SDM case study: Lattice, Kenya

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The high population growth and increasing incomes are expected to drive the per capita consumption of tilapia in Kenya, while production levels are insufficient to supply the current low per capita fish consumption. As a result, cheap imported fish from countries such as China have been on the rise but in turn, affect local fish prices. Low prices intensify the existing challenges faced in the aquaculture sector, which is predominantly formed by small-scale farmers, related to low access to quality and affordable feed and fingerlings and premium markets.

To enhance tilapia production in Kenya, and to overcome the challenges in the highly fragmented value chain presents, IDH and Lattice Aquaculture have brought together a consortium of partners to tackle different challenges facing smallholder producers; Aquaculture Academy (Operator), Aquarech Ltd. (Aggregator), Tunga Nutrition (K) Ltd. (Feed provider), Jewlet Enterprises and Kamuthanga Farm Ltd. (Fingerling/fry provider), and Finance providers. But:

  • what is the business case for value chain players and tilapia farmers in developing the value chain,
  • what bottlenecks should be anticipated in the development, and
  • what development strategies can be deployed to achieve a financially viable and sustainable tilapia value chain?

This SDM report, therefore, evaluates the business case and development for multiple players within the aquaculture value chain and provides, among other recommendations, the following key insights:

  1. Tilapia fish farming remains commercially unviable, particularly for pond and small-scale cage farmers.
  2. Value creation across the value chain players requires redistribution to enhance the sustainability of the ecosystem in the long term.
  3. While access to finance is critical, most of the farmers are not attractive to commercial financial service providers making a case for the development of blended finance.
  4. Farmer (sub) groups will play an important role in the project scale-up phase, which makes group formalization and professionalization crucial.
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