Our dry grazing lands can serve world markets

Monday April 3 2017

By BITANGE NDEMO
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We are in the thick of a devastating drought. Although it was predicted, its magnitude was uncertain. 

The government invested in some mitigation measures, including livestock insurance for the vulnerable in arid and semi-arid (ASAL) areas but it wasn’t enough, as information and logistics become a major challenge.

Scarcity of water and grazing land has led to conflict in many counties in ASAL areas, including Baringo, Pokot, Samburu and Laikipia.

It is a problem that dates back pre-colonial days, and that cannot be solved easily. Although land, which is blamed for all the evils in these parts of Kenya, is not adjudicated, adjudication is hardly the sole solution. Problems here go beyond economics.

Some socio-cultural practices date back several centuries and the political class is not making solving them easier. While Kenya is building a reputation as a technology hub, some of our citizens live in the 18th century. 

The major social and political question that we must ask ourselves is: How do we bring those stuck in the 18th century into the 21st century?  While we grapple with this issue, we must take care of their economic interests and seek ways of sharing these scarce resources.

CYCLICAL CONFLICT

From classical capitalist economic theory to present-day economic schools of thought, the major preoccupation of an economist is to answer the following two questions: How does society utilise scarce resources to create and build wealth? How does that society distribute the created wealth among its members?

Until we adequately respond to these two questions, the cyclical conflict that emerges every time drought reduces our resource base will persist.

Poverty, too, will continue to haunt us as we approach the definitive date of the Sustainable Development Goals in 2030.  

Economists agree that wealth creation and wealth distribution present fundamental, and at times even controversial, questions about the development and progress of any society.

Entrepreneurship researchers have, however, established that entrepreneurship, human creativity, and innovation in scientific ideas are major mechanisms and catalysts for the creation and distribution of societal wealth.

Although they have different philosophies on how to accomplish that, there are indeed frameworks proposed by different thinkers based on their disciplines, including sociology, psychology, and economics.

In my view, if we look at the problem of resource scarcity in ASAL areas and think holistically, we can flip these problems into an opportunity.

'MONEY WAS JUST INCIDENTAL'

ASAL areas have two of the critical factors of production, that is, land and labour. If we pursued the economic theory of entrepreneurship, capital and entrepreneurial ideas would flow.

Sympathisers of the economic theory of entrepreneurship argue that entrepreneurship and economic growth take place when economic conditions are favourable. 

Economic incentives are the main motivators. These include taxation policy, industrial policy, security, sources of finance and raw material, infrastructure availability, investment and marketing opportunities, access to information like market conditions, and technology.

Both national and county governments are dealing with some of these incentives. 

We need to do more to fast-track these initiatives. For a start, we need a sensitisation exercise towards an economic reorganisation of pastoralist communities. In essence, we can use their strengths in livestock rearing to sharpen their entrepreneurial capabilities by commercialising livestock farming. 

Bring technology, market access and other enabling services to change their lifestyles forever.

There is no human being on earth who does not have the need to achieve and be part of economic progress. Many people subscribe to a myth that entrepreneurs are born, and that as such, pastoralists cannot be taught to become entrepreneurs. 

Several studies contradict this myth. David McClelland, a well-known American behavioural psychologist, made interesting studies on why certain communities exhibited great creative powers at specific periods of their history.

He concluded that "the need for achievement" was the answer. People’s "need to achieve" motivate them to work hard and making money was just incidental. Money, as other researchers have found, is only a measure of achievement, not the core motivation.

TOP MEAT EXPORTERS

If we developed market channels into the Middle East and China (one of the largest markets in the world, as in the chart below) and provided extension officers to help the community switch from looking for grazing fields to feeding their cattle in order to make a globally acceptable meat product while developing the leather industry, we would indeed flip the problems into opportunities. 

The young morans who spend their life looking after cattle have ambitions. Many times I have talked to some of them and what I see are young people in need of an education for a better future. 

In some of my earlier studies of the pastoralist communities, there is convergence with McClelland that the "need to achieve" is a universal aspiration that we must exploit.

China has changed the fortunes of many countries by becoming the biggest market in the world and top meat exporters like Brazil, the United States and Australia cannot satisfy the market. 

Several smaller countries have stepped in but the market keeps on enlarging, so that with proper trade negotiations, Kenya too could exploit the meat market.

An October 2015 report from PricewaterhouseCoopers says that increasing consumption of meat in China “will place enormous burdens on an already challenged domestic food system and have significant ramification on international trade in agriculture.”

Meat Exports to China from 1997 to 2013 GRAPHS

Meat Exports to China from 1997 to 2013 GRAPHS | GRO INTELLIGENCE

China and the Middle East present the greatest market opportunities, considering that Kenya Airways and China Southwest Airlines have direct flights between the two countries. Since nothing comes on a silver platter, we need a renegotiated trade deal to help reduce our trade imbalance with China.

WHEAT AND HORTICULTURE

The very problem of un-adjudicated land could be Kenya’s silver lining in a cloud of increased land sub-division, which has reduced people in adjudicated areas to paupers. 

The large swathes of land in Kenya’s northern counties could be a magnet for large-scale wheat and horticultural farming. The consumption of wheat in East African countries is surpassing 12 million tons a year (see chart below), with most of this wheat being imported.  

While consumption in Kenya surpassed two million tones, production remains below 500,000 tones. Growing wheat will serve a dual purpose, that is, human consumption and fodder to feed livestock in northern Kenya. 

The investment could indeed create a new supply chain for molasses and lead to viability of sugar plants in western Kenya. If managed well, these proposed initiatives could create several jobs, besides improving resource utilisation.

Wheat consumption in East Africa, 1971 - 2016.

Wheat consumption in East Africa, 1971 - 2016. GRAPH | GRO INTELLIGENCE

Kenya leads East Africa in wheat yields at 2.6 tons per hectare, followed by Ethiopia at 2.4 tons per hectare. With a little more effort, the rest of East Africa is a market waiting to be exploited.

Wheat yields in East Africa, 1999 - 2016 |

Wheat yields in East Africa, 1999 - 2016 | GRAPH | GRO INTELLIGENCE

Kenya continues to import horticultural products from Israel and South Africa, yet the country has enough land and labour resources to become a major competitor in the ever-expanding market. 

Some warmer counties in the North are conducive to horticulture and use their resources to create a constant supply of cattle feeds to grow a commercial venture in livestock, as a strategy to re-engineer pastoralist economies.

We have the opportunity to share scarce recourses through well-tested mechanisms of entrepreneurialism and change the lives of pastoralists forever.

The writer is an associate professor at University of Nairobi’s School of Business. Twitter: @bantigito