Peanut Value Chain Development: The Case of Lower Lake Victoria Basin of Kenya
Authors: Odunga George Okoth , Bidzakin John , Mutsotso Beneah , Okoth Sheila , Graves Anil 
Published: August 2024

Peanut is one of the important legumes grown in Kenya, ranking second after beans. Its production is most common in Western and Nyanza regions of the country with higher volumes being produced in Nyanza Region compared to the Western Region. The value chain for peanuts in Kenya consist of many actors including input dealers, producers, aggregators, traders, processors, exporters and consumers. The general objective of this study was to map the value chain for peanuts, indicating the opportunities that value chain actors can benefit from and strategies that can be used to upgrade the chain. The specific objectives were to characterize the key actors along the peanut value chain; determine the costs and value added along the groundnut value chain; and determine the constraints and opportunities in the value chain and suggest ways to upgrade the chain. A cross-sectional survey was conducted among the key actors in the value chain in 2 purposively selected sub-counties in Kenya where peanuts are predominantly produced marketed and/or consumed. The sub-counties are Karachuonyo and Nyakach. The data collected included socio-economic characteristics of the value chain actors, sales volumes and prices, trends in demand and supply, constraints and opportunities in peanuts and trade policy related issues. Secondary information mainly on value chain aspects was drawn from past research reports and internet. The data were analyzed using descriptive statistics and parameters such as means and percentages were determined and used to interpret the results. These enabled the drawing of peanut value chain map illustrating interrelations among chain actors, and activities they conduct. Results show that more females (68%) compared to 32% male participate in peanut production. Results further show that the female farmers were order compared to the male farmers. Few farmers were aware of improved technologies, for example only about 26% were aware of existence of improved peanuts varieties, and only 1.5% used the improved seed. No peanut farmer was using inorganic fertilizers, citing high price, nature of the soil and lack of knowledge as the major hindrance. At wholesale level, the chain was dominated by male traders partly attributed to the very versatile nature of the business that requires intensive travels, and also being capital intensive afforded by few females. On the other hand, retail traders were dominated by females. Retailers do deal in small quantities and therefore use less capital compared to other categories of traders. The majority of the processors were males also attributed the capital-intensive nature of the processing business. Most of the businesses were located in urban areas because of easier access to the raw materials and markets for the processed groundnuts. On multi-stakeholder platforms with various parties in the chain, an analysis of strengths, weaknesses, opportunities, and threats (SWOT) was undertaken. Cost variables were used to calculate gross margin profit and benefit-cost ratios. Overall, the sector was mostly a fresh food market, with a focus on peanut producers, processors, and direct sales to wholesalers, retailers, and end users. The SWOT analysis indicated numerous prospects, such as advantageous production ecologies, processing alternatives, and insatiable local and international markets. To operate synergistically with a collective profit motivation, institutional players must network with primary actors. Priority production restrictions, such as seed availability, chemical fertilizer costs, field pests and diseases, and declining soil fertility, should be addressed.