Agricultural Sector Perspective of Drivers of Change
It is granted the drivers of change study focus was not directed to the agricultural
sector. This could have logically limited the scope of actors relevant to this
agricultural policy process considered. The picture however needs to be completed in
view of our concern with agricultural policy formulation. In the case of contextual
factors there is a glaring omission of fundamentally important factors some of which
have actually been referred to peripherally as exogenous shock, for example drought
(p8). In the same vein, the authors aim at mapping out social and economic trends but
leave out the historical origins of policies and factors therein. Post independence
Kenyan policies especially for agriculture, and specifically land, have roots in the
colonial settler economy. There is for instance historically entrenched policy
dichotomy for estate commercial farming and smallholder farming mainly for
subsistence. The implication is to take into account the historical dimension and
consider historically derived policies/acts as contextual factors. These types of
policies call for change in the first place for drivers of change to have an impact.
In relation to demographic issues critical concerns comprise first the fact that poor
family households are large and those in the rural areas either have no land or the land
has been subdivided into units that are no longer economically viable. Secondly, there
is a fast-growing number of female-headed households not owning production assets
and living in poverty. Thirdly, population settlement has virtually followed
geographically suitable zones for crops and livestock under rainfed agricultural
production. Lastly, regional dimensions of poverty in Kenya clearly shows that the
pattern of poverty countrywide coincides with the historical population settlement
along ethnic lines.
The deterioration of infrastructure has increasingly become a major hindrance to
development initiative in Kenya generally and is indeed turning out to be a major
stumbling block to pro-poor change. Infrastructure constraints to agricultural concerns
in particular and overall rural economy development is a fundamental consideration.
A key concern in this regard is expansion and proper maintenance of various modes
of transport and communication for adequate coverage of the rural areas.
The growth of the informal sector and specifically creation of employment is now a
key feature of Kenya’s economic development. At the same time the report correctly
points out the rise of the informal sector is an indication of failed development. The
research evidence available points to informal sector enterprises being less
productive, paying lower wages and being more precarious than formal sector firms
(Bigsten et. Al. 1999; Alila and Pedersen 2001). As a contextual factor in addressing
pro-poor change, it is necessary to go beyond the now familiar general policy
prescriptions of improving access to credit, regulatory requirements, business and
skills development, etc. It is necessary in addition to take into account first, which
enterprises the poor tend to engage in given the diversity and heterogeneity of
informal sector enterprises. Secondly, the location of enterprises, mostly in the rural
areas and the key role played by agriculture, both commercial and subsistence
agriculture. Thirdly, the fact that the majority poor live in the rural areas and comprise
women, youth, landless and pastoralists. These issues taken into account are pointers
to the fundamental contribution of sound agricultural policy and development in the
rise of the informal sector.
The discussion on human development as a contextual factor tends to concentrate on
improved health and education which it is argued raises labour productivity and helps
empower citizens to engage in political processes. A direct link could be made
between the livelihoods discussion raising issues of increasing inequality,
landlessness, falling food production, HIV/AIDs pandemic etc to human
development, in the broader context of human capital development. Thus the pressing
policy issues of agricultural development regarding productivity, technological
change, access to credit and inputs etc are adequately captured. Also to be taken into
account is the important dimension of social capital formation closely related to
access to credit and kinship community organization for participation in the
agricultural development process.
Poverty Profile
The brief statement on poverty profile highlights the key pertinent issues including
incidence of poverty mainly in the rural areas; location of the poor in particular
geographical zones including ASAL, western Kenya and central highlands;
association of poverty with large households, female headed households, how
educational status and households reliance on agriculture and informal sector. It is
important to point out in relation to female-headed households being poor that a
sizeable proportion are in subsistence agriculture in which most rural poor are found
and is the only way of life known to them. In addition, the fact that most of the
women may not generally be involved in production decision-making has a
consequence of low returns to farming which in turn aggravates poverty.
It is decried that Millennium Development Goals (MDGs) as pointers to poverty
reduction efforts face grim prospect that they will not as a whole be realized in the
foreseeable future. This is a damning worry especially in the African context
including Kenya. The key problem areas in effecting pro-poor change leading to
meeting these goals are well recognized by the Kenya government in her policies on
issues of broad-based economic growth, access to markets, services and assets,
political and social empowerment, etc as the report explicitly states (p9).
Regarding economic growth it is stated that gains made in growth during the first two
decades have been erased over past twenty years of stagnant or negative growth.
