Agricultural Policy in Kenya: Issues and Processes

A paper for the Future Agricultures Consortium workshop,

Institute of Development Studies, 20-22 March 2006

by

Patrick O. Alila and Rosemary Atieno

Institute for Development Studies

University of Nairobi
P.O. Box 30197, Nairobi, Kenya
Email: r.atieno@kenyaweb.com

Final version, July 2006

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The authors would like to acknowledge the contribution of Alfred Ouma Shem, in compiling some
of the information used in writing this paper.
Contents
Page

Acronyms and Abbreviations 2

1. Introduction 3

2. Key Policy Issues 3

Key Policy Concerns
Possible Concerns
Consistency with SRA priorities

3. Structures and Actors Affecting Agricultural Policy 15

Drivers of Change
What Shapes the Policy Environment?
Emerging Agricultural Policy Formulation Processes
SRA and the Various Policy Making Nodes
Case Studies

4. Sufficiency of Structures and Processes to Implement SRA 33

5. Table 1: The Relationship between the Drivers of Change

Considered 16

6. Appendix 38

7. References 39

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Acronyms and Abbreviations

ASAL Arid and Semi-Arid Lands

ASIP Agricultural Sector Investment Program
CBK Central Bank of Kenya
CBO Community based Organization
CDF Constituency Development Fund
COMESA Common Market for Eastern and Southern Africa
COTEPA Coffee and Tea Parliamentary Group
DfID Department for International Development
DFRD District Focus for Rural Development
EAC East African Community
EU European Union
ERSWEC Economic Recovery Strategy for Wealth and Employment Creation
FBO Faith Based Organization
FPE Free Primary Education
GDP Gross Domestic product
GOK Government of Kenya
ICC Inter-ministerial Coordination Committee
IPAR Institute of Policy Analysis and Research
KARI Kenya Agriculture Research Institute
KIPPRA Kenya Institute for Public Policy Research and Analysis
KPCU Kenya Coffee Planters Co-operative Union
KTDA Kenya Tea Development Authority
LATF Local Authority Transfer Fund
MDGs Millennium Development Goals
MOA Ministry of Agriculture
MOCD Ministry of Co-operative Development
MOF Ministry of Finance
MOL Ministry of Lands
MOLG Ministry of Local Government
MP Member of Parliament
MTEF Medium Term Expenditure Framework
MVP Millennium Villages Project
NARC National Rainbow Coalition
NGO Non Governmental Organization
NPEP National Poverty Eradication Plan
PER Public Expenditure review
PIU Project Implementation Unit
PRGF Poverty Reduction and Growth Facility
PRSP Poverty Reduction Strategy Paper
REF Rural Electrification Fund
RMLF Road Maintenance Levy Fund
SAPs Structural Adjustment Programs
SRA Strategy for Revitalizing Agriculture
SUPA Sugar Parliamentary Group
SWAP Sector Wide Approach
TA Technical Assistance
TIC Technical Inter-ministerial Committee

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1. Introduction
Agriculture remains the backbone of the Kenyan economy. It is the single most
important sector in the economy, contributing approximately 25% of the GDP, and
employing 75% of the national labour force (Republic of Kenya 2005). Over 80% of the
Kenyan population live in the rural areas and derive their livelihoods, directly or
indirectly from agriculture. Given its importance, the performance of the sector is
therefore reflected in the performance of the whole economy. The development of
agriculture is also important for poverty reduction since most of the vulnerable groups
like pastoralists, the landless, and subsistence farmers, also depend on agriculture as their
main source of livelihoods. Growth in the sector is therefore expected to have a greater
impact on a larger section of the population than any other sector. The development of the
sector is therefore important for the development of the economy as a whole.

The importance of the sector in the economy is reflected in the relationship between its
performance and that of the key indicators like GDP and employment. Trends in the
growth rates for agriculture, GDP and employment, show that the declining trend
experienced in the sector’s growth especially in the 1990s, is reflected in the declines in
employment and GDP as a whole (fig. 1. in Appendix). Policies that affect the
performance of the sector have important implications for the economy.

Policies for agriculture consist of government decisions that influence the level and
stability of input and output prices, public investments affecting agricultural
production, costs and revenues and allocation of resources. These policies affect
agriculture either directly or indirectly. Improved agricultural production has been
seen as one of the overall objectives for poverty reduction in the country. The
objectives of agricultural sector strategy have been increasing agricultural growth,
seen as important for increasing rural incomes and ensuring equitable distribution.
Due to limited availability of high potential land, it has been envisaged that increasing
agricultural production will have to come from intensification of production through
increased use of improved inputs, diversification especially from low to high value
crops, commercialisation of smallholder agriculture, and increased value addition
through stronger linkages with other sectors. In the following sections, we review
some of the key policy issues and concerns with respect to the sector’s development.

2. Key Policy Issues

Agricultural policy in Kenya revolves around the main goals of increasing

productivity and income growth, especially for smallholders; enhanced food security
and equity, emphasis on irrigation to introduce stability in agricultural output,
commercialisation and intensification of production especially among small scale
farmers; appropriate and participatory policy formulation and environmental
sustainability. The key areas of policy concern, therefore, include:

• Increasing agricultural productivity and incomes, especially for small-holder

farmers.
• Emphasis on irrigation to reduce over-reliance on rain-fed agriculture in the face
of limited high potential agricultural land.
• Encouraging diversification into non-traditional agricultural commodities and
value addition to reduce vulnerability.

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 • Enhancing the food security and a reduction in the number of those suffering from
hunger and hence the achievement of MDGs.
• Encouraging private-sector-led development of the sector.
• Ensuring environmental sustainability.

Key policy concerns

i. Declining agricultural performance: Declining performance of the sector in
terms of its growth, has been one of the major concerns facing policy makers and
those having interests in the sector. The performance of agriculture, which
remains the backbone of the economy slackened dramatically over the post
independence years from an average of 4.7% in the first decade to only below 2%
in the 90s. This decline culminated in a negative growth rate of -2.4% in 2000. As
a sector that engages about 75% of the country’s labour force, such a decline
implies lower levels of employment, incomes and more importantly, food
insecurity for a vast majority of rural Kenyans. It is instructive to note that a
sizeable proportion of the rural labour force (over 51%) are engaged in small-scale
agriculture and that women are the majority in the sector. A decline in agriculture
has thus far reaching implications in terms of employment and income inequality
as well as food security for the country (UNDP 2002).

• Despite its declining performance, agriculture has continued to support the

livelihoods of over two thirds of the labour force. This was mainly because the
decline in agriculture’s performance since the mid 1980s was not matched with
any real transformation in the economy which would have ensured that the share
of other sectors in GDP and employment increased as agriculture’s share declined
(ILO 1999). As a result, incomes have continued to decline as poverty has
continued to entrench itself in the rural areas.

• It is recognised that low productivity, reflected in low yields per acre of land is
among the main sources of high unit production costs in agriculture in Kenya.
Among the reasons that explain this is the inability by farmers to afford readily
available modern technologies of farming. The objective of policy makers in this
area, therefore, is to increase output using improved technologies of farming,
which would inevitably increase farm productivity and hence farmers incomes.

• Agricultural productivity can be increased, farmers incomes raised, more people

fed and in deed, the general economic welfare enhanced. The SRA (2004-2014)
recognises this and that to improve smallholder farm productivity as well as
increase incomes, smallholder farming must be changed from producing for
subsistence to commercial profitable businesses. It will then attract private
entrepreneurs willing to invest therein and employ modern farming techniques
necessary to achieve increased productivity. When agriculture is technology-led,
not only is food security achievable but also poverty alleviation is also possible.
Inability to afford new and readily available farming technology, however, is
partly blamed on poor access to financial resources, especially in a nation where
the majority, and not only farmers, are poor and the financial markets have not
developed to support agricultural investment.

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 • Poor marketing facilities and institutions are some of the constraints to increased
agricultural production. The major marketing constraints comprise high
transportation costs due to dilapidated roads, improper handling, poor storage
facilities and wastage. These result in fluctuations in both productions and
incomes. For livestock marketing, limited cattle holding grounds and meddling
with stock-routes has limited access to markets. Promoting marketing of
agricultural produce will require that holding grounds, watering points, stock-
routes and livestock markets be developed; the private sector be encouraged to
invest in slaughter houses and cold storage; local authorities in collaboration with
the private sector invest in storage facilities; the government provides all-weather
rural access roads, improve communication facilities and market information
systems among others. The two sets of interventions, in enhancing agricultural
productivity and marketing systems as recognized too by the SRA (2004-2014)
will lead to agricultural growth.

ii. Limited high potential agricultural land and over-reliance on rain fed
agriculture. Only about 17% of the country’s land is high and medium potential
agricultural land where most intensive crop and dairy production take place. The
rest is arid and semi arid, not suitable for rain fed agriculture. This means that
increasing agricultural production will have to come from intensification of land
use in the high and medium potential lands. The high reliance on rain fed
agriculture vulnerable to weather variability leads to fluctuations in production
and incomes especially for rural areas. There is low utilisation of irrigation
potential with only less than 7% of the cropped land under irrigation 1 . Poor rains
always lead to poor agricultural performance and the subsequent famines affecting
large sections of the population. This spills over to negatively affect agricultural
incomes and hence investments in rural areas.

