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February 26, 2024 AGRI ECONOMICSRESEARCH0

 

The Food and Agriculture Organization (FAO) of the United Nations recently released its Yearbook on the state of world food and agriculture. The Statistical Yearbook 2023 reports that global agriculture was marked by both triumphs and challenges in 2021. The comprehensive report explores various facets of the global food system, encompassing production, trade, prices, food security, nutrition, and sustainability.

One of the notable highlights of 2021 was the record-breaking global food production, with total cereal production reaching a record 2.9 billion tonnes showing the resilience and adaptability of agricultural systems worldwide. However, amidst this abundance, the report sheds light on the looming challenges confronting the global food system, including the ominous specters of climate change, burgeoning population growth, and geopolitical conflicts.

A salient revelation from the FAO report is the unambiguous concentration of primary crop production, with the top three producers wielding significant influence over global supplies. For example, the top three producers of wheat account for 56% of global production. This concentration of production raises concerns about food security, as a disruption in production in one country could have a significant impact on global food supplies, which could precipitate supply shortages and price spikes.

The report also finds that the two largest net exporters of food are the Americas and Brazil. The Americas exported a net of $401 billion worth of food in 2021, while Brazil exported a net of $113 billion. China, on the other hand, is the world’s largest net importer of food, importing a net of $252 billion in 2021.

Key statistics from the report highlight the evolving contours of agricultural landscapes worldwide. Notably, agricultural value added surged by 84% between 2000 and 2021, reaching a commendable USD 3.7 trillion. However, amidst this growth trajectory, the report elucidates a notable shift in labor dynamics, with agricultural employment declining from 40% of the global workforce in 2000 to 27% in 2021, highlighting the gradual transformation of economies towards diverse sectors.

The FAO report also shines a spotlight on environmental sustainability within agricultural systems. Alarmingly, pesticide use surged by 62% between 2000 and 2021, with the Americas accounting for a substantial share of this increase. Additionally, agricultural reliance on inorganic fertilizers remains pronounced, with nitrogen constituting 56% of the 195 million tonnes of nutrients utilized in 2021. These trends stress the need to adopt sustainable agricultural practices to mitigate environmental degradation and safeguard ecosystem health.

Also, the report highlights the inextricable linkages between food security and nutrition. Sadly, an estimated 777 million individuals grappled with undernourishment in 2021, while 2.3 billion people lacked access to adequate nutrition. These sobering statistics emphasize the urgency of concerted efforts to boost food security and address malnutrition through multifaceted interventions encompassing sustainable agriculture, market accessibility, and food waste reduction initiatives.

The report concludes by calling for a more sustainable and equitable food system. The report recommends a number of measures to achieve this, including investing in research and development, promoting sustainable agricultural practices, and reducing


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The UK economy officially entered a recession in the second half of 2023, as defined by two consecutive quarters of negative GDP growth. The final quarter of 2023 saw a contraction of 0.3%, exceeding most predictions. Several factors contributed to the recession, including (1) high inflation caused by rising energy and food prices, which have placed immense pressure on households and businesses; (2) interest rate hikes as a consequence of the actions of the Bank of England to combat inflation, but this also dampened economic activity; and (3) a global economic slowdown, further impacting the UK’s export-oriented sectors.

The recession is already having a noticeable impact on the UK, with job losses as businesses are cutting costs and hiring freezes becoming more common. There is also reduced consumer spending due to rising costs and economic uncertainty, as well as lower living standards since many people are struggling to afford basic necessities due to inflation.

With the winds of change blowing across the global economy, many in the agricultural sector, particularly in Africa, are understandably concerned. While the UK’s economic woes might seem distant, the interconnectedness of our world means the ripples will be felt far and wide. This is because the UK is a major buyer of Africa’s horticultural products, tea, coffee, among others. Reduced demand for exports, potential trade disruptions, and tighter investment belts—these are just some of the challenges African agriculture might face.

Will farmers’ hard work, sweat, and hope be swept away in this economic storm?

Imagine the sting of sunburnt shoulders after a long day on the farm. The calloused hands, the grit on a farmer’s boots, the quiet satisfaction of watching life burst from the earth! That’s the heartbeat of African agriculture, a rhythm that’s about so much more than just crops. It’s about families, communities, and the very foundation of life on this continent.

