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3 、

Value chain management

As shown in the table below, the Kenyan coffee value chain belongs to the category "Captive" and is mainly characterized by the fact that a smaller number of suppliers rely on one or more buyers with more actual operational authority for commercial activities. In this type of relationship network, the leading company will have a relatively high degree of supervision and control in the whole transaction relationship.

In < part 1 > above, we can see that the value chain of Kenyan coffee is currently in a serious imbalance because it is fragmented throughout the production stage, but is highly concentrated in the upper reaches of the value chain, so that its entire lifeline is in the hands of economies both at home and abroad.

According to national law, 700000 small workshop coffee farms in Kenya have to sell their coffee products through about 600 coffee partners, and because the fruit must be processed within 24 hours after harvest, this natural habit has led to less business competition between partners, as the level of traffic is limited, coffee farmers have to sell their beans to nearby partners. The partners then take a series of commercial activities such as processing the coffee bean fruit, opening the credit channel, and starting to operate their own coffee market. Generally speaking, the actions they take are not static and will be adjusted accordingly according to the changes in the market.

In the processing stage of coffee beans in the upper reaches of the industry, auction and marketization are the two most important issues. There are only five mills in Kenya, and KPCU manages the largest one and controls about 70% of its production revenue. For the auction phase, until 2002, the Kenya Coffee Commission (Coffee Board of Kenya) was the only auction agent. After a round of reforms in 2002, it changed its role and became an institution with the right to issue agency licenses to applied auction agents. As a result, KPCU has been granted an agency license, and its rights have been further expanded. Recently, about 20 marketing agents have applied to participate in weekly auctions. Since coffee beans from small farms are processed separately, they are easily mixed with lower quality coffee beans from other farms and sold to exporters during grinding. this reduces the enthusiasm of small-scale farmers to produce high-quality coffee beans because they are paid according to the level of income generated by the number of coffee beans they produce. Not based on the quality of the coffee beans they produce.