How AFEX is bridging the storage gap for smallholder farmers in Kenya
Sponsored by AFEX Fair Trade Limited
In Kenya, agriculture is a vital sector that contributes significantly to the country’s economy, with smallholder farmers accounting for 75 percent of the total agricultural output. However, many small-scale farmers face numerous challenges, including limited access to proper storage facilities for their produce.
The storage capacity in Kenya is only 3.5 million metric tons (MT), while the annual agriculture production is 44 million MT. This situation often leads to postharvest losses, reduced income, and increased vulnerability in the value chain.
Recognising these challenges, companies like AFEX Fair Trade Limited Kenya have taken significant strides to address the infrastructure gap and postharvest losses among smallholder farmers in Kenya. By deploying supply chain solutions for key commodity value chains in Kenya, this farmer service company is ensuring that farmers have access to finance, storage, and a more efficient market, to improve food security and drive economic growth in rural communities.
Far too often, valuable food items never make it to consumers. They are lost or wasted through the supply chain. To address this, AFEX is setting up warehouses across grain-producing regions in Kenya, and is providing storage as a solution for farmers.
AFEX, which was recently ranked by Financial Times as the fastest-growing company in Africa, runs over 17 warehouses spread across two counties in Kenya, with over 12,000 registered farmers. The company also successfully conducted a $1 million input programme between March and May of 2022.
In 2023, AFEX became the first private sector company to be licensed as a warehouse receipt operator by the Warehouse Receipt System Council (WRSC), for the AFEX Soy Mateeny warehouse in Uasin Gishu County.
The Warehouse Receipt System (WRS) allows farmers to deposit their produce in certified warehouses and receive a receipt representing the value of the stored commodities. These receipts serve as collateral, enabling farmers to access credit and other financial services alongside the established benefits of storage, such as standardisation and quality control, and postharvest loss reduction.
However, AFEX’s business model focuses not only on storage but also on optimising the entire supply chain. Farmers also need robust market linkages to derive maximum value from their produce. Through their extensive network, AFEX connects farmers directly to buyers, processors, and exporters, and by eliminating intermediaries, farmers can negotiate fair prices and secure reliable markets for their commodities.
Looking ahead, AFEX aims to transact with 100,000 Kenyan farmers by 2025. In achieving these goals, the company will support Kenya’s food security while promoting a fair value exchange among players in agricultural value chains. By leveraging their solutions across infrastructure, financing, and access to markets, AFEX is reducing Africa’s food shortage gap by increasing access to food, promoting economic diversification through commodities export, improving supply chains to meet demand and supply, and fostering economic development in Africa.
For more information about AFEX, go to https://africaexchange.com/
