Columnists

Let market forces guide agriculture

kmc

A Kenya Meat Commission outlet in Nairobi. FILE PHOTO | NMG

jenny

Summary

  • Perhaps the one area we have the least excuse for is the one, same issue we have been grappling with as state and nation for the entirety of the republic’s independence, which makes now nearly 60 years: and that’s the matter of when the state needs to step into commercial management.

I frankly admit to writing a lot about agriculture, because I’m an economist, and agriculture is the make or break for Kenya, for food security, for Vision 2030, and for our everything.

Only look at what we used to call the Asian tiger economies, where agricultural revolutions, in the form of super-abundant and value-adding fishery and bamboo sectors, laid the foundation for rapid economic transformation and wealth, and it’s as clear as ever: sort agriculture and it drives everything else.

The UK and Europe got the plough, which led them into agricultural processing. Worldwide, human and economic development has only ever delivered one story: first sort your agriculture. And our agriculture has long been ailing. Of course, there’s no news here. We suffer from everything and almost all of it under one label: underinvestment.

Most of our agricultural produce is made by smallholders, who are often growing crops and livestock far from markets without tarred roads or ready transport. Storage facilities are close to non-existent. And so our list goes on: poor soils, poor farm management, inadequate inputs.

Yet perhaps the one area we have the least excuse for is the one, same issue we have been grappling with as state and nation for the entirety of the republic’s independence, which makes now nearly 60 years: and that’s the matter of when the state needs to step into commercial management.

According to some of our reporters, who still cannot distinguish fact from opinion, this matter is a matter of fact. Reported one, on the militarisation of the Kenya Meat Commission, in a statement printed on a ‘news’ page as reporting: Sectors like livestock, farming and fishing should never be left entirely to market forces as mismanagement and malign interests take over, threatening food security and Kenyans' livelihoods.

That reporter remains oblivious to the fact that this is his opinion. But his assertion sits anyway, just so we all know: the market isn’t good enough for Kenyan agriculture. Because look how well we have done with our agricultural parastatals.

Now, my column is an opinion. It’s my opinion, and the way it works is, I give my opinion and argue ‘why’ I believe that.

Our reporters, government, and many parastatals clearly don’t have to do that. They can just say that in their case market forces can never be trusted. Full stop.

But, honestly, if this is going to continue to be the quality of our discourse in working to become a middle-income nation, we aren’t going to get there. For you know that old adage about insanity — doing the same thing and expecting different results? So, what have been the results? The facts are that the proof of our public servants’ superiority over a free market is their track record, or any empirical evidence that they can outperform the market — which comes up pretty much a fail every time, so far.

Moreover, the way you stop malign interests taking over in free markets is through legislation, that does stuff like make cartels illegal, apply competition laws, or create regulators.

So does the army need to run our meat processing for it to outperform Brazil’s (which can still export beef, where we can’t, because our quality is too low)? Well it’s surely nice to see the army investing funds in agriculture that it apparently has and clearing all those debts to cattle farmers.

And it’s extraordinary to have spotted that all the world’s business schools should now be bulldozed, because the world’s top performers in running businesses are actually soldiers. Certainly, there’s a case that the army has honed its skills in project management, things like logistics, and supplies, and implementing orders.

But two years ago we were privatising this commission, and 26 other parastatals too. What happened? When did we lose that battle? Where was the amazing proof that public was, after all, better? Any chance whatsoever we could see it? Or is the public sector also not able to clean up parastatals for investors and sell them?

For, Dear News Reporter, agriculture has always performed best where it is driven by free markets — show me an exception.