The UK might be tightening its belt, but the world is a vast and hungry place. For Africa, it’s time to explore new trade routes and chart new courses. Here’s the thing: Africa has weathered storms before, and it’ll weather this one too. For Africa, this is not a time for despair, but for strategic thinking and proactive measures that turn challenges into opportunities. The continent majorly relies on farmers, after all, and adaptability is in their blood—farming is their business!

ALSO READ: 8 Macro Trends that will influence Africa’s Agriculture in 2024

Future outlook

It’s important to note that the exact impact of the UK recession on global markets and African agriculture is difficult to predict, as it depends on several factors like the severity and duration of the recession, government interventions, and global economic trends. It is important to note that the severity and duration of the UK recession are still unclear. Some economists believe it will be short-lived, while others predict a more prolonged downturn. The UK government is already implementing various measures to mitigate the impact, but the ultimate outcome will depend on a complex interplay of domestic and global factors.

Turning challenges into opportunities

The impact of the UK’s recession might be unevenly distributed across different regions and sectors in Africa, and some African countries might even benefit from opportunities arising from the changing global economic landscape. The UK recession might cast a shadow, but for African agriculture, it can also be an opportunity to reimagine, reshape, and emerge stronger. By working together, embracing innovation, and fostering resilience, African countries can navigate these uncertain waters and achieve economic gains. This can only happen by being nimble and embracing new technologies, digging into data-driven solutions, and finding smarter ways to farm. Who knows, maybe Africa will even discover a hidden gem that will become the next revolutionary agricultural technique!

In order to thrive, Africa must chin up and face the future with the same determination that pushes its farmers out into the fields each morning, the same hope that sees a tiny seed transform into a life-giving fruit.


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February 19, 2024 AGRI ECONOMICS0

 

As we approach the end of the first quarter of 2024, global economic trends are already taking form, influenced by various factors such as elections in at least 64 countries worldwide. Naturally, these events impact global trade, including the agricultural sector.

In the face of this, the African Development Bank (AfDB) Group released is biannual report titled “Africa’s Macroeconomic Performance and Outlook”, providing an updated analysis of the continent’s recent macroeconomic performance and short- to medium-term prospects. This report serves as a crucial resource for policymakers, investors, researchers, and development partners seeking to understand Africa’s economic trajectory amidst global dynamics.

In the sphere of macroeconomic policy, aligning strategies with agricultural transformation is increasingly essential. This involves a comprehensive approach integrating agricultural perspectives into macroeconomic frameworks (including price, fiscal, monetary, exchange rate, and trade policies) to drive effective strategies for agricultural development.

Looking ahead to 2024, Africa’s agriculture sector is poised for significant growth, buoyed by several macro trends:

  1. Projected GDP Growth – Amidst the changing landscape, AfDB reports that projections for Africa’s GDP growth for 2023 and 2024 have been revised downwards to 3.4% and 3.8% respectively, reflecting evolving economic conditions. However, these figures underscore the region’s resilience and potential for growth, particularly within the services sector, which is anticipated to be a key driver of economic expansion.
  2. Market Opportunities – Market opportunities beckon, driven by demographic shifts, income growth, and changing food demand patterns. These shifts open avenues and pathways for investments in African agriculture and agri-food value chains, promising not only economic growth but also broader socio-economic development.
  3. Rising Population – The burgeoning population, projected to reach 2.5 billion by 2050, heralds increased demand for food, offering farmers opportunities to expand production and market reach.
  4. Urbanization fuels shifts in dietary preferences, creating new markets for processed foods and agricultural products. As more Africans move to cities, their diets are changing, with a growing demand for processed foods, fruits, vegetables, and animal products. This will create new opportunities for farmers who can adapt their production to meet these changing preferences.
  5. Climate change is already having a negative impact on African agriculture, with more frequent droughts, floods, and extreme weather events. Despite the looming specter of climate change, African agriculture stands to benefit from climate-smart practices and innovations.
  6. Technological advancements, including precision agriculture and satellite imagery, hold promise for enhancing productivity and resilience in the face of environmental challenges. These technologies have the potential to revolutionize the way farming is done in Africa.
  7. The influx of investments, both domestic and international, underscores confidence in Africa’s agricultural potential. The growing investment in African agriculture from both domestic and international sources will help to finance new technologies, infrastructure, and agribusinesses, which will further boost the sector’s growth.
  8. Services Sector and Risks – Africa is expected to be the second-fastest-growing major region in 2024 majorly driven by the services sector. Yet, amidst these opportunities lie inherent risks, including security threats, political instability, and debt burdens, stressing the need for vigilant monitoring and adaptive policy responses.

