Informal stakeholder meeting_kenya_ppt-victor

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Informal stakeholder meeting_kenya_ppt-victor

  1. 2. <ul><li>Context and Study Objectives </li></ul><ul><li>Exploring Agritrade-Rural Livelihoods-Food Security Linkages </li></ul><ul><li>How Regional and International Agritrade Impact Rural Livelihoods and Food Security </li></ul><ul><li>Policy, Institutional Frameworks and Interplay of Stakeholders </li></ul><ul><li>Conclusions and Recommendations </li></ul>
  2. 3. <ul><li>World’s malnourished increased from over 800 million in 2008 to 923 million in 2009 (FAO, 2009) </li></ul><ul><li>Kenya ranks 29 among the countries with worlds poorest food security </li></ul><ul><li>Effects partly due to recent droughts and rising food prices as well as rising poverty </li></ul><ul><li>Rising food poverty: expenditure is about 60 percent of poor household’s incomes </li></ul><ul><li>70 percent of the Kenyan population are market-dependent and net buyers of food </li></ul>
  3. 4. <ul><li>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. </li></ul><ul><li>Kenya thus relies on imports and Trade is important for stabilizing the national food supplies and food prices. </li></ul><ul><li>  However trade is affected by tariffs, NTBs and subsidies. </li></ul>
  4. 5. <ul><li>After Government Withdrew agricultural support measures following liberalization: </li></ul><ul><ul><li>food security started worsening by early 90s </li></ul></ul><ul><ul><li>By 2003, the country relied more on imports to fill food deficits; </li></ul></ul><ul><ul><li>About 25% of value of agric exports and 14% of the total exports were now being diverted to import food . </li></ul></ul><ul><ul><li>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; </li></ul></ul><ul><ul><li>incomes of the poor have plummeted, and they can’t sufficiently buy the imported food from the market </li></ul></ul>
  5. 6. Some Stylized Facts about Kenya Agritrade, Poverty and Food Security <ul><li>Trade deficit has been widening </li></ul><ul><li>Value of exports increased by 14% in last 2yrs but that of imports grew faster and at a higher rate (16%) </li></ul><ul><li>Poverty still remains high and overlaps largely with rural areas </li></ul><ul><li>Where 67% of pop lives, affecting largely small-scale farmers </li></ul>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
  6. 7. Poverty Rates Selected Years (1992-2007) <ul><li>With such statistics in poverty, there is also a markedly increase in food insecurity in the past few years </li></ul><ul><li>Food Security definitions </li></ul><ul><ul><li>secure access by all people at all times to enough food for a healthy, active life’ World Bank (1996). This implies </li></ul></ul><ul><ul><ul><li>Availability of enough food for an active healthy life; </li></ul></ul></ul><ul><ul><ul><li>access to this food; and </li></ul></ul></ul><ul><ul><ul><li>the guarantee of access to it at any time [Christiaensen 1995] </li></ul></ul></ul><ul><ul><li>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 </li></ul></ul>Region 1992 1994 1997 2000 2007 Rural 42.o 46.8 52.9 59.6 49.1 Urban 29.3 28.9 49.3 51.5 33.7 National 46.3 46.8 52.3 56.8 46 Source: Kenya Economic Surveys (Various Issues), KNBS 2007
  7. 8. <ul><li>Identify linkages between trade, rural livelihoods and food security more specifically within the Kenyan context. </li></ul><ul><li>Determine magnitude and composition of regional trade in Agriculture (both formal and informal) and inherent effects on rural livelihoods and food security. </li></ul><ul><li>Carry out a review of national policies related to agriculture – food security, trade, and regional integration </li></ul>
  8. 9. <ul><li>Literature review to establish the Linkages between Trade, Livelihoods and food security. </li></ul><ul><li>Secondary data used for trend analysis </li></ul><ul><li>Primary data – FGDs with farmer organizations. </li></ul><ul><ul><li>Key Informants </li></ul></ul><ul><li>Review of Policies, Legal and Regulatory Frameworks </li></ul>
  9. 10. <ul><li>Dependence on Agriculture for Livelihoods </li></ul><ul><li>In the rural the poor are linked to agriculture as </li></ul><ul><ul><ul><li>farmers, laborers, transporters, marketers and processors of produce and as suppliers of non-agricultural services to households whose income is principally agriculture-derived </li></ul></ul></ul><ul><ul><ul><li>food purchase is their main consumption expenditure </li></ul></ul></ul><ul><li>In the rural towns and large cities </li></ul><ul><ul><ul><li>They engage in the processing and distribution of agricultural products from the hinterland. </li></ul></ul></ul><ul><ul><ul><li>They buy most of their food needs in addition to supplies from rural relatives, and </li></ul></ul></ul><ul><li>So to the extent that trade affects agriculture then it affects rural livelihood as well </li></ul>
