ukambani Districts exhibit distinct bimodal distributions. The first rains fall between mid-March and end of May and are locally known as the long rains (LR). The second rains, the short rains (SR), are received between mid-October and end of December. Average seasonal rainfall is between 250-400 mm. Inter-seasonal rainfall variation is large with a coefficient of variation ranging between 45-58 per cent. Temperature ranges between 17-24⁰c.  Evapo-transpiration rates are high and exceed the amount of rainfall, most of the year except the month of November. The main Agro-ecological Zones (AEZ) in the region are: Upper Midland (UM), Lower Highland (LH), Lower Midland (LM) and Lower Lowlands (IL). The LM zone is the most predominant. Based on rainfall criteria, the following main zones can be found: Sub-humid (2) Semi-humid (3), Transitional (4), Semi-arid (5) and Arid (6).  The  major soils of the dryland areas are developed on basement rocks (gneisses), quartzite and plio-pleistocene bay sediments. The most predominant soils include alfisols, acrisols, ferralsols, vertisols, and andasols (FAO classification).

2.2       Farming Systems and socio-economic conditions

The main food crops are maize, beans and cowpeas.  However, the growing conditions allow a wider range of food crops to be grown. The main on-farm cash generating activities revolve around coffee, horticulture, agro-forestry and cross-bred based dairy farming under the zero and semi-zero grazing systems. Population density within the region (see Table 1) is high and thus the average farm size is within the range 1‑7.5 ha.  Like in the rest of the country, the majority (about 60%) of the farmers in this region live below the poverty line and they can’t therefore meaningfully contribute to personal or national wealth creation.  Poverty and low production risk only permit some of them to use purchased inputs. Farm operations are generally based on hand labour. High value horticultural crops such as tomatoes, onions and Asian vegetables are the main crops and these are raised mainly in Matuu in Yatta division and Kibwezi. Virtually every smallholding has at least some horticultural crop. There may be a combination of tree types on the farm. There are smallholdings where distinct plots are dedicated to the production of one or more types of horticultural crops. This may be under rain-fed or irrigation. There are also medium to large-scale horticulture farms in the area. The main problems are that the quality is low, production constraints such as damage by pests and diseases, and lack of appropriate varieties. These crops exhibit seasonality. They are bulky and highly perishable. They come onto the market at short intervals and then the prices fall, then times of shortage prices increase.

2.3 Infrastructure and Institutional Environment

Machakos district is served by 1682 km of roads, out of which 75 per cent are only motorable during the dry season.  Makueni district has 1593 km of roads. Kitui and Mwingi districts have a combined 3373 km of roads (3 per cent are all weather). Telecommunication services are more developed in the major town centres such as Machakos and Kitui. Electrical power is supplied to major town centres by the Kenya Power and Lighting Company (KPLC). The government, NGOs and community self help groups have sponsored projects that provide wells, dams and piped water in main areas of human settlement. However, most of the water development ventures are for domestic use and not for agricultural production except in areas where high value crops are raised under irrigation. The area is served by a number of suppliers of seeds, fertilizers, pesticides and fungicides nationwide in the major town centres. A variety of tools and implements can be purchased at these outlets and maintained and serviced through networks of local artisans. The Kenya Industrial Estates (KIE), a public corporation established for the purpose of assisting  small‑scale industry also participates in the production and marketing of farm implements. Participation by KIE in the farm implements business is however, not extensive. There is considerable local market trade in farm produce, clothing, tools and implements. Loans for agricultural purposes can be obtained from sources such as the Agricultural Finance Corporation (AFC), the co‑operative movement and commercial banks. However due to various factors most small-scale subsistence farmers do not have access to the credit facilities.

