Assessing Market Potential of Agroforestry Tree Seedlings in Western Kenya

Published on September 1, 2014 | Author: Judith B.A. Oduol, Steven Franzel

In this study, Porter’s framework is used to analyse the forces that coordinate and control the market for agroforestry tree seedlings in the Nyando basin in Western Kenya where smallholder farmers were assisted by non-govern- mental and research organisations to start tree seedling nurseries, with a view to fostering adoption of agroforestry in the region. In addition, financial viability of the enterprise is assessed and the resources and interventions required to improve the operators’ competitiveness and make the enterprise sustainable are identified. Primary data collected from eight nursery operators and sixty agroforestry farmers are used and supplemented with secondary information obtained from relevant literature to gain an insight into the tree seedling industry within and outside the region.

The results indicate that the tree seedling industry is highly competitive and is characterised by several small-scale operators who employ similar strategies and produce and sell nearly homogenous products. Consequently, competition is based on price rather than on strategies that require capital investments such as branding, product differentiation and product promotion. The enterprise is financially viable but the gross margins, particularly those of timber tree seedlings, are sensitive to low seedling prices suggesting that competitors are exerting pressure on prices and profitability. Thus, to gain an edge over the competitors, the small-scale operators need to build competitive advantage by adopting strategies that allow them to charge higher prices for their products, maintain customer brand loyalty and understand the coordination, control and relationships within the industry.

Oduol, J.B.A. & Franzel, S. Assessing Market Potential of Agroforestry Tree Seedlings in Western Kenya. Small-scale Forestry 2014, 13:281-298. DOI: 10.1007/s11842-013-9254-2

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