ECONOMICALLY FEASIBLE OPTIONS
FOR INCREASED FEMALE
PARTICIPATION IN KENYAN
AQUACULTURE VALUE CHAIN
Leah Z.B. Ndanga*, Kwamena Quagrainie & Jennifer Dennis
Department of Agricultural Economics
Purdue University
403 W. State Street
West Lafayette, IN 47905-2056
lndanga@[Link]
Outline
1. Introduction
2. Tilapia and Catfish value chains
3. Porters 5 forces industry analysis
4. Factor evaluation matrix (FEM)
5. SWOT analysis
Outline
6. Economic Profitability Analysis
7. Cost Benefit Analysis (CBA)
8. Key Success Factors
9. Opportunities
[Link]
Introduction
Fish -important food source in many Africans diets
Fish supply in Kenya- mainly wild capture fisheries and
imported marine fish
Aquaculture development in Kenya- identified as a core
activity for funding in NEPAD Action Plan in 2000.
Growth in aquaculture- cover the fish supply gap.
Despite governments efforts (ESP program), access to
capital - major constraint
Introduction (continued)
Limited distinction in marketing of wild caught fish and
farmed fish
Farmed fish- usually sold directly to consumers, or nearby
small traders and establishments
Main aquaculture activity- pond culture of mainly Nile tilapia
(Oreochromis niloticus) and African catfish (Clarias gariepinus)
Fish production in male domain- relied on the full
participation of women and family
Women traditionally have central position in harvesting, postharvest handling of fish and marketing.
Tilapia and Catfish value chains
Lake/ river
Middlemen/
Buying Agents
Input
suppliers
Wholesalers
Bait Market
Small scale
processing
Export
Market
Multiplication centers/ hatcheries
Farmer/ Breeder
Retailers
Industrial
Processing
National & Private
Breeding Centers
Consumers
Growout Farmer
Domestic Market
Restaurants/ Hotels
Institutions
Figure 1: Tilapia and African Catfish supply chain in Kenya
Adapted from Quagrainie, et al (2007), Charo-Karisa, et al (2007) & survey findings
Nile Perch
fishers
Interviewed value chain participants
1. Input suppliers
Aquashops and Agrovets
Harvest equipment suppliers
Irrigation and Greenhouse equipment suppliers
2. Fish farmer/ Input suppliers
3. Fish farmers
4. Fish marketers
Wholesalers
Retailer/ Traders
Processors
Porters 5 forces industry analysis
Input supply
Threat of
New
Entrants
High
Supplier
power
High
Industry
Rivalry
High
Buyer
Power
Medium
Threat of
Substitutes
High
Porters 5 forces industry analysis
Fish farming/
Input supply
Threat of
New
Entrants
Medium
Supplier
power
High
Industry
Rivalry
Medium
Buyer
Power
Low
Threat of
Substitutes
Low
Porters 5 forces industry analysis
Fish farming
Threat of
New
Entrants
Medium
Supplier
power
High
Industry
Rivalry
High
Buyer
Power
Medium
Threat of
Substitutes
High but
declining
Porters 5 forces industry analysis
Fish Marketing
Threat of
New
Entrants
Medium
Supplier
power
High
Industry
Rivalry
High
Buyer
Power
Medium
Threat of
Substitutes
Low
Factor evaluation matrix (FEM)
Place
Price
Product
Promotion
Procurement
Harvest
equipment
suppliers
4.67
Aquashops
and
Agrovets
4.00
Irrigation &
Greenhouse
Material
Supplier
4.00
4.67
21.78
4.67
4.50
18.00
3.50
4.00
16.00
4.00
4.50
18.00
4.50
4.50
18.00
4.50
4.23
21.15
5.00
4.03
16.13
5.00
4.08
20.38
5.00
4.00
12.00
5.00
4.67
21.78
4.67
4.00
14.00
4.00
3.00
12.00
5.00
4.00
18.00
5.00
3.00
13.50
5.00
3.38
16.92
5.00
3.47
17.33
5.00
4.12
20.58
5.00
4.36
21.79
5.00
4.67
21.78
3.67
4.00
16.00
2.50
4.00
20.00
4.00
3.00
15.00
1.00
3.80
19.00
1.00
3.92
19.62
3.00
3.77
18.83
3.00
4.31
21.54
3.00
4.21
21.07
4.00
3.33
1.00
4.00
1.00
1.20
3.73
3.62
3.58
3.50
Score
Importance
Ranking
Performance
12.22
4.67
2.50
4.00
16.00
4.00
1.00
5.00
1.20
5.00
11.19
5.00
10.85
5.00
10.73
5.00
14.00
5.00
4.67
4.50
4.00
3.00
3.50
3.12
3.04
3.96
3.36
Score
21.78
18.00
16.00
15.00
17.50
15.58
15.19
19.79
16.79
99.33
68.50
80.00 67.00 69.20
84.46
78.33
93.02
85.64
Importance
Ranking
Performance
Score
Importance
Ranking
Performance
Score
Importance
Ranking
Performance
Score
Importance
Ranking
Performance
TOTAL SCORE
Western
Province
Fish
Farmers
4.00
Central
City
Province
Market
Fish
Fish
Farmers Marketers
4.00
5.00
Gikomba
Market
Kisumu
Eldoret
Fish
Fish
Fish
Marketers Marketers Marketers
4.00
5.00
3.00
Radar chart of Fish marketers performance
in terms of the Place
Marketing Mix
4.5
4.0
3.5
3.0
2.5
2.0
Procurement
1.5
Price
1.0
0.5
0.0
Promotion
City Market Fish Marketers
Kisumu Fish Marketers
Product
Gikomba Market Fish Marketers
Eldoret Fish Marketers
Radar chart of Input suppliers and fish farmers
performance in terms of the Marketing Mix
Place
5.0
4.5
4.0
3.5
3.0
2.5
2.0
