World Bank ranks Kenya highly on farm regulations

A farmer harvests tomatoes on his farm in Naivasha last August. A new World Bank report attributes the low participation of Kenyan women in agricultural value chains on limited land ownership and access to credit. PHOTO | RACHEL KIBUI 

By SANDRA CHAO-BLASTO, schao@ke.nationmedia.com

Kenya’s regulation practices are impacting positively on agriculture but there is still room for improvement, a new report compiled by the World Bank says.

The Enabling the Business of Agriculture report indicates that Kenya has scored above the global average of 60 per cent, meaning that the regulatory environment is boosting the sector.

The report surveyed regulatory good practices across the agriculture value chain (seeds, machinery, inputs, finance markets and transport) in 40 countries across the world.

“Agricultural value chains need to be dynamic, productive and efficient if the sector is to thrive in the face of climate change and to be part of the solution to the growing food demand projected to rise by 20 per cent over the next 15 years,” the report notes.

The survey shows that countries where agriculture accounts for less than 25 per cent of Gross Domestic Product (GDP) have better regulatory systems that foster agribusiness and ensure quality control and safety of food production.

Kenya has for long relied on rain-fed agriculture to produce its food, condemning the country to perennial food shortages despite having large tracts of arable land.

Agriculture, however, still accounts for slightly over a quarter of Kenya’s gross domestic product and over half its exports, meaning the country is set to reap huge economic benefits with increased value addition.

In 2014 agriculture, forestry and fishing accounted for 27.3 per cent of the country’s GDP and 17.4 per cent of the total private sector employment.

Among top five

Accordingly, the World Bank report says countries like Kenya, where agriculture is a major economic activity, have greater room for improving key regulations that govern the agribusiness sector.

“Clear and accessible laws foster a business environment that benefits all market players from farmers to customers and large investors,” the World Bank states.

“When regulations are too complex, unpredictable or discriminatory they raise costs and cut incentives to enter formal competitive markets.”
Kenya was listed among the top five countries in seed registration, development and certification.

It also performed above the global average in providing financing, appropriate machinery and transport systems but scored below average on regulation of fertiliser and markets.

The ideal agribusiness environment described in the report includes macroeconomic and sector specific laws, policies, regulations and support services.

It continues to state that a country should strive to have information structures that help with labour force preparedness.

The report also reveals that the participation of women in the agricultural value chains is still limited and attributes this to lack of land ownership and limited access to credit.

This in turn reduces the capacity of women to invest in better inputs and equipment.

In addition legal restrictions, lack of information, social norms, market failures and institutional constraints also affect the effectiveness of the available resources for women.

“Reforming laws that directly affect women’s capacity to own and manage property, conduct business, open  accounts in own names and use public institutions and services increases women’s economic empowerment and participation in agricultural value chains,” the report recommends.