President William Ruto Pledges On Agricultural Transformation and Inclusive Growth

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President William Ruto Pledges On Agricultural Transformation and Inclusive Growth

Agriculture

A griculture is the largest sector of the economy, contributing half of Kenya’s GDP, a quarter directly and another quarter indirectly. Two-thirds of Kenyans derive either all or part of their incomes from agriculture.

Agriculture thus remains the foundation of the economy. Many of the challenges that we are experiencing can be traced to agriculture, either directly or indirectly. At a time when the price of unga (maize flour) has hit an unprecedented Sh230, the role of agriculture to the cost of living need not be belaboured.

Food accounts for 54 per cent of household expenditures, but the poor spend 60 per cent or more. Agricultural productivity has not kept up with population growth, resulting in higher dependence on food imports.

Over the last decade, food imports have increased from 10 to 17 per cent. This, in turn, has increased our exposure to global price shocks. The case for investing in agriculture, as the sector that will lead the economic recovery, is predicated on seven factors.

Quick turnaround.

First, agriculture offers the quickest payback period for investments. This is because, in many cases, there is no new capital investment required. Increasing production only requires addressing the cost, quality and availability of inputs (animal feeds, seeds, fertilisers, pesticides etc) and providing farmers with the working capital to buy adequate supply of the inputs as well as other direct production expenses such as ploughing of land and labour. Consider the case of the dairy sector.

The biggest challenge that farmers face is the cost of animal feeds. We know that nutrition impacts on milk production in a matter of weeks.With a dairy herd estimated at 2.2 million lactating cows in Kenya, an increase in average productivity by 0.5kg per cow translates to 401 million kilogrammes of milk with a farm gate value of Sh16 billion at Sh40 a kilogramme.

We have estimated that provision of Sh4,000 per cow, a total of Sh8.8 billion would be sufficient working capital for our dairy farmers. Cost of living. The cost of living that we are experiencing can only be resolved by raising agricultural productivity. The battle is between farmers needing higher incomes and consumers who want low prices.

Maize is a good example: Planting an acre at a cost of Sh5000 and producing 10 bags equates to a cost of Sh500 a bag, while producing 25 bags equates to a cost of Sh200 a bag. So the higher the number of bags produced an acre, the lower the cost of production.

A farmer may see the cost of diesel as the main challenge while, in fact, the problem is low productivity. The same applies to fixed costs such as labour, since weeding an acre that yields 10-bag or 25-bag crop takes the same amount of labour.

By enhancing productivity through access to affordable inputs, including fertiliser and certified seeds, the farmer will earn more and subsequently reduce the six million bags imported annually and lower the cost to the consumer.

"Food accounts for 54 per cent of household expenditures but poor households spend more than 60 per cent. Agriculture has the highest employment multiplier effect i.e. agricutural growth creates more jobs in other sectors than any other, owing to its strong forward and backward linkages to other sectors of the economy."

SOURCE: Citizen Digital

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