Contemporary Issues Determining the Future of Kenyan Agriculture: An Agenda For Policy And Research

Abstract

Kenya’s agricultural sector has just gone through a period of market liberalization. The government has moved out of setting prices, imposing controls and subsidizing parastatals. The trade and exchange rate regimes also have been liberalized. The process of market liberalization is not yet complete, but already a number of sectors are finding the new regime not to their liking. This is evidenced by sometimes violent farmer reactions to what they see as a reduction in their incomes, loss of control of their organizations and political interference in the running of their affairs. This paper will review where the agricultural sector currently stands with regard to the market liberalization agenda with a view to giving some context to the ongoing struggles. Much of this material has been presented before in a number of fora, but nowhere has it been put together in one place where the recurring themes and broad lessons can be addressed. The paper will look at the key policy issues in the commodity sub-sectors, as well as in the service inputs like credit, research and extension, policy formulation and guidance. The paper argues that the biggest single issue facing Kenyan agriculture is whether or not it will be efficient enough to compete at world prices, or at the levels of protection that domestic consumers, and the World Trade Organization (WTO) allow. If it is not then agricultural incomes, and by extension national income, will continue to stagnate and fall. However the blame should not be laid at the door of market liberalization which only made it more difficult to hide some of the distortions, taxes and subsidies in Kenyan agriculture that reduce overall economic growth. Facing up to these misapplications of resources is the first step to solving the puzzle of why agriculture continues to perform poorly even in the liberalized environment that was to make everyone better off. The paper also allows Tegemeo Institute of Egerton University an opportunity to involve sector stakeholders in setting the agenda for 3 years of agricultural policy work it will be undertaking. Not all the key constraints, issues and options facing Kenyan agriculture are currently known. Much agricultural policy research and advocacy work remains to be done, and it needs to involve stakeholders in research design, implementation, and dissemination. Tegemeo hopes to provide fora where informed discussion of the agricultural policy issues facing Kenya over the coming years can take place. The paper begins by looking at the import competing industries % livestock, maize, wheat and sugar % examining information needs, policy issues and potential areas of research that may inform players interested to ensure the survival of these sectors as import competition becomes more difficult to avoid under the WTO rules. Part of the recipe for survival revolves around groups of producers getting involved in looking beyond their own production system, and recognizing that a number of their problems % e.g. policy dialogue and the provision of services % are best approached collectively. Tea and coffee are dealt with next in an analysis that suggests that collective action is no panacea, and needs to be closely monitored to ensure that the benefits of collective endeavors are captured by the intended beneficiaries. A look at the credit, agricultural research, extension and policy making services suggests a similar lesson. Stakeholders need to play a bigger role in ensuring that funds spent in their name % particularly in the public sector % are effectively, and efficiently used.