Table 1. Population distribution in the four Ukambani region districts

3. Kamumo Products

Registered under the Business Act (Cap 499 s.14 of the Laws of Kenya) in 1987, Kamumo Products enterprise is located at Katoloni Market, about 4 km from the centre of Machakos Town along Konza Road.  It is about 70 Km south east of Nairobi.  The firm's vision is that of food insecurity in the third millenium. Accordingly, the mission of Kamumo Products is to promote global food security and good health through processing raw agricultural produce based on training and sound business management practices.

The goals behind the establishment of the enterprise were to:

The firm processes mangoes, citrus, papaws and passion fruits mainly from Machakos, Makueni, Kitui and Mwingi Districts. The firm is especially keen to buy excess fruit whenever there is surplus production and process these into products that can be used when shortages occur. These are transformed into fruit pulps, juices, jam and sauces.

3.1       Status of the firm

At inception, Kamumo Products employed one full time person. The number of employees has since risen to four. All the members of staff receive on-the job training and work under direct supervision of the proprietor. The enterprise has also witnessed significant changes in production technology used. The aluminium utencils which were used in the beginning have been replaced with those made of stainless steel. Small scale semi-automatic tools have largely replaced hand tools based manual procedures. This technical progress has facilitated improvement in product quality, and, at the same time, reduction in unit costs.

All these improvements have culminated into increased productivity as well as product diversification. Initially, the firm processed horticultural produce into a single product. The range of products has increased to six. Total production has increased from 50 kg/litres per week to 3,500 kg/litres per week. Annual turn-over rose from U$ 10,000 to 25,000.

3.2       Marketing

 Kamumo Products sells its finished products to wholesalers, supermarkets, hotels, cafes, hospitals and schools. The firm also reaches its market through participation in trade fairs, symposia, exhibitions, business net-works, some of the firm's products are on display at a recent International  Trade Fair in Nairobi.  

Like many Jua Kali enterprises, Kamumo Products faces a severe capital constraint. Conditions for accessing credit from either the business community or commercial banks in the Machakos area can not be met by many of the small enterprises. Thus the only realistic source of investible funds is the profits they make and these are, by any standards, meager. This has seriously impaired the firms capacity to undertake investment that should facilitate adoption of efficient technologies.

Availability of raw material for processing is constrained by a number of factors, among them, competition from exports, low quality produce from local farmers and the deplorable state of the transport, storage and communications infrastructure.

Kamumo Products suffers from adverse effects arising from lack of fruit processing infrastructure, inaccessibility to research findings, lack of training opportunities for staff, inadequate exposure to local as well as international markets and the impact of unpredictable climatic factors on both quality and quantity of fresh horticultural produce for processing.

Lack of market research information (international, regional and local) is a serious constraint. There is a general lack of regional and international standards and product specifications. Poor finishing and packaging also pause as serious threats to the marketing of Kamumo Products.

Figure 1. .Mr  Frederick Kiilu, Managing Director of Kamumo Products describes to H.E. the President some the products of the firm during a recent trade exhibition in Nairobi.

4.         Objectives

The goal of the study was to identify market opportunities (and constraints) for the fruit and vegetable processing industry in Machakos district. Objectives of the study were to:

1.      Identify the main players in the production, distribution, processing and marketing of fruits and vegetables in Ukambani.

2.       Assess the availability of raw materials (fresh produce), and intermediate inputs (fruit pulp, and concentrates).

3.       Assess the need for local production of semi-processed products (fruit pulps, pastes and concentrates).

4.       Identify volume, prices and revenue trends associated with the production and trade in intermediate as well as final products. 

5.         Methods

The strategy that was adopted for this study embraced five distinct sets of activities. The first set of activities entailed collection, collation and analysis of information about production, trade and processing of fruits and vegetables in the area from secondary sources and through discussions with the key persons in the area and in Nairobi. These were facilitated by visits to the libraries, the horticulture Division of the Ministry of Agriculture and Rural development, traders, processors, the Departments of Trade and Industry, the HCDA and many others. This yielded information which guided identification of gaps in information and the design of the surveys.

