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Jul 04, 2019

Agribusiness Holds the Promise for Kenya’s Economy

Kenyans are increasingly venturing into agribusiness that is carrying out farming and providing agricultural services purely for commercial purposes. Whether one is working as a laborer in a farm; distributing seeds; manufacturing feeds; transporting farm produce; engaging in agroforestry or carrying out fish farming, opportunities in agribusiness and the agribusiness value chain are limitless. 

That agriculture is Kenya’s mainstay and the economic pillar can never be overemphasized. Kenya’s agricultural sector straddles many subsectors that include industrial crops, food crops, horticulture, livestock, fisheries and forestry. Agriculture’s contribution to the country’s Gross Domestic Product (GDP) is the single largest by any sector - 26% directly and 27% indirectly by way of interlinking with other sectors of the economy. Notably, more than two in five Kenyans are employed in the agricultural sector and the ratio significantly increases in rural areas.

In its large and complex nature, agriculture is the source of livelihood to many households, providing them with income and food. Non-agricultural sectors such as manufacturing, banking, transport, tourism, education and construction are dependent on agriculture by some means. A complementary player to the operations of the non-agricultural economy, agriculture provides inputs and markets to the other sectors.

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Everyone bears witness to the fact that the economy suffers stress whenever there’s low performance in the agricultural sector. For instance, just two months ago, the World Bank and the International Monetary Fund (IMF) both lowered Kenya’s economic growth targets citing delayed onset of long rains which was projected to lower Kenya’s agricultural productivity. In retrospect, bumper harvests last year largely contributed to good economic prospects in as much as other factors like a stable macroeconomic environment also came into play. 

Despite the struggles by many Kenyans to succeed in agribusiness, they are still being saddled by, unstable weather patterns, high costs of farm inputs and transportation; unscrupulous middlemen; post-harvest losses; inaccessible markets; pests and diseases among others. Financiers are also only keen on other sectors of the economy which they deem predictable and lucrative.  Agricultural extension services have also slumped particularly in this era of devolution. It was thought that with the coming in of counties, such services would be brought closer to the people with a bid to increase investments in the agricultural sector.

Overreliance on traditional subsistence methods of carrying out agriculture is no longer tenable. It is reassuring, however, to note that a lot of Kenyans are embracing new practices in agribusiness and its value chain.  Only that measures need to be put in place to identify such innovators so that they are supported to scale up their inventions in order to reap big.

Value addition and the use of technology have the potential to create more opportunities in the value chain and make agribusiness attractive especially to the younger generation who currently shoulder the heaviest burden of unemployment.  There has to be better planned and well-coordinated linkages among agribusiness ventures, farmers, transporters, retailers and other players in the whole supply chain. When constraints in the value chains are addressed, they become more competitive hence providing expanded opportunities.

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Smallholder farmers must be supported to move away from subsistence farming and adopt agribusiness. This also means ensuring diversification.  So many opportunities abound- be it in rearing fish or pigs; keeping poultry or livestock; growing macadamia, avocado, capsicum or bamboo trees - the list is inexhaustible. The onus is on the government to ensure inputs such as fertilizers, seeds and equipment are of good quality. Entrepreneurs in this sector must be able to access financing either from the government or private funders. Also, the opening up of international markets is key to agribusiness-related ventures.

With all these in practice, the benefits of agribusiness will be felt by all: employment will be created, there will be food sufficiency and the economy will grow in leaps and bounds.

By Vincent Ogaya

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