Big Four agenda under threat as farmers' tears dampen growth prospects in agricultural sector

Dwindling returns in the agricultural sector could jeopardise the country’s chances of achieving food security as envisioned in President Uhuru Kenyatta’s Big Four agenda, according to data from the Economic Survey 2018.

The contribution of agriculture, the biggest of all sectors, grew steadily from 26.4 percent in 2013 to 32.1 percent in 2016, but dipped to 31.5 percent in 2017. Crop production, the biggest subsector, followed a similar trend in the same period, rising from 18.4 percent and peaking at 25.4 in 2016 before dropping to 24.9 percent the following year.

The growth rate in real gross value added in the agriculture sector has been unstable in the last five years and has significantly dropped from six percent in 2015 to 1.6 percent in 2017, the data show. The deceleration is reflected in the diminishing production volumes of certain major food crops and cash crops.

Maize production registered a 13 percent drop from 40.7 million bags in 2013 to 35.4 million bags in 2017. Harvests have been fluctuating for the past few years, the very poor performance in 2017 being largely the result of the fall armyworm outbreak and drought.

The same period saw production of wheat, another Kenyan staple, slump by 17 percent from 194,500 tonnes to 165,200 tonnes. Production of sorghum dropped by six percent, millet 57 percent and potatoes 29 percent.

The sugar sector was one of the worst hit, with cane production dropping by close to a third from 6.7 million tonnes to 4.8 million tonnes in the same period. This is against the backdrop of a Food and Agriculture Organization (FAO) forecast that world sugar production would hit a record in 2017/18 and exceed global consumption by a large margin.

Investment

This grim portrait of the country’s food security situation provides ready use for the Sh20.3 billion set aside in the 2018/2019 budget for enhancing food and nutrition security. The amount will finance 10 intervention strategies, including irrigation (Sh8.5 billion), fertiliser subsidy (Sh4.3 billion) and cereal enhancement (Sh1.9 billion).

In the past five years, farmers have put in more resources with the hope of arresting the deteriorating situation. Last year, they spent Sh66.1 billion on farm inputs, a nearly 60 percent increase from the Sh41.7 billion in 2013. Expenditure on fertilisers, fuel and power accounted for more than half of the total spending.

However, poor farming practices, climate change and sectorial mismanagement have led to poor harvest and low profits.

Low yield

Many farmers are increasingly harvesting less quantity and lower quality of crops from the same size of land.

Wheat recorded a 47 percent drop in yield, from 2760.2 Kg/ha in 2013 to 1452.5 Kg/ha in 2016. Maize didn’t do well either, slumping by 18 percent from 1692.2 Kg/ha in 2013 to 1428.4 Kg/ha in 2016.

In 2017, an additional 7,363 hectares of land was placed under irrigation for rice production, representing a 51 percent increase. Similarly, the number of plot holders practising irrigation also rose by 25 percent to 16,326 in 2017. Despite the increase in the area cropped and in the number of plot holders, the volume of total paddy declined by 20 percent to 81,200tonnes in 2017.

Coffee and tea are some of the big foreign exchange earners that have lost favour with the soil, with a 24 percent and 19 percent drop in yield respectively.

According to FAO, sustainable improvement of yield requires a comprehensive strategy that focuses on irrigation, improved seeds, fertiliser, conservation agriculture, integrated pest management and efficient irrigation technologies. ''Rice farmers in Kenya, for instance, can increase their yields by up to 30 percent by mechanising the harvesting process,'' says Mulat Demeke, FAO's senior agricultural policy officer for Kenya.

Alongside adopting farming practices that acknowledge climate change, farmers are also encouraged to ensure their crops against losses occasioned by severe weather such as drought and poor yields.

At the launch of the Kenya National Agricultural Insurance Programme in 2016, then World Bank country director for Kenya, Diarietou Gaye, said, ''The large majority of the poor in Kenya are farmers, so this program has the potential to have a significant impact on Kenya’s economic development.''

The programme, which was designed as a partnership between the government and the private sector, builds on best practices in other parts of the world.

''A successful crop insurance policy allows a farmer to withstand a tough year and hopefully allows them to continue providing for their family and reinvesting in agriculture or other pursuits in the future,'' says Mr Willie Myers, crop insurance specialist at One Acre Fund.

In 2018, the organisation provided crop insurance protection to 345,000 farmers in Kenya, a half of the total number of those who were enrolled for the services in the six East and Southern Africa countries in which it operates.

''In some countries, we partner with governments in order to maximise coverage for our farmers. For example, in Kenya, we participate in the Kenya Agriculture Insurance Programme which allows us to double our insurance coverage through government subsidisation,'' he said. In the current financial year, the government intends to use Sh300 million for a crop insurance scheme.

Unstable market prices

However, farmers’ woes transcend low yield and production. Those who realise bumper harvests or at least manage to produce enough to sell have to contend with a chaotic domestic market.

Earlier in the year, the National Cereals and Produce Board (NCPB) irregularly paid maize importers and middlemen Sh1.9 billion, money meant to buy the commodity from local farmers at a negotiated farmer-friendly price of Sh3,000 a bag.

The scandal has left farmers with some 500,000 bags of last season’s crop whose value is estimated at Sh1.6 billion, pushing down prices at a time when the National Cereals and Produce Board still owes them Sh3.5 billion for maize they already delivered.

Price volatility is higher for maize than for rice or wheat. It is also higher in Kenya than in neighbouring countries, according to FAO.

''Low and uncertain prices are among the major constraints to a sustained increase in staple food production in Kenya. Because of inadequate and distorted markets, farmers sell their produce at low farm-gate prices and buy inputs and other items at very high prices,'' said Demeke.

Besides the unscrupulous imports that destabilise the domestic market, the country has generally embraced importation of farm produce that could otherwise be produced locally, as a way of augmenting modest production volumes. Maize imports increased fourteen-fold between 2013 and 2017 as sugar imports shot up two-fold, and wheat import figures went up by a third in the same period.

Last year 1.32 million tonnes of maize was imported, 44 percent of which got in from Mexico.

As the government looks outwards for solutions to deficits, farmers faced with dwindling profitability have had to either increase acreage in order to maintain production volumes, or put their land into other more profitable enterprises.

In less than five years, 11 percent of land initially used for sugarcane production has been lost to other crops and economic activities. Increased acreage for certain crops like rice (18 percent), tea (17 percent) and coffee (4.5 percent), despite diminishing yields, could have been out of the need to sustain production volumes.