A young poultry farmer recently got everyone talking on Facebook. She was distraught and desperately sought assistance on where to sell her eggs.
Having gone through the tedious and challenging task of raising her layers successfully, she was stuck at the last stop on her long journey: sales.
She could not get a market and had been reduced to hopelessly staring at her daily production of 2,000 eggs, with no clue as to where she could sell them profitably.
The eggs kept piling up as was confirmed by the images she posted on social media.
Having approached supermarkets, hotels and restaurants, in vain, she was dismayed to find loads of trays from a neighbouring country retailing for as low as Ksh200 per tray, a price she could not match, if she was to make any profit.
To break even, she needed to sell her eggs at least Ksh250 per tray. Frustrated, she finally resorted to social media where she got a buyer.
However, her plight sparked debate and raised questions as to why Kenyans seem to be importing agricultural products despite the sector being the backbone of its economy. In fact, the country has the potential to produce adequate food for itsown citizens and have a surplus to feed the rest of the continent.
Kenya is a country that is agriculturally endowed, able grow all the food it needs and cater for the people’s protein requirements. Yet, lately, most of the horticultural and livestock produce that could be generated in many Kenyan backyards is being imported: Onions and pineapples from Tanzania; eggs, chickens and tomatoes from Uganda; poultry products from the United States, fish and garlic from China.
These increasing imports are hurting Kenyan farmers, who are finding it difficult to compete against the cheaper products. Many have suffered losses, with some giving up on farming altogether. More than a year ago, the rains failed and so did the much anticipated maize crop.
There was panic that the national strategic reserves were inadequate to tidy the country through the coming months. Following this, the price of maize flour skyrocketed, with a 2kg packet retailing at Kshs200, up from Kshs80.
The quantity one could buy was limited, causing a lot of public anxiety. Kenyans were a worried lot, with many straining to buy the flour to make the staple ugali.
To avert a looming disaster and regulate prices, the Government sanctioned maize imports from Mexico. But six months down the line, after harvesting their maize, farmers were shocked when the National Cereals and Produce Board (NCPB) rejected their produce, claiming that the strategic reserves were full.
Prices tumbled and farmers had nowhere to sell their produce.
Thanks to the imports, their maize could only fetch a paltry Kshs2,300 per bag (if you were lucky to have yours accepted), which could not cover the farmers’ costs of production, let alone earn them a profit.
Many suffered untold losses and others have given up on planting maize altogether. In the poultry sector, too, stakeholders are crying foul. Imports have driven the prices of chicken and eggs down and Kenyan farmers can hardly compete.
Farmers are suffering and some have abandoned the business, which they say, is no longer profitable as they are selling, at Sh200 a tray. About 20 tonnes of poultry meat originates from the US and is shipped to Zanzibar. It is repackaged and rebranded before being brought to Kenya.
The country has a population of 32 million birds but these are not enough for the consumers of poultry products. While Kenya imports poultry worth Sh500 million from Uganda, significant trade is carried out through informal avenues.
Kenya also imports more products from South Africa and Israel. Tomatoes have not been left out. Last year, the country imported 21,000 tonnes of tomatoes, or more than three times what was imported in 2016. In 2016, six tonnes of tomatoes were imported.
Most tomatoes and beans came from Tanzania.
In early 2016, Tanzania, Egypt and other onion-producing countries had taken over the Kenyan market. Tanzania supplied more than 50 per cent of the product.
A year later, Tanzanian onions started flooding Kenya’s largest onion producing county of Nyeri. Traders soon opted for the imported onions because they are cheaper and sold in bulk.
Unlike the local produce that is packaged in kilogrammes, Tanzanians sell onions in gunny bags.
All these imports are happening when the government and other stakeholders are pushing for more interest among Kenyans in farming, especially youth.
While the interest seems to be taking root, many are beginning to wonder if venturing into agribusiness makes sense at all, if after the grind of production, they cannot sell their produce. Some are giving up, while others have steered clear of agriculture.
It is the hope that joining in the agricultural value chain can boost job creation and absorb a large number of jobless Kenyans – Kenya’s unemployment figure stands at a shocking 40 per cent – while also providing food security and economic empowerment for producers.
However, this could remain a pipe dream if imports continue to grow. There is nothing essentially wrong with imports, especially from the East African region.
In fact, Kenya is a signatory to agreements that allow free trade across the region. Imports have a good and bad side.
They are good when they meet a genuine deficit such as when there is demand for food imports to meet a growing population with changing eating habits and tastes; and ensure adequate nutrition and food security
However, when they compete with the locals who rely on the sector, then, there is a problem. Kenya is an agricultural country that relies on the sector for about 30 per cent of its GDP, while 70 per cent of the population relies on it for its livelihood.
Some 40 per cent of Kenyans rely on the sector for direct employment. This means that its proper management is critical for the economy.
To the small-scale farmers, any form of market disruption no matter how small has the potential to significantly affect them, which is why great care should be taken when sanctioning imports of competing products. Few countries will allow imports at the expense of its indigenous industries.
Many will enact policies to protect their producers.