Following Rapid Rural Appraisal procedures, four surveys were carried out during the months of May and June 2001. These were, the survey of fruits and vegetable farmers, entities which trade in fruits and vegetables, intermediate consumers of processed fruit and vegetable products, and, small, medium and large scale processors of fruits and vegetables.

5.1       The survey of fruits and vegetables farmers

A survey of 35 fruits and vegetables farmers was carried out in Kitui, Machakos Makueni and Districts. Selection of participating farms was effected in two stages. In stage one, areas within the four districts where growing of fruits and vegetables is most intense, taking the variability in production as well as socio-economic conditions in the area and the need to represent this variation into consideration. The second stage involved the actual selection of farmers within the fruit and vegetable farming areas identified in stage one. In each of the areas selected, field interviewers identified rural access tracks branching off the main roads, and selected every third fruits or vegetable farm and interviewed the head of the household. Each field interviewer repeated this procedure until his quota of farmers to be interviewed was completed. A formal questionnaire had been drawn up and pre-tested before being used in the survey.

5.2       Survey of fruits and vegetables traders

The survey of fruits and vegetable traders was carried out during the months of May and June 2001. The survey involved the interviewing of 40 small and medium scale traders in Machakos, Nairobi, Kitui and Makueni areas. First, the main markets in which fruits and vegetables are traded in those areas were identified. Within each market, interviewers selected every third fruit or vegetable trader, requested an interview and if granted, applied the questionnaire.

5.3       Survey of intermediate consumers of the processed products of fruits and vegetables  

Various entities were classified as intermediate consumers of processed products of fruits and vegetables if they acquired these from identifiable sources for passing on to final or other intermediate consumers. These entities included shops, supermarkets and a variety of institutions. Trading centres in Nairobi, Machakos, Kathiani, Kibwezi, Kitui and Matuu areas were selected because they represent existing and potential loci of the market for goods processed by Kamumo Products. A total of 45 entities were selected. Interviewers obtained information about trade in processed fruits and vegetables products using a structured questionnaire. The survey of intermediate consumers of fruits and vegetables processed products took place during the months of May and June 2001.

5.4       Survey of small, medium and large-scale enterprises processing fruits and vegetables

In a recent study of the fruit processing sub-sector in Kenya (K-MAP 1994), 29 firms which process or otherwise use intermediate inputs derived from fruits and vegetables were identified. While more than half of the 29 firms are to be found in the city of Nairobi and its environs, the remainder are located far outside the catchment area of Kamumo products, in places such as Mombasa, Nakuru, Kisumu and Eldoret.

Largely because of the small numbers of firms that are involved in processing fruits and vegetables, no attempt was made to apply formal sampling procedures for this survey. In lieu of this, it was decided that the firms which are located in the vicinity of Nairobi and Machakos be approached and requested to supply the information that was needed for this study. Nine of the firms obliged and supplied information in varying degrees of completeness. Of the remainder, some declined to participate citing the potentially sensitive nature of information that was being sought, while others were not able to release the relevant officers due to time constraints. Respondents representing the nine firms which agreed to participate were interviewed during the months of May, June and July 2001. These interviews were guided by a structured questionnaire.

6.         Availability of Fruits and Vegetables for processing in Kenya and Ukambani

A reliable supply raw materials of acceptable quality is a major determinant of the viability of the processing industry. As noted in the preceding sections, Kenyan farmers have committed a sizeable hectarerage to production of fruits and vegetables. In 1999, for example, 134,000 ha of prime land were planted to fruits and 97,000 ha to vegetables. The leading commodities by hectarage, volume and value were bananas, mangoes, citrus, papaws and avocado (fruits) and kales, cabbage and tomatoes (vegetables). This hectarage yielded 3,276,000 tons of fresh produce. Out of this production, a small proportion (70,000 tons) was exported. The bulk the fruits and vegetables that did not find its way into the export market was used by farm families for subsistence. The remainder was sold to Kenyan consumers through direct purchases from farms, retail outlets or various other arrangements.  

