Kenya’s farmers connect to better prices

Gretchen Wilson Feb 19, 2007

Kenya’s farmers connect to better prices

Gretchen Wilson Feb 19, 2007

Martin Kisuya at the commodities price board outside the KACE’s office.

BOB MOON: Agriculture is what keeps most African economies alive. Small-scale farming generates most of the food produced on the continent. At the same time, it provides jobs for 60 percent of working people.

Those farmers often fall victim to local traders who dictate prices well below market rates. But one business is using technology to help farmers get a competitive price. Gretchen Wilson reports from Kenya.

GRETCHEN WILSON: Bungoma is a small town tucked into the green hills of western Kenya, and it’s home to this nation’s second-largest agricultural market. Thirty thousand small-scale farmers come from miles away to trade their goods, such as bananas or beans. Most live far from electricity and phone lines. But some, like Martin Kisuya, know exactly how many Kenyan shillings their tomatoes would fetch at markets around the country.

MARTIN KISUYA: In Nairobi, they’re selling at 3,950. In Kitale, they’re selling at 1,600. Then in Mombasa, it’s 3,300.

Kisuya is reading this morning’s prices — on his cell phone. Every day, he’s one of 10,000 Kenyans who send a simple text message that costs about seven cents.

KISUYA: Then I’ll automatically get the prices of the commodities from various markets. On a large scale, it has actually reduced my costs of looking for markets. Because I would not have managed to go to each and every market looking for the best prices.

In the 1990s, Kenya was one of many African nations that privatized its agricultural sector, part of structural adjustment policies mandated by the World Bank and IMF. Some farmers are still figuring out how to compete in a free market system.

That’s why a business called the Kenya Agricultural Commodity Exchange, or KACE, now makes pricing available on cell phones nationwide. It’s one way farmers are gaining bargaining power in an increasingly global economy.

DR. ADRIAN MUKHEBI:A small farmer producing here in Kenya is actually competing with farmers all over the world!

That’s KACE’s founder, Dr. Adrian Mukhebi. He says these farmers can go head-to-head with commercial farmers from Europe, the U.S. and Brazil. That’s because they can compete on price and they can deliver locally. And, by using market information, they earn about 25 percent more than those who don’t.

If farmers around the continent used services like this, it could ignite Africa’s development.

MUKHEBI: As I say, without giving people handouts. But using private sector, using markets to give people incentives to sell, and make money, and create wealth, and move out of poverty!

That’s the hope of farmers in Bungoma, who used to have to rely on the word of buyers about what prices their goods could fetch.

George Maufa raises poultry and cattle.

GEORGE MAUFA: We used to be exploited because we didn’t have the information.

KACE also posts daily prices on expansive chalkboards outside its office here. Managing director Alex Wasari says this means even farmers without cell phones can haggle more effectively.

ALEX WASARI: So, with this office here, they can come in the early in the morning when they come with commodities. Then they check the prices. Then when somebody comes and says “I’m offering you a low price,” they say, “No, I’ve confirmed from KACE.”

The company also brokers trades through a new weekly radio program. DJs announce offers and bids on commodities from chickens to sweet potatoes. Interested listeners call an off-air number to make a deal, and KACE collects a commission.

James Chanji is one of the hosts of Soko Hewani, or “Supermarket on the Air.”

JAMES CHANJI: It’s very popular. In fact it’s one of our most popular programs on air. Because it’s a new invention. It’s stock market for farmers on radio. Which is something that’s never happened in Kenya, or even East Africa.

Chanji says some listeners didn’t really understand the show at first.

CHANJI: We had a situation where people came with even their livestock to trade at the studio. They thought we were actually doing the trading in the live studio (Laughs) so they came with their livestock here. But later on they realized actually you can just sit at home, use your phone and trade.

Armed with cell phones, a radio program, and even something as low-tech as a chalkboard, these small-scale farmers are now more empowered to truly compete in a global economy.

In Bungoma, Kenya, I’m Gretchen Wilson for Marketplace.

James Chanji, right, and Barnard Kisika, co-hosts of “Soko Hewani”— or “Supermarket on the Air”— a regional radio program.

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