A man works on his farm in Kakamega County. PHOTO | ISAAC WALE
According to State of Food Security and Nutrition in the World 2018 report the number of hungry people in the world has reached 821 million.
This situation has been worsened by climate change impact leading to high temperatures, low rainfall in turn lowering agricultural output, incomes and over 793 million people undernourished. Entire of Africa spends $35 billion annually to import food. It is time to rethink agriculture from poor business models adapted to clear understanding of agricultural value chains and sustainable subsidized financing and interest rates.
When we critically look at an aspect like lending, it makes no sense to lend half way the agricultural value chain. Financial institutions should lend from farmers to the processors all the way to the marketers.
It is argued that the risks of this type of lending are high, however, if the financial institutions take time to evaluate the agricultural value chains they can significantly reduce costs and risks embedded in them.
Food security is one of the Big Four agendas. However, to achieve the aspiration under this agenda will depend on what we do with agriculture. We must pay attention to the uncultivated arable land versus total population, value addition, agro-industrialisation and land governance.
Exporting raw materials like coffee, tea exposes farmers to variability and insatiability of commodity prices and ultimately negatively affecting the economy.
This over reliance on exporting raw materials explains why as we are not about to stop complaining about fiscal deficits and balance of payment deficits creating a decline in public expenditure, inflation and currency devaluations. Wealth of nations is acquired through value addition in all relevant sectors. For Kenya to encourage young people to invest in agriculture we have to develop and implement policies to unlock the huge potential in the sector and think through agricultural value chains and agro industries with a view to make young people who are investing in agriculture for wealth creation more competitive. The agriculture systems and policies adopted should not be for survival they should support more dynamic and market oriented agriculture with a commercial orientation, while building equity, fairness and collective wealth.
Time has come to invest and expand production possibilities of agriculture sector young investors, remove all binding constraints such as limited access to technology, markets, infrastructure, and long term finance.
This will make the sector a reliable source of their livelihood and a wealth creating sector as opposed to a survival sector.
In conclusion agricultural value chain finance should be an inclusive affair. The envisioned productivity gains and direct and indirect employment creation opportunities are grossly hampered by having fragmented value chains.
There is need to ensure agriculture operations happen within effective mechanisms of linkages, co-ordination and synchronisation so as to encourage young people to view agriculture as a wealth creation centre.
Dr. Kellen Kiambati, senior lecturer, Karatina University.
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