• Droughts and floods have increased in frequency and intensity in the immediate
past three decades, resulting in high crop failure and livestock deaths. The current
ravaging drought is a stark reminder to this. In addition, increased land
degradation has also decreased land resilience thereby exacerbating the effects of
droughts and floods leading to devastating famines that claim increasing human
and livestock lives. Recurrent droughts, floods and the associated losses are
concerns that have featured much in public debate in the recent past.

• Over reliance on rain-fed agriculture, therefore, can be seen as one of the major
causes of food insecurity. Despite the enormous potential for irrigation, irrigation
based farming is not widely practiced. It is developed under large-scale irrigation
schemes for crops like rice a few farmers have their own irrigation systems for
export crops like horticultural produce and a limited number of smallholders
practice small scale irrigation farming. This has been due to low utilisation of
water, lack of efficient technologies, destruction of rainfall catchment areas, poor
management of government irrigation schemes, degradation of surface water,
uncontrolled exploitation of underground water, leading to a drop in the water
table and increase of water extraction costs, sluggishness in permit allocation for
use of water, the lop sided Nile Treaty among others. Putting more emphasis on

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Kenya has 540,000 hectares of irrigable land but less than 90,000 hectares have been irrigated (SRA
2004).

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 irrigation is important in increasing arable land, productivity per acre of land,
stability of agricultural output during adverse weather conditions and stemming
famines achievable only with addressing factors that hinder irrigation efforts.

iii. Limited diversification of Agricultural production: Narrow base of agricultural

products, especially exports leads to high vulnerability of incomes to the
international market trends. The sector is characterised by weak vertical
integration, made worse by weak institutions and support services for agricultural
exports. Only a few commodities (coffee, tea, dairy, maize, wheat, beef, and
horticulture provide livelihood for over 85% of the population while coffee and
tea alone provide 45% of the wage employment in the sector. Closely linked to
this is the narrow base for agricultural exports (UNDP 2002).

• Primary agro-based products constitute about 51% of the country’s total exports,
with the value of exports from agricultural sector accounting for 64% of total
exports (Kenya 2003)a. Despite the potential for exports of fresh produce and the,
it only accounts for 3% of the total production of fresh produce. This is mainly
due to limited diversification, and low value addition in agricultural exports. The
challenges to the diversification of agricultural exports, which hinder the
realisation of the potential include; poor outdated technology that hinders the
processing of agricultural products into high value products, limited access to
breeds with high yield potentials, WTO regulations that increase the cost of
imported seeds and planting materials, limited capacity by quality assurance
bodies to ensure compliance with international standards and the imposition of
non tariff barriers to trade like sanitary and phytosanitary standards.

• Kenya has not exploited its agricultural potential to the full which is necessary to
diversify into no-traditional commodities. This would improve and stabilise
agricultural output, productivity, incomes, significantly check famine and thus
food insecurity. The country has varied climatic conditions suitable for diversified
agriculture into specialised niches like horticulture, herbs, spices, fruits and even
lean beef, but which have not been exploited to the fullest despite very good
efforts made in horticulture and fruits. There is also a vast fish potential that has
remained unexploited. The inability to effectively monitor and enforce compliance
and rules governing offshore territorial waters has curtailed full exploitation of the
offshore fishing potential. However, full exploitation of this potential has been
hindered too by lack of equipment to undertake deep-sea fishing and the
availability of more lucrative alternative sources of livelihood found in the tourist
industry.

• Produce from agriculture is commonly marketed with minimal processing

resulting in low revenue earning capacity to farmers, fishermen and creation of
fewer employment opportunities for citizens. Efforts should be made to enhance
agro-processing to increase value of agricultural exports and enhance their income
earning potential. Some of these measures recognized by SRA (2004-2014)
include, provision of appropriate incentives for establishing agro-industries in
rural areas; focused research on value addition regarding processing, storage and
packing of agricultural produce; promotion of partnerships between smallholders
and agribusiness; improvement of supportive infrastructure, e.g., rural access
roads, rural electrification, water and telecommunications; and undertake training

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 for farmers and farmer institutions in value addition among others. The media has
recently highlighted the plight of mango farmers who cannot market their bumper
produce.

• There is also limited exploitation of the regional market potential. The regional
markets that have resulted from regional integration, e.g., in the East African
Community (EAC), Common Market for Eastern and Southern Africa
(COMESA), etc., and trade liberalisation are yet to be exploited to a significant
level. The government needs to encourage trade in agricultural produce across
borders, improve and/or provide quality control services, capacity build farmers
and fish traders on sanitary, phytosanitary and zoo sanitary measures and
international standards, build effective systems to gather and utilize information
on external market opportunities, enhance efficiency in port and airport handling
services to eliminate delays and costs, designate disease free zones to speed up
access to export markets for livestock and their products. Furthermore, the country
can become a regional hub for exports to the opened up markets through regional
integration and trade liberalisation to the Far East as well.

iv. Poor and inadequate rural infrastructure: Poor infrastructure including poor
rural roads, markets and transport systems that result in high transactions costs for
farmers and inaccessibility to input and output markets are among the main
concerns for the sector. The performance of the sector is affected right from the
production to marketing domestically and even internationally. For exports this
means lack of sustainable supply of raw materials due to uncontrolled production,
with gluts alternating with shortages as well as uncompetitiveness since high
transport costs are reflected in high prices. Poor infrastructure has also contributed
to the poor market integration in the country.

• Although agriculture has over the years contributed more than proportionately to
GDP growth in comparison to other sectors, this has been partly due to
infrastructure established through efforts made for specific commodities. Some of
these include provision and maintenance of rural access roads to facilitate the
movement of agricultural produce to markets, establishment of agro-based
industries to increase the value of agricultural produce, education, training and
extension services to enhance the adoption of modern farming techniques,
establishment of local market centres to open up markets for farmers produce,
rural electrification to facilitate agro-processing and safe storage for the produce.
Most of these services have been provided centrally by the government through
various concerned implementing ministries, until when new fiscal reforms were
initiated after the realisation that the productivity of the funds ware not very
effective.

v. Inadequate and declining research in agriculture: During the first decade of

independence, agricultural research emphasised cash crops and major food crops
led to major break throughs in these commodities, which largely contributed to
increased agricultural production. There was however insufficient appreciation of
the economic aspects of small scale farming, leading to research being based on
input levels that were uneconomical to the small farmers. Productivity from small
scale farms has therefore been lower than from the large scale farms. Agricultural

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 research was also not coordinated, until the creation of the national scientific and
research council. Training for agricultural extension staff also expanded.

• Inadequate research, especially demand driven research, coupled with ineffective

extension and delivery system of research findings has been yet another concern.
The decline in government allocation to the sector has contributed to this
continuing trend. The results here include decline in other agricultural services
like artificial insemination services, lack of good quality seed and planting
materials for farmers. High costs have led to inadequate application of improved
purchased inputs on most of the farms. A major concern with respect to research
is also that the limited research activities generally cover only export crops,
ignoring the essential food crops. The research system in place for agriculture also
faces a number of problems like lack of strong research-extension-farmer
linkages, inadequate funding, and high turnover of research scientists due to poor
incentives.

• The provision of services has also been affected by too many official interventions
especially in commodity marketing and pricing, characterised by proliferation of
parastatal activities in pricing controls of agricultural commodities. Institutional
failure due to lack of capacity by the private sector to take over the functions
previously performed by the state after liberalisation of the sector. Limited
investment and coordination by local research institutions like KARI and
institutions of higher leaning is also a concern.

• A number of constraints have however hindered further progress in research. Lack

of well defined priorities that reflect policy pronouncements, lack of monitoring
and evaluation, the low use of trained scientists from institutions of higher
learning and low funds for research have all contributed to the concern. The
ability of Kenyan agriculture to play its role in the economy depends on the
research agenda that the country charts out for its national agricultural research
system. The international agricultural research centres should therefore only
complement local research output. Although agricultural research is currently
coordinated by Kenya Agricultural Institute (KARI), a critical problem is
availability of research funds. Research expenditure as a percentage of GDP
remains below 10%, although most financing has been done by donors.

vi. Agricultural sector financing and related activities. The lack of finance for
agriculture limits increasing production and investment in value addition activities
in agriculture. Inaccessibility to credit especially for small scale farmers and
especially women has limited the range of activities, the type of technology used
and the scale of operations that a farmer can adopt on his farm. Agricultural credit
available to farmers has tended to diminish over time since independence.
Although there have been a number of institutions that have been involved in
agricultural financing over time, actual investment in the sector has been small.
Thus to improve agricultural productivity and incomes, especially of smallholders
most of whom reside in rural areas, access to affordable financial credit is
important to enable them acquire new farming technology - a necessary input in
realising the higher productivity goal.