The range of fruits and vegetables grown in the Ukambani area is wide. Citrus, papaws, bananas, avocado and mangoes (fruits) and tomatoes, cabbage and kales (vegetables) are the most important fruits and vegetables commodities in the Ukambani area. The hectarage of fruits and vegetables grown in four districts of Eastern Province (Ukambani region) is shown in Table 2a below.  The contribution of this region to the national fruit and vegetable production is shown in Table 2b. As shown in Table 2c, the average fruit and vegetable yields within the Ukambakani region is comparable and in some cases much higher than the national yields. Thus, it is evident that the Ukambani districts account for a significant proportion of the Kenyan fruit and vegetable production. These districts produce two thirds of guavas, half of papaws, two fifths of citrus and one tenth of mangoes, avocado and passion fruit. Machakos is the leading producer of fruits and vegetables. Neighboring Makueni and Kitui districts are important producers of papaws, bananas and mangoes. Some of the fruits and vegetables were used as raw materials for production of shelf stable products for the local as well as the export market. The need to tap this huge potential through promotion of local industries that add value to the farm produce is hereby strongly indicated.

Table 2a. Hectarage of fruits and vegetables in four districts of Eastern Province (Ukambani region)

Source: Ministry of Agriculture and Rural Development,  Nairobi.

Table 2b. Hectarage, volume, yield, value and prices of fruits and vegetables in Kenya

Source: Ministry of Agriculture and Rural Development,  Nairobi.

Table 2c. Production and yields of fruits and vegetables in four districts of Eastern Province (Ukambani region)

Source: Ministry of Agriculture and Rural Development,  Nairobi.

7.         The Market for Fruits and Vegetables and Processed Products

A major purpose for the survey was to identify the main players in the fruits and vegetables production, trade and processing. Farmers, traders of fruits and vegetables, processors and the final consumers were identified as the major players in the sub-sector. Through the study, the entities within the sub-sector were identified and their main attributes characterized. Table 1 represents a summary of the characteristics of the main players in the sub-sector of relevance to the development of the market for fruits and vegetables in the Ukambani area.

Table 3. Characteristics of the main players in the fruit and vegetables sub-sector.

7.1       Gender

The results of the surveys highlighted the significance of the gender factor in the sub-sector. Fruits and vegetable farmers were predominantly male (83 per cent). This result was not surprising, given that cash crops farming in the area is a male dominated activity. The converse was true for fruits and vegetables traders where the majority (80 per cent) were female. Just under half (40 per cent) the proprietors of the institutions, shops, supermarkets, retailers and other outlets for the processed products of fruits and vegetables were female. The leadership of the firms which process fruits and vegetables was also male dominated.

7.2       Age

The findings of the study suggest that fruits and vegetables farmers and traders in Ukambani are relatively young. Average ages of farmers and traders were 44 and 40 years respectively. Operators of processing businesses as well as the outlets of finished products were even younger (mean age was 36 and 38 years respectively.

7.3       Level of formal education

More than three-quarters of the managers of the firms interviewed for this study had post-secondary education, and, out of these, more than half (56 per cent) had university education. Even the managers or proprietors of the supermarkets, retail and other institutions that act as intermediate consumers of processed fruits and vegetables products were well educated. More than three-quarters had secondary school education and or more. The managers and proprietors of enterprises which carry out fruits and vegetables trade, on the other hand, were the least educated. The majority (55 per cent) of the fruits and vegetables traders interviewed for this study had a minimum of primary school education. Another 37.5 per cent had secondary school education. Although some farmers had university education (14 per cent) and middle college education (9 per cent), the majority (46 per cent) had secondary school education and primary school education (29 percent).

Seasonality

Production of all these commodities is characterized by seasonality. The main season for citrus span the months of May, June, July and August. Some farmers identified a minor season in the months of October and November. Mangoes come into full production in one major season spanning the months of January, February,  March and April. Pawpaw production was more evenly distributed throughout the year with some element of peak season in March and June.