2024 will certainly be characterized by uncertainties, but it will also witness advancements in new technologies, which will increasingly influence agriculture and environmental sustainability. The theme of sustainability will remain crucial, alongside factors like identity, territory, innovation, and development. For Africa, navigating the intricate agricultural terrain will require embracing these trends and promoting innovation as a top priority. By utilizing technological progress, adopting sustainable methods, and making strategic investments, Africa’s agriculture sector can not only overcome forthcoming challenges but also emerge more robust, resilient, and better prepared to cater to the needs of a growing population.


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In the midst of a global technological revolution, the potential for artificial intelligence (AI) to reshape economies is both thrilling and concerning. As we navigate the complexities of AI, it becomes imperative to explore how this transformative technology can revolutionize the agricultural sector, particularly in the context of Africa.

The Impact of AI on Global Labor Markets

Before delving into the specifics of agriculture, it is crucial to understand the broader implications of artificial intelligence on the global economy. According to recent analysis by the International Monetary Fund (IMF), nearly 40 percent of global employment is exposed to artificial intelligence. Unlike previous technological advancements, AI has the unique capability to impact highly skilled jobs, creating both risks and opportunities.

In advanced economies, where approximately 60 percent of jobs may be affected by artificial intelligence, there is a dual prospect of job enhancement and displacement. Meanwhile, emerging markets and low-income countries face a lower immediate disruption rate of 40 percent and 26 percent, respectively. However, the lack of infrastructure and skilled workforces in these regions poses a risk of exacerbating global inequality over time.

AI’s Influence on Inequality and the Labor Market

The IMF’s findings also suggest that artificial intelligence could exacerbate income and wealth inequality within countries. As AI becomes integrated into businesses worldwide, there is a potential for polarization within income brackets. Workers adept at harnessing artificial intelligence may experience increased productivity and wages, while those unable to adapt could fall behind.

To mitigate this risk, policymakers are urged to establish comprehensive social safety nets and retraining programs for vulnerable workers. The goal is to ensure an inclusive transition to an AI-driven world, protecting livelihoods and curbing inequality.

AI Preparedness Index: Crafting Inclusive Policies

The AI Preparedness Index, measuring readiness in key areas such as digital infrastructure, human capital, innovation, and regulation shows that wealthier economies, including advanced and some emerging market economies, tend to be better equipped for AI adoption. However, there is considerable variation among countries.AI Preparedness Index

For advanced economies, the focus should be on prioritizing AI innovation and integration while developing robust regulatory frameworks. In contrast, emerging markets and developing economies need to lay a strong foundation through investments in digital infrastructure and a digitally competent workforce. By doing so, we can cultivate a safe and responsible artificial intelligence environment that maintains public trust.

READ: Top Technology Trends That Are Revolutionizing Agriculture

AI in African Agriculture: A Game-Changer

In the agricultural sector, artificial intelligence holds immense potential to address critical challenges faced by Africa, including low productivity, unpredictable climate conditions, and inadequate infrastructure. The integration of artificial intelligence technologies can bring about transformative changes in the agricultural sector.

For example, in precision agriculture, AI-driven technologies such as drones and sensors provide real-time data on soil conditions, crop health, and weather patterns, enabling informed decision-making and resource optimization.

AI can also be used to optimize the supply chain with AI algorithms that can predict market demands, optimize logistics, and minimize post-harvest losses, benefiting farmers and contributing to national food security.

In smart farming practices, AI-powered applications can assist farmers in remotely monitoring and managing their farms, from automated irrigation systems to predictive analytics for disease control.

Tailoring AI Adoption to African Realities

Contrary to concerns about global income inequality, Africa has the potential to bridge the gap through thoughtful AI integration in agriculture. Tailored solutions addressing crop diversity, regional climate variations, and socio-economic contexts are essential. Capacity building initiatives and investments in digital infrastructure, especially in rural areas, are imperative for successful AI adoption.