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 • There has been a bias of credit towards large farms and cash enterprises. Poor
mobilisation of financial resources through weak cooperative system, and grass
roots organisations needs to be addressed.

vii. Limited development and exploitation of the livestock sector. Despite the long
recognised potential of the livestock sector, this potential remains largely
unexploited. Kenya’s livestock sector contributes 10% to the GDP and about 42%
of total agricultural output (Republic of Kenya 2002). It supplies the domestic
requirements of meat, milk, dairy products and other livestock products, and
accounts for about 30% of all marketed agricultural output. The sector also earns
foreign exchange through the export of live animals, hides and skins, dairy
products and processed pork products besides providing raw materials for agro-
based industries. It employs 50% of total agricultural labour force. Although
livestock keeping is commonly practiced through out Kenya, more than 60% of all
Kenya’s livestock is found in the ASAL where it employs 90% of the local
population. The livestock sector is charged with ensuring self sufficiency in
livestock products (Republic of Kenya 2002; Ministry of Livestock and Fisheries
Development 2006).

• The development of the livestock sector is however constrained by a number of

factors. Recurrent droughts that lead to massive losses in livestock and therefore
livelihoods for the pastoralists are a major concern. This, coupled with lack of
reliable markets has seriously undermined efforts to realise the full development
potential of the sector. Since the liberalisation of domestic marketing of
agricultural products, which reduced the role of marketing boards like Kenya
Meat Commission (KMC) and Kenya Cooperative Creameries (KCC), the
marketing of livestock and livestock products was left to private traders, who
lacked the capacity to take over the role of the state corporations (ILO 2002). The
marketing problem has been aggravated by the poor state of infrastructure, which
increases the marketing costs.

• The high costs of inputs and veterinary services have also constrained the
development of the sector. The withdrawal of government subsidies as part of
economic reforms meant that many farmers became unable to afford such
services, leading to reduction in their use. The privatisation of artificial
insemination services has in effect increased costs, which has led to decline in the
use of such services. This has led to the problem of poor quality livestock through
problems of inbreeding and limited use of improved inputs. Diseases and pests
also pose a challenge to the sub-sector due to weak inspectorate and quality
assurance as well as lack of enforcement of the existing rule and regulations
governing the movement of livestock and their products.
• The high potential for exports from livestock and livestock products remains
unexploited due to inadequate capacity in standardisation and quality control as
well as inadequate processing capacity. This has meant that the livestock sector is
largely dominated by primary production with little processing of produce. The
shortage of high quality breeding stock acts as a further constraint to the
exploitation of exports from the livestock sector. The lack of quality control and
standardisation of livestock products has significantly hindered access to foreign
markets as local farmers fail to meet export health standards and quality
requirements.

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 • Due to pressure from other competing land uses, the high and medium potential
areas have been turned into growing of subsistence crops. This has meant that
alternative management systems for livestock production have to be adopted.
While in the high potential areas livestock production is threatened by population
pressure, in the ASALs, it is problems of land degradation, droughts, and soil
erosion that are the main threat. Inadequate water facilities, poor marketing
infrastructure and poor animal husbandry practices as well as poor slaughtering
practices limits the quality of hides for exports.
• Other policy concerns in the livestock sector arise from the marketing of products
like dairy. Milk marketing was liberalised in 1992, leading to the proliferation in
the market of private processors and informal traders/hawkers of raw milk.
Critical issues that have emerged influencing the development of the sector
therefore include, marketing arrangements for private traders, product quality
control and assurance as well as the management of strategic reserves. The
production and marketing of beef products has been affected mainly by the
collapse of the KMC. Although Kenya has the potential to meet her domestic
demand for meat and realise a surplus for export, local producers continue to face
problems of drought, and poor marketing outlets that limit their production. Poor
timing of livestock sales, with majority of pastoralists selling their stock under
very desperate circumstances, is another problem.
• There is therefore need for programmes that enhance access to appropriate
production technologies and inputs as well as increasing the efficiency and overall
productivity of the sector.
• The revitalisation of the livestock sector will therefore require among other things,
the rehabilitation of marketing infrastructure facilities, facilitating the private
sector to invest in both primary and secondary livestock processing plants close to
production areas. It will also be necessary to develop programmes that promote
and support the production of feeds that augment the conventional feeds. Reviving
and privatising the KMC to provide a market outlet for livestock will also
contribute to reducing the vulnerability of livestock farmers especially pastoralists
whose livelihoods depend on livestock. This is especially important in addressing
the problem of food security in the ASALs.

viii. Lack of a comprehensive land use policy: This has over time led to difficulties of
access and utilisation of land. The country lacks a clearly articulated land policy
with the result that issues like land use, management, tenure reforms and
environmental protection are inadequately addressed through the existing systems
(Kenya 2001). Land is an important resource in agriculture in Kenya and lack of
access to or ownership of land is considered one of the major causes of poverty
(UNDP 2002). The scarcity of agricultural land makes the issue of land use policy
a critical one. Only less than 20% of the country’s land surface is high and
medium potential. The PRSP identifies the improvement of land uses management
as one of the ways of improving agriculture.
• Issues on land that are relevant to agricultural development include conflicts
between different land uses due to the lack of a coordinating body that can ensure
harmony between different users (Kenya 1994). Harmonisation of different
development activities that can foster optimal land use and control of
environmental degradation is a critical issue..
• The failure by the existing land conservation policy and the need to have attendant
laws to generate environmentally sound land use habits for sustainable

10
 development is a relevant concern for agriculture. There has been an over
emphasis on the protection of property rights and inadequate provision for the
regulation of the rights in the interest of soil conservation. This is compounded by
the lack of a well coordinated land management policy with respect to various
land uses. The existence of numerous legislations and complex procedures
relating to plan approvals, subdivisions and registration prevent the various
government agencies from keeping up with the demand for their services.
• The lack of accurate and up to date database information on land is also a critical
issue. Most information on land continues to originate from the districts.
• The problems of pastoral land tenure relations, with its roots in the dispossession
of pastoral communities of their lands by the colonial administration, has
implications for agricultural development especially food security and
sustainability. There should also be security and equity in access to and use of
land in pastoral areas. There is therefore need to provide a legal framework that
defines and recognises pastoral land and related natural resource rights. There is
need to recognise pastoralism as a legitimate land use system as the basis for legal
backing.

Possible Policy Concerns

• Maize is the main staple commodity in the country and therefore important for
food security. National food policy and the ability to meet the country’s food
security needs is therefore a major concern with respect to maize. The majority of
Kenyans are food insecure due to inadequate strategic reserves in major food
commodities, and lack of proper distribution systems that can facilitate the
efficient movement of food commodities from surplus to deficit areas. They have
no access to adequate quantities of food and even what they have access to, has
poor nutritional value. The main cause of shortfalls especially in maize has over
time resulted from the low use of fertilisers, lack of finance and the withdrawal of
other services like extension by the government. Lack of guarantee for markets for
maize produce has compounded the problem as farmers have no incentive to
invest in productivity increasing practices. The incidence and prevalence of food
insecurity, however, is greatest in the arid and semi-arid lands (ASALs) due to
poor resource endowment and scanty and unpredictable rainfall patterns. While
the area is endowed with livestock production potential, lack of markets for
livestock has increased the vulnerability of pastoralists whose livelihoods depend
on livestock products but are negatively affected by weather variations. This has
compounded the problem of food security in the ASALs. Pastoralists often remain
with inadequate livestock to sustain their livelihoods after prolonged droughts

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• That famine is a frequent phenomenon in the country is a source of great concern
to policy makers while its regular highlights in the media reflect the media’s
distaste for it. It is not easy to reconcile that in a country where agriculture is the
mainstay of the economy, famine is so frequent. Some of the famines experienced
could have been avoided or their impacts significantly mitigated. These include,
famine brought about by drought, floods and rapid deforestation. Inadequate early
warning systems, disaster unpreparedness, farming practices that do not hinge on
environmental sustainability, rampant destruction of rainfall catchment areas
especially through rapid encroachment of human settlements, lack of
implementation of elements of the food security policy are some of the culprits of
the frequent occurrence of famine. Further, poor logistics worsen famine
management even with bumper harvests in the food basket regions of the country
particularly the north rift. The current ravaging famine in the ASALs would have
been significantly checked if logistics were right to move surplus food from the
basket zones. Famine amidst plenty reflects generally on the country’s state of
unpreparedness in the face of a disaster. Measures to address these handicaps and
those that would match population growth to food production that include family
life education - family planning - ought to be adopted.

• Increasing importance of small scale agriculture in the sector, coupled with its
declining productivity and low incomes are a concern especially relevant to
poverty reduction efforts. The small scale sector contributes 75% of total
agricultural production and over 70% of the total marketed production, reflecting
the increasing importance of smallholder farms in agricultural production, and
absorbs about 51% of the total labour force in the sector. Food production also
accounts for a major share of small scale agricultural production (Republic of
Kenya 1999). The importance of agriculture especially smallholders as a source of
livelihoods in the rural areas is therefore a major concern for agricultural and rural
development. This is because of the high poverty levels in the rural areas
especially among smallholder subsistence farmers.

