Commercial farming crucial in achieving food security goals

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