IA Kenya

The Kenya Business Development Services (BDS) Project and the Horticulture Development Centre (HDC) Project support USAID/Kenya’s strategic objective of increasing rural household incomes in Kenya. They seek to raise smallholder productivity, widen market outlets, facilitate vertical and horizontal linkages, and promote the sustainable development of business services for rural MSEs.

Kenya BDS, a five-year project, started in 2002 and worked initially on the tree fruit value chain. In its first two years, the project issued tenders and awarded contracts to eight private sector and NGO partners. The contracts were designed to facilitate the development of sustainable solutions/services that provide material inputs (agro-chemicals and seed varieties), appropriate technology to upgrade products and production processes, business and skills training, and extension and information services. Several contracts promote market linkages between smallholder producers and lead firm exporters through supply contracts and lead firm provision of embedded services, and encourage inter-firm cooperation through the organization of producer groups and provision of embedded services.

The HDC project focuses on a wide range of horticulture products, of which only their work with passion fruit was included in this impact assessment. Project activities planned to: (1) introduce new varieties of passion fruit for fresh export; (2) improve agricultural practices of local producers; (3) expand local processing capabilities for local market products; and (4) strengthen the farm-to-market value chain, inclusive of business services to small farmers. Unlike Kenya BDS, the HDC project does not operate through contracts but carries out activities directly through project staff based in Nairobi and agronomists based in four field offices. It works with and through cooperating partners, including KARI, existing smallholder associations, and two small businesses producing plant stock. In the future, it intends to work through input suppliers as well. This five-year project began in late 2003 and was in its first year of operation at the time of the baseline survey.

Impact Assessment Overview

The Kenya BDS and HDC projects have taken on a twofold challenge: improving the competitiveness of Kenya tree fruit exports in global markets and increasing the participation of smallholders in the tree fruit value chain. In this context, a key question facing both projects is whether Kenya can stay competitive in global tree fruit markets and, at the same time, maintain a high level of smallholder participation in the tree fruit value chain.

Building on this, it is important for this impact assessment to examine whether project-facilitated interventions have had a positive impact on improving the competitiveness of Kenya’s tree fruit sub-sector and on integrating smallholders into the value chain. To what extent do project-facilitated interventions contribute to changes in sub-sector competitiveness? To what extent do project facilitated interventions contribute to changes in smallholder integration into product markets, input markets, and service markets in the value chain?