• The significant involvement of women in small scale agriculture is an important

factor among measures to improve agricultural performance. Women provide 75%
of the labour force in small scale agriculture and manage 40% of the small scale
farms. Upto 2/3 of the female population in rural areas is engaged in subsistence
farming. Despite women’s significant contribution to agriculture, they face a
number of constraints, especially limited access to productive resources like
improved inputs, extension, and marketing facilities which limit their productivity.
Institutional factors also limit women’s access to financial services. The
expansion of rural investments like infrastructure is likely to have more beneficial
effect on women, the majority of whom are among the.

• The increasing disparities in opportunities and incomes between agriculture and

rural areas on the one hand and non agricultural urban areas on the other hand is
also a concern. These disparities have meant that poverty levels have continued to
be higher in the rural areas where the majority of the population reside.

• Environmental degradation and rising poverty is a major concern relevant to

agricultural development. As agricultural land continues to be scarce, and rural
poverty continues to increase, agricultural practices that conflict with the

12
 environment have increased. High levels of poverty in the rural areas, where
agriculture is the main source of livelihoods, have significant implications for
environmental sustainability. The poor engage in farming practices that negatively
affect the environment and reduce the potential for ASALs. With increased
pressure on the natural resource base and the need to increase productivity, the
challenge remains that of intensifying land use while enhancing the long run
productive capacity of the resource base. Low productivity, with pressure on the
natural resource base has led to migration into Arid and Semi Arid Lands
(ASALs) with inappropriate farming practices and negative environmental
consequences. A big proportion of the country, (84%), is classified as ASALs and
unsuitable for rain-fed agriculture. But even in these regions, most of the activities
people engage in are agricultural. Livestock keeping predominates, with limited
small-scale crop farming practiced in some areas.

Consistency of policy concerns with SRA priorities

The key policy concerns discussed so far are to a large extent consistent with SRA
priorities. The overriding objective of the SRA is to achieve a progressive reduction in
unemployment and poverty. The primary objective of the strategy is to provide a
policy and institutional environment that is conducive to increasing agricultural
productivity, promoting investment, and encouraging private sector involvement in
agricultural enterprises and agribusiness. Important for this environment is the
creation of a legal and regulatory framework that is fair to all farmers, producers,
processors and marketers of agro products. Among the objectives of the institutional
reform agenda set out in the SRA are: increasing productivity to lower per unit costs
of production, improve the extension service system, improve the link between
research, extension and the farmer, improve access to financial services, encourage
growth of agribusiness, reduce taxation of agriculture, increase market orientation and
improve the regulatory framework.

The objectives and policy concerns among policy makers can be discussed in terms of
whether they are consistent with what is outlined in the SRA 2004-2014. These are
the areas of concern for the development of agricultural sector in terms of boosting
productivity and incomes, and ensuring food security, irrigation farming and
enhancing diversification into non-traditional commodities.

In the recent past, efforts aimed at addressing the problems of poverty have been
participatory in their approach. These include the Poverty Eradication Commission
(PEC), the Poverty Reduction Strategies Paper (PRSP) and Economic Recovery
Strategy (ERS), with all emphasising agriculture as the main sector both for poverty
reduction and economic development. Although the SRA recognises stakeholder
involvement in the policy process in the sector, it was not a result of a participatory
process itself, marking its first major bottleneck on whether it will sell with the
stakeholders. It thus has to be marketed aggressively so that stakeholders can buy it
and take ownership of the various measures that it prescribes to revitalise agriculture.
Secondly the SRA is a medium term – to long-term policy framework and should
have embodied a monitoring and evaluation framework that would be used to measure
its success and failure to allow measures prescribed to be refocused in light of its
progress. This is another major oversight of the policy document and ought to be
thought out and formalised. Thirdly the SRA lays out a massive reform initiative that

13
requires it to have the right manpower in place for its implementation. Some of that
manpower could be lacking in skills required for the successful implementation of the
SRA. Capacity building for the kind of staff and skills required are not well spelt out
in the document. This could bring about haphazard and inconsistent implementation
of the policy framework and deny the economy of the benefits envisaged from it.
Although poverty reduction has been a major objective since independence,
realisation of growth even in the sector has not reduced it. Agriculture grew at an
average rate of 4.7% during the first decade of independence, but declined
significantly to below 2% in the 1990s and actually contracting by 2.4% in 2000
(Kenya 2001). Despite the sector’s growth during the first decade of independence,
the problem of poverty continued to increase, becoming more entrenched with time. It
has been argued that despite agricultural sector’s importance in GDP, the sector’s
performance is dominated by a few cash crops, concentrated in the high potential
areas. This has implied that only a small proportion of the population participates in
its performance. Hence positive growth in the sector even during the first decade did
not lead to a reduction in poverty 2 . Given that a number of initiatives have already
been undertaken with similar objectives, SRA does not give a clear point of departure
from these initiatives, and its value addition. Especially important is the extent to
which it is participatory and encourages participatory policy processes. Pro-poor
growth, targeting those activities within agriculture with the highest potential for
raising rural incomes is needed to address the issue of poverty reduction.

The SRA nonetheless also recognises efforts from other sectors that are necessary to
achieve its objects for example in having the right and stable macroeconomic
environment, supportive services in policy analysis and research, affordable financial
services, good roads especially rural access roads, rural electrification, water supply,
accessible and affordable curative and preventive health care and seeking to have the
resources and techniques to increase farmland under irrigation. However, it fails to
recognise and build in the policy framework the ongoing public expenditure reforms
that favour devolution of public expenditures to the districts and constituencies. These
devolved funds are creating rural infrastructure that without them would not have
been undertaken at all. Cognizance of these efforts is very important for they have the
effect of opening up the hinterland and enable resources that would have been taped
only expensively to be tapped relatively cheaply. In addition they also open up
markets for farmers whose produce would reach destination markets with difficulty
and at higher costs.

2
See UNDP (2002), for more detailed discussion of pro-poor growth, and agricultural contribution to
poverty reduction and human development.

14
3. Structures and Actors Affecting Agricultural Policy
Agriculture being the dominant sector in the economy draws a lot of interest from
different actors and stakeholders through the formulation of policies that affect its
performance and development. In an effort to discuss the structures and actors in
agricultural policy, we present a summary and discussion of two studies that have
attempted to identify the main players and policy making processes.

Drivers of Change

The first report titled “Strengthening the Incentives for Pro-Poor Change: An analysis
of drivers of change in Kenya” emanated from a study commissioned by DFID
Kenya. The overriding purpose is an analysis of drivers of change in Kenya. To this
end, the major problem focused on is the political elite having captured public
institutions and resources essentially driven by motives of serving their private
interests. The resulting consequences have been that “corruption has flourished,
public institutions have declined, growth has faltered and poverty has worsened” (p6)

Elite Attitude to Change and Prospects

In regard to attitude to change the report laments that the very same political elite
benefiting from the status quo have generally opposed desirable patterns of change.
It is nevertheless the contention of the authors regarding prospects for change that the
types of policy reforms required to reverse the decline, and hence for the envisaged
change to be realized, are fairly well understood. This somewhat complacent position
is seemingly based on the view that “better prospects for pro-poor change” were
created by the election of the NARC government in 2002. The indication stated in
this connection is that important reform processes are underway that could lead to
improved governance and renewed development.

Analysis Framework and Approach

The study, in terms of methodology, applied the “Drivers of Change” approach

adopted by DFID as an analytical tool notably in Zambia, Nigeria and Asian
Countries to understand processes of change at the country level. The focus of the
approach is on long term “incremental changes” taking place to interrelated social,
economic, political and institutional processes that alter the context for policy making
over a period of a “few decades”.

On the premise that critical obstacles to bringing about change lie in the realm of
political economy and governance the study for the most part relies on political
economy analytical framework. The key concept used is patron-clientelism. The
rationale for the framework is on the one hand to highlight the plight of the poor and
argue for pro-poor change. On the other hand, political leadership or elite and donors
are identified as the main forces affecting pro-poor change. The form taken by these
forces depends on the nature of incentives and restraints resulting from changes
emanating from social, economic, political and institutional processes which keep
altering the context for policy making.

15
The Relationship between Drivers of Change
It is categorically stated that change processes occur within the constraints of political
economy and hope expressed that donors should work with a broad range of actors to
promote pro-poor change. The various actors the report identifies and processes
discussed are set out in a table (p7) as follows:

Table 1: The relationship of drivers of change considered

Contextual Factors Institutions Agents of Change
Globalization, trade and Political process The political elite
investment Public administration Civil servants
Regional influences and The rule of law Parliamentarians
integration Land rights Political parties
Demographic change Ethnicity Local government
Urbanization Gender The judiciary
Deteriorating The military
infrastructure Civil society organizations
The rise of the informal Trade unions
sector Academic and policy
Changing rural livelihood research units
Human development Faith groups
HIV/AIDS The media
The private sector
Donors

To summarize, three types of drivers identified that may drive or block pro-poor
change are categorized as follows:

i) Long-term process of social and economic change-referred to as

contextual factors, globalization, urbanization, human development
etc.
ii) Changes in the workings of institutions including political processes,
ethnicity, gender, etc.
iii) Reform minded organizations and individuals – referred to as agents of
change notably the political elite, parliamentarians, political parties,
etc.

