Accessing export markets: a developing country producers’ perspective

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.