Policy workshop - key concepts in agriculture with a focus on policy

1. Key concepts in agriculture with a focus
on policy
Paul Guthiga
Senior Policy Analyst
ReSAKSS-ECA/ILRI

2. Policy vs public policy
 What is policy?
oA course or principle of action adopted or proposed by an organization
or individual.
 What is public policy?
o The authoritative statements or actions of government which reflect the
decisions, values, or goals of policymakers.
oThe sum of government activities, whether pursued directly or through
agents, as those activities have an influence on the lives of citizens.
oThe combination of basic decisions, commitments, and actions made by
those who hold or affect government positions of authority.

3. Characteristics of public policies
 Problem-centred: attempt to address specific problems affecting specified
groups in the society such as farmers/pastoralists, investors disadvantaged
groups etc
 Based on scientific methods to be able to convince stakeholders on reliability
and some degree of objectivity;
 Normative – Not completely objective as value judgement cannot be entirely
eliminated;
 Involves some art, craft and persuasion to marshal various interest groups
especially the losers in a policy decision
 Multi-disciplinary: Good public policies incorporate ideas from different fields
such as economics, sociology, biology, political science, etc

4. Definition of key elements of policy (1)
 Policy objectives- the "ends" of a policy and reflect the overall
purpose or long-term aim(s); they are what the policy is
intended to achieve (e.g. increased maize production).·
 Policy instruments- the "means" of a policy, the actions used to
carry it out and the methods by which its objectives are
achieved (e.g. a subsidy on fertilizer).
 Policy formulation-defined as the process of considering
alternative policy options and deciding to implement one or
several of them.

5. Definition of key elements of policy (2)
 Within policy formulation, we can further distinguish
between policy analysis and policy making
oPolicy analysis-is the process of investigating issues and options, and
of drawing up and comparing different proposals.
oPolicy making-is the act of deciding which objectives should be met
and selecting the instruments by which to do so.
 ·Policy implementation-defined as the process of carrying out
the policy (or policies) decided on during the formulation
stage.

6. Definition of key elements of policy (3)
 Policy consistency means compatibility and uniformity of course of
actions between the top to the bottom level stakeholders so that it
can be correctly and efficiently followed by all of them without
creating a conflict.
 Policy coherence is the systematic promotion of mutually
reinforcing policies across government departments to create
synergies towards achieving agreed objectives and to avoid or
minimize negative spillovers in other policy areas.
 Policy incoherence can be:-
oHorizontal, with overlapping mandates and confused responsibilities among
co-providers and other public bodies, or
oVertical, where policies do not have clear implementation plans or funding.

7. Policy vs politics
 The purpose of policy is to affect the real world; to be effective political realities
must be fully taken into account.
 While imagination is good at policy formulation stage, there is no point in
proposing a policy which is bound to be rejected for political reasons.
 Policy proposals will not be accepted - and policies will not be effective - unless
they have the support of prominent politicians and interest groups.
 Policy analysts must understand and take into account the concerns of
politicians if viable policies are to be formulated.
 Politics and politicians are, in fact, central to policy issues and should not be
viewed as irritating side-issues, to be ignored whenever possible.

8.  Key economic for policy intervention is market failure.
 Markets are said to have failed when they do not exist at all or
when they are unable to allocate resources efficiently.
 Causes of market failure:-
o Existence of monopolies or oligopolies;
o Imperfect information;
o Existence of externalities;
o Inability of the private sector to provide public or collective goods and
o Barriers to entry or exit
Why are Public Policies needed?

9. Existence of monopolies and oligopolies
 Monopolists and oligopolies enhance their profits by restricting output so
as to charge higher prices for their products.
 They could also lower the quality of their products to increase their
margins.
 It is incumbent upon the government to check these unscrupulous
behaviours through appropriate public policies (anti-trust laws)

10. Imperfect information
 Decisions of consumers, for instance, are conditioned
by the amount and quality of information available to
them.
 Where information asymmetry exists, sellers take
advantage and exploit consumers, either by selling
inferior quality good or over-pricing the goods.
 Government intervenes to ensure that accurate and
adequate information is availed by producers and
sellers.

