Lack of start-up capital derailing food production in Western and North Rift Kenya

David Indeje is Khusoko’s Digital Editor, covering East African markets.
Agricultural production in the Western and North Rift areas of Kenya is at a crossroads. Persistent food shortages are now being amplified by climate change rapid population growth, scarcity of arable land, and rising food prices.
Most parts of the region are headed for a devastating economic meltdown. Associated with this meltdown are looming food crisis, hunger, and malnutrition. These are largely rural-based economies that rely on commercial maize farming, smallholder subsistence mixed farming, small-scale intensive horticulture and inter-community trade.
Food production has failed to keep pace with human population growth. Nearly 6 million Kenyans are chronically hungry.
The agriculture sector is characterized by the dominance of small-scale farming with 3.5 million small-scale farmers with land size averaging 2.5 acres. Small-scale farmers account for over 75 percent of the total agricultural production and over 50 percent of market output.
Yet, Kenya remains a low-income food deficit country with an overall national prevalence of poverty at 56 percent in rural areas and 49 percent for urban populations. Poverty has risen from 3.2 million in 1972/73 to 11.5 million in 1994, 12.5 million in 1997 and an estimated 15 million today, according to the Innovative Financial Instruments for Agriculture Strategy and Plan 2008-2010.
There are good reasons to expect agricultural growth to reduce poverty. The agricultural development raises returns to land, the only real asset the any rural poor in Africa own.
“The importance of agriculture and other natural resource-based livelihoods for poverty reduction goes far beyond its direct impact on poor people’s incomes. Evidence shows that increasing agricultural productivity benefits millions across the world, through higher incomes and cheaper food,” according to Gareth Thomas MP, UK Minister for International Development in his Innovation, agricultural growth and poverty reduction essay published by  The Smith Institute- Going for Growth science, technology and innovation in Africa.
Moreover, the growth of food output should push down the price of staple foods, to the immense benefit of the poor who even in rural areas are overwhelmingly net buyers of food.
Western and North Rift are expected to be the breadbasket of the country; however, this is not the case. They still rely heavily on the government to feed it.
The main reason is that the most productive arable lands have been converted into sugar cane and maize zones with no proper policies to factor in the aspect of food crops.

In the last four decades, more than half of the land in Western Kenya has been abandoned as a result of soil degradation. Millions of tonnes of fertile soil are lost by soil erosion at a fast rate.
Dr. Keith Shepherd, of the World Agro forestry Center (ICRAF) notes: Over twenty years, land degradation can mean the difference between productive land and land that becomes stone.”
If vegetation is removed, the process speeds up, and the physical structure of the soil starts to degrade and collapse, depleting vital nutrients. Reversing the process of desertification is difficult and expensive. 

The key, says Shepherd, “Is to identify the problem early enough to prevent switches that occur from a very healthy ecosystem to a degraded state.”

The challenge, therefore, is how to increase productivity among subsistence smallholder farmers. The opportunity and innovation lies in the role of policy, technology, research support and institutional arrangements that can aggregate production on small farms rather than aggregate the land resource base.
My sense is that the traditional focus on large holdings as a pre-requisite for modernization and profitability of African agriculture is misplaced.
Improving agricultural productivity is the key to reducing poverty in the country. A global consensus has emerged that agriculture must move up on the global development agenda and that investment in agriculture especially smallholder agriculture must be increased if the twin goals of poverty reduction and food security are to be achieved according to the Draft Report of the Consultation on the Eighth Replenishment of IFAD’s Resources.
In fact, if Kenya is to achieve the first Millennium Development Goal, to eradicate extreme poverty and hunger, the agriculture sector needs to grow much faster and maintain an annual growth rate of 6.2 percent.
This requires that we work on every single aspect of the agriculture production chain from regenerating depleted soil, using better seeds and ore fertilizers (whether organic or industrial) to drastically improve the quality of so-called extension services that support agriculture. It implies working on marketing and storage issues, road infrastructure and financial services. 
Only by tackling all those aspects at once, involving both the public and private sectors, will we manage to improve agriculture productivity in a sustainable way.
Weaning smallholder farmers from subsistence maize production to high-value export crops is something that must be done to extend the benefits of a globalized economy to the majority of Western and North Rift rural population.
Local product markets remain weak, uncertain, and inaccessible with high transaction costs arising from poor market information and poor infrastructure.
Furthermore, owing to high transportation costs, lack of credit, storage facilities and risks in supplying small-scale farmers agriculture inputs and financial services are low amongst smallholder farmers in Kenya.
Small-scale farmers in rural areas of Western and North Rift have not been able to access financial services for acquiring far inputs among other needs to improve farm productivity. 

This is partly due to the low density of financial institutions in rural areas, inappropriate financial products, along with the high cost and high risks of lending.
Smallholder farmers adjust by resorting to informal credit, reduction of farm inputs, sub-optimal production techniques and borrowing from family and friends. This limits the investment in far equipment and capital as well as other agricultural assets and inputs.
In addition, small-scale farmers concentrate on low risk, low return activities because they cannot access start-up capital and cannot transfer risks. 

As a result, there is low productivity among smallholder farmers attributed to the inadequate use of enhancing technologies and inputs such as fertilizers has led to food insecurity amongst the smallholder households and worsens unemployment and poverty.
Credit is an important input in the production system and it contributes to increased food productivity. Access to credit increases the farmer’s working capital enabling the farmers to buy productivity-enhancing inputs such as good quality seeds, fertilizers and chemicals.

The challenge for agricultural financial institutions is to develop low-cost ways of reaching farmers, especially smallholders.
Consequently, farmers especially smallholder farmers have trouble accessing credit, obtaining information on market opportunities or new technologies, purchasing certain inputs and accessing product markets.
There is the need for farmers’ education to sensitize them on existing and new technologies they can use to improve production. 

This is especially among the rural farmers. 

Eventually, this would help in strengthening and establishing producers and trade unions: providing farmers with professional advice, current market information and input results in an organized way; controlling market pricing and products, providing farmers with loans at lower interest rates while improving transportation, storage, and processing standards.
More food must be produced to contain the impact of soaring prices on poor consumers and simultaneously boost productivity and expand production to create more income and employment opportunities for the rural poor. 
Smallholder farmers must have proper access to land and water resources and essential inputs such as seeds and fertilizers. 
To ensure that small farmers and rural households benefit from higher food prices, a policy environment that relaxes the constraints facing the private sector, farmers and traders must be created. That would mean reversing the decline in the level of public resources spent on agriculture and rural development and investing more in agriculture.
If agriculture is to be the engine for rural development and prosperity for the millions currently ensnared in the poverty trap, we must build new institutions that reach the invisible, underserved smallholder farmers.
David Indeje is Khusoko’s Digital Editor, covering East African markets.

In my role as Community Engagement Editor For Khusoko, I care about our audience. engaging them, getting news delivered to them across a variety of platforms, and expanding the diversity of voices on our website.

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