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VALUE INITIATIVE PROGRAM(VIP)
AMPATH-FPI, Export Promotion Council, Fintrac
part of the SEEP Network Value Initiative
HorticultureUrban Value Chain Development
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Problem: High poverty levels; economicmarginalization of the poor and HIV affectedin the Rift Valley and Western region of
Kenya Goal: increased income for MEs within
HIV/AIDS affected communities
Purpose: increased productivity and accessto passion fruits markets for the poor andHIV/AIDS affected populations.
The Value Chain Initiative Program
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AMPATH-FPI Approach
Holistic Approach: Health + Economic
Strengthening
Target entire community Create a path out of poverty
Strengthen community safety
nets to reverse spread and destruction of
HIV.
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Consortium:
AMPATH FPI (Over 70,000 AMPATH patients)
Export Promotion Council (Over 4,000 clients served)
Fintrac (Over 80,000 farmers assisted)
SEEP Network
The Value Chain Initiative Program
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VIP TARGET OUTREACH
ME owners 7,000
Employees 2,500
Sensitized communitymembers
1,600
TOTAL 11,100
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Population7.6 million
Average Farm
Household6.8
Poverty Rate48%-65%
HIV/AID Prevalence
Rate5.7 %
VIP target Coverage:At least 12 Districts(see map)
Main EconomicActivitiesAgriculture, breadbasket for Kenya
Main Social-Economic Features of the Target Region
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1.
2. Improved knowledge and understanding ofmarket demand &competitive quality of product amongst the MEs
3. Increased MEs productivity
4. Improved market access for MEs
5. Increased income opportunities for MEs
6. Increased labor options as the industry grows, as theenvironment becomes more conducive for successful MEs
Expected Outputs
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Passion fruit is a vine with a life cycle of 2 to 3years
Starts fruiting at 6th month
42kgs life cycle average production
WHY PASSION FRUIT FOR MEs?
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End Market Opportunities for MEs
Global Demand Fruit juice import trade 2001-2006 increased
by 73% to nearly US 11 billion.
This trend applies to all fruit juices includingpassion fruit juice
Regional Demand
In East Africa, market for fresh and processedfruit products e.g. passion fruit is growing at10% p.a.
Premiums paid for high quality
Why passion Fruits?
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Local Demand
The domestic demand is increasing for
both fresh product and juices Current supply is unable to meet the
demand
As a result the prices to farmers are
increasing Yr 2007 Kenya Consumption was 70,148tons while in Yr 2006 it was 60,371 tons-a 16% increase in local demand
End Market Opportunities for MEs
Why passion Fruits?
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Kenyan National Passion production
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Competitiveness of Passion Fruit
Ideal for the small-scale growers and micro-processors the VIP is targeting.
Managed manually reducing the advantagesof economies of scale of large farmers
Low perishability, sweeter taste andincreased juice % a few days after harvest.
Higher market value for higher quality fruit.
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Individual RetailerRetail Shops/HotelsLocal Supermarket
Distributors (EU)Major Supermarkets
(EU)
Large Exporters
(e.g. EAGA, KHE.....)
Reg. Brokers
(Uganda)
Local Brokers
Local Processors
(Del Monte, Pick N Peel)
Small Scale ProcessorsMed-Scale Processors
(kevian, Fips, etc)
Farmers Groups
Small-Scale Farmers Medium - Large Scale Farmers
Inputs Retailers
Chemical Sprayers
KARI Private Nurseries
Inputs Suppliers
Extension
(MOA/HCDA)
DOMESTIC MARKET REGIONAL MARKETINTERNATIONAL MARKET
Retail
Importing
ExportingWholesaling
Processing
Local Trading
Production
Input Supply /Services
Passion Fruit Value Chain- CURRENT
LEGEND
Major Product Flow
Processed Product Flow
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Support Products andServices (Fee-for-service)
Poor have difficult time accessing convenientcapitalNo solid commercial agricultural extensionsupportBDS providers are typically MFIs that limit
business training support to a few days trainingInadequate packaging and handling
Lower financial barrier: Lower start up cost,Increase access to credit, Group savingsWork with medium to large processors to
provide agricultural extension supportFacilitate meetings between support
product/service providers and MEsFacilitate training on handling/transport offruits
Business Performance(MEs and others in the
value chain)
Requires business management knowledge ofwhich many of the poor are lacking
Facilitate training by BDS providers onbusiness management practises
o w K no wl ed ge a ndk il l s i n G rou p
M a n a g e m e n t
,Poor Quality Supply
&Biz Mgtskills
,Low Volume Low Quality and Exclusion of Poor and HIV Affected
:GOAL STATEMENT Increased income for micro- ( ) / enterprises MEs within HIV AIDS affected communitieswho are or become active participants in the horticultural value chain
