Hannington Odame refers to the discussions from the panel on policy and investment in agriculture at the Agricultural Industry Forum (AIF), 3-5 March 2020. He analyses the nature of public –private policy dialogue, and assesses whether an innovative new finance mechanism in Kenyan agriculture is needed to respond to low levels of investment in the sector.
Written by Hannington Odame
How exactly does agricultural policy relate to politics in Kenya? For those of a cynical disposition, the following FAC blog on Africa’s plural seed systems – where doubts on the ability of scientists and policy analysts to influence seed policy because of a technological lock-in to hybrid maize and the narrow interests of powerful actors – might contain an element of truth from the perspective of a political economist.
‘’The farmer only appears every five years, to cast his vote.’’
But it is the plight of the smallholder farmer is often a subject of public debate and political interest during every electoral cycle, but have the wide-ranging policy and regulatory reforms initiated to strengthen Kenyan agri-food systems in the past decade sufficiently recognised the needs of smallholder farmers? Is enough attention given to the complicated policy change processes needed to build robust and sustainable food systems? These are subjects all up for discussion in Kenya.
Public-private policy dialogue process
A lack of coordination across government and sector stakeholders has undermined progress that was made during the first wave of the Kenyan Green Revolution in hybrid maize in the 1970s. In response, there are several on-going private sector coordination initiatives to establish effective participation in agricultural policy processes
“There is need to institutionalise coordination mechanism that enables public participation, private sector engagement and an inclusive growth of youth and women, and smallholder.”Dr. Mulat Demeke, Senior Policy Expert, FAO, speaking at the AIF
The AIF 2020 Communique calls for working together towards establishing an all-inclusive public private dialogue platform aimed at engaging the government in policy development, implementation and coordination within the agriculture sector. While public-private policy dialogues are central to the development process, the investments that transform agriculture sector for inclusive growth is a major concern in Kenya. Agriculture Sector Network, a multi-agency organisation that seeks to coordinate the industry transformation agenda. Its objectives include policy advocacy and support services that promote productivity, competitiveness and attracts investments into the sector as well as building the capacity of various business membership organisations (BMOs) to strengthen their ability to develop and represent their value chains adequately.
Investment in agriculture
Public investment in the agriculture sector is very low – only 2-3% of national revenue against the CAADP target of 10%. Low public financing for Kenya’s agriculture sector and the sector’s reliance on donor funding are contentious issues. Mr Justus Mwololo, Kenya Small Scale Federation of Farmers, attributed this situation to the gap between planning and implementation. The National Agricultural Investment Plan is not integrated into national budgets:
“Budget execution trails budget allocation, so available funds are not used.“Justus Mwololo, General Secretary, Kenya Small Scale Federation of Farmers
Malabo commitments cannot be achieved by agriculture alone. Complementary investments are needed from other sectors. For example, agricultural flagships need related investment from agriculture to industry to ICT.
Mr Argwings-Kodhek’s other major concern is that funding for agricultural research and extension services is low and targets are often not achieved. Within agricultural investment, research and development has up to a 63% annual return; whereas extension and advisory services is 48%. Although donors and NGOs fund research and extension through projects, the government needs to lead funding for research and development.
“Policy is in the midst of a process of self-examination in Kenya and by extension in Africa.”Gem Argwings-Kodhek, speaking at the AIF.
This calls for innovative financing mechanisms, in particular private public partnerships – with government-backed guarantee funds. As Mr Argwings-Kodhek explained, development partners have role to facilitate partnerships between industry, government and banks. Technical assistance is a critical complementary investment to create lasting success, such as product quality and better understanding of the production cycle.
- An improved policy environment requires finalisation of an overarching agricultural policy to guide agriculture sector, promote public participation, and coordination.
- Institutional and legal frameworks are enhanced by reforming and enforcing laws and regulations.
- Inclusive financing mechanisms through private public partnerships. This includes finalising cooperative policy to guide the management of cooperatives in financing and contract farming.
- Investment in information knowledge management to promote evidence-based policy decisions, new financing models, coordination of value chains, reduction in transaction costs, and improved efficiency and transparency.
Dr. Hannington Odame (PhD) is the founder and current Executive Director, Centre for African Bio-Entrepreneurship (CABE). He is also the Regional Hub Coordinator, APRA-East Africa, Nairobi, Kenya
Credit for all photos: Micky Abachi, CABE-APRA
Please note: During this time of uncertainty caused by the #COVID19 pandemic, as for many at this time, some of our APRA work may well be affected in coming weeks but we aim to continue to post regular blogs and news updates on agricultural policy and research.