The majority of Kenya’s rural population lives below the poverty line. The main causes of poverty in rural areas are poor governance and a shortage of employment and income opportunities. Agriculture is one of the mainstays of the Kenyan economy. Farmers and those who process farm products generate about half of the country’s gross national product. With 70 % of the workforce occupied in agriculture, the sector is by far the most important employer in the country. Nevertheless, the sector could be growing much more strongly. Its capacity to promote rural development and poverty alleviation is not being fully utilised at present, mainly because farmers are ill-informed about the potential of regional and international markets. Further constraints on the agricultural sector include poor access to improved seeds and fertilisers, the inadequate network of rural roads, and the unfavourable legal and political framework for the private sector.

In collaboration with the ministries of agriculture, livestock, fisheries and cooperatives, and working together with other German development organisations, GIZ is promoting the development of the private agricultural sector. It is helping small and medium-sized enterprises to seize more of the existing market opportunities.

The programme takes a value chain approach, showing the contributors at each stage of numerous product chains how to maximise the value of their own stake in the chains. It also promotes the wider use of environmentally-sound methods of recycling waste and by-products. Specific measures include:

• improving the political and legal framework for the private agricultural sector through capacity development, advisory services and backstopping
• improving provision of services in value chains, such as training, extension services, business development and business linkages
• strengthening private sector organisations, such as farmer groups, agricultural cooperatives and associations
• improving the regional infrastructure
• promoting resource-efficient technologies like biogas plants and energy-saving stoves.

The support provided by the programme between 2003 and 2009 reached around 50,000 rural households. Despite post-election violence and a severe drought in 2009, half of these beneficiaries enjoyed increased annual incomes derived from agricultural production. The programme has used a range of interventions to successfully address problems facing the supported value chains. In this way, for example, potato farmers have increased their yields and now employ many more seasonal workers, most of whom are women. Beef butchers now process their meat hygienically and in accordance with national standards, while mango farmers have also reduced their post-harvest losses.

From 2011, GIZ will continue to provide policy advice and support environmentally-sound technologies. Efforts to extend the value chain concept will include developing a curriculum for universities and colleges and setting up a value chain development facility. This will be used to support grant-financed capacity building measures aimed at the private sector. The approach will only include the public sector where significant gaps are identified, such as for the scaling up of capacities for value chain development, ideally linked to a loan facility mechanism intended to protect value-chain investments against risks.