Regional Trade and Rural
Livelihoods: Implications on Kenya’s
Food Security
GLORIA OTIENO
Structure of Presentation
 Background
 Context and Study Objectives and Methodology
 Exploring Agritrade-Rural Livelihoods-Food Security
Linkages
 Regional Trade and Implications on Rural Livelihoods and
Food Security In Kenya



Rural Livelihoods, poverty and Food Security in Kenya
Trade and its linkages with Rural Livelihoods in Kenya
Implications of regional trade and livelihoods and food security
 Policy, Institutional Frameworks and Interplay of
Stakeholders
 Conclusions and Recommendations
Background
 World’s malnourished increased from over 800
million in 2008 to 923 million in 2009 (FAO,
2009)
 Kenya ranks 29 among the countries with
worlds poorest food security
 Effects partly due to recent droughts and rising
food prices as well as rising poverty
 70 percent Kenyans -net buyers of food
 dependence on rain fed agriculture -output from
maize fell from a surplus of 9 million bags in
2006 to a deficit of 35 million bags at present
Background contd’
 Kenya thus relies on imports and Trade is
important for stabilizing the national food
supplies and food prices.
 However trade is affected by tariffs, NTBs
and subsidies.
 Regional trade important for food security
Kenya : Stylized Facts
Some Stylized Facts about Kenya Agritrade, Poverty and Food Security
Variable
2000
2002
Economic growth
200
3
200
5
2006
5.8
1.3
Agric as % of GDP
Exports value (mn)
Imports Value
2007
24
69,285
244.5bn
412.4bn
314.9bn
Export as % of GDP
23.6
Import as % of GDP
30.4
605.1bn
27.4
29.8
25.1
37.5
Trade deficit has been widening
Value of exports increased by 14% in last 2yrs but that of imports grew
faster and at a higher rate (16%)
Poverty still remains high and overlaps largely with rural areas
Where 67% of pop lives, affecting largely small-scale farmers
Kenya : Stylized Facts cont’d
Poverty Rates Selected Years (1992-2007)
Region
1992
1994
1997
2000
2007
Rural
42.o
46.8
52.9
59.6
49.1
Urban
29.3
28.9
49.3
51.5
33.7
National
46.3
46.8
52.3
56.8
46
Source: Kenya Economic Surveys (Various Issues), KNBS 2007
Study Objectives
1. Identify linkages between trade, rural
livelihoods and food security more
specifically within the Kenyan context.
2. Determine magnitude and composition of
regional trade in Agriculture (both formal
and informal) and inherent effects on
rural livelihoods and food security in
Kenya.
3. Carry out a review of national policies
related to agriculture – food security,
trade, and regional integration
Methodology
 Literature review to establish the Linkages
between Trade, Livelihoods and food
security.
 Secondary data used for trend analysis
 Primary data – FGDs with farmer
organizations.
› Key Informants
 Review of Policies, Legal and Regulatory
Frameworks
Agritrade-Rural Livelihoods-Food
Security Linkages
 Agricultural trade and Rural Livelihoods
Incomes – farmers are able to sell or export their produce
-processing and distribution agricultural produce
- incomes from labour in large and medium farms

 Thus if incomes from agric trade are
rewarding then we expect:
›
Rural households’ incomes to increase hence increased demand for
food and other consumer goods,
›
creation of non-farm jobs and employment diversification, especially
in small towns close to agricultural production areas
›
surplus rural labor is absorbed, raises demand for agricultural
produce and again boosts agricultural productivity and rural incomes
Agritrade-Rural Livelihoods-Food
Security Linkages
 Thus, impact on rural livelihood
comes through
›
falling real food prices,
›
creation of employment,
›
higher real wages, and
›
rising incomes from small farm households
Trade, Rural Livelihoods and Food
Security contd’ - Positive Linkages
Linkages between agricultural trade and rural livelihoods
therefore occur in three phases according to Evans
1990:
1. rural households earn higher incomes from production
of agricultural goods for non-local markets, and
increase their demand for consumer goods
2. this leads to the creation of non-farm jobs and
employment diversification, especially in small towns
close to agricultural production areas
3. which in turn absorbs surplus rural labor, raises demand
for agricultural produce and again boosts agricultural
productivity and rural incomes (Evans, 1990).
Trade, Rural Livelihoods and Food Security –
Negative Linkages
 Trade Liberalization such as SAPs – many sectors