However, in the presentation in table form, drivers of change have essentially been
listed without clear indication of relationships between the various actors and more so
actors across the three categories. The listing could have been more analytical taking
into account the fact that policies are relevant to drivers of change to different degrees
depending on the particular issues at stake. It is therefore essentially drivers of
change, for whom pro-poor change policies are relevant, in other words those
affected, who are likely to get involved in that particular policy formulation process.
A case in point is agriculture policy affecting virtually all the actors since agriculture
is the dominant sector in the economy and the majority of the poor live in the rural
areas and struggle to earn a living from agriculture. In contrast, policy on tourism
affects a relatively limited number of drivers and smaller percentage of the Kenyan
population. Furthermore, certain policies are of immediate and direct consequences

16
in improving conditions of the poor, for example land tenure reform leading to
landless poor having access to or owning land for agricultural production to satisfy a
critical basic need food.

It would therefore seem worthwhile for understanding relationships between drivers

of change, their policy moves as well as policy actions and outcomes, that analysis
does not have to aim at a comprehensive listing of drivers of change. Rather, analysis
should be directed towards specific drivers of change for whom issues/problems in
agriculture policy area/sector, for example, are of relevance and will therefore
participate in that policy process. This is simply because for them stakes are
particularly high in this policy area and will direct greater effort and focus including
mobilization of resources to realize the policy outcome in their interest. They may of
course participate in the policy process for other areas but this invariably will be to a
lesser degree depending on the nature and extent of relevance of the policy issues.

A focus on agricultural policy also readily brings to mind other contextual factors not
addressed in the analysis such as natural resource base including arable land,
grassland, water, climate, etc, environmental degradation through soil erosion and
deforestation and a rural economy with an enduring subsistence subsector. The
implication is a revision of the drivers of change listing to bring out key factors and
various actors in the agricultural policy process. The ministries of agriculture and
livestock as well as cooperatives are in fact leading institutions together with their
statutory boards, parastatals and cooperatives. At the same time, as individual actors
in the policy process they are also top of the list of agents of change in agriculture.
This is in contrast for example to the military, political parties, the judiciary and to
some extent trade unions. The argument in a nutshell is that there will be varying
configuration of actors for different policies even the various pro-poor policies.

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

17
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

18
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

19
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

20
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

21
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

22
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

23
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.

ii. Agricultural Sector Policy Processes and Actors

The emergent phases in the political and economic policy environment in Kenya as
presented by (Smith and Karuga 2004) can be seen as a reflection of the changing
roles for various actors, institutions and processes in agricultural policy initiation,
formulation and implementation. On that basis, five plausible forms of policy
initiation and formulation process can be distinguished. They include bureaucratic
initiatives both requiring and those not requiring cabinet approval; executive
directives; budget policy decisions; other domestic policy initiatives; and external
policy initiatives.

At the bureaucratic level, like at the directorate or permanent secretary level, a

number of policies are initiated, formulated and approved by the minister. Before
1985, it is claimed; most policy formulations were bureaucratic at this level. Inter-
ministerial co-ordination at the permanent secretary (PS) level with adequate
consolations with the Treasury for the allocation of funds for their implementation
predominated. Over the years, however, this approach to policy initiation and
implementation has been continuously abandoned. There are also some important
policy decisions initiated by the bureaucrats but which need them to write a cabinet
paper for their approval. Policy initiatives that need new legislation or major changes
in existing legislation before they are implemented would require that they be
approved by parliament, accompanied by the release of a Sessional Paper.

Some policy decisions are executive presidential directives with the role of the
technocrats being to accommodate them within the resource envelope and
methodology of implementation. Commonly, such decrees are based on vested
interests or are reactions by the president or executive to either previous or perceived
crises. The bureaucracy thus simply rubber stamps the directives.

Policy decisions directly linked to resources are embodied in the government annual
budget. The budget represents a summary of presentations made by ministries as to
the programs and projects for funding in the evolving fiscal year. It will thus entail
policy decisions of every ministry. They are usually likely to be implemented because
they have resource allocations attached for their implementation. Any policy,
therefore, requiring government resources and approval to be implemented, must be
accorded due recognition in the budget.

24
Policy decisions affecting agriculture are also made during the budget preparation
process. The medium term budgetary expenditure framework (MTEF) budgetary
process that the country adopted in 2001 has an elaborate process through which
concerned ministries lay out their policy framework to their budget and plan. The
ministry of agriculture (MOA) has to make policy decisions it perceives can best
enable it achieve its objectives, not only annually but also in the medium term that
captures two outer fiscal years. This should make annual policy proposals for which
resources should be allocated be in line with the broader policy objectives captured in
the outer two fiscal years. The budget making process also provides for sector
hearings giving an opportunity to the other sectors whose decisions may have some
impact on agriculture to also contribute to its decision-making within it. Nevertheless,
in the budgetary process it is those with the final say on resource allocations that
determine which policy decision will be implemented because most policy decisions
require resources to implement. The Ministry of Finance is therefore crucial in the
realisation and implementation of policies.

Domestic policy initiatives emerge also from outside the arena discussed so far and
are at one stage incorporated into the budgetary process. Such is the case of the
development planning process. Although thought of as a normal policy process, many
are the policies proposed in the development plan that are never implemented because
resources are not mobilised or allocated for their implementation in the budget. This is
also the case with the sessional papers or documents arising from task forces. Other
sources of domestic policy initiatives include motions by MPs in Parliament, which
get the acceptance and approval by key decision makers in the budgetary process.

The long history of foreign aid to Kenya has meant that there are policy initiatives
that are typically donor driven. They are formulated and initially implemented
through donor financed efforts like the project implementation units (PIUs) or non-
governmental organisations (NGOs) and are funded outside the national budget.
Significantly, there are some that are taken over by government and resources
deployed for maintenance.

The roles of the bureaucrats, donors and other players have, however, changed over
the years. The bureaucrat’s role has diminished increasingly after 1985 with policy
decisions being shaped more by the executive’s views instead. The executive policy
directives represent “road side,’’ ad-hoc and “spur of the moment” approach to policy
making, which has been represented difficulties for policy formulation since they lead
to confusion and contradictory policies and at times completely derail budgets. These
executive declarations have persisted and traversed the three post independence
political regimes.

The role of technocrats who are involved in formulating agricultural policy have been
marginalised. The circle formulating policy has been limited in size, concentrated in
the ministry of finance (MOF) and the Central Bank of Kenya (CBK). Even within
the MOF and CBK the policy formulation clique has been quite small. The MOA
technocrats consider their inputs ignored by MOF since their budget submissions
detailing priorities for the ministry get reordered without consulting with them.
Instead they resorted to lobbying MOF decision makers for policies they would wish
to implement accepted. O’brien and Ryan (2001) however note that economic policy
formulation group, within the policy formulation circle of the CBK and the Finance

25
ministry has been small with controlled internal discussions. One of the reasons given
for this closed approach has been the passive approach to earlier consultations from
other ministries. Another reason given is the desire by the core policy makers to
prevent potential losers from the policy from mobilising opposition.

The policy formulation process has also been influenced by technical assistance (TA).
TA has enabled the training of key policy advisers in the core ministries, especially
public sector economists in policy analysis. Nevertheless, their impact in policy
formulation has been impaired by the inability of the government to retain them in
public service. They have moved out of public service due to low pay, poor leadership
and inadequate resources with which to operate, leading to low morale, and
productivity. Technical assistance has however been associated with a number of
factors affecting development policy. These include coordination of resources related
to technical assistance due to multiplicity of donor objectives, preferences and
strategies. Donor centred development process also weakens domestic ownership and
therefore integration into the national policy objectives (UNDP 2003).

Also emerging in the recent past are policy decisions that receive inputs from
enhanced voices of parliamentarians, the private sector, civil society and smallholders
as the process becomes more systematic, transparent and inclusive. In the PRSP there
was wider stakeholder policy considerations discussed right to the village level in
some districts. And when the NARC government came to power in December 2002,
the preparation of its blue print for economic revival, the Economic Recovery
Strategy for Wealth and Employment Creation (ERSWEC) which addressed policy
issues in the agricultural sector as well, received widespread stakeholder consultations
with parliamentarians, donors, trade unions, professionals, financial institutions,
industrialists, ASAL representatives amongst others. The policy process has also
benefited from the 1993 reconstitution of parliamentary committees under the
umbrella Liaison Committee chaired by the Speaker of the national assembly. The
Agriculture, Land and Natural Resources Committee is tasked to process and/or vet
proposed legislation from all the six ministries 3 involved in the sector. Parliamentary
caucuses established from 1999 to seek opportunities for commodity producer groups
and stakeholders are also concerned with policy formulation. For instance, caucuses
have been created comprising MPs from areas growing three commodities, namely,
the Coffee and Tea Parliamentary Group (COTEPA) and the Sugar Parliamentary
Group (SUPA). They influence policy on these commodities, especially when put
under pressure by their constituents to change or improve policy guiding the
production of the affected commodity.