  10. 11. <ul><li>Agricultural trade and Rural Livelihoods (II) </li></ul><ul><li>Thus if incomes from agric trade are rewarding then we expect: </li></ul><ul><ul><li>Rural households’ incomes to increase hence increased demand for food and other consumer goods, </li></ul></ul><ul><ul><li>creation of non-farm jobs and employment diversification, especially in small towns close to agricultural production areas </li></ul></ul><ul><ul><li>surplus rural labor is absorbed, raises demand for agricultural produce and again boosts agricultural productivity and rural incomes </li></ul></ul><ul><li>Thus, impact on rural livelihood comes through </li></ul><ul><ul><li>falling real food prices, </li></ul></ul><ul><ul><li>creation of employment, </li></ul></ul><ul><ul><li>higher real wages, and </li></ul></ul><ul><ul><li>rising incomes fro small farm households </li></ul></ul>
  11. 12. <ul><li>Agricultural trade and Rural Livelihoods (III) </li></ul><ul><li>Trade affects rural livelihoods through importation and exportation and policies thereof </li></ul><ul><li>Domestic </li></ul><ul><ul><li>Production, with main determinant being price farmers receive and boost government revenue which can also be ploughed back through support </li></ul></ul><ul><ul><li>Policies (like subsidies) that dampen world prices create uncompetitiveness of products produced by countries who cannot afford subsidies </li></ul></ul><ul><ul><li>Reduce incentive to invest in agricultural infrastructure, agricultural research and development, </li></ul></ul>
  12. 13. <ul><li>Agricultural trade and Rural Livelihoods (III) </li></ul><ul><li>International </li></ul><ul><ul><li>Countries can produce and export based on their factor endowments </li></ul></ul><ul><ul><li>Use income from exports to import national food requirements </li></ul></ul><ul><ul><li>Ability to import food depend on incomes generated from imports and world price of food </li></ul></ul><ul><ul><li>Thus Export competitiveness and price matter </li></ul></ul>
  13. 14. <ul><li>Linkages between agricultural trade and rural livelihoods therefore occur in three phases according to Evans 1990: </li></ul><ul><li>1. rural households earn higher incomes from production of agricultural goods for non-local markets, and increase their demand for consumer goods </li></ul><ul><li>2. this leads to the creation of non-farm jobs and employment diversification, especially in small towns close to agricultural production areas </li></ul><ul><li>3. which in turn absorbs surplus rural labor, raises demand for agricultural produce and again boosts agricultural productivity and rural incomes (Evans, 1990). </li></ul>
  14. 15. <ul><li>Trade Liberalization such as SAPs – many sectors became uncompetitive. </li></ul><ul><li>International trade policies such as </li></ul><ul><li>Subsidies -dampened world prices, leading to collapse of many agricultural sectors in developing countries </li></ul><ul><li>NTBs – such as standards have also acted as barriers for developing country exporters. </li></ul><ul><li>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. </li></ul>
  15. 16. <ul><li>Poverty rates in Kenya are 46.1 percent. Rural poverty is higher than the national average and stands at 49.1%. </li></ul><ul><li>Rural poverty mostly associated with agriculture and land </li></ul><ul><ul><li>Highest in ASALs in Eastern and North-eastern – due to poor climatic conditions </li></ul></ul><ul><ul><li>High potential areas e.g Central are over exploited due to population pressure </li></ul></ul><ul><li>Poverty is highly correlated with food security i.e high poverty areas are the most food insecure – Asals and Coast </li></ul><ul><li>Food security worsened since 1990s and by 2003 imports were 14 percent of total value of imports and 25 percent of agricultural imports. </li></ul>
  16. 17. <ul><li>Statistics show that only 47 percent of the entire Kenyan population is food secure. </li></ul><ul><li>Hence Kenya’s dependency on food Aid has continued to rise over the years and is observed to have high peaks in 1993, 2001 and in 2007 </li></ul><ul><li>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 </li></ul><ul><li>Food imports especially cereals have also increased – deficits last year was 95,000MT met through imports </li></ul><ul><li>Most imports come from the region Uganda and Tanzania 108,155 MT and 56,900 respectively </li></ul>
  17. 18. <ul><li>More than 70 percent of Kenya’s Population live in rural areas </li></ul><ul><li>Agriculture and pastoralism the mainstay of the Kenyan Rural economy </li></ul><ul><li>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. </li></ul><ul><li>Incomes from Agriculture alone are not sufficient to meet food needs especially in ASALs hence purchase of food is very common. </li></ul>
  18. 19. <ul><li>Exports </li></ul><ul><ul><li>dominated by the agricultural sector- horticulture 22%; tea 17.9%, others eg petroleum and manufactured exports about 45 percent of exports. </li></ul></ul><ul><ul><li>Main destinations EU – 22 %; and Africa – 60 Percent </li></ul></ul><ul><ul><li>Exports to the COMESA and EAC region consist of manufactured products such as Fermented tea (35%), Cement (4.5%), Cigarettes (4.2%) amongst others </li></ul></ul><ul><ul><li>Exports to Africa increased 26% in the past 10 years </li></ul></ul><ul><ul><li>Exports to Africa facilitated by EAC and COMESA customs union </li></ul></ul><ul><ul><li>- Main barriers to Exports include NTBs, poor infrastructure and delays at various border points </li></ul></ul>