1.
2.

became uncompetitive.
International trade policies such as
Subsidies -dampened world prices, leading to collapse of
many agricultural sectors in developing countries
NTBs – such as standards have also acted as barriers for
developing country exporters.
Consequently, production declined and this led to a drop
in employment for farmers and dependency on imported
food leading to major changes in food prices and
worsening the food security and livelihoods situation.
Rural Livelihoods, Poverty and Food
Security: The Kenyan Situation
 Poverty rates in Kenya are 46.1 percent. Rural poverty
is higher than the national average and stands at 49.1%.
 Rural poverty mostly associated with agriculture and
land
›
›
Highest in ASALs in Eastern and North-eastern – due to poor
climatic conditions
High potential areas e.g Central are over exploited due to
population pressure
 Poverty is highly correlated with food security i.e high
poverty areas are the most food insecure – Asals and
Coast
 Food security worsened since 1990s and by 2003
imports were 14 percent of total value of imports and 25
percent of agricultural imports.Trends In National
Food Security Indicators
Food Security Situation contd’
 Statistics show that only 47 percent of the entire




Kenyan population is food secure.
Hence Kenya’s dependency on food Aid has continued
to rise over the years and is observed to have high
peaks in 1993, 2001 and in 2007
Currently WFP is feeding a total of 3.6 million people
in 25 districts and 535,000 children are given school
meals through the school feeding program
Food imports especially cereals have also increased –
deficits last year was 95,000MT met through imports
Most imports come from the region Uganda and
Tanzania 108,155 MT and 56,900 respectively
Rural livelihoods and Implications
on food Security in Kenya
 More than 70 percent of Kenya’s Population live in rural
areas
 Agriculture and pastoralism the mainstay of the Kenyan
Rural economy
 An average of 68% rural household income is derived
from off-farm incomes, and around 32% comes from
own production (crops and livestock products), with
maize and wheat being the leading sources of crop
income.
 Incomes from Agriculture alone are not sufficient to
meet food needs especially in ASALs hence purchase of
food is very common.
Magnitude, Composition and Direction of
Trade-Kenya
 Exports
 dominated by the agricultural sector- horticulture 22%; tea
17.9%, others eg petroleum and manufactured exports about
45 percent of exports.
 Main destinations EU – 22 %; and Africa – 60 Percent
 Exports to the COMESA and EAC region consist of
manufactured products such as Fermented tea (35%), Cement
(4.5%), Cigarettes (4.2%) amongst others
 Exports to Africa increased 26% in the past 10 years
 Exports to Africa facilitated by EAC and COMESA customs
union
 Main barriers to Exports include NTBs, poor
infrastructure and delays at various border points
Magnitude, Composition and Direction of
Trade
 Imports –
 Kenya’s imports mainly consist of petroleum products (14
percent of total imports); crude petroleum (9 percent);
industrial machinery (11 percent); and motor vehicles (6.4
percent).
 Main source of Kenya’s imports include Middle and Far East –
China and India, UAE and EU countries including South Africa.
 Kenya also imports food specifically maize from EAC and
COMESA countries to meet shortages
Informal Trade and Food Security contd’
 Goods entering Kenya included, maize, beans, bananas, fresh
fruits and vegetables-tomatoes, onions avocados, pineapples and
Textiles
 Goods leaving Kenya included counterfeit batteries, cigarettes,
detergents, beverages, sugar, mattresses and other household
goods
1.
Reasons for illicit trade:
›
›
›
2.
3.
delays at the border which in some cases along Busia-Malaba border was up
to 7 hours
High Administrative costs -numerous requirements such as trade licenses –
business and road license, phyto-sanitary certificates
Corruption and bribery at police checkpoints
Magnitude is hard to measure
Positive aspects#
›
›
›
Improve access to food#
drives down prices of goods# - a plus for consumers but not producers
Provides incomes and improves livelihoods for traders#
Implications of Trade on Food
Security
 Continued high prices of food due to:
a) sustained high level of effective demand in the country,
especially in main urban centers,
b) accelerated appreciation of the Kenyan currency in recent
years
c) the impacts of increased internal production costs, given the
general cost of inputs and other production outlays, and
d) the overall rise in inflation, - rising to 31.5 percent in May and
29.4 percent in June 2008,
e) Overwhelming dependence on maize as the key staple for the
majority of the population.
f) drought and poor weather conditions;
g) rising food prices which is a global phenomenon as well as
h) The post-election violence which occurred in 2008 January
Implications of Trade on Food
Security contd’
 Increased imports – cheap food imports acting as a
dis-incentive for producers although this has
improved access to food Slide 26 Slide 27
 On one hand –loss of incomes for producers and
labourers but on the other hand creation of
employment and incomes for traders Slide 25
 Dependency on food aid has also acted as a disincentive for production although it has provided
much needed food for millions of people in extreme
food insecurity trends in foodaid.doc
Policy, Institutional frameworks
and the interplay of Stakeholders
 Trade liberalization under SAPs and various trade
agreements such as EAC and COMESA have led to
openness and reduction of tariffs
 Even after the trade regime was liberalized cheap food
imports have suppressed domestic food prices and
therefore food production
 Food security policy has laid much emphasis on Maize
sector ignoring other sectors which could raise
incomes of rural folk#
 Food Security policy not coherent with trade policy
Agricultural Policies and recent
Developments in the Sector
 Strategy for Revitalization of Agriculture 2003 wide spread stakeholder consultations
 sector based approach- implementation by different ministries
 National food security policy
 Parliamentary committees – SUPA, COTEPA
 Advocacy groups –Civil society – SUCAM
 Programs to help farmers –
fertilizer subsidy program
 National Accelerated Agricultural Input Access Project
Kilimo plus- voucher system for seeds and fertilizer
Kilimo biashara – Low costcost credit to purchase inputs (Ksh 605
million for 121,000 farmers
 Njaa Marufuku - Ksh 327.6 million to assist 1,866 groups, 40 schools
and 35organizations to undertake food security projects.

