Facilitating Equitable Agricultural Development in sub-Saharan Africa

1
Facilitating Equitable Agricultural Development
in sub-Saharan Africa

• The Case of Kenya

2
Contents

• Objectives, TORs and methodology
• Agricultural sector in Kenya an overview
• Evolution of polices and outcomes
• Stakeholders and their relations
• Stakeholder participation in policy process
• The Private sector in agriculture
• Smallholders and agricultural development
• Challenges for various stakeholders
• Recommendations

3
Objectives, TORs and Methodology

• Analyse the enabling environment for inclusive
  agricultural development in Kenya
• An overview of the sector
• Policy, legal and regulatory frameworks in the
  sector
• Relationships existing between policy makers and
  key stakeholders
• Private sector in Agriculture and smallholders
• Recommendations for policy

4
Methodology

• Literature review
• Secondary data from MoA, MoT and several
  parastatals
• Primary data from
• -FGDs with farmer organizations,
• Key informants from agricultural sector
• Consultations with FNRG

5
Agricultural Sector in Kenya An overview

• Contributes to 23 per cent of GDP, 65 per cent
  of total exports and 70 per cent of employment
• Economic growth is highly correlated with
  Agricultural growth (figure 1.1)
• More than 80 per cent of total agricultural
  production is done by low income smallholders
  with farms ranging from 0.25 to 2 acres
• Consists of 6 sub-sectors Livestock, food
  crops, industrial crops, fisheries and forestry
• Horticulture contributes 33 per cent of GDP and
  38 per cent of export earnings

6
Agricultural systems, production and trade

• 16 per cent arable land in medium to high
  potential areas
• Land fragmentation is too high, about 4 million
  farms are less than an acre
• Small holders re about 6million with farm sizes
  ranging between 0.25 to 3 ha
• Major crops cash crops include, horticulture,
  tea, coffee, sugarcane and cotton
• Major food crops include maize and rice

7
Trends in productivity

• General low productivity per ha for most crops
  except tea and horticulture
• Decreasing area under production for key crops
  such as cotton, sugar, coffee which are directly
  linked to poverty alleviation
• Increased area under production for maize but
  decreasing yields (productivity)
• Low technology adoption and poor farming methods

8
Evolution of policies outcomes

• Pre-independence policies were mainly colonial,
  Africans were not allowed to grow any cash crops
  but they provided labor for the British farmers
• Post independence 1960s to 70s
• government intervention and support in
  production and marketing
• Smallholders organized in cooperatives
• Rapid growth in agriculture (6 per cent)

9
Evolution of policies contd

• Liberalization era 1980s to 90s
• Liberalization as a conditionality for Aid
• SAPs saw abolition of marketing boards and
  cooperatives
• Abolition of government support in production and
  marketing
• Declining growth in the sector to -4.1 percent at
  its lowest
• Post liberalization policies eg SRA
• Emphasis on the need to revitalize agriculture
• Increased agricultural spending and an increase
  in agricultural growth

10
Stakeholders

• Government institutions
• Ministries Ministry of Agriculture, Ministry of
  Regional Development Authorities, ministry of
  cooperative Development and Marketing, ministry
  of fisheries Development and ministry of
  Livestock Development
• Their role is mainly policy implementation,
  creating an enabling environment
• Parastatals for various crops managing the
  production and marketing of various crops
• Producer organizations umbrella organizations
  for farmers
• NGOs and civil society advocacy and lobbying
• Research institutions- provide evidence based
  research
• Donor Agencies and ODAs, - funding for projects
  and programs
• Farmers, private sector and agro-processors

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Relationship between stakeholders

• Individual smallholders produce or subsistence
  and may sell to middle men or producer
  organizations
• Some have contractual arrangements with
  agro-processors eg sugarcane industry
• Middlemen either sell directly in the local
  markets, supermarkets or they sell to
  aggro-processors
• relationship.docx

12
Relationships between stakeholders in policy
process

• Pre- independence policies were largely made by
  the colonialists to suit them, no participation
  of any other stakeholders
• Post independence policies were dictated by the
  government with no participation from other
  stakeholders
• In the 1990s era of SAPS policy was largely
  influenced by doors and policy process was
  largely a donor / government affair
• Post liberalization involved participation of
  private sector lobby groups, advocacy through
  civil society and POs through policy round tables

13
Private Sector in Agriculture

• Typology
• farmers, middlemen, Processors and foreign
  investors
• Supporting institutions financial and credit,
  capacity building, marketing and information
  support
• Agro processing and value added is still low
• FDI predominantly large farms dominion and
  horticulture sector (employment, vs competition)
• Middlemen exploitative to smallholders during
  surplus periods

14
Constraints for private sector development in
agriculture

• Macro-economic environment inflation, high
  interest rates and high taxes
• High cost of energy
• High cost of labour
• Poor infrastructure
• Policy and regulatory environment not conducive
  for smallholders
• Lack of clear regulatory measures to protect
  smallholders against exploitation by middlemen
• Regional Trade policies that are not harmonized
  and therefore hamper exports
• Cartelization o the agricultural sector

15
Smallholders in Agriculture and their constraints

• Constitute 80 per cent of total agricultural
  output
• Lack of technology and poor technology absorption
• High cost of inputs
• Lack of information and knowledge en better
  agricultural practices
• Lack of proper marketing channels hence
  exploitation by middlemen
• Poor access to credit
• Poor infrastructure especially rural access roads
• Cheap imports sugar, maize, rice and cotton
  sectors (dis-incentive for production)
• Lack of proper representation in policy decisions
  lobbying is mostly done by large farmers eg
  wheat sector

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Conclusions

• Major highlights
• Poor policy, legal and regulatory frameworks that
  hamper development of the sector
• Poor resource allocation and investments in the
  sector by the government (poor planning)
• Low FDI inflows
• Low technology adoption resulting in low
  productivity
• Poor infrastructure
• Macro-economic environment that is not conducive
  for investments and growth of the sector
• Corruption, cartels and cheap imports virtually
  leading to a collapse of sugar, cotton, rice and
  perhaps maize sectors

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Recommendations

• 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
• Urgent need for stabilization of macro-economic
  environment
• Urgent need of investments in rural
  infrastructure and irrigation
• Creation of a stimulus package for investments in
  agro-processing, value added and export promotion
  in the region
• Addressing corruption and cartels hampering the
  development of some sub-sectors
• Enhancing support services for smallholders by
  strengthening their producer organizations and
  cooperatives, including institutional capacity
  for policy advocacy and lobbying
• Address regional disparity in resource allocation
  and governments investments