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Abstract
This paper reviews several of the principal driving
factors in export-orientated agriculture in developing
countries. There is sometimes debate over developing
countries that may be food deficient having segments of
their agricultural sector focusing on export instead of
producing food entirely for domestic markets. Exportorientated
high-value agriculture maximises returns
(price) to smallholders, which in turn improves their
food purchasing power, leading to poverty alleviation.
It also facilitates adoption of international best practices
through trade interaction between importing and
exporting countries, leading to improved efficiencies
and competitiveness. Foreign exchange earned from export trade helps
stabilise local currencies against hard currencies, and that contributes to
macroeconomic stability.
This paper also highlights the realities of the market access challenges that
export traders of fresh produce face routinely. These include capacity to
meet the multiple stringent standards demanded by developed countries.
There is no question that standards are necessary — they are an essential
passport to all trade, local or export, but the farmer bears the costs of
compliance and certification. That smallholders in developing countries
such as Kenya do meet the official control market standards demanded
by supermarkets in developed countries is shown by Kenya’s horticulture
exports of about US$1-billion-worth of fresh produce annually, 82% of it
to the European Union, one of the most demanding markets in the world.
For developing countries’ exporters, there can sometimes be 3–5 steps
between a producer in developing countries and a consumer in a developed
country, leading to low value retention at the developing country level.
Pricing and contracting mechanisms by supermarkets for fresh produce limit
the capacity of exporters and growers in developing countries, particularly
smallholders, to enter into binding contracts. There is insufficient risk
sharing along the value chain, leading to smallholders bearing the highest
risks in supermarket fresh produce trade. There are development issues in
developing countries accessing export markets.
This paper examines the case for capacity-building among smallholder
producers to be treated as a ‘public good’ in the interests of improving
best practices and competitiveness, of building export infrastructure such
as facilities for testing and certification. Agriculture research is important
in developing production efficiencies, controlling pests and diseases, better
land-use management and better informing farmers on economics/market
trends of key commodities. Ultimately, export trade from developing
countries should contribute to Millennium Development Goal 1: Eradicate
extreme hunger and poverty.I speak to you as a representative of farmers from Kenya. I’m talking about
small-scale farmers, defined that way not just by their scale of operation but
also by economic considerations. I also speak very strongly from a developing
country point of view. In brief, the Fresh Produce Exporters Association of
Kenya (FPEAK) and the Horticulture Council of Africa (HCA) represent farmer
groups. The HCA works with farmer groups that are dealing especially with
fresh produce, in 11 countries, extending all the way from Ghana through east
Africa to South Africa.