Impact of Agricultural Trade and Related Policy Reforms on Food Security in Kenya

Abstract

Kenya’s agricultural sector has undergone various changes emanating from policy reforms over the years. These reforms, which occurred from the late 1980s to the early 1990s, were aimed at reducing government involvement in economic activity and allowing the economy to move towards a free market. Policy reforms covered monetary, fiscal and trade aspects and liberalization of the agricultural sector. This study analyses the impact of specific reforms on agricultural production, performance and trade, and therefore food security. The study uses secondary data from the Central Bureau of Statistics and the Ministry of Agriculture. Welfare Monitoring Surveys of 1982, 1992 and 1997 were used as sources of regional cross-sectional household data. Trends in production and trade are analysed, the impact of policy instruments such as prices and market access explained, household incomes and expenditures estimated, and food security trends are analysed using various indicators for both the pre- and post-reforms periods. The analysis indicates that agricultural prices and production have generally declined. The performance of the agricultural sector in the 1990s was dismal, with annual growth in agricultural GDP averaging 2% compared with 4% in the 1980s. Agricultural export growth after the reforms has shown mixed trends due to market access limitations for Kenyan exports. Market access for imports into the Kenyan market has improved since the reforms, occasioning tremendous import growth. However, the capacity to import food has declined, making the country more food insecure. The balance of trade between Kenya and the rest of the world has worsened against Kenya. After the reforms the country moved from broad self-sufficiency in production of most food staples to a net importer. The sources of food security for rural people are subsistence food production and purchases using farm or off-farm income, with a third of households receiving remittances. The linkage between the performance of the agricultural sector and household incomes indicates that when the performance of the sector is poor, household incomes are low. In the light of these challenges, the country needs to reconsider increasing the use of domestic support measures allowed within the World Trade Organization (WTO) agreement on agriculture to allow adequate development of the sector. However, implementation of liberalized policies should be harmonized and coordinated to avoid adverse effects on the sector.