Agricultural Policies and recent
Developments in the Sector contd’
 Agricultural Sector Development Strategy – 2010-
2020
Part of Comprehensive African Agricultural
Development Programme (CAADP) launched in Kenya
in 2005.
 Agriculture positioned as the key driver for delivering
10 percent annual economic growth rate envisaged in
the vision 2030
 Recognises food security as an integral part of
agriculture
 Emphasis also placed on other enabling factors such as
infrastructure, NTBs etc
 Implementation through ASCU- Agricultural Sector
coordination unit

Conclusions and Policy
Recommendations
Need for an equitable global environment for trade;
removal of subsidies.
2. Taking care of regional NTBs to enhance regional trade
3. Most of what needs to be done is mainly at National
level
1.
1.
2.
3.
Need for a clear and comprehensive trade policy that takes into
account food security issues
Addressing infrastructural bottlenecks and redistributive
mechanisms from surplus to deficit areas.
Need for a comprehensive institutional framework to enable
private sector participation in the process as well as consolidation
of information for future referencing.
Institutional Frameworks
 The integrated approach KFSMG,
KFSSG
 National Food Security committee-consisting of
key gov’t ministries, donors , civil society and
private sector
 Institutions dealing more and more with
emergency situations
 The NCPB
Trends In National Food Security Indicators
Year
Per Capita
Food self-
Cereal Self
Ratio of food
Ratio of food
Food
Sufficiency
Sufficiency
import to
imports to
Production
ratio
ratio
agricultural
total exports
(Kg/yr)
exports
1992
626.42
0.98
0.91
0.21
0.16
1994
615.45
1.00
1.00
0.29
0.19
1996
602.93
0.94
o.71
0.14
0.09
1998
612.41
0.95
0.76
0.22
0.15
2000
561.69
0.91
0.65
0.18
0.15
2002
569.88
0.91
0.71
0.20
0.11
2004
581.98
0.93
0.79
0.37
0.21
2006
560.76
0.90
0.67
0.33
0.19
2008
554.78
0.87
0.60
0.42
0.29
Table 3.6: Wage employment by sector by region(numbers)2007
Region
Agriculture
Trade
Services*
Services**
Nairobi
10229
67038
45709
178761
Central
7059
7495
4176
15185
Coast
1150
3120
15817
60459
Eastern
115
1045
737
1640
Nyanza
539
7535
4038
34035
Western
643
3281
385
5931
11580
20841
9054
43663
Rift Valley
North Eastern - No data available
Services* Finance, Insurance, real estate and business services
** Community, social and personal services