There is definite truth in growth decline in recent years for the whole economy and
particularly, the agricultural sector overall. But certain subsectors of agriculture,
notably horticulture and also tea, have continued to witness gains and in the past three
or so years the whole agricultural sector has moved out of the doldrums of negative
growth. All is therefore not lost or erased, what is of grave concern is that there has
been increasing inequality. A small group continues to benefit disproportionately and
a few accumulating more wealth while the majority population becomes poorer.
Political context of Agriculture Policy making
The report while expressing optimism regarding policy reform with the installation of
the NARC government in 2002 at the same time had deep rooted reservations. It was
pointed out first, that only fragile gains have been made and these may not be
sustained in view of unstable NARC coalition politics. Secondly, the report surmised
that political elite could revert to “previous behaviour” with adverse consequences for
growth and poverty reduction. It would seem that the optimism, also expressed by
most political analysts, was borne out of the political euphoria that brought NARC to
power but has fast melted into disappointment almost by the day due to crises in the
political, economic and even social sphere. The reality unfolding has revealed that it
is the reservations that actually contained valid predictions.
The governing coalition has all along been bedeviled by irreconcilable differences
essentially because of misunderstandings on power sharing. The initial claims that
contradictory public pronouncements on policy by ministers and senior civil servants
were due to a different style of leadership and administration, compared disparagingly
to Moi regime, that delegates actual authority to ministers has been proved false. The
political power game has magnified the differences to personal and family level and
the coalition is virtually dead. The implication of this very fluid trend for policy is
ever changing power sharing arrangements yielding unstable political alliances that is
also transforming the political landscape of patron-clientelism.
In regard to the agricultural sector specifically, a number of policy reforms
undertaken especially in the 1990s shows some measure of acceptance of change by
the political elite rather than complete opposition to change to preserve the status quo.
This implies some knowledge of the reforms and also a certain measure of political
will but not necessarily a complete understanding of change especially those that were
imposed. However, full understanding of envisaged change may essentially be at the
level of top civil servants policy makers, and in this case a possible constraint is that
their policy preferences may not be in conformity to the politicians’ policy priorities.
It can therefore be said generally that the political elite at the minimum are aware of
the changes, they should know of most of them but not necessarily have a full
understanding. Furthermore whatever the level of understanding they could even be
safeguarding their political interests along party, factional, ethnic lines etc.
The politics of the agricultural sector and indeed most sectors of the Kenyan economy
are greatly influenced by patronage revolving around the presidency and his cabinet.
This can be traced way back from the Kenyatta through Moi regimes and has assumed
greater proportions in the present Kibaki regime evidenced by mega corruption in the
sugar industry and fertiliser trade. The analysis of drivers of change however puts
emphasis on political elite apparently viewed as a homogenous entity and considered
the crucial determinants of change in a patron-clientalist framework. There is no
doubt the political elite is not homogenous and the diverse factions due to differences
in wealth and political clout need to be recognised to bring to light leverage in the
policy process. The agriculture sector policy is a good example where there are
diverse interests among various policy actors based on geographical climate regions
which determine agricultural commodity produce and marketing and also coincides
with ethnic origins. It is these ethnic, producer and trade interests, both African and
Asian that place policy demands regarding coffee, tea, horticulture, sugar,
pastoralism, etc directly to the president or through power brokers. It needs to be
emphasised in this connection that the political elite acts in alliance with economic
and social elite and not in isolation. Furthermore in some cases these alliances have a
long history although there is emerging realignments of actors in recent years. A
significant indication of this trend is cooptation of former KANU regime key players
and power brokers in the agricultural process into the NARC regime. The
consequence is continuity rather than significant change in the agricultural policy.
What shapes the policy environment?
The paper by Smith and Karuga (2004), reports on the study commissioned by the UK
Department for International Development (DfID). It examined the factors that shape
the policy environment in Kenya’s agricultural sector. A number of factors are
identified as shaping policy in the sector. The paper argues that the patrimonial state
in Kenya, which is typical of many states in Africa, has profoundly influenced
agricultural policy formulation processes over the past 40 years of independence
through a number of ways, namely, partisan exercise of presidential powers, linkage
between ethnicity and agricultural production systems, the quest for rent extraction
and patronage by favoured groups/individuals, what is referred to as the anti-poor
bias, the disregard of evidence based policy formulation, and expectation of access to
donor funding.
i. The influence of the patrimonial state
Kenya’s political system concentrates power in the presidency which means that
virtually every major policy during formation, adoption and implementation has
required presidential intervention if not approval. This has been the case for all the
three regimes, from the Kenyatta, through Moi and now Kibaki NARC regime. In the
various stages of policy formulation different policy actors at national and sub-
national levels have to recognise the pivotal role of the president and his key advisers
and close associates revolving around the so-called “kitchen cabinet” who control
accessibility to him. Kenya’s political system, with the concentration of power in the
presidency, determines how policy is made. The executive commonly has the final
say on policy, which in the case of the presidential directive particularly disrupts even
earlier policy positions. The directives have to be implemented and if not earlier
budgeted for, have to be fitted somewhat in the existing budgetary framework (Smith
and Karuga 2004).
