Kenyan households that are engaged in agriculture contributed 31.4% to the reduction of rural poverty, and agriculture remains the largest income source for both poor and non-poor households in rural areas, the latest World Bank economic analysis indicates
“We found that productivity increases in the agriculture sector not only benefit poor households, but it can also potentially lift them out of poverty,” said Ladisy Chengula, World Bank Lead Agriculture Economist.
Nonetheless, real agricultural value-added has declined as compared to the levels attained in 2006 and this attributed to weather-related shocks, the prevalence of pests/disease and dwindling knowledge delivery systems such as the lack of extension services on adoption of modern technology.
Some of the policy reforms recommended in the report include the increased used of fertilizer by farmers adding that the government fertilizer subsidy program is inefficient as it mainly benefits medium/large scale farmers.
It also identified a gap in the lending for agriculture stating that only 4% of commercial bank lending is for agribusiness, despite most Kenyans being employed in agriculture or agribusiness.
World Bank also recommended more investment in the irrigation projects, especially in the arid and semi-arid lands stating the country fully relies on rain thus making it vulnerable to drought shocks.
The analysis shows that investing in irrigation and agricultural water management for smallholders can reduce productivity shocks and raise the sector’s total factor productivity, potentially climate proofing the industry.
The report highlighted that the agriculture sector lacks strong farmer organizations that could foster economic inclusion of smallholders adding that their many smallholder farmers are not integrated into key agriculture value chains.
