Kenya Agricultural Sector Risk Assessment
Despite highly variable growth rates, agriculture remains a crucial backbone of Kenya’s economy. The sector directly accounts for more than one quarter of the gross domestic product (GDP), 70 percent of rural jobs, 65 percent of exports, and 60 percent of foreign exchange earnings. Consequently, agriculture is vital to Kenya’s economic growth, national food security, and poverty reduction. Yet Kenya’s reliance on smallholder, rain-fed agriculture and its high poverty rates render the country particularly vulnerable to climate risks.
In 2014, the Agricultural Risk Management Team (ARMT) of the World Bank conducted the Kenya Agricultural Sector Risk Assessment (PDF) to better understand the dynamics of agricultural risks and identify appropriate responses, incorporate agricultural risk perspective into decision-making, and build capacity of local stakeholders in risk assessment and management. This work highlights major risks facing Kenyan agriculture and identifies pathways toward stronger sector resilience.
Key findings of the report are summarized in the Kenya Agricultural Sector Risk Assessment Policy Note (Download PDF).
Summary of the Report
Managing Agricultural Risks
While handicapping growth, unmanaged risks are also a significant factor contributing to chronic poverty in Kenya. Shocks to agricultural production and markets adversely impact household wellbeing in a variety of ways: by limiting food availability, weakening food access, and negatively affecting future livelihoods through income disruption and depletion of productive assets. Chronically vulnerable groups with high exposure to risks experience a disproportionately large impact from adverse events and typically lack coping mechanisms available to other groups. Understanding these and other risk dynamics is key to developing appropriate risk management responses that can help reduce production volatility, safeguard livelihoods, and put the sector and the broader economy on a firmer footing for growth. Effective strategies can also make a meaningful contribution to poverty reduction efforts. Management of agricultural risk is not new to Kenya. The Government of Kenya has a long track record of investing in risk mitigation, transfer, and coping mechanisms. Moving forward, Kenya’s Vision 2030 recognizes the need to strengthen existing risk management systems and the Government has launched a range of new initiatives to confront the most severe threats facing the country. In 2011, it established the Drought Risk Management Authority to better coordinate preparedness and speed up response measures. It also launched the Disaster Risk Reduction Program, the National Climate Change Action Plan, and the National Hunger Safety Net Program. These and other initiatives by the GoK and its development partners are already helping to safeguard livelihoods, promote adaptation, and strengthen resilience against impacts from natural disasters and a changing climate. Yet Kenya’s agricultural supply chains remain highly vulnerable to myriad risks that disrupt the country’s economic growth, cripple poverty reduction efforts, and undermine food security. A more targeted and systematic approach to agricultural risk management is needed in Kenya.
Strengthening ex ante resilience requires moving beyond individual practices to integrate through a whole-farm and whole-landscape systems approach. Many gains will come though better and more equitable management of natural resources such as soil, water, and landscapes, which will require knowledge generation and sharing, and integration of investments at multiple levels. These will need to be supported by policy and institutional reforms. Equally critical will be ensuring that producers have good access to needed productive inputs, including market and weather information, credit, and well-functioning markets. Based on an assessment of existing risk management practices and programs in Kenya, the following recommendations are tailored to address Kenya’s unique risk landscape, fill existing gaps, and scale up effective strategies. The interventions encompass a broad range of interrelated, mutually supportive investments that align with the Livelihoods Enhancement goals within Vision 2030 and aim to strengthen the resilience of vulnerable farming and pastoralist communities to shocks.
1. Improved Water and Soil Management
Addressing climate-change-induced water stress and promoting better water-use efficiency, particularly in marginal rainfall zones, will be required to strengthen resilience in Kenya’s agricultural sector. Similarly, curbing soil erosion, increasing soil fertility, and improving access to high-quality, drought- and disease-tolerant seed varieties are crucial to enhancing the productivity of smallholder systems. In most parts of the country, access to irrigation remains limited, and farmers are at the mercy of rainfall. Perception of high production risks drives their ex-ante decisions and discourages them from investing in fertilizers, improved seeds, and better crop husbandry practices. Irrigation infrastructure build-out is costly and not suitable for many areas where long-term access to groundwater is uncertain. However, water harvesting and improved soil management offer a sustainable and cost-effective way to favor investments in yield-enhancing practices. In order to strengthen risk management at the farm level, increase the effectiveness of productivity-enhancing programs, and improve the effectiveness of public support systems, the following is recommended:
2. Strengthening Rangeland Management and Livestock Services
Given the importance of the livestock sub-sector, safeguarding the long-term viability of arid and semiarid rangeland ecosystems is a key component of building resilience in Kenya’s agricultural sector. This will require reversing the degradation of water, soil, and vegetative cover, and ensuring access to sufficient grazing land. Successful strategies to mitigate rangeland degradation must also address resource conflict between and within communities, improve pastoralists’ access to markets, and reduce the vulnerability of marginal livestock owners to shocks. In order to achieve sustainable, community-driven pastureland management, the following is recommended:
3. Climate Services for Better Decision-Making
Improving the productivity and climate resilience of smallholder farmers and pastoralists requires timely, cost-effective, and relevant information on improved agricultural practices, markets, prices, inputs, weather, and news of impending disasters. Yet, access to and quality of these climate and market information services are critically low or non-existent in many parts of Kenya. The assessment highlighted the need for developing integrated, modern agro-weather forecasting and marketing information systems to equip farmers with the right information to make better decisions and manage climate variability. These tools will also enhance extension services delivery by providing advice on agronomic best practices, agro-input use, storage technologies, and marketing of production. Building partly on the experiences from Agro-weather Tools for Climate Smart Agriculture pilots funded by the World Bank Netherlands Partnership Program in Embu and elsewhere, proposed interventions include:
The risk assessment process highlighted opportunities for strengthening the climate resilience of Kenya’s agricultural sector. The country is currently undergoing a revolutionary transformation within its political, fiscal, legal, and administrative makeup. Launched in 2012, the devolution process has decentralized power and resources across key sectors of the economy to local levels of government.
For agriculture, this means that 47 county governments are now in the driver’s seat. While this presents near-term challenges, it also presents a unique opportunity for more localized and more targeted planning and decision making on agricultural sector growth and development priorities. It also empowers more localized, more effective responses to the growing threat of climate variability and extreme weather. It is hoped that this study’s findings will help to inform optimal policy and investment choices toward stronger climate resilience of agricultural systems and livelihoods in Kenya.
Find all key findings of the report summarized in the Kenya Agricultural Sector Risk Assessment Policy Note (Download PDF).