Despite IMF’s warning of potential inequalities, Africa can chart a different course by leveraging artificial intelligence to foster inclusive growth. The emphasis should be on empowering smallholder farmers, a significant portion of the agricultural workforce, with AI tools and knowledge. Governments, in collaboration with private stakeholders, can play a pivotal role in ensuring equitable distribution of AI benefits.

As Africa stands at a pivotal juncture, the transformative power of artificial intelligence in agriculture offers a unique chance to leapfrog traditional development barriers. Embracing artificial intelligence with a tailored approach can not only bridge technological gaps but also pave the way for building a resilient and prosperous agricultural future. In this AI-driven era, Africa has the opportunity to pioneer a sustainable and inclusive agricultural ecosystem that sets a global standard for progress and equity.


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The world is bracing itself for a potential increase in chocolate prices due to cocoa crop shortage in the leading cocoa-producing regions of Ghana and Ivory Coast. These two countries collectively supply two-thirds of the world’s cocoa, and their struggles with adverse weather conditions and crop diseases have sent cocoa prices surging by approximately 47% over the past year.

The cocoa market is no stranger to fluctuations, but the combination of recent challenges has raised alarm bells in the sector. Cocoa prices have been on a relentless climb, largely driven by concerns over adverse weather conditions and crop diseases in Ivory Coast and Ghana. These issues have significantly impacted cocoa production, sending shockwaves throughout the industry.

The recent surge in cocoa prices has raised concerns among major chocolate manufacturers such as Hershey Co. and Lindt & Spruengli AG. They have cautioned about potential price hikes that could potentially affect demand in both Europe and the crucial growth market of Asia. This situation has caused ripples across the cocoa supply chain.

“The current situation is looking relatively dire unless there is a dramatic improvement in the outlook. Further price increases could weigh on consumption,” noted Darren Stetzel, Vice President of Soft Commodities for Asia at broker StoneX.

The cocoa crisis is not solely the result of one factor but rather a confluence of challenges. Excessive rainfall, pest infestations, and crop diseases have wreaked havoc on West African cocoa crops. The key question revolves around the size of the two annual cocoa harvests in Ghana and Ivory Coast, with Ivory Coast initially forecasting a nearly 20% decrease in output for the main-crop season.

Rabobank and Marex analysts have projected a drop in West African cocoa output for the 2023-24 season, with Marex even anticipating a global deficit of 279,000 tons, surpassing the combined shortfalls of the previous two seasons. This poses a significant threat to the livelihoods of African cocoa farmers, many of whom are already living below the poverty line.

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Agricultural inputs like fertilizers and pesticides have also become scarcer and more expensive for these farmers, hampering efforts to rejuvenate or treat damaged cocoa trees and address the swollen-shoot disease, which threatens Ivory Coast’s cocoa output, affecting approximately 20% of the nation’s crop.

Despite the jitters, Ghana has taken proactive steps to address the crisis. The country has increased cocoa farmer pay by over 60% to curb smuggling into Ivory Coast and encourage investment. This move may lead to increased cocoa production in Ghana, but challenges remain.

One such challenge is the aging cocoa trees in Ghana, which could contribute to a declining production trend. The cocoa market’s tight supply chain has also resulted in reduced processing of cocoa beans into confectionery products globally. High cocoa prices are starting to impact demand in Asia, with Swiss grinder Barry Callebaut AG reporting lower sales in July.


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September 26, 2023 AGRI ECONOMICSINDUSTRY NEWS0

 

In a concerning development for Kenya’s agricultural sector, the production of sugar by local millers has taken a sharp nosedive, plunging by nearly a third within just seven months. The primary culprit behind this dramatic decline is a severe shortage of sugarcane that has sent sugar prices soaring to record highs, impacting consumers and the broader economy.

An analysis of the most recent data released by the Kenya National Bureau of Statistics (KNBS) reveals that domestic sugar production plummeted to 332,034 tonnes in the seven months leading up to July, marking a staggering 31.2 percent decrease from the 482,871 tonnes produced during the same period last year. This stark drop in sugar output paints a grim picture for an industry already choked with numerous challenges.

For consumers, the implications have been nothing short of a nightmare, as sugar prices have skyrocketed at an alarming rate over the past year. According to KNBS data, the cost of sugar has surged by a staggering 61.4 percent during this period. In plain contrast, the prices of other essential food commodities, such as beans, maize flour, and cooking oil, have seen substantial but comparatively modest increases of 27.9 percent, 9.6 percent, and 18.5 percent, respectively.

