CRAFT Climate & Business Narrative

High potential growing counties include: Kitui, Makueni, Machakos, Tharaka Nithi, Embu, Meru, Tana River, Lamu, Kilifi, Kwale and Taita Taveta. For example, according to 2018 Kenya National Crop data, Makueni’s total area under green grams was 52,633 ha against production of 52,633 tons translating to 580 kg/ha (approximately 6 bags of 90 kg/ha). Low potential growing areas include: Mandera, Marsabit, Wajir, Isiolo and Garissa.

The map on the right shows the green gram growing counties in Kenya. For legend, click button in the bottom-left corner of map.

The table below shows activities of different actors in the value chain.

Input suppliers: The main input suppliers include Kenya Seed Company, KALRO Katumani and Dryland Seed Ltd for green gram variety development and multiplication, ETG, Toyota Tshusho, and Yara fertilisers for fertilizers; Osho, greenlife and Syngenta for agrochemicals and soils amendments. Local suppliers include agro vets stocking products from different companies. There is a lot of seed recycling from retained seeds from other farmers and local retailers (Source:  Kilimo Trust, 2017 ).

The image on the right shows the green gram value chain map for Tharaka Nithi country (Source: SNV, 2019)

Producers: The production is controlled by small scale farmers who constitute the majority of the upstream chain players with at least 51% being women. Farmers are mainly growing local varieties that are characterised by low yields and long maturity periods (3-4 months). Kenya is facing a large yield gap, current producing 0.45 tons /ha against a potential of 3 tons/ha (Source:  Kilimo Trust, 2017 ).

The image on the right shows women and youth farmers working on a green gram farm in Kenya (Source: SNV, 2019).

Aggregators: Most of green gram is aggregated to be sold to export market, or at wholesale level to processors or retailers. Aggregators vary from producer organizations with target market, local vendors who buy from farmers and transport to main markets to wholesalers or sole proprietors who have the capacity to bulk huge volumes.

The image on the right shows aggregators drying and threshing harvested green grams (Source: SNV, 2019).

Off takers: Include traders, wholesalers and retailers.

• Local traders are often farmers at the village level. They establish small enterprises in the form of cereal shops or “stores” based where they buy from local producers to either sell back to the local market or sell at the national or export market through intermediaries, for example, producer organisations.
• 80% of the wholesalers are sole proprietorships. They serve as a pivotal point that supplies retailers, institutional consumers and exporters. Their storage capacity is 59% due to low supplies, seasonality and limited capital (Source:  Kilimo Trust, 2017 ).
• Retailers are largely informal with less than 50% registered. Most retailers handle small volumes only (100-200 kg/season) to principally sell to individual consumers. They procure just enough to avoid the need for investing in storage facilities (Source:  Kilimo Trust, 2017 ).

The image on the right shows green gram trading at a local market in Kenya (Source: SNV, 2019).

Processors: Generally, the product specification is limited due to the limited level of processing. The main value addition in Kenya is cleaning, polishing and packaging as whole grain, dehulling and splitting the grain to make dhal.

Exporters: Most of them are registered as Limited companies. They receive their supply mainly through suppliers (large farmers) or intermediaries. Exporters currently operate below capacity (60%) due to low supplies and limited working capital (Source:  Kilimo Trust, 2017 ).

Consumers: Individual consumers are the largest segment and they are mainly served by retailers. Other consumers include vendors, hotels and restaurants. The most commonly demanded form of green grams is the whole grain. There is also a huge target market, consumers, in learning institutions (schools) that buy large volumes of green grams. Green grams is a predominant food for the majority of the population in urban and peri-urban slum / low income areas.

The image on the right shows local dishes in Kenya made from green grams.

National production in the last five years has ranged from 61,000 tons to 121,000 tons. Over the same period, national consumption has grown from 58,000 tons to 127,000 tons. This implies a deficit in some years that is bridged through imports. The bulk of the produce is sold in local markets and the remainder is exported to neighboring countries and South Asia. The increase in demand is mainly driven by population increase and healthy cautious citizen, who are cutting down on meat products (Source:  Kilimo Trust, 2017 ). With the exception of big companies (such as Capwell Industries and Spiceworld), who process and also export to India, the domestic marketing structures are very informal, characterized by wholesalers , retailers and middlemen The major trading/marketing towns in Kenya are : Nairobi/ Nyamakima, Mombasa, Makueni, Kitui, Tharaka Nithi, Machakos, Eldoret, Nakuru and Kisumu.

