Investment Potentials in Kenya Agriculture Sector

Kenya Agriculture sector is the highest contributor of Kenya gross domestic product , So any investment in agriculture in Kenya starts with profits .

The major agricultural activities in Kenya are crop production, horticulture, dairy and livestock farming. The principle food crops include maize, wheat, beans, potatoes and rice, while major cash crops are coffee, tea, sugarcane, sisal, and pyrethrum.

There area also opportunities for improvement in technology infrastructure such as packing, storage, and transportation. Intensified irrigation and additional value added processing are marketable areas for investments.

Overview on Investment in Agriculture Sector in Kenya

This sector offers the greatest scope for investors and support services, such as cold storage and refrigerated transport for perishables and other horticultural products.

In the area of Coffee productions, despite the dramatic plunge in coffee production due to the severe drought in 2006, opportunities abound in coffee roasting and grinding.

Another lucrative field lies in producing decaffeinated coffee for export. New regulations and technologies are also helping producers sell more efficiently and profitably.

KENYA AGRICULTURE SECTOR INVESTMENT OPPORTUNITIES IN TEA

Tea was introduced to Kenya over 100 years ago. Now a major tea producer with an annual production of approximately 350 thousand tons - 10 percent of the total global tea production - Kenya is the world's fourth largest tea producer and the largest exporter.

Tea is not only the most important agricultural sub-sector, but the leading foreign exchange earner in Kenya. Approximately 10 percent of the population is employed by the tea industry. More than 50 countries import Kenyan tea, which is considered by many to be the best in the world.

The main buyers are Pakistan (which takes approximately 23 percent of the total exports), followed by the United Kingdom, Egypt and Yemen. There are many existing opportunities to explore in the tea industry market for such a highly valued beverage world over.

Currently, approximately 62 percent of the total crop in the country is produced by small-scale farmers who process and market through the Kenya Tea Development Agency (KTDA), the largest single producer of tea in the world with 53 tea factories.

The rest is produced by large-scale tea estates in 39 factories operated on a private basis. Some of the famous names include Unilever Tea, Finlay Tea Solutions and George Williamson.

The success of this sector gives a strong example of how effective foreign investment in Kenya can be, and the excellent results it can yield.

Investment opportunities exist in many areas, including tea plantations and processing and packaging plants (for export under the Manufacturing Under Bond or the Export Processing Zones programmes).

Above all, consumption of green tea in some countries like Japan has stimulated interest in its production in Kenya where KTDA has instructed all the tea factories to introduce a line each for processing of green tea.

KENYA AGRICULTURE SECTOR INVESTMENT OPPORTUNITIESIN COFFEE

The coffee sub-sector in Kenya is one of the major employers and contributed approximately 5 percent of export revenue in 2003, with Germany, Sweden and Belgium being the main importers. The type of coffee grown in Kenya is known as Arabica, with Robusta only making up 1 percent of the market.

Coffee farming is done mainly by small farmers (60 percent) organized into co-operative societies, the remaining 40 percent being controlled by large-scale farmers.

Investment opportunities exist in processing and packaging plants, instant coffee processing and Robusta coffee growing.

There are new markets for Kenyan coffee to be explored, particularly the US, as well as opportunities to develop infrastructure in coffee producing areas.

In terms of value addition an area with the greatest potential is the production of ready to drink - RTD coffee.

KENYA AGRICULTURE SECTOR INVESTMENT OPPORTUNITIESIN HORTICULTURE

The horticultural sector is one of the fastest growing sectors in the economy and is the second largest foreign exchange earner after tea.

Opportunities exist in production and export of products such as cut flowers, French beans, pineapples, mushrooms, asparagus, mangoes, macadamia nuts, avocados, passion fruits, melons and carrots with Europe as the main market.

KENYA AGRICULTURE SECTOR INVESTMENT OPPORTUNITIESIN AGRO-PROCESSING

Numerous investment opportunities exist in this sector. Edible and other oils produced locally include butter, ghee, and margarine as well as sunflower, rapeseed, cottonseed, seamen, coconut and corn oil, while a large quantity of palm oil is imported.

Kenya produces excellent beer, utilizing locally grown barley. The country has recently developed papaya and grape wines that can be exported to regional and international markets.

Opportunities exist in coffee roasting and grinding, with a further potential in the production of decaffeinated coffee for export.

There is also considerable potential for the expansion of chocolate and the confectionery products for export. Opportunities for investment exist in the production and processing of sugar, tea, meat, and dairy products.

KENYA AGRICULTURE SECTOR INVESTMENT OPPORTUNITIESIN FISHERIES

Kenya's water resources of the Indian Ocean and Lake Victoria provide vast fishing potential. At present, deep sea fishing, prawn and trout farming are in their infancy but growing rapidly.

Opportunity also exists in fish processing (filleting and fish meal production), as well as fisheries-support infrastructure (refrigerated transport, cold storage, etc).

KENYA AGRICULTURE SECTOR INVESTMENT OPPORTUNITIESIN LIVESTOCK

Investment opportunities exist in the rearing of livestock for meat and dairy products. The dairy industry has been liberalized, providing newinvestment opportunities in milk processing for local and regional markets.

Non-conventional livestock farming for example, of ostrich and crocodile farming, represent an exciting new area of investment. Bee keeping and honey processing are an untapped potential in Kenya.

Other areas such as wood and wood products, pharmaceuticals andmanufacturing also hold potential for investors.