Agriculture is the main driver of Kenya’s economic growth and
development in the medium term yet it continues to receive dwindling
budgetary allocations. PHOTO | FILE | NMG
Food security is one of the pillars of President Kenyatta’s Big Four agenda for the next five years.
Other
pillars that the government hopes will create and sustain inclusive
economic development are affordable housing, manufacturing and universal
health care.
The government plans to
almost double maize production from the current 38 million bags to 74
million in five years for food security. Rice, the other staple, has a
similar target.
For Kenya to achieve
these goals, commercial agriculture is the key. It enables farmers to
produce surplus food and get positive returns for their investment.
CASH ALLOCATION
But
are counties and the national government doing enough to ensure this
happens? Hardly. Kenya has had challenges with the high cost of
production, inability of farmers to access markets and high post-harvest
losses.
These challenges must be
addressed if the ambitious food production targets are to be achieved.
But evidence on the ground suggests we are not doing enough.
The
national government has continued to distort the cereals market through
unregulated imports and inadequate cash allocations to the sector in
the budget.
This has had the effect
of demotivating farmers and hence a decline in production. The drive
towards commercialisation requires enhanced availability of information
and use of the existing production technologies, public-private
partnerships and proper coordination between counties and the national
government.
SH20 BILLION
And
money. Agriculture is the main driver of Kenya’s economic growth and
development in the medium term yet it continues to receive dwindling
budgetary allocations.
In 2017, the
government allocated the sector Sh20.25 billion, translating to about
3.5 per cent of the budget, which is less than the minimum 10 per cent
pledged in the Maputo Protocol.
Pricing
of food crops has also been a major issue affecting production, given
the high cost of inputs. Take maize, for example. The average cost of
production for a 90kg bag in Kenya is between Sh1,950 and Sh2300. Yet
this is the same range in which a bag of maize is selling in the market.
NCPB offered a high of Sh3,200 but most of the money allocated was
gobbled up by brokers, who imported maize leaving genuine farmers to
their own devices.
The low margins and inability of farmers to access the NCPB market this year may hamper production.
ARMYWORM INFESTATION
Kenya
does not produce enough food to meet its domestic demand. In 2017, the
demand for maize was about 48 million bags against a production level of
37 million. To meet the deficit, Kenya imports maize from the global
and regional markets.
In 2017, Kenya
imported about 10 million bags of maize, 620,000 metric tonnes of rice,
and 1.8 million metric tonnes of wheat. Although the imports play an
important role in stabilising prices, they should be managed in a way
that does not hurt local farmers.
Losses
after harvest are another major challenge. Last year, Kenyan farmers
incurred a total of Sh32 million in post-harvest losses and the fall
armyworm infestation. There is a need to identify the exact point of
losses and use the most appropriate innovations and technology to
address them. This requires active involvement of researchers and
extension staff in linking research outputs to the market.
MEGA IRRIGATION
The
other method for Kenya to increase food production is through
irrigation. Irrigation has the potential to increase production by about
100-400 per cent.
The cost of
production under irrigation is about Sh1,600, exclusive of the fuel cost
under smallholder and large-scale irrigation like Galana-Kulalu.
Irrigated maize production is profitable, assuming the market and
government prices of Sh2,200 and Sh3,200 respectively.
But
the success of mega irrigation projects needs the right public-private
partnership, creating complementary incentives, agreeing to the terms
and conditions, as well as laying down clear responsibilities defining a
PPP joint initiative and linkages. Where the government implements the
projects alone, accountability has always been problematic. The
Galana-Kulalu food security project is a 500,000-acre irrigation maize
project yet the actual acreage under irrigation is hardly 2,500.
PIPE DREAM
Maize
productivity in early 2018 fell within what Tegemeo predicted at 22
bags per acre, which is profitable. However, lack of project information
has reduced public confidence in the project.
The
budget allocation to agriculture has been declining over time. In the
2017 and 2018 budgets, the government allocated Sh38 billion and Sh20.2
billion respectively. The 2017 allocation was 2.3 per cent against the
required 10 per cent. This undermines devolved functions such as
agricultural extension, which many stakeholders believe is no longer
effective.
It also means that NCPB
has been unable to intervene in the market in any significant way to
stabilise prices because it is not allocated enough money. Add
corruption that saw brokers import and supply NCPB at the expense of
genuine farmers this year and the problem becomes worse as prices
plunge. Though traders and consumers have benefitted, farmers have been
the losers. Unless their plight is addressed, increasing production
envisaged in the agenda blueprint will remain a pipe dream.
INCENTIVISE INVESTMENTS
There
have been positive interventions. The establishment of the Joint
Agricultural Sector Consultation and Cooperation Mechanism (JASCCM)
charged with implementing sector proprieties as defined in the 2016
Agricultural Policy is a step in the right direction.
It
has contributed towards facilitating awareness and capacity building
among national and county stakeholders across the sector pertaining to
application of intergovernmental governance and partnership principles.
However, its capacity to influence change at the policy formulation and implementation levels is still limited.
As
a way forward, the government should not be an active player in the
input and food markets but rather a facilitator. This will reduce
effects such as crowding out the private sector as observed in the
fertiliser and food markets when prices are low to incentivise
investments.
VALUE ADDITION
Tegemeo
studies have shown that increased farm mechanisation may lower the cost
of production, making food cheaper. Even the fertiliser subsidy
programme, whose initial aim was to moderate prices and help
small-holder resource-poor farmers, has been abused and is only
benefitting large-scale farmers. This has watered down the programme and
fertiliser costs remain high.
This
programme requires redesigning to enhance fertiliser targeting. Where
difficulties arise, the government can seek support from development
partners to help implement the projects and where possible link
production to markets.
Further, it is
important for Kenya to draw lessons from the increased production in
neighbouring countries. This will enable it to implement policies that
cushion local farmers from the effects of regional and global markets
where the costs of production are low. Key among these is linking
farmers to markets and value addition.
Dr Otieno is an agricultural economist and Research Fellow at the Tegemeo Institute of Agricultural Policy
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