Agricultural Value Chains Bridging the Kenyan Food Security Gap

“My grandfather used to say that once in your life you need a lawyer, a doctor, a policeman and a preacher but everyday, three times a day you need a farmer”. – Brenda Schoepp

Agriculture has always and continues to be the backbone of Kenya’s economy and the numbers support this. In 2006, almost 75 percent of working Kenyans made their living by farming.

Agriculture is also the largest contributor to Kenya’s gross domestic product (GDP). In 2005, agriculture, including forestry and fishing, accounted for about 24 percent of the GDP, as well as for 18 percent of wage employment and 50 percent of revenue from exports.

Approximately 20% of Kenya’s land is fertile with under 8% being utilized for productive agricultural purposes and this represents a stark irony in that Kenya continues to experience food insecurity. A recent statement by the government confirmed that at least twelve counties are experiencing moderate to severe drought and food insecurity. This has resulted in reduced forage and water for livestock, deterioration in livestock body condition and poor crop harvest especially at the Coast and lower Eastern regions. Further, there is water shortage and increased risk of malnutrition. As a result 1.3 million people in these counties are in need of relief food.

On its development journey, Kenya has taken significant steps in ensuring all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life, which is essentially food security. In the recent years, and especially starting from 2008, the country has been facing severe food insecurity problems. These are depicted by a high proportion of the population having no access to food in the right amounts and quality.

Official estimates indicate over 10 million people are food insecure with majority of them living on food relief. Households are also incurring huge food bills due to the high food prices. Maize being staple food due to the food preferences is in short supply and most households have limited choices of other foodstuffs.

The current food insecurity problems are attributed to several factors, including the frequent droughts in most parts of the country, high costs of domestic food production due to high costs of inputs especially fertilizer, displacement of a large number of farmers in the high potential agricultural areas following the post-election violence which occurred in early 2008, high global food prices and low purchasing power for large proportion of the population due to high level of poverty.

In as much as the government seeks to intervene through policy reforms and emergency relief food, the journey to attaining a food secure nation lies in increased yields and production along the agricultural value chain and technology plays a major role in ensuring the leap is made.

There are various kinds of information and communications technology (ICT) initiatives being implemented globally to improve agricultural value chains and agribusinesses. Many of the solutions presented entail improving access to reliable and timely information. Inequity in access to information allows those with information to take advantage of those without it (often farmers), even though much of the information is technically within the public domain. Because of the ever-lower costs and growing ubiquity of ICT, such as mobile phones and the networks needed to connect them, new avenues have been opened, offering critical information to farmers, fishers, small traders and business people. We provide examples of three types of ICT solutions, categorized in terms of the end result for the consumer: ICT for production systems management, ICT for market access services, and ICT for financial inclusion.

ICT for production systems management

Information services provide data that are tied to helping farmers improve their productivity, yields and profitability during the course of their normal business of growing agricultural produce. Information services are one of the most common ICT-related categories for inclusive agricultural value chains. They are broken down into sub-categories of information services that involve short-term and long-term productivity enhancements; those that minimize the negative effects of crisis events, for example, by informing on how to protect crops from freezing weather in the short term; and those that improve field-based risk management, for example, by guiding the implementation of crop rotation to preserve the soil in the long term.

ICT for market access

Market access ICT services comprise any service that provides beneficiaries, especially farmers, with access to information on pricing of agricultural products (inputs and outputs) and on finding and connecting to suppliers, buyers or logistics providers, such as storage facilities and transport companies.

Such services include simple pricing services, virtual trading floors (matching services or full commodity exchanges) and holistic trading services. Market access services also cover ICT solutions that help the typically larger upstream and downstream firms, such as processors or exporters, to manage their operations and the quality of their produce better – here called downstream administration.

ICT for financial inclusion

The primary types of financial services offered through ICT solutions for value chains are transfers and payments, credit, savings, insurance and financial derivatives. ICT can help improve rural communities’ access primarily by convincing financial institutions to enter potential rural markets through unconventional methods. These methods typically involve a reduced need for high-cost branches, improved productivity of the staff in place, and a cost model that generally emphasizes variable costs by paying agents on the basis of transaction volumes instead of salaries.

Informal financial services, such as savings groups, often meet two critical needs of the rural poor: convenience (e.g., door-step service), and flexibility (e.g., ability to save and withdraw small amounts). However, these informal services typically lack another key criterion – security. Security is where formal financial institutions generally excel. So ICT enhancements for financial inclusion services can either entail making informal providers more secure or making formal players more convenient and flexible.

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