Along the same vein have emerged various civil society interest groups, which are
comprised of more farmers. Those already created include SUCAM (Sugar Campaign
for Change in Western Kenya), NGOMA (“Ng’ombe na Mahindi” to cover maize and
milk in the North Rift, SAWA (“Sauti ya Wafugaji” – North Eastern pastoralists,
MAMBO (“Matunda na Mboga” for horticulture in Eastern province. Currently
efforts are underway to unite the sub-sectors into a national umbrella body with
representation from all the groups to enable them deal with issues that are cross-
cutting that include policies and a common voice in the policy process.

3
Agriculture, Livestock and Fisheries Development, Co-operative Development and Marketing, Lands,
Water and the Environment and Natural Resources

26
The main actors in the policy making process can therefore be identified as the
government, parliamentary caucuses, donors, and the civil society organisations. Prior
to the era of reforms, the government dominated the allocation and management of
resources in the country. The government established public or quasi-public
institutions operating like monopolies or regulatory bodies in agricultural markets.
This meant limited participation by other stakeholders especially the private sector,
the civil society as well as the general population in the development process.
Economic policy making in the country in the early post-independence years was
therefore highly centralised and was for a long time limited to government ministries
and parastatals both at sectoral and national levels, with limited dialogue and
interaction with other stakeholders. It has further been argued that even within these
government institutions, the policy formulation group remained narrow 4 .

During the first decade of independence, the focus of agricultural policy was on land
ownership and resettlements, emphasising the controls on marketing and pricing of
agricultural commodities as well as government support for agricultural services like
research, extension, and livestock production inputs. These largely contributed to the
success in the performance of the sector witnessed during this period. By late 1970s,
serious problems had emerged especially with payment and marketing of most
commodities, with official involvement in the marketing and pricing viewed as
possible sources of operational inefficiencies.

Government authority over the economy was also increased through the regulatory
framework and steady expansion of controls on macro economic variables like
domestic prices, interest rates, foreign exchange, and external trade. Policy making
during this period was therefore largely concentrated around the government. In the
wake of reforms however, there has been increased focus on the role of other actors,
with sustained advocacy for participation in resource mobilisation allocation and
management. Since the commencement of the implementation of the District Focus
for Rural Development (DFRD) strategy, the government has continued to emphasise
the use of participatory methodologies in programmes and project implementation
(Republic of Kenya 2002).

Donors played an important role in policy reforms in the agricultural sector,

especially in the implementation of reforms in agricultural marketing and prices,
whose implementation were sometimes linked to donor conditionalities. Policy
dialogue between the government and both multilateral and bilateral lenders played an
important role in indicating approaches to some of the problems identified in the
reform process. The growing importance of programme and structural lending has
therefore had implications for the role of donors in policy formulation.

Through technical assistance, a cadre of economic advisors have been provided to the
core ministries including agriculture who have been involved and influence the
direction of policy thinking in the country. It is argued that some technical assistance
advisors have had positive impact on the economic policy making process in the
country (O’Brien and Ryan 2001). Lack of cleat guidelines the utilisation of external

4
O’brien F.S and T. C. Ryan (2001). Kenya. In. Devarajan S., D. Dollar and T. Holmgren (eds). Aid
and Reforms in Africa. Lessons from ten Case studies, the World Bank, Washington D.C.

27
resources through technical cooperation has at times led to lack of effective
implementation of development policies.

The civil society organisations through empowering of grassroots organisations

mobilise resources and advocate for issues affecting their members to be included in
policy formulation.

In general, when analysing policy processes in the country, it is important to note that
one of the problems with effectiveness of policy has been the lack of implementation
of policy pronouncements. As a result, the policies that have been initiated are not
reflected in the actions in terms of resource allocations and commitments. While
policies in the 1960s and early 1970s were mostly implemented, this has not been the
case over time.

Government policies with respect to agriculture and rural development in particular,

have suffered from lack of common objectives and coordination among the
implementing ministries. Some policies have also tended to respond more to short
term interventions, rather than focus on long term sustainable development. In
addition, institutional failure due to lack of capacity by the private sector to take over
functions by the state after liberalisation, has also been a problem.

The conduct of the policy process in agriculture, therefore, is not a straight forward
formalised step by step exercise involving defined and recognised institutions. It
attracts various actors defined by politics, geographical settings, interests, gender and
donors among others. The process involves the central government, ministry of
agriculture, the executive, parliament and its caucuses, civil society (NGOs, FBOs,
CBOs, trade unions, etc), the budget process, development partners, interest groups,
the farming community, ethnicity and even the political system. The decisions that
influence and/or affect agricultural policy formulation and implementation are made
by these actors interactively or singularly.

iii. Emerging Agricultural Policy Formulation Processes

Since the commencement of the implementation of the District Focus for Rural
Development (DFRD) strategy, the government has continued to emphasise the use of
participatory methodologies in programmes and project implementation. Through the
DFRD, central government departments are all represented at the district level,
leading to decentralisation of power and management of responsibilities. However, in
certain cases, the decentralisation of decision making to the district did not take place
(UNDP 2003). But still, it remained largely broad and was also relatively more
participatory than was the practice in previous years.

Much more recently there are indications that the policy formulation process is
becoming more systematic, transparent and inclusive. There has emerged a relatively
greater role for various stakeholders and a voice for parliamentarians, the private
sector, civil society and the poor. A number of policy frameworks have evolved that
are the result of largely consultative processes. The government subscribed to the
Poverty Reduction and Growth Facility (PRGF) in 2000, and started to prepare the
Poverty Reduction Strategy paper (PRSP 2001-04). This, however, was never
completed due to the change of government in 2002. In a deviation from the past,

28
however, there were widespread stakeholder consultations nationally going down to
the grass roots. The PRSP provided an opportunity for pro-poor growth through the
participatory nature and direct budgetary allocation to priority sectors. The Economic
Recovery Strategy for Wealth and Employment Creation (ERSWEC) was produced in
2003 to revive the economy. Again there were widespread stakeholder consultations
with parliamentarians, donors, trade unions, professionals, financial institutions,
industrialists, ASAL representatives amongst others but also considered widely ideas
contained in the PRSP, NARC manifesto and post-election action plan.

The Strategy for Revitalising Agriculture (SRA 2004) was started to complement the
ERS in agriculture and emphasises public-private sector partnerships to facilitate
competition, enhance markets, raise efficiency in the usage of resources and improve
private profitability. It recognises only two roles for government: to provide a limited
range of goods and services and to carry out a reduced range of regulatory functions
that cannot be enforced by private self-regulation and industry code of conduct.
However, unlike the other policy framework documents before it that were
participatory, the SRA embodied no stakeholder consultations. However, this was due
to speed with which it was formulated. It now nevertheless faces the challenge of
developing stakeholder ownership. In spite of this, the SRA has the advantage of a
well-defined medium- to long-term framework for policy formulation and
implementation in the agricultural sector.

The adoption of the PRGF by the government required it to formulate and implement
its budgetary process through the Medium Term Expenditure Framework (MTEF),
which seeks to link policy, planning and budgeting in order to improve budgetary
outcomes. Its main objective is to link strongly the annual budget to national
development policies and align expenditure allocations to national priorities, outputs
and outcomes. Because the SRA outlines the agricultural sector priority areas set out
in the ERS, the MTEF process ought to allocate resources to these priority areas in
agriculture for their realisation. However, for this to be achieved it would require the
technical inputs of staff at the ministry together with the sectors’ advocacy groups
who are both well trained to analyse budgetary issues and formulate budget proposals
for the sector.

Policy making in general and within the ministry in particular, is tending towards
evidence-based findings from research undertakings of local consultants, universities
and policy research institutes (PRIs), which policy formulation had made very limited
use of in the past. The importance of policy based on evidence has grown with the
establishment of PRIs, namely, the Institute for Policy Analysis and Research (IPAR),
the Kenya Institute for Public Policy Analysis and Research (KIPPRA), the Institute
for Development Studies (IDS) of the University of Nairobi and the Egerton
University based Tegemeo Institute of Agricultural Policy and Development.
Although Smith and Karuga (2004) argue that a general perception tends to persist of
low demand for evidence-based policy analysis and formulation due to the fear of loss
of power, influence, current employment and even economic rent through informed
policy reforms, there is some shift towards this direction given that some ministries
and other private organisations make use of the PRIs as much as they can to inform
their policies.

29
The emerging policy formulation process in Agriculture, therefore, attracts various
players who will have to arrive at various policy positions consultatively and in a
participatory manner. The MTEF budgetary process will be required to allocate
resources as per the agreed priorities amongst the various stakeholders. In addition,
policy formulation will benefit more from evidence generated from research thus
PRIs are going to play an increased role in the policy formulation process in
agriculture than before.

iv. Case Studies

The emerging trend in the policy formulation process points to a more participatory,
consultative and inclusive development process. This has highlighted the role of
different stakeholders in the initiation and implementation of development projects.
This links with the shift towards a strategic focus on wealth creation and poverty
reduction through pro-poor growth. A number of initiatives illustrate these emerging
processes. Two case studies are presented below that illustrate such inititaitves.