Procurement
1.5
Price
1.0
0.5
0.0
Promotion
Harvest equipment suppliers
Irrigation&GreenhouseMaterialSupplier
Central Province Fish Farmers
Product
Aquashops and Agrovets
Western Province Fish Farmers
SWOT analysis for input supply
Strengths
Diversified product offering
Convenient bulk sales
One stop shop
Training & Consultation on aquaculture
Liaisons with government - Department
of Fisheries referrals
Opportunities
Only 6 government accredited
aquaculture input suppliers
Well defined market with access to
capital
More fish farmers- more customers
Successful 2008 ESP government pond
initiative
Increased local government financial
support
Referrals from government for technical
assistance
Weaknesses
Temperature control
Expensive transportation
Customer defaults on payment
High initial capital investment
Threats
More crime- higher incidence of con
men, thefts and burglaries
US$ fluctuations
Customs and port delays
Expensive transportation and
Transport delays
High input prices
Slow delivery of inputs
SWOT analysis for fish farming/ input supply
Strengths
Only available option in close proximity
Good verifiable Quality
Training & Consultation on aquaculture
After sale services/free consultation
Great service-personal touch
Connects supply chain actors
Opportunities
Only 6 government accredited
aquaculture input suppliers
Shortage of fingerling/fry to stock ponds
More fish farmers- more customers
Weaknesses
High initial capital investment
Temperature control
Lack of binding contractual
arrangements
Expensive transportation- no delivery
Small scale- no chain power
Threats
Lack of support structure and
institutional organization
US$ fluctuations
Lack of quality control in terms of
inputs
Input supply delays and shortages
Successful 2008 ESP government pond
initiative
Referrals from government for technical
assistance
Increased local government financial
support
Fish culture inputs too costly/not
available locally
SWOT analysis for fish farming
Strengths
Less labor intensive than other
agriculture
Improved food security- ready protein
source
Source of water used for irrigation &
livestock and household use
Pond bottom mud used to fertilize
gardens/fields
Enhanced community relations- farm
gate sales
Opportunities
Successful 2008 ESP government pond
initiative
Increased local government financial
support
Ready market due to government
undersize fish ban
Branching into input supply &/or value
addition
Change source of inputs-purchase, rent,
or hire
Can diversify into ornamental or bait fish
Weaknesses
High initial cost for training, pond construction &
inputs
Need expert for choice of fish species and
appropriate culture
Require training on fish rearing and pond
management
Require expert evaluation of location/site/water
and constant access for problem diagnosis &
solutions
Expensive construction and operation costs
Threats
Constrained access to inputs
Lack of trained extension officers
Shortage of fingerling/fry to stock ponds
Low land availability
Need close proximity to water
High labor costs
SWOT analysis for fish marketing
Strengths
Can engage in wholesaling, trading and
processing concurrently
Low start up and operating costs
Convenient bulk sales delivered to
market
Can process (dry, smoke or fry) leftover
fish
No construction or training required
Low switching costs in terms of products
of location
Opportunities
New farmed fish market
More female traders
More youth economic participation in
market
Better market conditions from
government
Consolidation into one market facility
Improved sanitation (slight)
Weaknesses
Fish perishability-leftover & due to
transport delays
Low profits-high buying and low selling
prices
Crime & Theft by middlemen & employees
Access to capital/finance
Transportation for fish supply, to market
Expensive storage and refrigeration costs
Threats
Less/none government assistance in some
markets,
Poor roads-delayed delivery & accidents
Fish shortage - undersize fish policy and
underdeveloped aquaculture sector
Poor hygiene in the market &
transportation
More crime & corruption
Increased competition even from other
markets
Fish marketers Economic Profitability Analysis
Summary of Fish Marketers Household Benefit: Cost
Ratio
Nairobi
Markets,
Central
Province
Kisumu
Market,
Western
Province
Eldoret
Markets,
Rift Valley
Province
Monthly
Sample
Averages
Total
Total Annual
244,354.28 128,824.64 133,213.30 198,503.77
Costs
Total Annual
580,896.55 218,266.67 225,454.55 437,174.39
net revenue
Benefit: Cost
2.33
1.694
1.692
2.202
Ratio
Fish farmers Economic Profitability Analysis
