Linking farmers to markets in Kenya: The evolving KACE model

Abstract

The Kenya Agricultural Commodity Exchange Limited (KACE) was incorporated in 1992 but formally launched in 1997 to address the challenges facing farmers in Kenya, especially poor smallholder farmers, in accessing input and output markets. A commercial for-profit model was chosen in order to charge clients modest fees for services rendered and raise revenue to sustain the services in the long term. The KACE model has evolved through various stages over time, with KACE developing, testing and experimenting with various platforms to link smallholder farmers to more remunerative markets. This article describes the various platforms, the challenges that were experienced and how they were addressed at each stage in the evolution. Chronologically, these platforms consisted of a physical trading floor, market information points (MIP), information and communication technology (ICT)-based platforms (short messaging service - SMS, interactive voice response service - IVRS, Internet based website and electronic database and radio), market resource centres (MRC), and a market call centre (MCC). Thus, the challenge experienced by KACE has been to find the right mix or portfolio of appropriate and affordable technology platforms, with complementary human skill and capacity, to efficiently manage the technologies, as well as the revenue flows, towards increased technical and financial sustainability. Despite the challenges, the KACE model continues to evolve and function, with a social entrepreneurial spirit of determination, to provide a solution to the social problem of poor smallholder farmers in Kenya, and God and technology willing, in the rest of Africa. The ICT platforms are being upgraded to improve technical and financial performance and efficiency, and the MRC staff are being trained to improve their capacity to generate and manage revenue efficiently.