Facilitating Equitable Agricultural Development

in sub-Saharan Africa

The Case of Kenya

ContentsO Objectives, TORs and methodologyO Agricultural sector in Kenya: an overviewO Evolution of polices and outcomesO Stakeholders and their relations

O Stakeholder participation in policy processO The Private sector in agriculture

O Smallholders and agricultural development

O Challenges for various stakeholdersO Recommendations

Objectives, TORs and Methodology

O Analyse the enabling environment for inclusive agricultural development in KenyaO An overview of the sectorO Policy, legal and regulatory frameworks in

the sectorO Relationships existing between policy

makers and key stakeholdersO Private sector in Agriculture and

smallholdersO Recommendations for policy

MethodologyO Literature reviewO Secondary data from MoA, MoT and

several parastatalsO Primary data from

O -FGDs with farmer organizations,O Key informants from agricultural

sectorO Consultations with FNRG

Agricultural Sector in Kenya: An overview

O Contributes to 23 per cent of GDP, 65 per cent of total exports and 70 per cent of employment

O Economic growth is highly correlated with Agricultural growth (figure 1.1)

O More than 80 per cent of total agricultural production is done by low income smallholders with farms ranging from 0.25 to 2 acres

O Consists of 6 sub-sectors – Livestock, food crops, industrial crops, fisheries and forestry

O Horticulture contributes 33 per cent of GDP and 38 per cent of export earnings

Agricultural systems, production and trade

O 16 per cent arable land in medium to high potential areas

O Land fragmentation is too high, about 4 million farms are less than an acre

O Small holders re about 6million with farm sizes ranging between 0.25 to 3 ha

O Major crops cash crops include, horticulture, tea, coffee, sugarcane and cotton

O Major food crops include maize and rice

Trends in productivityO General low productivity per ha for

most crops except tea and horticulture

O Decreasing area under production for key crops such as cotton, sugar, coffee which are directly linked to poverty alleviation

O Increased area under production for maize but decreasing yields (productivity)

O Low technology adoption and poor farming methods

Evolution of policies & outcomes

O Pre-independence policies were mainly colonial, Africans were not allowed to grow any cash crops but they provided labor for the British farmers

O Post independence – 1960’s to 70’sO government intervention and support

in production and marketingO Smallholders organized in

cooperativesO Rapid growth in agriculture (6 per

cent)

Evolution of policies cont’dO Liberalization era 1980’s to 90’s

O Liberalization as a conditionality for AidO SAPs saw abolition of marketing boards and

cooperativesO Abolition of government support in

production and marketingO Declining growth in the sector to -4.1 percent

at its lowestO Post liberalization policies eg SRA

O Emphasis on the need to revitalize agricultureO Increased agricultural spending and an

increase in agricultural growth

StakeholdersO Government institutions

O Ministries – Ministry of Agriculture, Ministry of Regional Development Authorities, ministry of cooperative Development and Marketing, ministry of fisheries Development and ministry of Livestock Development

O Their role is mainly policy implementation, creating an enabling environment

O Parastatals for various crops – managing the production and marketing of various crops

O Producer organizations – umbrella organizations for farmers

O NGOs and civil society –advocacy and lobbyingO Research institutions- provide evidence based researchO Donor Agencies and ODAs, - funding for projects and

programsO Farmers, private sector and agro-processors

Relationship between stakeholders

O Individual smallholders produce or subsistence and may sell to middle men or producer organizations

O Some have contractual arrangements with agro-processors e’g sugarcane industry

O Middlemen either sell directly in the local markets, supermarkets or they sell to aggro-processors

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Relationships between stakeholders in policy process

O Pre- independence policies were largely made by the colonialists to suit them, no participation of any other stakeholders

O Post independence policies were dictated by the government with no participation from other stakeholders

O In the 1990’s era of SAPS policy was largely influenced by doors and policy process was largely a donor / government affair

O Post liberalization –involved participation of private sector lobby groups, advocacy through civil society and POs through policy round tables

Private Sector in Agriculture

O Typology – O farmers, middlemen, Processors and foreign

investorsO Supporting institutions – financial and credit,

capacity building, marketing and information support

O Agro –processing and value added is still lowO FDI predominantly large farms –dominion

and horticulture sector (employment, vs competition)

O Middlemen – exploitative to smallholders during surplus periods

Constraints for private sector development in agricultureO Macro-economic environment – inflation, high

interest rates and high taxesO High cost of energyO High cost of labourO Poor infrastructureO Policy and regulatory environment not conducive

for smallholdersO Lack of clear regulatory measures to protect

smallholders against exploitation by middlemenO Regional Trade policies that are not harmonized

and therefore hamper exportsO Cartelization o the agricultural sector

Smallholders in Agriculture and their constraints

O Constitute 80 per cent of total agricultural outputO Lack of technology and poor technology absorptionO High cost of inputsO Lack of information and knowledge en better

agricultural practicesO Lack of proper marketing channels hence

exploitation by middlemenO Poor access to creditO Poor infrastructure especially rural access roadsO Cheap imports –sugar, maize, rice and cotton sectors

(dis-incentive for production)O Lack of proper representation in policy decisions –

lobbying is mostly done by large farmers eg wheat sector

ConclusionsO Major highlights

O Poor policy, legal and regulatory frameworks that hamper development of the sector

O Poor resource allocation and investments in the sector by the government (poor planning)

O Low FDI inflowsO Low technology adoption resulting in low productivityO Poor infrastructureO Macro-economic environment that is not conducive

for investments and growth of the sectorO Corruption, cartels and cheap imports virtually

leading to a collapse of sugar, cotton, rice and perhaps maize sectors

RecommendationsO Need to increase resource allocation to a desired level of 10

per cent of government expenditure and a need to review recurrent vs. development expenditure

O Urgent need for stabilization of macro-economic environment

O Urgent need of investments in rural infrastructure and irrigation

O Creation of a stimulus package for investments in agro-processing, value added and export promotion in the region

O Addressing corruption and cartels hampering the development of some sub-sectors

O Enhancing support services for smallholders by strengthening their producer organizations and cooperatives, including institutional capacity for policy advocacy and lobbying

O Address regional disparity in resource allocation and government’s investments