Treasury faces Sh40bn food bill

Treasury will require a heavy dose of budget re-engineering in the next six months to find the Sh40 billion that food security experts say is needed to cushion the Kenyan economy from the ripple effects of a persistent drought and mass starvation.

Office of the President-based Kenya Food Security Steering Group (KFSSG), says 3.8 million pastoralists and households in marginal agricultural regions require urgent humanitarian food assistance together with another 1.5 million primary school children in drought stricken areas.

“The situation is not expected to improve until February 2010 contingent on favourable short rains and implementation of the proposed multi-sectoral interventions,” KFSSG said in an assessment report.

Apart from the rural folk, some 2.5 million urban dwellers, who are unable to meet 50 per cent of their food requirements will also need emergency humanitarian assistance.

Besides, the State will have to feed two million of the rural population affected by the HIV/Aids scourge and close to 100,000 persons displaced by last year’s post-election crisis.

This out-turn presents Finance minister Uhuru Kenyatta with a massive off-budget expenditure obligation that he must find money to finance almost immediately.

And with the government’s revenue base still subdued in a sluggish economy, analysts said the looming emergency will, like last year, prompt Treasury into freezing a number of development expenditure plans to raise the money.

Such action will in turn weaken the medium term growth and erode any prospects of quick economic recovery. KFSSG estimates that the national maize output for the 2009 long rain season will stand at 1.84 million tonnes, 28 per cent below normal.

“There is a growing apprehension that the estimated production output could further be revised downwards due to insufficient and erratic rains in parts of the North Rift,” the group said.

And in a swift reaction to the KFSSG’s report, the World Food Programme’s (WFP) country office on Tuesday launched a separate international appeal for $230 million (Sh17.5 billion) to boost its emergency food supply in the next six months.

Mr Burkard Oberle, the WFP country director said the money will be used to feed 3.8 million Kenyans, who have been rendered food insecure by the deepening drought and rising food prices.

“People are going hungry, cattle dying and cases of malnutrition among children are on the increase. Our task has become a huge challenge that requires the resources of the international community to proceed,” said Mr Orberle.

The UN agency that is already feeding 2.6 million Kenyans said it needs the extra cash to reverse acute malnutrition rate among children under five.

Incidents of acute mal-nutrition now stand at 20 per cent in some areas of the country, five percentage points above the international emergency threshold of 15 per cent. 
Of the growing number of Kenyans who are becoming food insecure, the Government has promised to support only 1.2 million people until the end of October, leaving the rest to relief agencies.

Official estimates indicate that at the beginning of this month Kenya had 500,000 tonnes of maize against a monthly requirement of 300,000 tonnes -an indication of serious shortfalls by end of September.

The national maize stocks as at the beginning of August included, 178,000 tonnes held by National Cereal Produce Board (NCPB) of which 163,000 tonnes was Strategic Grain Reserve and 15,000 tonnes for relief food.

Some  230,000 tonnes was in the custody of farmers across the country, 78 per cent of it in Rift Valley, Western and Nyanza provinces. Another 92,000 tonnes was in the hands of traders and millers.

“Continued export bans in neighbouring countries of Tanzania and Uganda is likely to reduce cross border maize inflows by 46 per cent. The reduced levels of production and imports are likely to compound the tightening maize supply situation,” KFSSG said.

The assessment further revealed that high food prices have persisted throughout the country with average price of maize standing at 100-130 percent above normal.

“As a result, terms of trade for pastoralists, agro-pastoralists and marginal agriculture farmers and purchasing power of urban households have deteriorated significantly given that over 70 per cent of the population in Kenya is net buyers of maize,” the team stated.

KFSSG said the Sh40 billion budget would help offset some of the pressures through specific interventions across key sectors over the next six months.

The food sector got a Sh27 billion budgetary allocation for the provision of 398,000 tonnes of food rations for some 3.8 million drought-stricken people and another 1.5 million school going children by February next year.

But KFSSG now want the government to allocate additional Sh1.1 billion to the agriculture sector for the provision of drought tolerant seeds, promotion of drought tolerant crops, water harvesting and expansion of irrigation infrastructure for irrigated agriculture, construction of soil and water conservation structures and  seed bulking of drought tolerant crops.

In the livestock sector the steering group wants some Sh5.6 billion allocated to vaccinations, de-worming and disease surveillance programmes.

The group is also asking for about Sh544 million to bankroll the management of moderate and severe acute malnutrition, capacity strengthening, strengthen disease and nutrition surveillance, support and protect infant and young child feeding practices, provision of immunization services, provision and stocking of essential drugs.

The funds will also help scale up micro-nutrient supplementation, de-worming of school going children, procurement and distribution of long lasting insecticide treated nets.

In the water sector, the KFSSG wants some Sh653 million sunk into the purchase of water bowsers, provision of gensets, drilling and equipping of boreholes, provision of fuel subsidy, water trucking and construction and de-silting of water sources.

Other initiatives in this sector would include the construction of latrines and hygiene promotion, rehabilitation of water sources, provision of storage tanks, conversion of borehole pumping systems, promotion of rainwater harvesting and construction or rehabilitation of irrigation schemes.