Promoting Investment in Kenya Agribusiness

  • 18th August 2017
  • by secretary
Establishment and management of a grant scheme for improved value chain integration of smallholder farmers/pastoralists by providing incentives to investments in the agribusiness sector in Kenya

The EC calls for proposals to identify an institution that will manage a fund to integrate smallholder farmers and pastoralists within their value chains by blending grants and commercial loans to promote agribusiness in Kenya. Eligibility for funding extends to NGOs, public sector operators, local authorities, and international (inter-governmental) organisations based in the EU and ACP countries (including Kenya).

  • Reference EuropeAid/154913/DD/ACT/KE. 
  • Published :14/07/2017
  • The deadline for concept notes is 05 September 2017

The European Commission and the Government of Kenya will sign a Financing Agreement called AGRIFI Kenya: Support to productive, adapted and market integrated smallholder agriculture, including a contribution to the Africa Investment Facility (hereafter AGRIFI Kenya). 

  • This programme responds to the 11th EDF National Indicative Programme Focal Sector 1: Food Security and Resilience to climate shocks in Arid and Semi-Arid Lands. The said programme contributes to Result 2 for this focal sector, namely for Productive climate resilient agriculture and community investments to safeguard productivity against climatic shocks supported. 
  • It builds on the ongoing 10th EDF Kenya Rural Development Programme and the Standards and Market Access Programme which have shown that limited access to finance, training and market integration of the smallholder farmers are the main obstacles to move out of subsistence farming. 
The rationale of AgriFI Kenya is based on the need to ensure sustainable food security and growth of agriculture, livestock and fisheries sector with more intensive farming systems as indicated in the Kenyan Agriculture Sector Development Strategy 2010 – 2020 (ASDS), the Medium Term Plan 2 and the Medium Term Economic Framework for Agriculture to 2017. 
Smallholders can greatly benefit from stronger integration in their value chain, by partnering with agribusinesses who can facilitate input and output market access: however, for the partnership to be fruitful for all parties, smallholders need to be offered fair deals, and understand their rights and duties. On the other side, many contract farming schemes fail because of the inability/unwillingness of smallholder farmers to stick to contractual terms, particularly through side selling and failure to comply with quality and food safety requirements.
  • Actions under this Call for Proposals will be part of Result 1 of AgriFI Kenya: Capacity of smallholder farmers/pastoralists to practice environmentally sustainable and climate smart agriculture as a business in market-integrated value chain on functional and equitable terms. This component includes also the complementary EIB Kenya Agriculture Value Chain Facility to Financial Institutions in Kenya, which will be funded through the Africa Investment Facility and implemented by the European Investment Bank (EIB)5 . 
  • Results 2, 3, 4, 5 of AgriFI Kenya will target, respectively: strengthening of value chain based ATVET institutions, capacity building of private sector actors on sanitary and phytosanitary