Agricultural production systems in Kenya are defined by the country’s diverse
topography and rainfall patterns into a number of agro-ecological zones suitable for
different agricultural production systems. It has been argued by some that these
productions have over the years been associated with particular ethnic groups.
Economic rent and patronage has also shaped the agricultural policy environment.
Rent in the agricultural sector is created by artificial shortages through licensing and
restrictions applied to the production and marketing of agricultural commodities,
inputs and services. Most effectively, patronage is dispensed by granting licences, or
the authority of granting licences and hence the rents, to favoured individuals and/or
groups. This mainly explains the reason why the heavy regulatory framework and
government involvement with almost all agricultural legislation is maintained. This
was first used by the colonial regime where the purpose had been the protection of
European settler farmers, but it is a phenomenon, which has persisted with the
subsequent regimes after independence.
Smith and Karuga (2004) argue that this relationship between ethnicity and
agricultural practices has shaped agricultural policy to a large extent whereby policy
formulation processes at times have tended to be influenced in favour of and/or
neglected given products apparently to favour or otherwise penalise given ethnic
groups. There is however little empirical evidence to this effect. This is essentially
attributed to historical factors underlying cash crop production for export. In the post
independence period, these factors have been used to meet parochial ethnic interests.
It is however important to observe that other factors apart from the patrimonial state
have played a significant role in influencing agricultural policy. The effect of
domestic agricultural policy especially on export crops have largely been determined
by external forces especially conditions in the international markets. Coffee is a case
in point where conditions in the international coffee market and weather conditions in
Brazil have influenced the benefits of Kenya coffee farmers. The collapse of the
International Coffee Agreement partly contributed to the decline in the coffee sector.
One of the main arguments put forward by the proponents of agricultural marketing
reforms in the late 1970s, was that agricultural sector was overly penalised especially
through the domestic marketing system, to the extent that agricultural exports suffered
from negative net protection. This contributed to the stagnation of the sector. Biased
agricultural development policies also emphasised only high potential areas, at the
neglect of low potential and marginal areas. The diverse agro-ecological potentials
have led to differences in opportunities influenced by various economic forces. These
forces have over time led to concentration of economic activities in some areas
compared to others. High agricultural potential areas have more investments and income
earning opportunities relative to the low potential and marginal areas. The nature of
policies pursued and implemented overtime is a major factor in this regard. Policies
especially on investment and agricultural development have tended to be biased towards
high potential agricultural areas, and in certain cases specific geographic areas. This has
resulted in wide regional differences in access to infrastructure and certain agricultural
services (UNDP 2002).
The patrimonial policy-shaping environment in the agricultural sector has not been pro-
poor. Little incentives have existed for the Kenyan political elite to listen to the poor.
They are basically considered when political support is sought and during such times the
elite resort to pro-poor populist policies, but which they quickly forget once political
power is attained. The result of this has been that rents have been extracted regressively
from the poor directly through lower farm-gate prices for their produce, higher prices for
food and inputs and indirectly through lower wages and/or rent for land.
Other factors identified by Smith and Karuga (2004) as having played some roles include
the political economy of agriculture and donor assistance priorities. The first phase of the
Kenyatta regime displayed signs of genuine interest in farming and the success of it, all
embodied in the vision to reduce poverty, ignorance and disease. At the start of this
phase, technocrats comprising Kenyan nationals and expatriates, worked with the
political elite to formulate and implement policy. Land settlement schemes and tenure
policies resulted in notable success in this phase. The development of smallholder
farming especially on cash crops through the purchase of land, provision of support
services, like research, extension, animal health and credit received considerable
attention. The initiatives made to evolve agricultural policy during this period were
demand driven responding to local stakeholder needs. From then onwards, most policy
initiatives have been supply driven and significantly influenced by donors, reaching a
climax in mid 1980s with the introduction of Structural Adjustment Programmes (SAPs).
Nevertheless, the emphasis on import substitution industrialisation strategy adopted over
the period to the mid 1980s, undermined the sustainability of achievements realised in
agriculture during the first decade of political independence.