During the seven-month period under review, the highest sugar production was recorded in January when output peaked at 81,648 tonnes. However, this figure rapidly dwindled to just 31,495 tonnes by May.

Kenya boasts 16 sugar factories, with five of them – Miwani, Chemelil, Muhoroni, Nzoia, and South Nyanza – being government-owned. Additionally, the government holds a stake in Mumias Sugar, which currently operates under receivership. These millers have been struggling with a severe sugarcane shortage this year, primarily due to the depletion of stocks of mature cane. The dire situation even forced some millers to resort to crushing immature cane, a less than ideal solution.

To mitigate the crisis, some millers reduced their crushing schedules to only a few days a week, allowing them to maximize their limited cane supplies. Others temporarily suspended operations to conduct maintenance and upgrades. Nevertheless, the situation became so dire that the government stepped in, refusing to renew licenses for sugar millers in July. This suspension of milling activities will continue until November, giving cane the time needed to mature.

By the end of last month, only three factories – Transmara, Sony, and Sukari – were still operational, worsening the decline in local sugar production. The total sugarcane milled by all sugar factories also decreased by 10 percent, falling from 436,694 tonnes in June to 395,232 tonnes in July 2023. Sugar production mirrored this trend, dropping to 33,328 tonnes from 34,373 tonnes in June, according to the Agriculture and Food Authority.

This alarming decrease in sugar production is a drawback to the economy and also calls for the urgent need for comprehensive reforms in the Kenyan sugar industry. Earlier in September, the Kenyan government introduced stringent measures for duty-free sugar imports to curb rogue traders that are taking advantage of the market shortage.


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Kenya is taking significant strides towards restructuring its agricultural taxation system. The Kenyan government’s recent proposal to introduce a 5% withholding tax on agricultural products delivered to cooperatives or other organized groups has sent ripples through the country’s farming community.

In his statement, the Cabinet Secretary, National Treasury & Economic Planning, Prof. Njuguna Ndung’u, disclosed that in FY 2022/23, Kenya’s tax gap was estimated at 11.5% of GDP, indicating the need for the government to take measures to increase the tax-to-GDP ratio and ensure effective provision of services to the public.

Revenue collection from the agricultural sector has long been a challenge for many African governments. Historically, a substantial portion of agricultural income has escaped formal taxation due to the fragmented nature of the industry. The Kenyan government’s move to impose a 5% withholding tax seeks to remedy this issue by ensuring that revenue from agricultural produce is captured more efficiently. It is worth noting that this tax is designed to target agricultural producers delivering their goods to cooperatives or organized groups rather than individual small-scale farmers.

How Withholding Tax Works

Tax withholding is a way for the government to maintain its pay-as-you-earn income tax system. This means taxing individuals at the source of income rather than trying to collect income tax after wages are earned.

In the case of the proposed taxation system by the Kenyan government, this will mean that whenever a farmer delivers produce to the cooperative or farmer society and gets paid, the entity withholds five percent of the amount due to them as income tax. This is then paid by the cooperative or society (withholder) to the Kenya Revenue Authority (KRA). The amount withheld should be remitted online by the withholder to KRA on or before the 20th of the following month.

Upon successful remittance of the withheld amount to KRA, the system generates and sends copies of the Withholding Certificate to the registered email addresses of both the cooperative or society (withholder) and the farmer (withholdee).

The amount deducted appears on the farmer’s payslip or statement, and the total amount deducted annually can be found on the P9 Form, which is a standard tax deduction card or form issued by the employers (in this case, the cooperative society) to the farmers with total emoluments. The cooperative or farmer society will then send the P9 Form to their members each year so they can file their annual income tax returns. The farmer will then be required to download the IT1 return form from the KRA online system and declare income earned as well as the tax withheld.

Although this proposal by the Kenyan government seems outrageous to many, it aligns with a global trend towards modernizing agricultural tax policies. In an era where governments are seeking innovative ways to boost revenue collection without overburdening the farming community, this approach warrants attention. This initiative by the government will be closely monitored by policymakers and experts, as it could serve as a case study for fine-tuning agricultural taxation systems in other regions.

