5/11/20151 Summary of Key Findings J. Nyoro Director Tegemeo Institute.

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Summary of Key Findings

J. Nyoro

Director

Tegemeo Institute

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Key issues Average age of a Kenyan Farmer is currently about 60 years

Land size is becoming a key factor in influencing agricultural productivity in Kenya. 30% of sample are cultivating less than 1 acre of land

Per capita land cultivated is declining from 0.46 acres in 1997 to 0.39 acres in 2007

Performance of agricultural productivity is mixed with best performers as maize, tea and dairy, poor performers are coffee and sugar ..mixed performance as horticulture

Fertilizer consumption in Kenya has been a success case

Increased diversification to include off-farm income

Declining poverty levels from 56% to 37%

Production and sale of domestic horticulture not keeping up with rising urban population

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Good Performers (Productivity)

  1997 2000 2004 2007

Maize overallBags/acre 6.6 7.2 8.2 9.3

HPMZ 11.5 10.4 13.8 13.3

Tea (kg/acre) 3,931 3,869 4,206 4,507

Dairy (lt/cow/yr) 1,164 1,079 1,298 1,371

Maize (40%), Tea (15%), Dairy (18%)

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Poor Performers (Productivity)

1997 2000 2004 2007

Coffee 1,459 1,826 1,577 1,285

Sugarcane 22.3 26.1 26.7 23.9

Coffee (12%), Sugarcane (8.4%)

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Drivers of Productivity Higher rates of seed and fertilizer adoption

High quantities of fertilizer used

Reduce distances to fertilizer and seed stockists from 8.1m to 3.4km and 5.6km to 3.4km

Better marketing arrangements and stable output prices

Improved access to credit 26% to 33%

Access to motorable roads from 1.1km to 0.5km

Better Access to Extension from 5.4km to 4.6km

Increase in crop particularity maize

Good governance of institutions

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Summary of the Productivity Trends

Increasing MaizeTea

Dairy

DecliningCoffee

Sugarcane

Rising but fluctuating Horticulture (cabbages

Irish potatoes)

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Fertilizer use trends Increasing fertilizer use from about 200,000 tons in early 1990s to over

450,000 in 2007

Increasing commercial imports with declining donor imports

Limited government participation in input markets

High adoption and application rates in maize and other crops

Decreasing fertilizer marketing margins

Reasons for upsurge of fertilizer use: Stable and predictable input policy Private sector investment 10-11 importers, 500 wholesalers and over

8,000 retailers Expansion of input dealers Greater competition among importers

But 2008 high global prices has raised concerns for fertilizer use

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Potential for Reducing Fertilizer Prices

Reduce costs of supplying fertilizer to farm gate Port costs at Mombasa Improve rail / road infrastructure

Promote viable farm extension / service provision to raise efficiency of fertilizer use

What about input subsidies?

Modalities of undertaking input subsidies: Targeted input voucher program less likely to undercut

commercial input distribution system Ensure that input subsidies are pro-poor by targeting the poorest

farmers

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Domestic Horticulture

Production and sales of domestic horticulture is not keeping up with rapidly rising population

Traditional horticulture marketing systems still dominate the marketing systems though other modern systems like supermarkets are gaining popularity

Investment in traditional systems such as wholesale markets will have higher payoff in the short run that that in the modern outlets chains like supermarkets

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Enterprise Diversification

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Diversification of Enterprises

General enterprise diversification from largely crops to more mixed business with crops, livestock, and particularly business

Proportion of area allocated to fodder crops has increased thereby raising the important of livestock income as a contributor to household income

Proportion of improved breeds have increased due to better marketing and more stable markets

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Income, Poverty and Inequality Real income for low income group has increased but that

of the highest income group has declined making the average income stagnate

Poverty levels have reduced from 53.7% to about 37.3%

More people have exited out of the poverty (20%) than has re-entered (5%) with about 30% has remain above the poverty bracket

Inequality has reduced slightly

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Poverty Dynamics 1997-2007

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Drivers out Poverty Age and gender: Younger households and male headed households

Higher land sizes and smaller households

Education where primary could be necessary but not sufficient

Engagement in business, salaried activities

Technology adoption

Access to financial services

Linkages to farm institutions such as cooperatives,

Access to better infrastructure (roads, electricity, piped water)

Regional dimension: Central highlands compared to Western lowlands

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Implications Make farming more attractive to young people

Land consolidation will be a key determined of productivity in future

Agricultural productivity better where there is mutual trust between public and private sector where markets are reliable and prices stable

Price stability a key determinant of productivity

Access to services such as credit, extension is a key driver to productivity

Kenya should not disrupt its long term growth projectory with unsustainable short term interventions

Build better trust between Public and private sectors particularly in fertilizer marketing

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Implications cont… Put more emphasize on livestock particularly beef

Productivity is necessary but should also encompass quality and to enhance competitiveness

Regional trade particularly in agricultural commodities has great potential in achieving growth

Encourage new opportunities where young people feel attracted such as in dairy and horticulture

Emphasize on public private partnerships to build mutual trusts between operators

Adopt a radical and aggressive approach is policy recommendations