Kenya’s economy is heavily dependent on agriculture, with 75% of Kenyans making their living from farming, producing for domestic consumption and for export. Industry participants range from subsistence farmers to large wholesale producers.

Maize is Kenya’s principal crop and primary food staple, with wheat, barley, vegetables and fruits also important. Kenya’s cash crops, which include tea, cotton and sisal, are mostly grown on large-scale plantations and for export. Tea has emerged as Kenya’s most important export crop, with local farmers producing more tea than any country in the world except India and China.

Only 15% of Kenya’s total land area is sufficiently fertile to be farmed, and only 7% can be classified as highly productive. Irrigation projects are limited to the Yala Swamp and Kano Plain in the west and in the upper and lower Tana River basins. Most of the country’s production is heavily dependent on rainfall.

The government’s agriculture policies have long been focused on assuring food security through annual domestic production supplemented by a strategic grain reserve. In the past decade or so, Kenya’s population growth has begun to outstrip its agricultural productivity, threatening food security.

Kenya’s 2002-2008 National Development Plan noted problems to be addressed. These included an emphasis on quantity at the expense of quality, an inadequate early warning system of supply shortage, insufficient strategic reserves, inadequate research, weak farmer institutions, lack of security in pastoral areas and the lack of effective control of crop and livestock diseases.

Recently, Kenya was hit by a devastating drought, creating a famine situation this year that the UN’s Food and Agriculture Organization has called the worst in recent times. Following the drought, the president declared a National Disaster and appealed for aid from local and international communities.

But internal policy analysts and outside observers have pointed to a host of issues besides drought that contributed to the food crisis. Analysts charge that inefficient markets and government decisions that favor consumers over producers share blame. Low crop prices have caused farmers either to cut planted area or export their output to neighboring countries where prices are higher.

Another issue is highpriced farm inputs and a lack of farmer knowledge on their use. An official at the Agricultural Information Centre, the agriculture ministry department responsible for farmer education, has said the department was constrained by inadequate funding and shortage of technical staff.

Finally, many say the famine situation was worsened by the highly controversial 2002 sales of strategic maize reserves for export. Current officials said the deal made sense at the time because it helped the government reduce debt and clear out old grain stocks of suspect quality. Proceeds of the sale also were expected to enable the purchase of fresh strategic reserve stocks since a bumper harvest had been expected in November 2002.

Nonetheless, details of the sales, including prices and the relationships of the parties involved, have brought concerns of high-level corruption to Kenya’s politically sensitive agriculture sector and have undercut the government’s credibility. The case remains under investigation by the Criminal Investigations department.

Meanwhile, the government, assisted by the World Food Programme, has begun emergency distribution of relief food. The UN reported in early November that food shortages in pastoral areas were worsening, as evidenced by high malnutrition rates, and that improved rains in November were critical.

WHEAT AND MILLING

Kenya in the past few years has been able to produce only about 25% to 30% of its wheat needs, as increased demand for bread, especially in urban areas, has outstripped production. The 2004-05 wheat harvest is estimated at 225,000 tonnes versus domestic food use of 875,000 tonnes.

About 75% of Kenya’s wheat crop is soft wheat. Millers blend the local crop with hard wheat at a 40:60 rate to make the desired quality flour, which requires hard wheat imports.

In 2002, Kenya’s Institute for Public Policy Research and Analysis surveyed Kenya’s milling industry and examined its challenges. According to the study, annual wheat flour milling capacity at that time totaled about 1.5 million tonnes, concentrated at 16 major companies mostly in major cities.

The largest mill had a capacity of 900 tonnes per day, with the smallest at 200 tonnes. Total annual capacity utilization was low, estimated at 30% to 60%.

Most of the mills originally were established to grind both maize and wheat as their core line of business. Over time, some diversified to produce bakery products or manufacture animal feed from by-products. Most also expanded product exports, with the East African Community and COMESA (Common Market of Eastern and Southern Africa) the key markets.

The Wheat Millers Association of Kenya (WMA) represents the country’s millers and lobbies the government on their behalf, but the organization handles several other functions unique for this type of group.

First, the WMA typically commits its members to buying all domestic wheat supplies before they import wheat. The goal is to prevent government imposition of a 50% import duty to protect local farmers. As part of this commitment, the WMA apportions to its members the quantity of the domestic crop each must buy.

The WMA also annually negotiates prices with the Kenya Wheat Growers Association. The WMA uses an import parity price based on hard wheat from Australia or Argentina, so Kenya’s millers typically pay more than the market price for soft wheat. Millers also are concerned that the local crop rarely meets the recommended moisture content of 13%.

Another challenge is logistics, as production is scattered around the country in small lots, and transport costs are high.

But the economic challenge ranked most difficult by millers in the study was the high level of duties and other charges levied. In addition to the 50% protection duty, the normal duty is set at 35%, CIF basis. Even though the WMA commits to buy the domestic crop, the government can apply or suspend the special 50% duty at three-month intervals, depending on its intentions and projected production.

Most millers reported that they had lost export share in recent years, mainly because of high duties imposed on wheat products and relatively high production costs related to Kenya’s poor transportation infrastructure. Another factor that cut Kenyan competitiveness in regional markets was high interest rates that added to production costs.

LIVESTOCK AND FEED

Beef and dairy cattle are important to Kenya’s agricultural economy, with beef accounting for more than 70% of all meat consumed. Kenya has one of the most developed dairy industries in Sub-Saharan Africa, with an annual milk production of about 2 billion liters.

Most of Kenya’s livestock is produced under ranching and nomadic pastoral systems. A significant proportion of beef also comes from bull calves and culled cows as by-products of the dairy industry.

In July 2003, Kenya’s feed manufacturing industry, which consists of about 100 registered and licensed feed makers, decided to create an association to attend to common issues. Formed with the help of South Africa’s Animal Feed Manufacturers’ Association (AFMA), the Association of Kenya Feed Manufacturers (AKEFEMA) elected Dr. Patrick Karanja, director of Kenya’s Jubilee Feed Industries Ltd., as its first president.

The Secretariats of AFMA and AKEFEMA said the groups’ goal was to work together to benefit the African feed industry.

"We believe that in the long run it could only be beneficial for the feed industry if we share our knowledge and cooperate where necessary," the groups said. "We should also (communicate) closely with other countries in Africa. At this point in time, there is very little information available on the feed industry in Africa and such an initiative should solve that problem." WG We want to hear from you — Send comments and inquiries about this article to [email protected].