Table 4.  Major fruits and vegetables production seasons in Ukambani region

X -  Represents the peak months

Both the yields and quality of fruits and vegetables depend on the climatic and soil conditions and on crop management factors. These in turn determine prices that producers receive and income derived from their fruits and vegetables crops. The relationship between price and yield level is generally inverse (the higher the average yield, the lower the price to be expected. These can cause a number of problems. Effective methods of storing the product and prices improve and processing excess produce into shelf stable product. The Horticultural Crops Development Authority (HCDA) has recently established a storage facility for handling fresh produce in Machakos town (Fig. 2).

Figure 2. The HCDA fruits and vegetables handing facility in Machakos town

The distribution of the harvests of the major fruits and vegetables in the area as indicated by Table xx.xx above is such that if processing is well scheduled, there can be continuous supply of raw materials throughout the year. Shortfalls can be evened out  through purchases of fresh produce from areas in the Coast and Western Kenya where harvesting periods are different. Surplus production from Tanzania and Uganda is also sold on the Nairobi market and can be accessed by Kamumo Products. Some of the processing firms stated that they import fresh produce from the East African Community member states and beyond. Fresh produce is often supplemented with concentrates and other ingredients purchased from suppliers in Nairobi.

The findings of this study provided evidence that even at current levels, Ukambani farmers are producing fruits and vegetables in quantities that are sufficient for small, medium and large scale processors. The main commodities are citrus, papaws, bananas, avocado and mangoes (fruits) and tomatoes, cabbage and kales (vegetables).

Kamumo Products' medium term target of raising processing capacity from the present 0.5 tons to 5 tons per day is likely to be met from its immediate vicinity. However, constraints such as competition from exporters, inappropriate varieties (low yields and poor quality), poor infrastructure, lack of investment still remain. Policy interventions to improve in the transport, storage and handling infrastructure, agronomic research to improve yield as well as quality, farmer education, increased support for input supply and marketing opportunities for producers  are needed. 

8.    Processing of Fruits and Vegetables

Seasonality of production results into large quantities of fruits and vegetables being brought to the respective markets at the end of the growing season, and the period following this with scarcity. Apart from the traditional functions of increasing job opportunities, enterprises to process fruits and vegetables into shelf stable products, can help farmers achieve stability in prices they receive and make the products available to consumers at reasonable cost. A number of firms now undertake processing of fruits and vegetables into a number of products. While a broad spectrum of products could be processed in Kenya, only a few products are made. KMAP (1994) listed 29 of the processors in various categories who process fruits and vegetables in Kenya. Most of these tended to be located in Nairobi, Nakuru, Kisumu, Mombasa and in other major urban centres country-wide.

8.1       Fruits for processing

Fruits processed by these firms are shown in Fig.3. The most frequently mentioned commodities were citrus, bananas, papaws, plums and berries. The sources of these commodities were varied. A significant proportion of the fresh produce that was processed originated from the Ukambani area..

Fig.3.   Fresh fruits used by processing firms

8.2       Products made from Fruits and vegetables

The main products are canned fruits, sugar preserves beverages and drinks. Some fresh produce is also processed into fruit juices, juice concentrates, fruit nectars, fruit drinks but many process fruit as a line among a diversity of products.

The nine fruit and vegetables processing firms varied greatly in terms of essential characteristics. The largest firms were based in Nairobi. None of the firms were processing one product only. Going by the number of firms producing a given product, fruit juice was the most commonly processed product. Out of the nine firms visited, seven (77.8 per cent) were processing fruit into the various types of juice. This was followed by Jam and marmalade (44.4 per cent) and then tomato and chili sauce (33.3 per cent).

Table 6. Proportion of manufactures processing various types of fruit and vegetables, annual production and prices of the products.