Summary of Fish Farmers Household Benefit: Cost Ratio & Net
Benefits
Year one
Average Benefit: Cost
Ratio
Average Net Benefits
(Ksh)
Year Two
Average Benefit: Cost
Ratio (Ksh)
Percentage change
from previous year
(%)
Average Net Benefits
(%)
Percentage change
from previous year
(%)
Western
province
Central
province
Rift Valley
province
0.328
-104, 460.96
0.009
-98, 352.53
0.018
-65, 223.11
1.751
0.107
0.024
81.28
92.01
23.67
-737.09
-18, 331.33
-32, 660.74
-14, 072
-436.53
-99.70
Cost Benefit Analysis (CBA)
Summary of the estimated values of the effects of aquaculture on
societys welfare in Ksh
Year 1
0%
5%
Year 2
15%
30%
50%
Value of increase in local employment per farm
Central province
Western province
Rift Valley Province
13,572.08 12,677.85 12,074.14 10,499.25 8,076.35
2,540.06 13,561.28 12,915.50 11,230.87 8,639.13
21,493.33 21,493.33 20,470.00 17,800.00 13,692.00
Value of increase in local food availability per farm
7,975.29
1,520.23
58.91
Central province
Western province
Rift Valley Province
1,760.18
357.17
31.4
Central province
Western province
Rift Valley Province
773.84
1,021.65 1,822.10 1,735.33 1,508.98 1,160.76
4,971.53 27,364.14 26,061.09 22,661.82 17,432.17 11,621.44
663.13
720.88
686.55
597
459.23
306.15
Value of generated growth in local economy
7,595.51
1,447.84
56.11
6,604.79
1,258.99
48.79
5,080.61
968.45
37.53
5,384.23
5,759.42
9,128.10
3,387.07
645.64
25.02
Key Success Factors
i. Input supply
Stable finances and substantial capital resources
Large contracts and/or links with NGOs and government
department to ensure referrals and large contracts
Good planning and foresight to circumvent effects of delays
Access to personal or reliable transportation
Strategic alliances
Key Success Factors (continued)
ii. Fish farming/Input supply
Strong knowledge base
Stable finances and substantial capital resources
Established good fish breeds, i.e. good brood stock
No accredited fish breeding centers or hatcheries in close
proximity
Strategic alliances
Alternative electricity source
Key Success Factors (continued)
iii. Fish farming
Stable finances and substantial capital resources
Reliable accredited input supplier
Good knowledge base
Patience and determination
Integrated aquaculture and agriculture system
Alternative electricity source
Key Success Factors (continued)
iv. Fish marketing
Versatility and persistence
Discipline in terms re-investing earnings
Good inter-personal skills and engaging personality
Cleanliness
Ability and equipment to perform light processing
Rankings based
on ease of entry
and exit
1
2
Opportunities
Reasons for choice
Supply
chain
function
Provides the most flexibility and liquidity
Fish
Marketing Easier to enlist additional assistance- no training
needed
Fish
Despite the high capital investments and high entry
farming
barriers, some of the costs can be minimized by
practicing an integrated system
Aquaculture is not as labor intensive as other
agricultural activities
Requires a long term commitment, patience and
persistence
Fish
Require large capital outlays and additional finances in
case of emergencies.
farming/
Input
Only established fish farmers can assume this rolesupply
need reliable good quality and significant quantity
stocks
Input
Require large capital outlays and additional finances in
supply
case of emergencies.
Often a full time obligation
Government & NGO interest reduces transaction costs
Conclusions
Fish farming is the driving function of the aquaculture value chain
Sale of fish enhances community relations and creates a stable
source of income and food.
Female participants seeking flexibility and liquidity - fish marketing.
Those seeking long term financial strength and with strong
educational and technical backgrounds - input supply.
Those not looking for quick returns and looking for long term
stability- fish farming
Established fish farmers may consider diversifying into input supply
and value addition.
Conclusions (continued)
Input supply continues to be an Achilles heel for all value
chain actors.
The government of Kenya commendable - boosting
aquacultural sector through its incentive schemes and ESP
program.
Private sector involvement commendable - aquashops (FARMAfrica and the UK funded Research into Use program) and
agrovets (CNFA) initiatives.
Need for a multi-level collaborative effort to determine a long
term strategic plan that benefits and includes all value chain
participants
Funding for this research was provided by the
COLLABORATIVE RESEARCH SUPPORT
PROGRAM
Thank you!
Questions?
