How Regional and International Agritrade Impact Rural
Livelihoods and Food Security
Policy, Institutional Frameworks and Interplay of
Stakeholders
Conclusions and Recommendations
3.
Worlds malnourished increased from over 800 million in 2008 to
923 million in 2009 (FAO, 2009)
Kenya ranks 29 among the countries with worlds poorest food
security
Effects partly due to recent droughts and rising food prices as
well as rising poverty
Rising food poverty: expenditure is about 60 percent of poor
households incomes
70 percent of the Kenyan population are market-dependent and
net buyers of food
4.
dependence on rain fed agriculture has seen output from maize
fall from a surplus of 9 million bags in 2006 to a deficit of 35
million bags at present.
Kenya thus relies on imports and Trade is important for
stabilizing the national food supplies and food prices.
However trade is affected by tariffs, NTBs and subsidies.
5.
After Government Withdrew agricultural support measures
following liberalization:
food security started worsening by early 90s
By 2003, the country relied more on imports to fill food
deficits;
About 25% of value of agric exports and 14% of the total
exports were now being diverted to import food .
Food imports have not necessarily helped the poor since at
household level (mainly in the rural and among the poor in towns
and urban centers) food insecurity has increased;
incomes of the poor have plummeted, and they cant sufficiently
buy the imported food from the market
6. Some Stylized Facts about Kenya Agritrade, Poverty and Food
Security
Trade deficit has been widening
Value of exports increased by 14% in last 2yrs but that of
imports grew faster and at a higher rate (16%)
Poverty still remains high and overlaps largely with rural
areas
Where 67% of pop lives, affecting largely small-scale
farmers
Variable 2000 2002 2003 2005 2006 2007 Economic growth 5.8 1.3
Agric as % of GDP 24 Exports value (mn) 69,285 244.5bn 412.4bn
Imports Value 314.9bn 605.1bn Export as % of GDP 23.6 27.4 25.1
Import as % of GDP 30.4 29.8 37.5
7. Poverty Rates Selected Years (1992-2007)
With such statistics in poverty, there is also a markedly
increase in food insecurity in the past few years
Food Security definitions
secure access by all people at all times to enough food for a
healthy, active life World Bank (1996). This implies
Availability of enough food for an active healthy life;
access to this food; and
the guarantee of access to it at any time [Christiaensen
1995]
Availability is thro local food prod or imports ; access is
thro ability to purchase enough quantity of quality food ( income
and food price ) and this to be so on a sustainable basis
Identify linkages between trade, rural livelihoods and food
security more specifically within the Kenyan context.
Determine magnitude and composition of regional trade in
Agriculture (both formal and informal) and inherent effects on
rural livelihoods and food security.
Carry out a review of national policies related to agriculture
food security, trade, and regional integration
9.
Literature review to establish the Linkages between Trade,
Livelihoods and food security.
Secondary data used for trend analysis
Primary data FGDs with farmer organizations.
Key Informants
Review of Policies, Legal and Regulatory Frameworks
10.
Dependence on Agriculture for Livelihoods
In the rural the poor are linked to agriculture as
farmers, laborers, transporters, marketers and processors of
produce and as suppliers of non-agricultural services to households
whose income is principally agriculture-derived
food purchase is their main consumption expenditure
In the rural towns and large cities
They engage in the processing and distribution of agricultural
products from the hinterland.
They buy most of their food needs in addition to supplies from
rural relatives, and
So to the extent that trade affects agriculture then it affects
rural livelihood as well
11.
Agricultural trade and Rural Livelihoods (II)
Thus if incomes from agric trade are rewarding then we
expect:
Rural households incomes to increase hence increased demand for
food and other consumer goods,
creation of non-farm jobs and employment diversification,
especially in small towns close to agricultural production
areas
surplus rural labor is absorbed, raises demand for agricultural
produce and again boosts agricultural productivity and rural
incomes
Thus, impact on rural livelihood comes through
falling real food prices,
creation of employment,
higher real wages, and
rising incomes fro small farm households
12.
Agricultural trade and Rural Livelihoods (III)
Trade affects rural livelihoods through importation and
exportation and policies thereof
Domestic
Production, with main determinant being price farmers receive
and boost government revenue which can also be ploughed back
through support
Policies (like subsidies) that dampen world prices create
uncompetitiveness of products produced by countries who cannot
afford subsidies
Reduce incentive to invest in agricultural infrastructure,
agricultural research and development,
13.
Agricultural trade and Rural Livelihoods (III)
International
Countries can produce and export based on their factor
endowments
Use income from exports to import national food
requirements
Ability to import food depend on incomes generated from imports
and world price of food
Thus Export competitiveness and price matter
14.
Linkages between agricultural trade and rural livelihoods
therefore occur in three phases according to Evans 1990:
1. rural households earn higher incomes from production of
agricultural goods for non-local markets, and increase their demand
for consumer goods
2. this leads to the creation of non-farm jobs and employment
diversification, especially in small towns close to agricultural
production areas
3. which in turn absorbs surplus rural labor, raises demand for
agricultural produce and again boosts agricultural productivity and
rural incomes (Evans, 1990).
15.
Trade Liberalization such as SAPs many sectors became
uncompetitive.
International trade policies such as
Subsidies -dampened world prices, leading to collapse of many
agricultural sectors in developing countries
NTBs such as standards have also acted as barriers for
developing country exporters.
