How agri-preneurs hold key to raising our export capacity

Two farmers in green wheat field examining crop during cloudy day. [iStockphotos]

Recently, agri-value chain actors converged in Nairobi for the Global GAP Tour Stop conference to help our agricultural exports meet standards for the global market.

Certification and standards are essential to any country's industrial operations, economic development and compliance with global standards.

Kenya has established its industry certification and standards within the agricultural sector to meets the necessary requirements and keep up with the world.

The forum couldn't be more apt, especially for our economy, given that agriculture is the mainstay of Kenya's economy. Studies by the Central Bank of Kenya show agriculture accounts for 47 per cent of our Gross Domestic Product directly and indirectly through its linkages with other sectors.

The sector employs 40 per cent of the population, and more than 70 per cent of the rural population relies on agriculture for their livelihoods. However, the sector continues to face several challenges, such as climate change and macroeconomic challenges, resulting in stagnant yields.

Last year, I attended the Fruit Attraction Fair in Madrid, Spain, which brought together leading exporting countries, global logistic companies, input and machinery providers, and larger exporters to upcoming players from developing countries.

From my interactions with Kenyan fresh produce exporters, I noted that the challenge was meeting the standards and certification requirements for produce entering the European market. Most exporters intimated the need for more technical knowledge on how to package their produce for the global market.

Lessons from the conference and visit to Spain show a need for the private sector to support Kenya's Agri-SMEs to meet certification standards locally and remain globally competitive. By following these standards, firms will produce quality goods and services that can be sold around the world.

Financial institutions therefore must widen their lens and find a way to support the agricultural sector better. Lenders should embrace the concept of shared value to develop commercially scalable solutions.

Absa Bank Kenya, for instance, has adopted a value chain approach that actively provides solutions for input providers, primary producers, aggregators, and agro-industry players. The bank does this through a four-pronged approach of access to markets, access to information, access to mentorship and coaching, and access to finance.

The information asymmetry between buyers and sellers has also been noted to be a hindrance to trade. I believe that commercial banks can help improve access to information to SMEs by providing networking platforms and events that connect traders with other actors in the global marketplace.

This can go a long way in easing access to markets and introducing international certification and standards for them to compete globally. Banks need to go beyond lending to help agriprenuers overcome the barriers to growth, increase their resilience, and ultimately contribute to the economy's growth.

The writer is an agribusiness specialist at Absa Bank Kenya