Financial Inclusion, Value Chain Innovation Critical to Agricultural Productivity in Kenya

By David Indeje / May 28, 2016


Western Kenya region residents depend on agriculture for their livelihood, yet sector inefficiency is widespread across the region and the rest of the country.

Farmers cannot access reliable markets, buyers cannot access reliable markets, source adequate quantities of produce and intermediaries cannot cost- effectively provide services.


Maize and sugarcane are the most important crops in Western Kenya region with maize as the main food crop. However, farmers are unable to increase their productivity unless the problems of plant diseases, reducing soil fertility and increasing soil acidity are overcome.


The end result is supply chain disorganization that depresses household income, increased food insecurity and hinders business development.


Decline in Maize Production Hurting the Economy

Performance of Agricultural Sector Improved in 2015

Alternative farming technology is rarely adopted because farmers lack adequate access to credit inputs and markets. Water is a limiting factor. Only farmers with access to water and efficient water management technologies can effectively practice crop diversification.


Several hindrances include: lack of awareness, lack of institutional framework in terms of non-existent or poor policies at national and local levels, information gaps, low investment in research and development and lack of private sector participation.


Over 95 percent of smallholder farms in Kenya show severe depletion of essential soil nutrients – nitrogen, phosphorous and potassium. Moreover, Kenya’s agricultural soils have dangerously low soil organic matter and exhibit worrying trends of acidification. This is according to a report by the National Accelerated Agricultural Input Access Programme (NAAIAP) released February 18, 2014.


Professor Calestous Juma of the Harvard, Kennedy School interested in innovation for development in The New Harvest: Agricultural Innovation in Africa, says about 30 per cent of all African labour potential is used in subsistence agriculture. If the percentage of the population could have access to methods of improving their agricultural techniques, increasing production, and gaining the ability to transform agriculture into an income earning endeavour, African nations would benefit in terms of Gross Domestic product (GDP), standard of living, infrastructure, and economic stability.

Read: The Critical Role Markets Play In Access to Information in the Agricultural Value Chain


A look at the Economic Recovery Strategy as stated in the Vision 2030 for revitalizing agriculture with an aim of transforming Kenya into “middle Income Country” as well as Sustainable Development Goal 2 which aims to end hunger, achieve food security and improved nutrition, and promote sustainable agriculture by increasing incomes and strengthening markets so that people can access food.


Stakeholders in the sector say their drive is to transform agriculture into a profitable economic sector capable of attracting private investments, providing gainful employment and food security for its people in line with the government priorities.


However, this has not been fully realized through the formulation and implementation of policy reforms to enable the farmers and stakeholders to move from subsistence production to market oriented ventures through adoption and use of modern technologies and business practices.


According to the Africa Human Development Report 2012 –Towards a food secure future, it says, “With real-time in-formation on prices, transport costs and demand, farmers can adjust their production and marketing and increase their efficiency.”


It adds that, “Information can also reduce food price volatility by better integrating rural markets, and it can expose unscrupulous traders, making it harder for them to cheat farmers. When farmers, transporters, sellers and buyers communicate regularly and rapidly, prices become more transparent, transaction times fall and the bargaining power of small producers increases.”

Improving farmer’s skill and abilities to create livelihoods out of agriculture than simply subsistence is critical in the way new knowledge is transmitted to farmers and adopted.


Prof. Calestous, says, “Rural radio programs that reach out to farming communities and networks of farmers’ associations spread new agricultural knowledge. In fact, there is a resurgence of radio as a powerful tool for communication.”


In Kenya, community and vernacular radio stations together with tailor made television programs – Citizen Tv’s Shamba Shape Up series and Nation Tv’s   Seeds of Gold – are playing a key role in providing significant benefits to farmers, their economies, and their societies.

This has been achieved through building partnerships with agricultural organizations such as Syngenta, Western Seed, Kenya Seed Company, Export Processing Zone, tertiary institutions among others to help farmers improve their agricultural output and make it easier to buy and sell their products at local or regional markets – food supply for both long and short term expand opportunity and strengthen regional economies.


The radio and television programs together with their weather news bulletin, has helped the regional farmers create conditions that will help small innovative firms grow, revitalise the local economy, including the role of economic diversification, enhancing their knowledge on resources, from land preparation, planting, weeding, harvesting and proper post harvesting initiatives like the use of pesticides among others.

Alex Awiti an Ecosystems Ecologist based at the Aga Khan University, Faculty of Arts and Sciences (East Africa) says, more productive, sustainable and resilient agriculture requires transformations in how rural people manage natural resources and how efficiently they use these resources as inputs for crop production. For these transformations to occur, it is essential that the world’s farmers, scientists, researchers, the private sector, development practitioners and food consumers come together to achieve climate-smart agriculture.

“Therefore, targeted investments in food production and high value market-led produce should pay off both in terms of food security at a time of soaring food prices, and in terms of household income and national economic development. The debate now focuses on where that investment should go.”

He thus, says, “The challenge therefore is how to increase productivity among subsistence smallholder farmers. The opportunity and innovation lies in the role of policy, technology, research support and institutional arrangements that can aggregate production of small farm rather aggregating the land resource base, “excerpts from his “Which way for Africa’s Agriculture?”

Therefore, “To be productive and profitable, smallholder production systems need an enabling environment: plant, soil and animal health extension services; timely and accurate climate forecast; quality inputs (seeds, animal breeds and fertilizer); reliable water supply; stable land tenure rights; access to affordable financial services, including insurance; appropriate mechanization; access stable markets; value addition through cottage processing. The creation of such enabling environment, public leadership is crucial as is public funding.”


Why Africa Needs to Invest More in Agriculture

Importance of ICT in the Agricultural Sector

Consequently, extension services to the farmers being one of the ways of imparting farmers with knowledge need to undergo changes that will involve decentralisation, accountability and diversified service provision in a way that is of demand led extension with the involvement of the  players in the delivery of services.

Another approach that is being proposed by Prof Calestous is the non-formal educational systems that would reach the population that is past the age of new techniques. He says encouraging local adoption of new techniques can improve economies only if farmers use them, so getting information into the hands of local farmers, and especially women, is vital to the success of research endeavours and should be part of any plan for agricultural growth.

This is through the trial seed packages to pilot farmers who end up becoming the early adopters.

“This strategy addresses both difficulties, since it allows for a trial with minimal risk, as well as a local source for new seed. Once the pilot farmer or association members grow the new variety of seed, they can sell it to their neighbours.”

He concludes that, there is need to bring the knowledge and perspective of farmers together with decision makers at other levels No new agricultural technology, however cutting-edge and effective, can improve the situation if people are unable to access it and use it. Farmers need to have the capacity to adopt and understand new technologies, and the system needs to develop to meet their needs and to enable them.

About David Indeje

David Indeje is a writer and editor, with interests on how technology is changing journalism, government, Health, and Gender Development stories are his passion. Follow on Twitter @David_IndejeDavid can be reached on: (020) 528 0222 / Email: [email protected]

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