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@purdue.edu

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
10.Conclusions

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?