  19. 20. <ul><li>Imports – </li></ul><ul><ul><li>Kenya’s 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). </li></ul></ul><ul><ul><li>Main source of Kenya’s imports include Middle and Far East, UAE and EU countries including South Africa. </li></ul></ul><ul><ul><li>Kenya also imports food specifically maize from EAC and COMESA countries to meet shortages </li></ul></ul>
  20. 21. <ul><li>an important aspect of cross-border trade among small traders along Kenya –Uganda and Kenya-Tanzania borders </li></ul><ul><li>Provides a source of income for traders and also provides food – improved access to food. </li></ul><ul><li>Occurs due to restrictive policies and NTBs – Magnitude is hard to measure </li></ul><ul><li>Involves small but significant amounts of food products moved over short distances using as bicycles, and boats </li></ul><ul><li>Goods entering Kenya included, maize, beans, bananas, fresh fruits and vegetables-tomatoes, onions avocados, pineapples and Textiles </li></ul><ul><li>Goods leaving Kenya included counterfeit batteries, cigarettes, detergents, beverages, sugar, mattresses and other household goods </li></ul>
  21. 22. <ul><li>Reasons for illicit trade: </li></ul><ul><ul><li>delays at the border which in some cases along Busia-Malaba border was up to 7 hours </li></ul></ul><ul><ul><li>High Administrative costs -numerous requirements such as trade licenses – business and road license, phyto-sanitary certificates </li></ul></ul><ul><ul><li>Corruption and bribery at police checkpoints </li></ul></ul><ul><li>Magnitude is hard to measure </li></ul><ul><li>Positive aspects# </li></ul><ul><ul><li>Improve access to food# </li></ul></ul><ul><ul><li>drives down prices of goods# - a plus for consumers but not producers </li></ul></ul><ul><ul><li>Provides incomes and improves livelihoods for traders# </li></ul></ul>
  22. 23. <ul><li>Continued high prices of food due to: </li></ul><ul><ul><li>a) sustained high level of effective demand in the country, especially in main urban centers, </li></ul></ul><ul><ul><li>b) accelerated appreciation of the Kenyan currency in recent years </li></ul></ul><ul><ul><li>c) the impacts of increased internal production costs, given the general cost of inputs and other production outlays, and </li></ul></ul><ul><ul><li>d) the overall rise in inflation, - rising to 31.5 percent in May and 29.4 percent in June 2008, </li></ul></ul><ul><ul><li>e) Overwhelming dependence on maize as the key staple for the majority of the population. </li></ul></ul><ul><ul><li>f) drought and poor weather conditions; </li></ul></ul><ul><ul><li>g) rising food prices which is a global phenomenon as well as </li></ul></ul><ul><ul><li>h) The post-election violence which occurred in 2008 January </li></ul></ul>
  23. 24. <ul><li>Increased imports – cheap food imports acting as a dis-incentive for producers although this has improved access to food </li></ul><ul><li>On one hand –loss of incomes for producers and labourers but on the other hand creation of employment and incomes for traders </li></ul><ul><li>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 </li></ul>
  24. 25. <ul><li>Trade liberalization under SAPs and various trade agreements such as EAC and COMESA have led to openness and reduction of tariffs </li></ul><ul><li>Even after the trade regime was liberalized cheap food imports have suppressed domestic food prices and therefore food production </li></ul><ul><li>Food security policy has laid much emphasis on Maize sector ignoring other sectors which could raise incomes of rural folk# </li></ul><ul><li>Food Security policy not coherent with trade policy </li></ul>
  25. 26. <ul><li>Food Security# </li></ul><ul><ul><li>Kenya Food Security Meeting & - Advisory role </li></ul></ul><ul><ul><li>Kenya Food Steering Group – Policy and administrative </li></ul></ul><ul><ul><li>NCPB – strategic grain reserve </li></ul></ul><ul><ul><li>Ministries and Government departments –MoT, MOA </li></ul></ul><ul><li>Institutions for food security not coherent with those of Trade </li></ul><ul><li>Stakeholders: Farmers and Small scale traders; Millers and Transporters; ODAs and NGOs; </li></ul>
  26. 27. <ul><li>Need for an equitable global environment for trade; removal of subsidies. </li></ul><ul><li>Taking care of regional NTBs to enhance regional trade </li></ul><ul><li>Most of what needs to be done is mainly at National level </li></ul><ul><ul><li>Need for a clear and comprehensive trade policy that takes into account food security issues </li></ul></ul><ul><ul><li>Addressing infrastructural bottlenecks and redistributive mechanisms from surplus to deficit areas. </li></ul></ul><ul><ul><li>Need for a comprehensive institutional framework to enable private sector participation in the process as well as consolidation of information for future referencing. </li></ul></ul>

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