Investigating Cash Flow in the Agricultural Supply Chain Within Kenya

Abstract

The agricultural supply chain within Kenya has been experiencing significant inefficiencies because of deficient information flow and the excessive number of actors involved in any given transaction leading to financial instability for many actors involved in the agricultural industry. In an attempt to obtain a more fundamental understanding of the specific issues within the agricultural supply chain, farmers from Kisumu County as well as wholesalers within the Kibuye market were surveyed to track the flow of money as produce moves from farms to the markets. From these surveys, a comprehensive price breakdown of transactions between farmers and wholesalers was obtained for tomatoes, mangoes, oranges, watermelons, and onions. The prices of each individual piece of produce was found to account for an average of 86.8% of the total purchasing costs while overhead costs were found to contribute to 3.2% to 15.5% of purchasing costs. Additionally, it was found that there was no correlation between distance traveled and transportation costs for wholesalers transporting produce which implies inefficiencies in the current transportation system.