The current import figures are scary: At almost Ksh100 billion in imports, Kenya’s dependence on foreign markets for food imports has nearly doubled in the recent period compared with Ksh55.80 billion at the same time in 2015, and is more than three times the Ksh33.66 billion in 2010. More than 77,500 tonnes of maize worth $31.2 million has been imported since January, this year, from neighbours, the highest amount of imports in the past five years.
There is a wide gap between Kenya’s imports and exports. In 2015, the country did Ksh537 billion worth of exports and imports Ksh1.6 trillion, so deficit was Ksh1.1 trillion, a 10 percent current account deficit, placing a lot of pressure on the exchange rate. Kenya imports 72 percent of consumer-oriented agricultural products mainly from Uganda, South Africa, Europe, India and the United States.
According to the Economic Survey 2018, the country’s major food imports include maize, unmilled wheat and wheat flour, rice and sugar.
Increased maize imports ran Kenya a Ksh4.13 billion trade deficit against Uganda in five months through May for the first time ever. Most of our exports are products such as coffee, tea, flowers and some legumes.
Kenya imported about eight million bags of white maize from North America. The rest came from South Africa and Uganda. Billions were also spent on imports of yellow maize from Ukraine and Russia. So one wonders? Why all these imports? Why are our products more expensive than those that come from our neighbours? Are our vast agricultural lands unable to plug this ‘portrayed deficit’? The answers may be complex and the solutions may not be simple, but some experts have given various reasons for this state of affairs.
The high cost of production
Expensive farm inputs fuelled by high taxation on imported agrochemicals, seeds, and fertiliser, among other inputs, have led to meagre returns from harvests, say experts. The cost of labour and electricity are also other drivers of the high cost of production.
According to Mr Okisegere Ojepat, the chief executive officer, Fresh Produce Consortium of Kenya, pricing and lack of agricultural products are among the reasons for the influx of cheap imports.
Experts tie the high cost of production that has made agricultural produce uncompetitive in terms of price in the increasingly globalized food system as part of the challenge.
This has seen them lose out in competition with cheap regional commodities that enter the country through cross-border trade. Logistically, Kenyan farmers go through a lot of challenges from the farm level to the market, which affects the cost at which they sell their produce.
“Our farmers are starting from a disadvantaged position hence killing Kenyan farmers’ morale,” Mr Ojepat says.
Take, for example, maize production in our neighbouring Uganda, is a total contrast of what happens in the country. A 90kg bag of maize in Uganda costs about Ksh1, 200 to produce, while a farmer in Kenya incurs about Ksh2, 000 average for the same, according to studies by Tegemeo Institute.
In Kenya, the cost of labour is very high, going at 30 per cent, while the cost of fertiliser and harvesting take up 25 and 22 per cent. The recent Fall Army worm outbreak has also brought about an added cost for farmers, who have to buy expensive chemicals to control the pest.
The seasonality of Kenyan produce that is overly-reliant upon rain does not does not help matters either. Drought leads to shortages and a lack of produce in the ensuing season, while rains may bring in plenty that often leads to glut or floods that lead to scarcity. When there is no produce in the market, imports take centre stage with brokers and middlemen, spiking up prices.
Taxes on cost of production:
The effect on the cost of production is massive, says Mr Ojepat, due to heavier taxes than our neighbours. He notes that the situation is likely to continue following the re-introduction of the 16 per cent Value Added Tax on agricultural pest control products. The reintroduction could raise the cost of production by 50 per cent for farmers, increase food prices and dependency on food imports. “Market share of various food products such as pineapples has been taken over by Tanzanians. As a country we can only restrict entry of these products because we are a signatory to cross-border trade agreements,” Mr Ojepat says.
Cost of agricultural inputs
The cost of farm inputs is also skyrocketing and is often exaggerated. The cost of fuel and electricity is also very high, contributing to the high prices of homegrown agricultural products.
The highly industrialised model that glorifies monoculture and the use of fertilisers, has also been blamed for the high cost of farming.
The prices of conventional fertilisers such as DAP, NPK, SSP and CAN are double the global rates. Worse still, seeds from local propagators are cheaper in other eastern African countries.
A 2015 report by USAid indicated that despite the strength of the private seed sector, seed availability remained a challenge.
Farmers growing onions are faced with the high cost of hybrid seeds. The cheapest hybrid onion seeds per kilogramme go for Sh10, 000. And with an acre requiring three kilogrammes, this is a tall order for most Kenyan farmers.
Only varieties with lower day-length needs can be grown. Suitable varieties, include Jambar F1(for size and high yield) or Red Passion F1, Bombay Red and Red Pinoy (they have lower yields but are in high demand and fetch a high price). Tanzanian farmers use locally bred onion seeds (Mang’ola seeds).
Kenyan farmers can restore the dwindling yields through better onion growing practices such as proper curing of harvested onions, use of high-yielding highbred seeds, and marketing to keep away brokers. Due to these costs and losses, farmers are in the long run opting out of farming for other ventures and economic activities, reducing significantly the amount of food that is produced, hence the continuing overreliance on external food markets.
Decreased production among smallholders comes with massive job losses in the rural areas. “As ridiculous as it may sound, most farmers have been rendered nothing more than a market for a couple of outfits that benefit from selling inputs,” says Mr Emmanuel Atamba, the ambassador, Route to Food Alliance.