8.3       Trends in traded volumes and prices of processed fruit and vegetables products

The respondents of the fruit and vegetable processors visited gave the general impression that trends in both volumes produced and prices received for most of the products were increasing. Respondents representing the firm producing dried mangoes and the firm producing yogurt asserted that volume trends were increasing, while the opinions of those representing the firms processing jam, marmalade and fruit juice were divided: One third stated that the trends were increasing. The remaining two thirds were equally divided, with 33 per cent stating that the trends were stagnant and 33 per cent stating that it was decreasing.

Table 7. Trends in traded volumes and prices of processed fruit and vegetables products.

8.4       Transportation of Fruits and vegetables products

The majority of the managers of the firms that participated in this survey (80 per cent) own transport facilities. More than half of the firms have contractual arrangements with suppliers of raw materials. Lack of adequate supplies, wastage, seasonality and transport were the major constraints. Others have several types of arrangements such as weekly and monthly payments and payment on demand.

Most of the firms visited operate their own transport (78 per cent). Just under half (44.4 per cent) deliver their products to their clients. Moreover, nearly all have contractual arrangements with the clients. Some orders are delivered on demand (11 per cent) while others (33 per cent) have term contracts to supply on either weekly, fortnightly or quarterly. Some, (22 per cent) operate on the basis of cash on delivery. The buyers of the products are located in Meru, Nairobi, Nyeri, Thika, Isebania, Migori, and Taveta and in many rural areas.

8.5       Sources of fruits and Vegetables

A variety of horticultural produce are processed into the products just described. The fruits and vegetables used are obtained from a number of sources. Some of these fruits and vegetables are supplied by individual farmers, while others source from local markets such as Gikomba and Wakulima market. Some of the fruits and vegetables are obtained from as far away as Tanzania. However, the bulk of fruits and vegetables processed are obtained from Machakos, Njoro, and from the Coast and Central Provinces. The findings regarding the fruits and vegetables processed are detailed in Table 7.

Table 8. Sources, quantity, prices and uses of some unprocessed fruits

9.         Intermediate Consumers of Processed Products Made from Fruits and Vegetables in Ukambani  

Some 12 products were identified by all the classes of intermediate consumer as commanding a significant proportion of the market for processed products made from fruits and vegetables in the Ukambani area. These were: juice, fruit concentrates, jam, jelly, ice cream, pies, yogurt, sweet mala, tomato sauce, tomato paste, tomato ketchup and chutney. It was frequently observed that there is considerable public demand for these products. Intermediate consumers included super markets, retailers and institutions.  These stocked varying quantities of one or more of the 12 products (Table 8). The various categories of consumers obtained the products from the intermediate consumers through purchase or through other arrangements.

Table 9. Quantities of processed fruit and vegetable products stocked per year by intermediate consumers.

Inquiry about the reasons for stocking intermediate products such as tomato paste and fruit concentrates produced three responses. First reason was due to unavailability of the commodities locally. Second, was that the stockists of these commodities were appointed agents of foreign monopolistic firms.  The third reason was to even out seasonal variations in the quantities and prices of the material concerned.

Processed products made from fruits and vegetables reach final consumers through a variety of business and other institutional arrangements. Managers or proprietors of seven types of business or institution were interviewed for this study.  Some characteristics of the businesses represented by the respondents are listed in Table 9.

Most of the businesses have been trading for the last three years (range 1-82 years), suggesting a fairly rapid rate of entry following the market liberalization policy by the government of Kenya. Total declared value of assets ranged from KShs. 15,000 to 12,000,000. Mean value assets was KShs 2,500,000. The largest firms employed up to 100 employees while the smallest one employed only one person. Average number of employees was 3.

Table 10. Characteristics of the business dealing with fruit and vegetables processed products

The inquiry covered 12 products: juice, fruit concentrates, jam, jelly, ice cream, pies, yogurt, sweet mala, tomato sauce, tomato paste, tomato ketchup and chutney. These are the products for which there is an increasing demand  (see Fig. 4) and this prompts importation and stocking of the same by intermediate consumers such as super markets, retailers, e.t.c.

