DEVELOPING SUPPLY CHAIN AND GROUP MARKETING SYSTEMS FOR FISH FARMERS IN GHANA AND KENYA Marketing , Economic Risk Assessment & Trade / Study & Activity / 07 MER 02 PU

The activity proposed a supply chain framework for small-scale and medium-scale commercial fish farmers in Ghana and Kenya to enhance their access to and integration into urban fish markets for better returns. The arrangement for marketing farmed fish in the two countries followed two distribution chains a short chain from farm gate to neighboring markets and a long chain to distant markets. The nature of the marketing arrangement depended on the scale of production, proximity of production points to urban markets, and size of fish. Some changes in the marketing pattern were proposed especially changes in the volume and supply consistency of tilapia sold by the small-scale and mediumscale fish farmers. These fish farmers traditionally operated independently but given their scale of production, they needed to be taught and encouraged to engage in collective efforts to plan production, and manage supply and sales. By improving on the current cluster farming system in Kenya and fish farming associations in Ghana, fish farmers could utilize their collective organization to develop strategic assembly location points for collective sales, and also minimize their marketing risks by benefiting from government programs and engaging in contracting with both input suppliers and fish buyers. INTRODUCTION Fish production technology has tremendously improved in Ghana and Kenya resulting from the developmental efforts of NGOs including Aquaculture CRSP. The aquaculture industry has benefited from foreign technical assistance that has led to increased food fish production (FAO, 2009). For example, the Aquaculture CRSP activities in Kenya were designed to stimulate development of viable small-scale aquaculture businesses (Neira et al., 2009). However, very few large scale commercial farms exist in the industry and most aquaculture production is by smallscale commercial farms. The number of small -scale commercial farms is growing but fish farmers lack the knowledge and skills in supply chain issues and marketing. The aquaculture industry in Ghana and Kenya could benefit from increased support from developing market chains that link small-scale commercial fish farmers into the market chain of the established large scale commercial aquaculture, capture fisheries and seafood markets, through organized and collective marketing TECHNICAL REPORTS: INVESTIGATIONS 2007-2009 199 efforts. This could be achieved by a thorough understanding of the fish marketing channels in order to ascertain how best small-scale commercial farms could be integrated into the existing supply chain. The growth in aquaculture in Ghana and Kenya can be sustained if fish farmers engaged in a marketing system that involved a chain of links between producers and consumers, including all mechanisms, flows, interchanges, services and operators (Johnson and Hofman, 2004). This would provide great earnings opportunities for fish farmers. The flow of fish products through a wellfunctioning fish marketing system includes information on prices, market situation, trends, consumer preferences as well as flows of money, and credit. By developing this chain, there will be potential benefits for aquaculture development, employment, higher income for fish producers, potential micro-financing by fish vendors and middlemen (FAO, 2002). The extent of the potential benefits depends to a large degree upon the efficiency and design of the system. Leyva (2004) demonstrated that a thorough understanding of urban markets and coordinated production and marketing efforts are key factors to profitability of fish farmers in Nicaragua and Honduras. Leyva (2004) further found that profitability resulted from primary sales to restaurants, with supplemental sales to supermarkets in relative proximity to the target restaurants. Fish farmers in Ghana and Kenya sell fish at pond banks and in the immediate local market and lack the knowledge and skills required to access lucrative and distant urban markets. The training in supply management provided fish farmers a better understanding of opportunities and constraints in the fish/seafood value chain, and the effects on competitiveness, demand, and linkage to specific markets. The overall objective of the activity was to develop a supply chain framework for smalland medium-scale commercial fish farmers in Ghana and Kenya to enhance their management skills to access and become integrated into urban fish markets to realize significant profitability. The framework involved training and building synergies that allowed both buyers of farm-raised fish products and smalland medium-scale fish farmers to act to minimize their joint transactions costs. The specific objectives were to: 1. Develop an aquaculture supply chain framework to create value for farm-raised fish in Kenya. 2. Train smalland medium-scale fish farmers in supply chain management, risk analyses, costs analyses, pricing strategies, quality and cost effectiveness in post harvest value chain. 3. Build synergies between fish producers and fish vendors for improvements in product and service delivery through cost effective supply-chain coordination. 4. Equip farmers with skills for group marketing, developing new markets, developing distribution and market structures and networks, and identify value-added opportunities for tilapia and catfish. METHODS AND MATERIALS Background information and data on fish marketing were collected from primary and secondary sources. The primary data were obtained through a survey using structured questionnaires, personal communications and observations in Ghana and Kenya. Information was gathered from fish retailers, fish producers and agents connected to the marketing of fish products. The questionnaires elicited information on quantities supplied and demanded, prices, mode of distribution, challenges encountered, etc. Retailers were selected randomly for the survey from Accra and Kasoa markets in Ghana and from Nairobi and Kisumu markets in Kenya. Fish producers were also chosen randomly for the interview. Both owners of very large commercials fish farms and small scale fish farms were TECHNICAL REPORTS: INVESTIGATIONS 2007-2009 200 interviewed in both Ghana and Kenya. Information gathered from personal communications came from officials at the ministry of fisheries in the two countries, host country project directors, and other personnel with more insights and in-depth understanding of the supply chain for fish. Observations were also made from the locations visited to provide first-hand knowledge of the flow of fish products from producers to consumers. Secondary data were obtained from sources such as annual reports on the fisheries sector, fisheries policy and development strategies, national production statistics, imports, exports of fish, and other fisheries project reports. These documents provided some background information and understanding of the environment and macro-economic fish policies prevailing in the host countries. Two workshops were conducted on June 15 and 22, 2009 in Kenya and Ghana respectively. Participants at the workshops included fish farmers, fisheries officers, fish processors, and fish traders. The training curriculum covered the importance of value chain, principles of supply chain management, principles of marketing, group marketing, developing new markets, and developing distribution and marketing networks.