Consequently, production declined and this led to a drop in
employment for farmers and dependency on imported food leading to
major changes in food prices and worsening the food security and
livelihoods situation.
16.
Poverty rates in Kenya are 46.1 percent. Rural poverty is
higher than the national average and stands at 49.1%.
Rural poverty mostly associated with agriculture and land
Highest in ASALs in Eastern and North-eastern due to poor
climatic conditions
High potential areas e.g Central are over exploited due to
population pressure
Poverty is highly correlated with food security i.e high
poverty areas are the most food insecure Asals and Coast
Food security worsened since 1990s and by 2003 imports were 14
percent of total value of imports and 25 percent of agricultural
imports.
17.
Statistics show that only 47 percent of the entire Kenyan
population is food secure.
Hence Kenyas dependency on food Aid has continued to rise over
the years and is observed to have high peaks in 1993, 2001 and in
2007
Currently WFP is feeding a total of 3.6 million people in 25
districts and 535,000 children are given school meals through the
school feeding program
Food imports especially cereals have also increased deficits
last year was 95,000MT met through imports
Most imports come from the region Uganda and Tanzania 108,155
MT and 56,900 respectively
18.
More than 70 percent of Kenyas Population live in rural
areas
Agriculture and pastoralism the mainstay of the Kenyan Rural
economy
An average of 68% rural household income is derived from
off-farm incomes, and around 32% comes from own production (crops
and livestock products), with maize and wheat being the leading
sources of crop income.
Incomes from Agriculture alone are not sufficient to meet food
needs especially in ASALs hence purchase of food is very
common.
19.
Exports
dominated by the agricultural sector- horticulture 22%; tea
17.9%, others eg petroleum and manufactured exports about 45
percent of exports.
Main destinations EU 22 %; and Africa 60 Percent
Exports to the COMESA and EAC region consist of manufactured
products such as Fermented tea (35%), Cement (4.5%), Cigarettes
(4.2%) amongst others
Exports to Africa increased 26% in the past 10 years
Exports to Africa facilitated by EAC and COMESA customs
union
- Main barriers to Exports include NTBs, poor infrastructure
and delays at various border points
20.
Imports
Kenyas imports mainly consist of petroleum products (14 percent
of total imports); crude petroleum (9 percent); industrial
machinery (11 percent); and motor vehicles (6.4 percent).
Main source of Kenyas imports include Middle and Far East, UAE
and EU countries including South Africa.
Kenya also imports food specifically maize from EAC and COMESA
countries to meet shortages
21.
an important aspect of cross-border trade among small traders
along Kenya Uganda and Kenya-Tanzania borders
Provides a source of income for traders and also provides food
improved access to food.
Occurs due to restrictive policies and NTBs Magnitude is hard
to measure
Involves small but significant amounts of food products moved
over short distances using as bicycles, and boats
Goods entering Kenya included, maize, beans, bananas, fresh
fruits and vegetables-tomatoes, onions avocados, pineapples and
Textiles
Goods leaving Kenya included counterfeit batteries, cigarettes,
detergents, beverages, sugar, mattresses and other household
goods
22.
Reasons for illicit trade:
delays at the border which in some cases along Busia-Malaba
border was up to 7 hours
High Administrative costs -numerous requirements such as trade
licenses business and road license, phyto-sanitary
certificates
Corruption and bribery at police checkpoints
Magnitude is hard to measure
Positive aspects#
Improve access to food#
drives down prices of goods# - a plus for consumers but not
producers
Provides incomes and improves livelihoods for traders#
23.
Continued high prices of food due to:
a) sustained high level of effective demand in the country,
especially in main urban centers,
b) accelerated appreciation of the Kenyan currency in recent
years
c) the impacts of increased internal production costs, given
the general cost of inputs and other production outlays, and
d) the overall rise in inflation, - rising to 31.5 percent in
May and 29.4 percent in June 2008,
e) Overwhelming dependence on maize as the key staple for the
majority of the population.
f) drought and poor weather conditions;
g) rising food prices which is a global phenomenon as well
as
h) The post-election violence which occurred in 2008
January
24.
Increased imports cheap food imports acting as a dis-incentive
for producers although this has improved access to food
On one hand loss of incomes for producers and labourers but on
the other hand creation of employment and incomes for traders
Dependency on food aid has also acted as a dis-incentive for
production although it has provided much needed food for millions
of people in extreme food insecurity
25.
Trade liberalization under SAPs and various trade agreements
such as EAC and COMESA have led to openness and reduction of
tariffs
Even after the trade regime was liberalized cheap food imports
have suppressed domestic food prices and therefore food
production
Food security policy has laid much emphasis on Maize sector
ignoring other sectors which could raise incomes of rural
folk#
Food Security policy not coherent with trade policy
26.
Food Security#
Kenya Food Security Meeting & - Advisory role
Kenya Food Steering Group Policy and administrative
NCPB strategic grain reserve
Ministries and Government departments MoT, MOA
Institutions for food security not coherent with those of
Trade
Stakeholders: Farmers and Small scale traders; Millers and
Transporters; ODAs and NGOs;
27.
Need for an equitable global environment for trade; removal of
subsidies.
Taking care of regional NTBs to enhance regional trade
Most of what needs to be done is mainly at National level
Need for a clear and comprehensive trade policy that takes into
account food security issues
Addressing infrastructural bottlenecks and redistributive
mechanisms from surplus to deficit areas.
Need for a comprehensive institutional framework to enable
private sector participation in the process as well as
consolidation of information for future referencing.