11. Externalities
 Unintended third party effects of activities of
economic agents; either positive or negative.
 Positive when the third party derives benefits for
which he/she is not charged (e.g. ambiance from
tree planting) and
 Negative when the third party suffers harm or losses
for which he/she is not compensated (e.g. pollution).
 Government intervene to force producers of
negative externalities say by means of taxation.
 Producers of positive externalities need to be
compensated

12. Provision of public goods
 It is not feasible to exclude non-paying individuals
from consumption of pure public goods such from
benefits of livestock vaccination campaigns (eg.
Rinderpest vaccine) or public road/national security
 The government itself must be directly involved
because it is able to fund the provision through
taxes.

13. Barriers to entry or exit
 In competitive markets, firms are free to enter and exit a given
industry without inhibitions.
 Barriers to entry or exit are said to exist when inhibitions to free
entry and exit exists in a given market.
 Examples of barriers to entry include:-
i. Advertising; firms in the market make it difficult for new competitors by
spending on advertising that new firms would find more difficult to afford..
ii. Lack of capital; new firms are unable to obtain the start-up capital such as
equipment, building, and raw materials
iii. Control of resources;
iv. Predatory pricing; The practice of a dominant firm selling at a loss to make
competition more difficult for new firms
v. Others include economies of scale, customer royalty, distributor agreements,
and government regulations among others.

14. Highlight on complexities in agriculture sector policy
and decision-making in Kenya

15. Constitutional/legal (1)
 In Kenya, the new constitution has made the agricultural policy
formulation a bit more complex;
 The Fourth Schedule of the Constitution provides for devolution of
specific functions in agriculture to the County Governments.
 There are some where the two levels of government have
concurrent/overlapping functions:
 However, the National Government functions include:
o Development of agriculture, livestock and fisheries policies, guidelines and
standards;
o Development of fishing (rivers, lakes, dams and marines);
o Animal and plant genetic conservation;
o Disaster management (drought risk mitigation, disease and pest outbreaks, floods);
and
o Capacity-building and technical assistance to the counties.

16.  The functions and powers of the county governments in
agriculture, include:—
(a) crop and animal husbandry;
(b) livestock sale yards;
(c) county abattoirs;
(d) plant and animal disease control; and
(e) fisheries.
 For policies to be effective they should:-
o Be formulated based on evidence
o Their likely impacts should be analysed and understood
o Be implemented effectively
Constitutional/legal (2)

17. Multi-stakeholder coordination (1)
 Agriculture sector has very many policy
stakeholders…
 At different levels and with complex
relationships
 For effective policy formulation and
implementation, there is need for robust
coordination mechanisms

18. Multi-stakeholder coordination (2)

19. Multi-stakeholder coordination (3)
 The Agriculture Intergovernmental Forum (IGF) is the top
agriculture sector coordinating mechanism for national and
county governments (operates under the umbrella of the
‘Summit’
 In 2016, IGF established Joint Agriculture Sector Steering
Committee (JASSCOM) was established
 The primary objective of JASCCM is to guide the
implementation of sector proprieties as defined in major
national agriculture policy documents and the regional and
international commitments entered in Kenya such as the
CAADP Declarations (Maputo 2003, Malabo 2014).

20. Multi-stakeholder coordination (4)
 The Joint Agriculture Secretariat (JAS) was established to
coordinate the implementation of the decisions made by
various coordinating organs
 Among the activities carried out by JAS are and not limited to:-
oFollow up with decisions of the Intergovernmental Forum, JASCCOM
and Joint Agriculture Sectoral Working Groups;
o To provide secretariat support to the Intergovernmental Forum, the
Joint Agriculture Sector Steering Committee.

