You are here  » Home   » Business News

Farmers in Kenya need State backing to improve earnings

By Mbatau wa Ngai | Published Sat, November 19th 2016 at 00:00, Updated November 18th 2016 at 18:32 GMT +3
A farmer offloads his fresh bananas in Riosiri market Kisii County. Addition revenue earned from value addition can help boost farmers' standards of living.

Kenyans hope the Government formed after next year’s election will put as much emphasis on value addition of agricultural produce as the last two have put into infrastructure development.

Plausible arguments can be made that the additional revenues earned in selling processed goods – as opposed to raw materials — would make paying back the loans borrowed to finance construction of roads, railways, ports and power plants much easier. Factories set up to process the produce would also soak up thousands of unemployed youth.

Yet, despite the obvious benefits, the Government of former President Mwai Kibaki and the current one of Uhuru Kenyatta stand accused of talking more and doing little to set the ball rolling.

True, the Governments have published impressive master-plans and even set aside or bought lands designated to house the planned industrial plants. But they seem sold on the idea that the construction of access roads, building of sewerage and sanitation plants and provision of power will, in themselves, attract investors, preferably foreign.

The approach contradicts experience from Europe — particularly Germany, Japan and the newly industrialised South Asian countries where the process was driven by purposeful government efforts. The result is many of these countries’ industrial champions are government backed.

This means a government’s commitment to pull its citizenry out of poverty is judged not on what it says but on the practical steps it takes to implement its policies in this area. And Kenya is not short of policies.
For starters, the new government will be judged on how it restructures and re-finances the country’s development institutions. This would give these institutions the muscle they need to partner with the co-operative sector, which has the money but lacks the vision and skills to move their produce from the farm to super-market shelves.

The realisation that many of the co-operative unions formed around the crops the grow are able to mobilize millions—if not billions of shillings—in a relatively short time means that the state institution’s role could be expanded to include the offering of the vision and expertise in setting up and running the factories and marketing the finished produce.

The ministry of industrialization and co-operative development could also be roped in to supervise the drawing up of rules and regulations that will govern the qualified staff employed to run these firms. The ministry would also be responsible for ensuring periodic audits are carried out by reputable firms.

The other expectation is that the results of these audits would be publicised among the firms’ shareholders. But, perhaps, of even greater importance, would be ensuring that the audit recommendations are implemented promptly.

The ministry of foreign affairs could also consider changes to ensure the bulk of its employees are qualified to sell the country’s products across Africa and beyond. The embassies would then be put on annual sales targets with the staff performing according or beyond expectations being offered generous bonuses on top of rapid promotions.

The good news is that the Government would not have to re-invent the wheel as it could run invaluable lessons from the Scandinavian countries which have highly organised co-operative sectors. Indeed, some of the co-operative unions in these countries are so ahead of the game that they have identified the hidden value in Kenya’s agricultural produce and have already put their money where their mouth is.

The Norwegian firm that is already processing coffee from Nyeri County offers a good example of the way the local co-operative societies, unions and individuals can go. To their credit, some of them are already taking baby-steps on this road.

There are many small companies around the country that have partnered with foreign companies to process their produce. In Baringo, for example, coffee farmers have partnered with a Korean firm. Other counties are dotted with entrepreneurs adding value to crops as diverse as potatoes, bananas and tea.

Unfortunately, these enterprises are still in their infancy and their owners need help if they are to scale up and make a real impact beyond their immediate neighbourhoods. The development financial institutions could start with these entrepreneurs who have already proved their mettle by going where few others dare.

[email protected]