A new ReSAKSS working paper, “Agricultural Growth and Poverty Reduction in Kenya: Technical Analysis for the Agricultural Sectoral Development Strategy (ASDS)—Medium Term Investment Plan (MTIP)”, is now available on the ReSAKSS website.
Written by Athur Mabiso, Karl Pauw and Samuel Benin, the paper was commissioned to analyze growth investment options within three agricultural ecological zones (AEZs) in the country of Kenya. The ASDS is the national agricultural development strategy policy document for the country’s future growth from 2010 until 2020.
The authors updated and revised the Kenyan Social Accounting Matrix then performed CGE modeling to identify commodities and priority subsectors for investment within each AEZ. Kenya has three distinct AEZs; the high rainfall, semi-arid and arid areas. The MTIP also has distinct investment strategies specific for each AEZ. The working paper reviewed past public expenditures alongside planned investments in each AEZ to estimate impacts on agricultural GDP and poverty levels. A baseline (business as usual) scenario was compared to that of the CAADP scenario (increased investment and accelerated growth) associated with exogenous increases in total factor productivity growth.
CGE Modeling helped to map out planned investments and forecast where the investments would yield accelerated growth and poverty reduction.
The working paper goes into detail on which agricultural commodities and subsectors would yield the greatest impacts on growth and poverty reduction at the AEZ and national levels. Findings show that accelerated growth of 6% or more would be required in multiple crops and subsectors if Kenya is to meet the CAADP Compact target of 6% agricultural GDP growth. Investments in high-rainfall areas would yield the greatest contribution to national agricultural growth, while the semi-arid areas would make the greatest contribution to national poverty reduction, closely followed by the high rainfall areas. While making the least contribution, the arid areas would be important and investments in the arid areas would be critical in enhancing resilience to drought. Thus fostering higher productivity growth and stronger linkages between the arid areas and the rest of the economy would help enhancine resilience to drought and reduce poverty.
The paper also finds that the proposed investments in the MTIP are largely in line with the required investments for Kenya to meet its CAADP 6% agricultural growth goal. However the paper caution high expectations of rapid growth given that the important infrastructure investments proposed in the MTIP will necessarily involve time lags. In addition the paper stresses the importance of fully implementing the MTIP and executing the ASDS at the AEZ and local levels as well as the need to leverage private sector investments, which will be necessary for the realization of Kenya’s CAADP agricultural growth target.
The paper concludes with investment policy recommendations for the Kenyan government highlighting mainly that the 6 percent growth outlined in CAADP is ambitious yet achievable in the near future.
To read the working paper, please download here.
This post was prepared by Heather Wyllie, a senior research assistant at ReSAKSS-AW.