a ck o f o rg an iz at io n,m o ng F ar m er sr ad er s a nde x p o r t e r s
n c o n s i s t e n t/r u it j ui c e/o l u me s a le s
r od uc ti on I ss ue s a rk et A cc es s
o w K no wl edg e an dk il ls i n C ro p H us ba nd lyn d B us i ne ssM a n a g e m e n t
i mi t ed a cc e sso p ro du ct i onI n p u t s
U n d e r -e v e l o p e du pp ly o f s us ta in ab le
u si ne ss s ol ut io ns a nde r vi c e m ar ke t s
o or Q u al it yf In put s
n a d e q u a t er a in i ng a nd
x t e ns i on S e rv i ce s
o or M ar ke t,i nk ag e p oo r
e rt i ca l a ndo r iz o nt a l l i n ka g es
a c k o f n f or ma ti on a n dn ow le dg e o fM a r k e t s
e a k A s s oc i a ti o ns
CONTRAINTS ANALYSIS
U n d e r -e v e l o p e du pp ly o f s us ta in ab le
u si ne ss a nd s er vi cem a r k e t s
Socio- , ,economic factors Limited Household Resources Policy Issues
n ad eq ua te c as h f lo wo p ur ch as e i np ut s
n a de q u at e c a pa c i tyb u i l d i n g
:PURPOSE STATEMENT /To enable excluded poor and HIV AIDS affected populations to increase their productivity and, .access to high value export regional and local markets
e al th I ss ue s
o o r q ua li ty/ o wv o l u m e
o ww ar en es s o r
v a i l a b i l i t yp p r o p r i a t ec r e d i t
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GOAL STATEME
PURPOSE STAT
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Support Products andServices (Fee-for-service)
Poor have difficult time accessing convenientcapitalNo solid commercial agricultural extensionsupportBDS providers are typically MFIs that limit
business training support to a few days trainingInadequate packaging and handling
Lower financial barrier: Lower start up cost,Increase access to credit, Group savingsWork with medium to large processors to
provide agricultural extension supportFacilitate meetings between support
product/service providers and MEsFacilitate training on handling/transport offruits
Business Performance(MEs and others in the
value chain)
Requires business management knowledge ofwhich many of the poor are lacking
Facilitate training by BDS providers onbusiness management practises
n cr ea se d K no w le dg e a ndk i l l s i n G ro u p
M a n a g e m e n t
,Improved Quality Supply&Biz Mgt skills
,Reliable Volume High Quality and inclusion of Poor and HIV Affected
:GOAL STATEMENT Increased income for micro- ( ) / enterprises MEs within HIV AIDS affected communitieswho are or become active participants in the horticultural value chain
r g a n i z a t i o n,m on g F ar m er sr ad er s a nde x p o r t e r s
o n s i s t e n t/r u it j ui ce/o l um e s a le s
n c re a se d P r od u ct i on a rk et A cc es s
d eq ua te K no wl ed ge a ndk il ls i n C ro p H us ban dl yn d B us in es sM a n a g e m e n t
o n v e n i e n tc c e s s o p ro du ct i onI n p u t s
e v e l o p e du pp ly o f s us ta in ab le
u si ne ss s ol ut io ns a nde rv i ce m ar ke ts
m p ro v e d Q u al i tyf I np ut s
c ce ss t or a in i ng a nd
x t en s i on S e rv i ce s
u s ta i na b le M a r ke t,i nk ag e s tr on g
e rt ic al a ndo r iz o nt a l l i nk a g es
A v a i l a b l en fo rm at io n a n dn ow le dg e o fM a r k e t s
t r en g t he n e d A s so c ia t i on s
SOLUTIONS ANALYSIS
e v e l o p e du pp ly o f s us ta in ab le
u si ne ss a nd s er vi cem a r k e t s
Socio- , ,economic factors Limited Household Resources Policy Issues
Convenient access toAffordable inputs
Credits
d e q ua t e c a pa c i tyb u i l d i n g
:PURPOSE STATEMENT /To enable excluded poor and HIV AIDS affected populations to increase their productivity and, .access to high value export regional and local markets
m pr ov ed H ea lt h
i gh q ua li ty/i n c r e a s edv o l u m e
I n c r e a s e dw a re n es s o n
v ai la bi li ty o fp p r o p r i a t ec r e d i t
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GOAL STATEM
PURPOSE STATE
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VIP INTERVENTIONS
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HOLISTIC APPROACH-PROVIDING PARALLEL SERVICES
AMPATH/FPI will provide HIV/AIDS care and education alongside valuechain development initiatives
Objective: To assist the Farmers and other Potential Entrepreneurs toEnter the passion Fruit Value Chain
TARGET
COMMUNITY
AMPATH
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INTERVENTION AREAS
INTERVENTION AREA SPECIFIC INTERVENTIONS.1 Fruit Output and
Quality.1 1 Technical Assistance provider.1 2 Tailored Financial Services.1 3 Inputs and Equipment package
. /2 Micro processingValue Add Products
.2 1 Quality control system
. .2 2 Tailored Financial service Products
.2 3 Technical and Business trainingprovider.2 4 Infrastructure Service
. :3 Market Linkage Farmer- Trader
.3 1 Market Information market
. /3 2 Business Skills Management Training
. :-4 Market LinkagesTrader to Formal Markets
.4 1 Promotion and Marketing services
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CAUSAL MODELS
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EXAMPLES OF BUSINESS
MODELS TO BE TESTEDBY VIP
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STRATEGY