The Millennium Villages Project

The Millennium Villages Project is a donor supported initiative that emerged after the
SRA had been produced. Although it addresses issues raised in the SRA such as the
objectives of the agricultural sector, these were not primarily the goal. However, those
goals pertaining to the agricultural sector find themselves embodied with those of the
project. These include reducing the number of those suffering from hunger, increasing
agricultural productivity, output and incomes, developing supportive rural
infrastructure, enhancing stakeholder involvement in the policy process and ensuring
food security.

The MVP applies all the MDGs targets agreed upon by the UN member countries
aimed at reducing poverty. The targets for all the goals represent a holistic package of
site-specific interventions for 12 impoverished villages in Kenya, Ethiopia, Ghana,
Malawi, Mali, Nigeria, Senegal, Rwanda, Tanzania and Uganda. Kenya’s Sauri sub-
location was selected in July 2005 to be the first Millennium Research Village5 . It
comprises 11 villages hosting 5000 people within Yala Division, Siaya District,
Nyanza Province in the western region of Kenya.

The principal objective of this project is the eradication of absolute poverty by 2025,
but with a medium term goal of cutting it to half by 2015 through the holistic
application of the MDGs targets. It is designed to find a model to tackle poverty at the
village level. Poverty, however, is relative and the poor who are targeted by the
project are the “poorest of the poor” generally referred to as the “extreme poor” or the
“absolute poor”, who comprise one sixth of humanity and cannot meet their basic
needs of survival unaided. They live on less than US $1 a day and all reside in
developing countries enduring below subsistence levels of living.

5
The Earth Institute (2005), Annual Report: Millennium Research Villages. The First Year: July 2004
– June 2005, Columbia University, December.

30
In recognition of this tragedy engulfing a sixth of humanity, the Earth Institute came
up with this project to assist them come out of the poverty trap and make first steps
towards development. The Project is conceptualised such that the local governments
and villagers work in partnership with the MVP in a comprehensive plan to place
necessary investments in critical, life-saving and practical interventions in agriculture;
education; health; nutrition; energy; transportation; water; sanitation; and the
environment to tackle the inter-related aspects of absolute poverty, namely hunger,
disease, lack of access to education, clean drinking water, poor sanitation, poor
infrastructure, etc. The project works with investments of about US $50 – US $70 per
person per year and calls for investment in what is termed the “big 5”, which include
investments in agriculture, basic health, education, power, transport and
communication, and safe drinking water and sanitation.

At Bar Sauri, the millennium village, these investments have been made.
Smallholders have received inputs namely; fertilizer, seeds, and extension services.
There have been reports of bumper harvest from the village, implying that increased
productivity in agriculture, increased agricultural output, food security and a reduction
in the number of the hungry in the village has improved and with it a fall in poverty
levels. The MVP has been seen as an example of a donor initiated and implemented
process, but one that works with local stakeholders, the government and local
villagers all of whom act to complement donor resources financially or through own
labour.

The villagers of Bar Sauri are impressed by the outcome of this project. They have
had a bumper harvest; have new and renovated dispensaries with staff and medicine;
and their rural access roads have seen some improvement. Improved access to health
increases agricultural productivity through a healthy labour force. Such efforts have
the potential to sustain long term agricultural development and should therefore be
facilitated. With their anticipated ripple effect from the epicentre and spreading
outwards, the impact would be significant in the outer years and especially if
sustainability could be achieved. Being a pilot project, however, the currently visible
achievements could be short-term for the period of the project. Even the anticipated
ripple effects entailing the multiplication of similar projects elsewhere, could be a
pipe dream because their attainment are largely pegged on availability of financial
resources. The major challenge, therefore, remains how to sustain the gains into the
long-term and also entice the ripple effects into the future ad in neighbouring villages
and beyond. It requires identifying a source of funding for the initiative for the long
haul which would eventually make the intended beneficiaries self-reliant.

At the same time, the short lifespan of the project also means that its weaknesses have
not emerged and that the jury is still out. The short lifespan does not enable a critical
assessment of the project’s impact in the neighbouring villages. The anticipated
impact is that it would generate the desire to emulate what goes on in Sauri and have
similar outcomes. Nonetheless, they would be handicapped in terms of resources
unlike Sauri, which is a pilot project with funding. That could generate some
resentment as they would also expect financial support that may not be readily
available. However, the project being pilot, is meant to demonstrate that there are
efforts that could have desirable outcomes in terms of improving people’s lives with
contributions from different sources ranging from government, central and local,
development partners, civil society, the scientific community, the community itself

31
and even the individuals themselves. They would tap into the resources they would
readily access like their own labour. Current efforts to improve development at the
districts or even constituencies level through devolved funding would be a boost for
such efforts.

The challenge for the government is also lack of the amount of resources that would
be required for such an initiative. Both lack adequate resources to meet the MDGs
requirements. The Needs Assessment and Costing Report estimated, for example, that
the country requires US $ 61 billion between 2005 and 2015 to achieve the MDGs.
This amount of resources cannot be secured from public sources solely but would
require the support of development partners as well. The bonding of the people and
the government to provide supplementary resources in terms of human effort and
additional local resources is, therefore, necessary but not sufficient. The development
partners efforts in terms of continued and sustained provision of the resources
required to meet the MDGS would provide the sufficient condition. Tapping this and
even depending on it is unadvisable given the inability to honour even the
development assistance targets pegged as a ratio of their respective GDPs to the
developing world in general.

Devolved Funds
Fiscal reforms aimed at devolving central government resources for rural
development is not a new phenomenon in Kenya. Such initiatives date back to the
early 1980s when the District Focus for Rural Development (DFRD) was introduced.
These earlier initiatives performed dismally mainly because of limited people
participation that failed to generate local ownership of projects funded under them.
The motivation for the introduction of devolved funds was the desire to avoid
government red-tape, delays in disbursement, increase absorption rates, and
encourage people participation on prioritization of their needs in their localities to
enhance their ownership of projects amongst many other reasons. Such Funds with
enhanced stakeholder participation include the Constituency Development Fund
(CDF), Local Authorities Transfer Fund (LATF), Road Maintenance Levy Fund
(RMLF), Rural Electrification Fund (REF), and HIV/AIDS Fund. These Funds were
aimed at establishing rural/urban infrastructure with the incorporation of people’s
voices. They represent good examples of community-driven development and have
been used to improve rural access roads (RMLF, LATF), improve water supply
systems (CDF, LATF), enhance accessibility to power (REF), enhance education and
training (FPE, Bursary Fund), leave smallholders with more funds to invest in
agriculture (Bursary Fund, FPE, HIV/AIDS Fund) and improve their health status and
their productivity (HIV/AIDS Fund, CDF, LATF) among others. Such developments
reflect a more participatory approach to resource mobilisation and utilisation where
development priorities as identified by the people are used. Such efforts embrace and
also complement the SRA vision of private sector led development and agricultural
commercialisation.

The funds impacts are important for the agricultural sector to facilitate the realization
of its goals. The improvement of rural access roads, access to power in rural areas,
adequate clean water, more funds released for investment in agriculture, for example,
would spur agricultural development. The access to markets and information provides
opportunities for use of improved technology for agro processing, storage, and other

32
forms of value addition. Their impacts therefore conform well to the broad goal of the
SRA to commercialise agriculture. They open up more markets, create the potential to
add value to raw produce via the availability of rural power for agro-processing,
reduce wastage of raw and perishable commodities due to good rural roads and
possible cold storage facilities due to availability of power, and improve health status
of farmers thus enhancing their productivity amongst others. However, the funds
introduction just before the SRA seems to be a coincidence rather than planned. The
SRA does not explicitly reflect the devolution of funds as an important aspect for its
implementation, although the contribution of these funds especially rural
infrastructure is crucial for the envisaged commercialised, private sector led
agriculture. The private sector needs an enabling environment for doing business,
which is facilitated by the devolved funds.

For the Funds to create the impacts for which they were designed, they not only need
continuity in terms of adequate funding, but also proper management structures with
the required capacity to deliver on their mandates. The devolution of funds from the
central government to the periphery is still a new and evolving phenomenon and
numerous teething problems still abound. The management of some of them like the
CDF and LATF, has shown signs of being misused by the political elite to satisfy
their political objectives. This has the potential to derail the Funds away from their
set goals and short change the communities who were meant to benefit from the
projects they fund. At the same time, basically all of them anticipate wider
consultations with stakeholders and the respective communities, who also face limited
capacity problems. They are expected to facilitate needs identification to which
priority of funds allocation should be made and thereafter perform monitoring and
evaluation of the projects being implemented. However, they may still not have the
necessary skills to perform these tasks. For instance, the monitoring and evaluation
demands qualitative and quantitative techniques to verify progress or ascertain
achievements of the projects and especially for the latter, communities would
generally be handicapped to deliver on that role. Capacity building for the Funds
management and stakeholders to perform roles anticipated for them under the various
Funds would be quite crucial for them to realise their roles satisfactorily. New
management structures that are aimed at reducing or eliminating control by the
political, economic or even social elites are necessary. This will ensure that
agriculture where majority of the population is employed benefits from such
initiatives. SRA therefore has to accommodate them in their policies and strategies to
facilitate the attainment of their own objectives and to avoid at the same time
duplications. The Funds thus have significant potential to influence and shape policy
implementation in agriculture, despite their current problems both.

