Increased investment key to agricultural growth

Last September, President Uhuru Kenyatta hosted the annual African Green Revolution Forum (AGRF) in Nairobi where he delivered a blunt assessment of Africa’s economic future. “The transformation of Africa,” he said, “will only work if we transform agriculture.”

Our future fortunes are in the hands of our farmers and the food industry. Three out of every four Kenyans work in some aspect of agriculture and food production and economic growth in agriculture is 11 times more effective at reducing poverty than growth in any other sector. 

The importance of agriculture for Kenya and for all of Africa is now widely acknowledged and a new wave of support is rising in both the public and private sector, and among development partners and donors.

For example, at last year’s AGRF, the African Development Bank pledged $24 billion over the next 10 years for agribusiness projects in Africa. 

In Kenya, Mr Kenyatta pledged $200 million in new spending to help young farmers gain access to markets, financing and insurance.

The Kenya Commercial Bank Group set aside $350 million—five per cent of the bank’s overall lending portfolio - for financing agriculture business initiatives targeting Kenya’s 3.5 million smallholder family farmers.

The prospect of a surge of investments for Kenyan farmers and local agriculture businesses is raising expectations for Kenya’s agriculture sector. That’s why the government, in partnership with the African Union Commission (AUC), the AUC’s New Partnership for Africa’s Development agency, the Alliance for a Green Revolution in Africa, and Africa Lead (a programme run by the United States Agency for International Development), convened a three-day meeting in Nairobi last month to build consensus for a new strategy that will guide the implementation of Kenya’s National Agriculture Investment Plan.

The discussions, which attracted more than 100 people representing a wide array of interests, are part of a series of meetings being facilitated by the AU to help African countries implement their commitments as signatories of the Comprehensive African Agriculture Development Programme . 

The impressive turnout for the Nairobi round of deliberations is signal that, in Kenya at least—where agriculture is strongly represented in its Vision 2030—there is a strong constituency ready to translate expectations into action.

But why should anyone invest in Kenyan farms and local agriculture businesses? One answer is to be found in Kenya’s rapidly growing food retail sector.

Driven by explosive demand among urban consumers, food purchases in Kenya are growing by an impressive ten percent per year and are expected to reach $17.6 billion by 2020. In fact, demand is exceeding domestic supply and imports now account for about half of all domestic purchases of staples like rice, wheat and soybeans.

And with the right mix of investments, Kenyan farmers could own 100 per cent of that market. For example, greater public investments in crop research and private investments in local production of high-yielding and locally adapted seeds and farm inputs could help rapidly narrow the pervasive “yield gap” on Kenyan farms.

Today, most Kenyan farmers harvest about two tons of maize per hectare when farmers elsewhere in the world get six, and about a half ton of beans per hectare when they could be getting ten times that amount.

Meanwhile investments in better storage options, particularly refrigerated facilities, and transportation infrastructure can help link farmers to markets and justify expenditures and loans for high-yield crop varieties and quality inputs.

In addition, investments can take advantage of many positive developments in the Kenyan agriculture sector.

For example, over the last 15 years, yields of bananas, mangoes, and potatoes on Kenyan farms have more than doubled, making them among the most valuable crops in Kenya and opening up business opportunities in both domestic and export markets. 

There is already a new public/private partnership dedicated to constructing cold storage facilities in Kenya and elsewhere in East Africa that will capitalize on the potential of rising potato production by connecting millions of smallholder farms to produce markets.

Our agriculture sector is also attracting investor interest because Kenyans are increasingly recognised around the world as an intensely entrepreneurial people who naturally gravitate toward innovation.

For example, Safaricom’s M-Pesa money transfer system is more efficient and more widely used than consumer electronic payment systems in the United States and Europe. Many people rightly believe we can bring that same kind of innovative thinking to agriculture.

But effectively channelling the new resources now becoming available for Kenyan agriculture requires achieving consensus on a detailed investment roadmap.

It must inspire confidence in the public and private sector, and in donor countries and international institutions, that generous commitments to agriculture will generate the progress Kenyans need and deserve.

We are now asking for a broad group of partners in the public and private sector to join us in seizing the moment for Kenya.

Together, we can build a coalition that can accumulate and allocate the right mix of investments that will ensure agriculture becomes a powerful engine for delivering economic opportunity and food security across Kenya.

Mr Bett is the Agriculture, Livestock and Fisheries secretary