The argument has however always been that during the post independence period, the
policies adopted penalised agriculture through the levying of various taxes especially for
the export commodities which suffered from negative net protection. The over protection
of industry also penalised agriculture through negative terms of trade between agriculture
and other sectors. These biases can be seen as contributing to relatively high levels of
poverty in the rural areas where agriculture is the main source of livelihood, and by
extension, high inequalities between rural and urban areas. The penalisation of
agricultural exports, together with the protection for import substitutes that failed to lead
to increased domestic efficiency in production, were some of the main arguments for
structural adjustments programmes initiated in the late 1970s.
It has also been argued that the failure to sustain achievements made in agricultural
sectors during the first decade can be attributed to a number of other factors. These
include the end of easy options like no breakthroughs in agricultural research like high
yielding varieties, no room for further subdivision of large scale farms, decline in
provision of extension services and inputs and the decline in donor support for targeted
agricultural programmes. Immediately after political independence, the strategy for the
development of agriculture as outlined in the Sessional Paper No. 10 of 1965 was to
revolutionise agriculture through provision of extension services, training, and
introduction of modern farming techniques. This philosophy therefore influenced
subsequent agricultural policies as reflected in various policy documents. A number of
special development programmes, were initiated largely with donor support to enhance
the development of agriculture and the rural areas in general. A careful review of the
initiatives however show that they suffered from a number of policy weaknesses. These
include the insufficient attention to involve the stakeholders and lack of coordination
among different actors. Another factor is that most of these initiatives were donor driven
and were therefore not integrated into the long term development country’s agriculture
(UNDP 2002).
In the mid 1970s and 1980s Smith and Karuga (2004) argues, considerable donor - driven
interventions influenced policy. The district focus for rural development program
(DFRD), akin to the current devolved funds, established in 1983 was preceded by
considerable donor investment in Integrated Rural Development programmes. Donors
also invested substantially in rural infrastructure, like rural access roads, storage facilities,
production and marketing facilities like sugar and coffee. Disappointingly, this period
also saw increased political patronage and self-interests of the elite seriously eroding
interest in policy advice. The structural adjustment programs (SAPs) of the 1980s for the
agricultural sector focused on market liberalization and price decontrols, which were
expected to reduce opportunities for rent extraction through the marketing chain by the
elite. O’brien and Ryan (2001) considered the attempted reforms on agricultural pricing
and marketing as the most difficult era of policy reform throughout the SAPs period. It
created mistrust and the highest level of misunderstanding between the government and
donors and represents the area where the gap between policy formulation and
implementation was widest. Implementation of reforms in agricultural sector were largely
tied to release of donor aid.
The next phase of the 1990s was one of historic reduction of donor funding labelled by
some the “donor-do-nothing phase”. Multilateral donor support in particular was
withdrawn in 1991 due to poor governance and corruption issues. At any rate,
considerable policy related activities in the agricultural sector such as price decontrol,
market liberalization and trade policies were undertaken during this time. Elimination of
price controls in 1994 marked successful policy reform efforts. In the same year, the
government and a joint donor group began an ambitious reform agenda in the agricultural
sector to establish an agriculture sector investment program (ASIP) - a holistic financial
and operational sector support policy. The intention regarding ASIP was to improve the
effectiveness of donor assistance by progressing from project-based approaches to
broader forms of public expenditure support. However, the unfavourable economic and
political environment in which the ASIP was initiated resulted in failure and poor
outcomes.
Important lessons were, however, drawn from the failed initiative, which are relevant for
current agricultural policy formulation. First lesson learnt was that it is extremely
important to cultivate local ownership and commitment to policy reforms or else they
fail. The donors did not attempt to cultivate local ownership either within government
or the wider community for the reforms they wanted introduced. Second local factors like
the political economy that could have been crucial for the successful implementation of
the proposed policy reforms were neglected, downplayed and ignored. Third, donors
made the mistake of not identifying and establishing access to key decision makers. They
often thought that by talking to the government they had gained this access only to dawn
later on them that they were in deed talking to individuals without influence in policy
formulation, a fact that is typical of patrimonial states. Fourth, it was learnt that it is
important to fully cost policy proposals and initiate methods to integrate the proposals
into the budgetary process and last, donors should appreciate capacity gaps in civil
service and the necessity, therefore, of introducing a phased out approach to complex
policy issues.
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http://siteresources.worldbank.org/INTKENYA/Resources/donor_statement_agricultu re
Joint Statement of Development Partners for the Kenya