INTERVENTION # 1.1 TECHNICAL ASSISTANCE PROVIDERLead firms access technical skills and embed them or lead firms purchase master farmer / agro-vet expertise and deliver to theirtargeted groups on embedded terms
VALUE CHAIN CHANGE
Increased production and market access for MEsWide geographic outreach, increased ME activity
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STRATEGY
INTERVENTION 1.2: TAILORED FINANCIAL SERVICE PRODUCTSTraders borrow from financial institutions; provide inputs to farmers on credit
VALUE CHAIN CHANGE
Increased production and Market access for MEsImproved business relationships
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STRATEGY
INTERVENTION 1.3: INPUTS AND EQUIPMENT PACKAGETraders pay consultant/agro-vet to quality control nurseries where they sources seedlings traders provide to farmers; traders provide the farmerswith inputs especially seedlings on credit
VALUE CHAIN CHANGE
Improved quality and outputsIncreased market access for MEs
M & IA: FRUIT OUTPUT AND QUALITY PILOTS
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Causal Chain Indicators
Increased farmer sales % increase in monthly sales volume/value per farmer # of farmers registering increased monthly sales
Increased farmers output of quality fruit % increase in monthly volume of quality fruits output# of farmers producing quality fruit
Improved farming techniques; improvedaccess and use of quality inputs
# of farmers applying improved farming techniques; # offarmers accessing and using quality inputs
Business Model work Profitability/sustainability of the Business model# of traders accessing and using appropriate business services(TA/Finance/Inputs & Equipment
Test business models TA provider Financial service products Inputs and equipment package
Business models tested
M & IA: FRUIT OUTPUT AND QUALITY - PILOTS
M & IA: FRUIT OUTPUT AND QUALITY ( MARKET UPTAKE)
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Causal Chain Indicators
Increased ME participation and increasedmarket output
% increase in # of MEs participating in value chain% increase in market output
Increased farmer sales % increase in monthly sales volume/value per farmer # of farmers registering increased monthly sales
Increased farmers output of quality fruit % increase in monthly volume of quality fruits output# of farmers producing quality fruit
Improved farming techniques; improvedaccess and use of quality inputs
# of farmers applying improved farming techniques; # offarmers accessing and using quality inputs
Uptake of business models TA provider Financial service products Inputs and equipment package
# of traders providing enhanced services to farmers# of traders accessing appropriate business services# of farmers demanding and accessing services
M & IA: FRUIT OUTPUT AND QUALITY ( MARKET UPTAKE)
VIP STRATEGIES TO REACH THE VERY POOR AND VULNERABLE: EXAMPLE
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INTERVENTION AREA 2
(Micro-processing /Valueadd products)
ENTRY STRATEGY FOR VERY POOR AND VULNERABLE
BUSINESS MODELS
2.1 Quality control system2.2 Tailored Financial ServiceProducts
2.3 Technical and BusinessTraining provider
Very vulnerable
Trainings: juice processing technology, hygiene/quality, KBS services(certification), biz mgmt, municipal biz permit, BDS provisions (credit &savings), public health certification, value add (home economics department)
Output: one glass ready to drink is KES 40 (200ml) or KES 200/liter; aim forrevenue of KES4, 000/day. Approximately KES2, 000/day.
Savings requirement
Move to VulnerableExperienced, rent a room or purchase cool-box
Increase production capacity and manage and train other juice providersOutput: Increase in income
Savings requirement
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Individual RetailerRetail Shops/HotelsLocal Supermarket
Distributors (EU)Major Supermarkets
(EU)
Large Exporters
(e.g. EAGA, KHE.....)
Reg. Brokers
(Uganda)
Local Brokers
Local Processors
(Del Monte, Pick N Peel)
Micro Scale Processors / DistributorsMed-Scale Processors
Farmers Groups
Small-Scale Producers Medium - Large Scale Producers
Inputs Retailers
Chemical Sprayers
Private Nurseries
Inputs Suppliers
DOMESTIC MARKET REGIONAL MARKETINTERNATIONAL MARKET
Retail
Importing
Exporting
Wholesaling
Processing
Local Trading
Production
Input Supply /Services
PASSION FRUIT VALUE CHAIN - FUTURE
LEGEND
Major Product Flow
Processed Product Flow
Business Service Flow
Ag Ext Svc Provider(lead farmers, traders)
Reliable supply =Growth in Sales
nical Service Providers
Quality Certification , Monitoring , Development (KARI, Moi Univ, KEPHIS)
Partner Financial Institutions
FP
FP
FP
Trade Association (networking, info
Street Outlets, HHs
STRATEGY FOR MARKET UPTAKE FUTURE MARKET SYSTEM
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= -micro enterprise activity
M
arketU
p-Take
FutureDi
agram
STRATEGY FOR MARKET UPTAKE: FUTURE MARKET SYSTEM
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For More Information About VIP
Ampath-Kenya Please Contact:
Naiomi LundmanAssociate Field Manager, FPI/ AMPATH
Tel: +254-0723-246-19
Email: [email protected]
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THANK YOU
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