Going by the observations and responses offered by respondents from these businesses, fruit concentrates and tomato paste were not stocked by many businesses because most of these are monopolized imported by a few businesses whom either directly import in bulk (which many SME businesses cannot afford) or process just enough to sustain their processing needs

Fig. 4. Growth trends in intermediate consumers

10. Conclusions and Recommendations

Several firms (e.g., Kamumo Products) have set up enterprises, which acquire fresh fruits and vegetables for processing into shelf stable products. Many of these are located in Nairobi and its environs and beyond. Kamumo Products and Matinyani Multi-purpose Women Group in Kitui (about 130 Km from Machakos town) are the only two micro-enterprises located in the Ukambani area that do processing of fruits and vegetables.  However, the Women Group only deals with dried mango processing. There is thus a real and pressing need to address the issue of processing the bountiful fruits and vegetables into shelf-stable intermediate and/or final household consumer goods.  The major intermediate products from fruits and vegetables of immediate concern include fruit juice concentrates and tomato paste- this last product is only made by one company in Kenya which is situated about 250 Km from Nairobi.

The study showed that there is substantial demand for finished products of fruits and vegetables, notably, fruit juices, jam and marmalade and tomato and chili sauce. This demand is currently satisfied by processors of fruits and vegetables who are located outside the Ukambani Districts.  Such processors used significant amounts of imported raw materials for processing (fruit juice concentrates and tomato paste - mainly).

The Ukambani Districts are major producers of tomatoes, citrus, avocado, guavas and bananas in Kenya. Production of these commodities however, comes under adverse influence of seasonality. Harvesting takes place over short periods which are followed by periods of scarcity and high prices. The findings of the study suggest that at harvest time about 10 -20% of the fresh produce harvested goes to waste because of lack of marketing opportunities.

There is need to establish a mechanism for processing this `surplus production' which otherwise goes to waste into shelf stable products including fruit concentrates, pastes, etc. These could be further processed into final products, demand for which the survey results have shown, is increasing. The demand emanates from the general public (domestic/households and micro to medium-scale food processors in Kenya and some neighboring countries), and from institutions such as hospitals, and schools (including school-feeding programs).  

This survey indicated that production of preserved fruits and vegetables (particularly the very perishable tomato) was insignificant within the region. In particular, Kamumo Products sources its raw materials for processing from local farmers through various arrangements and sometimes uses some imported intermediate products (mainly tomato paste and fruit juice concentrate) imported from as far away as South Africa and Egypt.  This is a very sorry state of affairs taking into account the huge potential of the Ukambani region to produce and supply the needed raw materials!

In view of the above, it is recommended that local production, processing and marketing of fruits anf vegetables within the Ukambani region be given adequate technical and financial support.  This will reduce wastage and guarantee higher returns to the farmer, reduce rural poverty through employment creation, curb rural-urban migration which undermines agricultural productivity socio-economical development.

 11.      References

Ministry of Agriculture. 2000. `An overview of market price trends of fruits and vegetables in Kenya 1994-1999.' Marketing Information Branch. Ministry of Agriculture and Rural Development. Nairobi, Kenya.

K-MAP. 1994. Preliminary analysis of the fruit processing sub-sector in Kenya. A study by Kenya Management Assistance Program (K_MAP) funded by ILO/FIT Project, Geneva, Switzerland.

Mungai, J.K. 2000. `Processing of fruits and vegetables in Kenya. Miscellaneous monograph, Market Information Branch, Ministry of Agriculture.

Republic of Kenya. Sessional Paper No.2 of 1994 on National Food Policy. April 1994.

Akumu, W. 2001. Industry says no to new law: horticulture players argue proposed bill will strangle private enterprise. Daily Nation, September 7, 2001.