In Zambia, smallholder farmers rely on rain-fed agriculture and constantly face challenges such as erratic rainfall, fragile soil and poor access to markets. Climate change places an additional burden on farmers’ food security by increasing the frequency and intensity of shocks including drought and flooding. However, the country’s agriculture employs more than 70 percent of the labour force and provides the main source of livelihood for more than 80 percent of the population living in the rural parts of the country, while contributing 20 percent to the National Gross Domestic Product (GDP). A consistent agriculture – centred development strategy and staple food crop-led agricultural development policy, honed through an incremental learning process, significantly shaped small holder agriculture in the country.
Similarly, agriculture is an important sector in Kenya. The sector directly contributes 24% of the GDP and 27% of GDP indirectly through linkages with manufacturing, distribution and other service related sectors. Approximately 45% of Government revenue is derived from agriculture and the sector contributes over 75% of industrial raw materials and more than 50% of the export earnings. The sector is the largest employer in the economy, accounting for 60 per cent of the total employment. Over 80% of the population, especially living in rural areas, derive their livelihoods mainly from agricultural related activities.
Despite the importance of Agriculture in both countries, Kenya scored dismally in the 2016 global hunger index, with a report suggesting that more than one million Kenyans in 23 counties are in need of food aid.
In a recent trip to Zambia, Kenya Markets Trust and other stakeholders learned valuable lessons on how systems in the country are working, and got insights on smallholder mechanization.
The team visited Musika, a not for profit Zambian organization funded by the UK’s Department for International Development (DFID) and the Swedish International Development Agency (SIDA) to stimulate and support private sector investment, smallholder farmers and agricultural Markets in Zambia. Musika provides its partners with quality, commercial focused technical advice and business support to catalyze and strengthen mutually beneficial relationships between businesses and smallholder markets.
An important lesson Kenya can learn from Zambia is allowing the commercial or private sector to play a key role in small-scale farmers’ growth. Private sector in Zambia is incentivized to enable small scale farmers access input, extension services, technology and market for increased productivity. This has led to a tremendous improvement in productivity.
Zambia compares better to Kenya when it comes to Agriculture financing, a key driver in promoting small holder productivity. Due to this, Zambian smallholder farmers have access to the right agricultural inputs, machinery, relevant technology and commercialized farming techniques, as opposed to their Kenyan counterparts.
An area of concern in Kenya’s agribusiness sector is the country’s agricultural subsidy programme. Although well-intentioned, subsidies around the world have been known to hurt private sector actors by causing distortions in agriculture value chains, amid other challenges such as untimely input supply, mismanagement and compromised distribution channels. However, Zambia has been quoted as one country that has run a successful subsidy programme. The country launched a system of e-vouchers operating through mobile phone networks that cuts out the middleman and allow farmers to choose which agro-dealers they would like to purchase from directly. Functioning on a mobile phone network, the e-voucher initiative is an update on previous paper voucher systems across Africa and other parts of the world. The digital nature of the e-voucher platform makes the process more secure and expedites trade through automatic payments to suppliers upon successful e-voucher redemption, keeping with the rising trend of mobile phone banking throughout Africa. The e-voucher program covers seeds, fertilizers and herbicides, offering subsidized agricultural products to small-scale farmers. Access to farming products and services has become speedier and efficient through use of the system. The E-Voucher system involves the participation of the private sector and government thus offers an efficient and effective subsidy programme.
Zambia is strides ahead of Kenya in terms of access to agricultural mechanization for smallholder farmers. Partnerships between various stakeholders have been set up to help machinery distributors to set up service centers and machinery distribution centers across the country. The partnership extends to financial services providers and the national farmers union to enable access to credit such as lease purchase schemes. This is aimed at providing access to mechanization services and machinery to farmers and offer marketing platform for the machinery distributors to the prospective farmers.
In Zambia, government policies play a key role on growth of smallholder farmers. The existing policies create a favorable environment for private sector participation in agriculture thus accelerating access to inputs and technologies to farmers.
Perhaps, Kenya can borrow a leaf from Zambia to unlock the tremendous potential our agribusiness sector distinctly possesses.