Discussion Paper No. 68 of 2007 on Policy and Institutional Interventions to Revitalize Kenya's Pyrethrum Industry

Abstract

Kenya has been the leading global pyrethrum producer for over four decades. The sub-sector has made significant contribution to economic growth through employment generation, foreign exchange earnings and livelihood improvement over this period. However, domestic production as well as export supply has recently been on a drastic downward trend. International competition, especially from Tasmania, Tanzania and Rwanda has become stiff, thus eroding Kenya's hitherto global market dominance. It is against this background that this study was conducted to explore policy options that would enable stability of domestic production and sustainability of the pyrethrum industry in future. The study was undertaken through farm-level surveys in key pyrethrum growing areas, and interviews with relevant stakeholder institutions in the country. Study findings indicate that despite a high desire by farmers to continue pyrethrum production, stability of supply in the future depends greatly on how well farm-level and institutional level constraints are addressed. The key constraints that need to be addressed include delays in payment of farmers, low value addition, poor marketing, lack of stakeholder participation and mismanagement of pyrethrum institutions. Some policy measures are suggested to improve institutional and regulatory framework, enhance competitiveness and promote sustainability of Kenya's pyrethrum industry. Further research is suggested on the potential for up-scaling pyrethrum production; breeding approaches to improve pyrethrin content; alternative value addition strategies; estimation of export potentials in current and emerging markets; and projection of likely drivers of global competition in the medium and long-term.