4. Sufficiency of Structures and Processes to Implement SRA

The success of any strategy in achieving its objectives depends on the structures that
exist to facilitate its implementation. Likewise the SRA spells out the agricultural
policy objectives contained in the ERS as well as their implementation. The reform
agenda envisioned by SRA is ambitious. Although implementable, it will require
substantial resources and collaboration with other sectors in the form of sector wide
approaches (SWAPS), while coordination among implementing agencies is crucial for
its success. The structure of implementation has already been thought of. At the

33
national level the framework envisages an annual national forum of stakeholders in
the sector organized by lead ministries to ensure there is political will to give the
strategy a niche and prominence. The national forum is expected to review progress
and discuss challenges limiting it and how to resolve them. This reflects the
incorporation of a participatory role for different stakeholders in the agricultural
sector. But if practice in the past is anything to go by then presidential decrees might
still influence agricultural policy from the outside. This is more probable with an all-
powerful presidency, which is also above the law.

The implementation framework also considers inputs from other sectors that are
important for its realisation. The framework embodies an Inter-ministerial
Coordination Committee (ICC) that include ministries that provide services the
agricultural sector, e.g., ministries of roads and public works. The committee also
comprises of private sector representatives. The lead ministries, like MOA, MOL,
MOCD and MOLG, form the Technical Inter-ministerial Committee (TIC) that acts as
the secretariat to ICC. It is envisaged that at this level, technical inputs necessary for
the achievement of SRA can be brought on board akin to the Sector Wide Approaches
(SWAPs) initiative. Without proper coordination and commitment from the other
sectors, agriculture will remain constrained and will fail to achieve goals set in the
SRA. This is particularly important since one of the factors constraining the
development of agricultural sector is the lack of coordination among the different
players in the sector.

The framework also recognises the crucial role played by donors in the policy process
especially with respect to availability of resources and technical assistance. In the
recent past, the donors have also been encouraging consultative and participatory
processes in policy decision-making to enhance stakeholder and local ownership of
policy reforms 6 . The framework anticipates a departure from past practices with
coordinated donor funding to ensure budgetary sustainability. Nonetheless, donor
interests are flexible and are clothed in conditionalities, which can be susceptible to
variations thereby having the potential to disrupt the policy framework. Mechanisms
to deal with this as and when it arises are not clearly spelt out though. It can only be
hoped that the proposed annual National Forum will have the capacity to deal with
such an eventuality.

The strategy also recognizes the role of civil society groups, eg., NGOs, CBOs, FBOs
Workers Trade Unions and agricultural trade organizations amongst others to:
enhance farmers’ capacity to organize and use resources more efficiently; provide
education, health and extension services; provide advocacy for improved governance,
human rights and environmental protection; supply credit to disadvantaged groups
among others. The SRA takes it that to enhance the role of civil society, the
government will review the legal and regulatory framework governing their
operations to empower their strategy in the strategy’s implementation. This is,
nevertheless, beyond the SRA. However, should the framework that regulates civil
society organizations go without review, then the implementation of the SRA could
be jeopardized. Workers unions in the agricultural sector can be particularly
disruptive to the production process due to work stoppages. The workers trade unions

6
See Joint Statement of Development Partners for the Kenya Consultative Group Meeting at
http://siteresources.worldbank.org/INTKENYA/Resources/donor_statement_agriculture

34
must be given sufficient room to negotiate for improved conditions of work for their
members to avoid actions that may derail the SRA’s implementation.

The SRA, in particular, presses for private sector led growth in agriculture. This is
only achievable when there are clear actions to strengthen the private sector to play an
active role to support farming, especially smallholding. The level of interaction
between government and the private sector must increase and stumbling blocks that
may impinge on private sector operations must be dealt with to create an environment
where they can make the envisaged contribution in the sector by SRA. There have to
be for instance, facilitative regulatory services like the proposed one-stop-shop for
issuing a single business permit to eliminate the current bureaucratic process of
business registration.

Lessons, therefore, have to be drawn from previous initiatives on agricultural

development especially with respect to implementation, where lack of coordination
has been a major contributor to their failure. The SRA’s implementation is a
consultative process. It is very important, therefore, for the supporting sectors and the
new development initiatives to integrate the agricultural sector when formulating their
agenda. The National Steering Committee for SRA and an Agricultural Sector
Coordinating Unit, therefore, need to go beyond simple recommendations to actual
implementation.

In addition to some of the considerations mentioned above pertaining to the

framework, the SRA faces also faces a number of challenges in its implementation.
The first difficulty it faces is the lack of stakeholder ownership of the proposed
reforms since there was no stakeholder participation in its formulation. The task ahead
is to market it to stakeholders for them to own up the intended reforms and effectively
participate by giving inputs in the implementation process. Past and current
development initiatives point to the importance of stakeholder participation.

Secondly, the SRA lays out a massive reform initiative that requires it to have the
right manpower in place for its implementation. This is a major challenge. Capacity
building for the kind of staff and skills required are not well spelt out in the document.
This could bring about haphazard and inconsistent implementation of the strategy and
deny the economy the benefits envisaged from a commercialized, private sector led
development in the agricultural sector. Such reforms will also require changes in
institutional structures for their implementation.

Thirdly, it fails to recognize and build in the policy framework of the ongoing public
expenditure reforms that favour devolution of public expenditures to the districts and
constituencies. These devolved funds are creating rural infrastructure that, without
them, would not have been undertaken at all. Cognizance of these efforts is very
important for they have the effect of opening up the hinterland and enable resources
that would have been tapped only expensively to be tapped relatively cheaply. In
addition, they also open up markets for farmers whose produce would reach
destination markets with difficulty and at high costs.

Fourthly, although it considers stakeholders input as important, the co-operative

movement and societies that manage the production and/or marketing and at times
fund different agricultural activities has not gotten adequate treatment.

35
Fifth is that the strategy envisages a wider market for agricultural commodities to
expanded regional and international markets. However, it fails to consider adequately
on-going reforms in those trading partner countries and even competition from
countries selling similar products in the same markets. It is only with such an
assessment that they can determine what share of the market of these commodities
they can capture and talk of expanded markets for the sector’s produce. Access to
regional markets is further made difficult by constraints in the country’s agriculture
and trade sector, which have to be addressed.

Beyond anything else, the SRA’s implementation requires the budgetary process to
allocate sufficient funding for the proposed reforms. However, the SRA is a 10-year
agricultural policy framework to be implemented under the MTEF budgetary process
that entails three-year rolling plans. There are therefore some inconsistencies here in
the sense that the SRA is long term whereas the budgetary framework is short- to
medium-term. The budgetary process will not contemplate the resource anticipations
for SRA’s implementation in the outer years after the medium term planning. This
will necessitate quite close collaboration between the strategy’s implementation and
the budgetary process to ensure that up to its 10th year of implementation the
budgetary process will be able to allocate adequate resources to its projects and/or
programmes. If this is not keenly observed, the country might end up with parallel
policy processes in the agricultural sector. In addition, if the decision makers at the
resource allocation level have not been involved and/or lobbied as it seems due to lack
of stakeholder consultations when the strategy was being prepared, then the reforms
might not see the light of day because they require resources for their implementation.
Advocacy, targeting top level political leadership and powerful private sector business
leaders will also be important.

It is important to recognise that the emerging policy formulation environment has

fundamentally changed over time. The emerging strengths include the increasing
transparency and room for debate; increasing voice, clear strategic path; formalized
policy formulation process; improved budgetary process; increased capacity for
policy analysis; and reduced opportunities for rent creation. However, there are still a
number of weaknesses, which include lack of reliable and updated data, weaknesses
in the budgetary process, problems of inter-ministerial co-ordination, personality
driven processes, vested interests and confused paradigms and policy narratives.

Opportunities also exist that can improve the policy process. These include donor co-
ordination and support, strengthening voices and creating local ownership of and
commitment to the policy and budgetary processes. In addition, the Ministry of
Agriculture has finalised a strategic plan to be used in implementing the SRA, which
provides for restructuring of the ministry to improve its efficiency and technical
service delivery. However challenges still exist even with this restructuring. Lack of
adequate finance to implement some of the projects identified as priorities like Njaa
Marufuku Kenya is an important lesson with respect to planning on the basis of
resources expected from donors. Lack of funds for extension services also threatens
the realisation of technical service delivery. While stakeholder consultations is
important, the lengthy nature of the process in policy and legal reviews is a factor that
needs to be taken into account by the SRA. Due to the acknowledged lack of funds, it
will also be necessary to secure additional funding to strengthen extension service

36
delivery and to rationalise all projects to avoid duplication (Kenya 2006). The
continued accumulation of pending bills due to inadequate resource allocation to
departments as noted in the PER 2003 is another factor with respect to sufficiency of
structures for SRA implementation. This calls for a unified strong ministerial
monitoring and evaluation.

37
Appendix:

Figure1 : Sectoral growth rate, 1964-2000

12
10
8
6
%

4
2
0
1964-71 1972-76 1977-81 1982-86 1987-91 1992-96 1997-2000

Agriculture Manufacturing Govt. service Total GDP

38
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