21. Agriculture in structural transformation (1)
Economic development transforms an economy from one
that is largely agricultural to one that is largely
manufacturing and services
 In the normal process of economic growth, non-agricultural
sectors grow more rapidly than the agricultural sector.
 Agricultural transformation is the process by which individual
farms shift from highly diversified, subsistence-oriented
production towards more specialized production oriented
towards the market or other systems of exchange (e.g., long-
term contracts).

22. Agriculture in structural transformation (2)
 The process involves a greater reliance on input and output
delivery systems and increased integration of agriculture with
other sectors of the domestic and international economies.
 Agricultural transformation is a necessary part of the broader
process of structural transformation, in which an increasing
proportion of economic output and employment are
generated by sectors other than agriculture.

23. 23
Economics of agricultural development: Transition process
Subsistence
farming
Diversified or
mixed farming
Specialized,
modern
commercial
farming

24. Food security-definition (1)
World Food Summit definitiom (1996): food security exists
“when all people at all times have access to sufficient, safe,
nutritious food to maintain a healthy and active life.”
Includes both physical and economic access to food that meets
dietary needs and preferences.
Improved FS is important for global reduction of hunger and
poverty, and for economic development.

25. Food security-definition (2)
 Food security involves four dimensions:
 Adequacy of food supply or availability;
 Stability of supply, without seasonal fluctuations or shortages;
 Accessibility to food or affordability; and
 Utilization: quality and safety of food.
 Hence FS is not only a function of production

26. Food security-definition (3)
 FS concept has evolved –currently FS has ethical and human
rights dimensions, some countries have adopted a rights-
based approach to FS- right to food enshrined in their
constituion constitution... Over 40 countries ...current kenya
constitution.
 Agriculture- key to FS- employment in agriculture and
international agriculture agreements
 FS is seen as a prerequisite for economic development

27. Food security pillars
i. Food availability: sufficient quantities of food available on a
consistent basis.
ii. Food access: having sufficient resources to obtain appropriate
foods for a nutritious diet.
iii. Food use: appropriate use based on knowledge of basic
nutrition and care, as well as adequate water and sanitation.
27

28. Food availability
 Guaranteed in two ways: production and trade
 Production: production aimed at self sufficiency and
lowering dependency on other regions/nations
 Trade : transport possibilities and storage capacities.
International trade in agric has expanded
28

29. Stability of food supply
 The two options for fulfilling demand – food imports and
domestic production – imply several reasons for instability of
food supplies.
 A major reason for instability in food supply is high fluctuation
in food prices (price volatility). Another factor is conflicts-
increases food supply risks.
29

30. Accessibility to food
Concerns both physical access and affordability -. access
to markets (transport), cost transmission of price
developments to producers.
30

31. Causes of food insecurity (1)
 Low agricultural productivity- agricultural output in SSA has
barely kept up with population increases, and Africa now imports
25% of its grain requirements
 Inadequate access to productive assets (land and capital)- access
to credit, inputs (prices)
 Inadequate infrastructure –to ensure low food prices and efficient
markets that can respond to changes in demand; Infrastructure
reduces the costs of transporting produce and inputs, and food
storage.
 Limited well functioning markets- the international mkt is
characterised by imbalances that threaten food security –
subsidies, tariffs and trade barriers
31

32. • High population pressure on land- Continued population growth
remains one of the biggest challenges to world FS and environ.
sustainability.
• Inadequate access to appropriate technologies by farmers-
improvements in cost and quality of food storage, processing,
packaging and marketing; labour-saving technologies; and better
communications
• Effects of global trade –prices, protectionist approach, oil
• Slow reform process – policy matters, governance -Poor governance
and corruption- affect hunger levels by disempowering vulnerable
groups and seriously undermine any policies in place
32
Causes of food insecurity (2)

34. This presentation is licensed for use under the Creative Commons Attribution 4.0 International Licence.
better lives through livestock
ilri.org
ILRI thanks all donors and organizations which globally support its work through their contributions to
the CGIAR system