New strategy can deliver agricultural industries

The recently published 2019-29 Agricultural Strategy comprehensively details key drivers for agriculture, a sector which has been intensely studied, talked about, but never prioritised with enough budgetary resources or political focus. It is a strategy that is 20 years too late.

Too late because agriculture in Kenya has been outpaced by the population growth, technological developments, and global trade and industrialisation trends. It is therefore a catch-up strategy with high socio-economic potential and expectations. The strategy deserves to be launched with a high political visibility to give it a lasting impact among stakeholders.

My key take on the strategy is agro-processing, an area that has always interested me. The report says that agro-processing contribution to GDP in Kenya is only 3.2 percent; with 2.4 percent contribution to national employment; and 8.5 percent of exports. Egypt, a “desert” country, has far higher agro-processing metrics.

For those of us who were around in 1960/70s, we can confirm that former President Jomo Kenyatta had delivered a high level of agro-industries, which unfortunately collapsed in the subsequent leadership of his successor Daniel Moi. The just launched strategy for agro-processing is achievable. All we need is to revisit the successes of yester years.

The strategy promises 10 agro-processing feasibility studies to be undertaken in the next five years, with five of them actually accelerated for design, construction and operation. If we shed off the bureaucracy and lethargy that is characteristic of our government systems and allocate sufficient budgetary resources, it is possible to deliver ten feasibilities and five industries in five years.

For effective development of agro-processing the Ministry of Agriculture will without doubt need to effectively align with the Treasury and ministries responsible for external trade and industries. Tax support on capital equipment and critical inputs will be essential, as much as policies for protection against unfair competition from imports. These policy and fiscal supports will be the ultimate proof of the government’s commitment to agricultural-based industrialisation.

Achieving the targets is very important because it will open the way for many other privately driven agro-industries which have been waiting for enabling policies, regulations and fiscal support. It will also incentivise and support revival of the limping agro-processing industries especially in the sugar zone.

Agro-processing end-markets are in local consumption, imports substitution and also exports. Again here we need effective policies that ensure that agro-processed outputs are competitive and where unfair trade practices exist, to intervene.

Zoning for agro-processing should be based more on “ecological” zones than the so called economic blocks. For example common sense dictates that Nakuru, Nyandarua and Narok naturally fit into an aligned agricultural zone with similar crop/livestock value chains and easy infrastructure connectivity. It is important to get the zoning and setting up of agro-processing hubs correctly to avoid inefficiencies and also duplication.

Counties should be adequately involved in the implementation of the entire agriculture strategy. They must prioritise agriculture and allocate sufficient budgets for the sector. Similarly collaborative linkages must be created with existing and future private sector industrial and agricultural investors.

The principles and support systems applied for agro-processing value chains can be replicated for any other crop and livestock activity. Importantly, marketing systems must ensure that the front-end farmers get a reasonable share of the value chain earnings.

In respect of the plan for 50 new large-scale private farms (bigger than 2,500 acres) supported by water supply from existing irrigation infrastructure, I would urge caution. The plan looks a tall order with high risks which include water resource conflicts, and above all high potential for corruption. This is a “handle with extreme care” program.

In respect of livestock industry, there is need to visit Botswana and interrogate that country’s beef/livestock sector success factors, so that we can replicate the same in Kenya. Further, we need to create a life-animal export hub at the new Lamu port to serve the northern and coastal pastoralist counties.

Yes Kenya can quickly and correctly catch up in the agricultural and livestock sector. Many will be anxiously waiting for the just launched agriculture strategy to translate into socio-economic opportunities, jobs and enhanced household incomes.