The map on the right shows green gram trading /marketing centers. Click points to identify centers.

There is competition between the production hubs within Kenya. For example, Tharaka Nithi is more price competitive in supply of green grams than Makueni. However, Makueni exports relatively more to India compared to Tharaka Nithi. The potential for product diversification in the green grams value chain is limited despite emerging potential for quality products like splits grains, baby food products, green gram flour which can be blended with other products.

From a regional perspective, Tanzania and Uganda produce surpluses while Kenya is a deficit country. Despite having the highest production in the region, Kenya takes up about 80% of the green grams exported by Uganda and Tanzania (Source:  Kilimo Trust, 2017) . Out of 859 tons of green grams imported into East Africa 80% ended up in Kenya (Source:  Kilimo Trust, 2017) . Green grams are also procured from Ethiopia by processing companies and exporters when the production in Kenya is too low to meet the demand of both the domestic and Asian market. Although the Kenyan consumer population is rapidly growing, it is the growing demand for green grams in the export market that is driving the production.

The map on the right shows regional trade flows of green grams in East Africa.

The averages prices in Kenyan markets are also higher than in Tanzania and Uganda. In Kenya, especially in Nairobi, prices can go as high as USD 116 per ton (Source:  Kilimo Trust, 2017 ). Using international benchmarks, however, it is cheaper to produce a ton of green grams in Australia or India than in Kenya.

Discussions with actors of the green grams value chain showed that they perceive a large set of strengths, weaknesses, opportunities and threats. 

The table on the right shows strengths, weaknesses, opportunities and threats as perceived by the value chain actors (Source: Muriu, 2019).

Actors in Kenya’s green gram value chain increasingly experience climate-related risks to their business. The CRAFT project helps these actors to understand and manage the impacts of climate change on the value chain. In particular, CRAFT supports IMCOS, a Multipurpose Cooperative Society, in becoming a climate smart agribusiness.

The image on the right shows IMCOS' office buildings (Source: SNV, 2019).

Igambang’ombe Multipurpose Cooperative Society: Igambang’ombe Multipurpose Cooperative Society (IMCOS) is a member-based organization whose primary objective is to provide quality and affordable services to its members involved in cereal and pulse farming. IMCOS has a total membership of 733 (i.e., 349 male and 384 female) drawn mostly from Igambang'ombe sub-county of Tharaka Nithi county, Kenya. 

IMCOS has a central position in the green gram value chain. It provides farmers with the following:

• Grain bulking and marketing services: IMCOS buys and stores green grams from its members, aggregates and sells the same to third parties at a small mark-up.
• Financial Services: IMCOS plays the role of a financial intermediary to members by providing savings and lending facilities.
• Inputs: IMCOS buys agro-inputs in bulk from suppliers at wholesale prices and sells them to its members.
• Currently, all services are delivered at very small scale. 

IMCOS sees climate change not only as a risk factor but also as an opportunity to growth. The society is interested in providing Climate Smart Agriculture (CSA) services to its members to increase both green gram production and sales under current and future climate conditions.

Specifically, IMCOS aims to support farmers to increase productivity and ultimately increase the grain offtake from the current procurement level of 66 tons (in 2018) to 532 tons in two years. IMCOS also targets to raise the number of member suppliers from 300 to 700 in order to achieve an output of 532 tons. These targets will also benefit other enterprises along the value chain.

IMCOS invests in the following strategy to achieve the above targets:

• Securing additional and reliable supply contract with major processors for grains.
• Training farmers in climate smart agriculture.
• Enabling farmers’ access to certified seeds and land preparation services.
• Supporting farmers in proper post-harvest handling practices including proper threshing, winnowing, drying, sorting and grading to meet the quality standards required by the market.

The image on the right shows IMCOS' aggregation center 

CRAFT supporting IMCOS to do climate smart business in green grams: CRAFT project co-invests in IMCOS climate smart and viable business plan helping the society to become a one-stop-shop for farmers. The business plan includes the following activities:

• Conduct training of trainers in the farmers field school methodology
• Train farmers in climate smart practices and technologies
• Provide advisory services in climate smart agriculture
• Provide weather services
• Provide threshing services
• Provide improved storage and packing services
• Provide access to high yielding and drought tolerant seeds and other inputs
• Expand marketing activities - formalized and diversified marketing of green grams
• Purchase of machines & equipment
• Mobilize new members