While this may seem like a financial maneuver, it directly affects the lives of countless farmers and their families. The tax burden may result in disincentives for farmers to engage with cooperatives or organized farmer groups. However, if done correctly and with the right intentions, the system can have the transformative power of effective agricultural taxation. If appropriated well, the government can allocate resources more efficiently towards rural development, infrastructure, and agricultural extension services. This, in turn, empowers farmers with knowledge, resources, and market access, ultimately improving their livelihoods.

Only time will tell the effects this new tax system will have on the farming community in Kenya and on the country’s prominence as an agricultural hub in East Africa once it is implemented.

READ: Taxes on Alcohol and Sugar-Sweetened Products to Increase


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Increased tax on alcohol, sugar-sweetened products, and tobacco are on the horizon in Kenya as we look ahead to 2024. The newly proposed taxes are the government’s proactive measures to promote healthier lifestyles and discourage excessive consumption, aligning with global efforts to combat the rising tide of diet-related non-communicable diseases.

Historically, studies have linked excessive sugar consumption to a host of health issues, including heart disease, type 2 diabetes, and obesity, which is increasingly prevalent in Kenya and across Africa. In line with this concern, the Kenyan government is planning to reevaluate its taxation approach for sugar-sweetened non-alcoholic beverages. The new proposal aims to tax these products based on their sugar content, effectively creating an economic disincentive for their consumption. This move is part of the government’s broader strategy to combat obesity and related non-communicable diseases.

This development follows the earlier introduction of a tax on locally manufactured sugar confectionery, including white chocolate, in July 2023. This tax imposition was also justified as a means to promote healthier living.

Targeting Alcohol Consumption for Public Health Benefits

Alcohol consumption, too, is in the government’s crosshairs due to its association with various health risks, including high blood pressure, heart disease, stroke, liver disease, and digestive problems. The United States Center for Disease Control (CDC) has further stressed the risks by linking alcohol consumption to injuries, such as motor vehicle accidents, falls, drownings, and burns.

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In the upcoming fiscal year, consumers of spirits and other high-alcohol-content products can expect an upward revision in taxes. The Treasury has explicitly stated that this tax hike is intended to discourage their consumption, given the elevated health risks they pose. The adjustment in tax rates will be guided by quantitative analysis to determine the optimal rates for each alcoholic product.

Tobacco Products Also Under Scrutiny

Taxes on cigarettes and tobacco-related products are also set to increase as part of the broader strategy to promote healthier living. This will apply to both filtered and non-filtered cigarettes, as well as other tobacco products. The objective is to harmonize excise duty rates across all tobacco products, ensuring fairness and equal treatment in taxation.

The government’s rationale is clear – the negative health consequences associated with these products necessitate action. Tax rates will be determined based on the extent of these health consequences, as well as recommendations from an ongoing study conducted in collaboration with East African Community partner states.

These changes, outlined in the draft three-year tax revenue strategy beginning in July 2024, will inevitably lead to higher prices for the affected products and will unquestionably have an impact on consumer behaviors, industry dynamics, and, ultimately, the country’s GDP.

READ: Kenya Implements Stringent Measures for Duty-Free Sugar Imports


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Brookside, a milk processor in Kenya, has disbursed a staggering 711 million Kenya Shillings, an estimated $4.9 million, to farmers in Kenya’s North Rift region for their raw milk deliveries. The payment by Brookside is aimed at growing the dairy industry in Kenya.

Leading the pack in this payout is West Pokot, where dairy producers received a handsome sum of 197.8 million Kenya Shillings from Brookside. Trans Nzoia closely followed, with an impressive 183.9 million Kenya Shillings disbursed to farmers. Uasin Gishu, Nandi, and Elgeyo Marakwet counties also reaped the rewards, with payouts of Ksh.171.3 million, Ksh.126.1 million, and Ksh.31.9 million, respectively.

These figures demonstrate Brookside’s substantial financial investment in the North Rift region, stressing the economic significance of dairy farming in this part of Kenya.

Mr. Emmanuel Kabaki, the General Manager in charge of milk procurement at Brookside, emphasized the company’s unwavering commitment to working hand in hand with farmers to elevate dairy farming into a full-fledged commercial enterprise, offering guaranteed incomes to farmers. In his statement, Mr. Kabaki stated that, Brookside’s expanded processing capacity and aggressive product sales campaigns ensure that it remains a guaranteed market for milk from farmers. He further added that Brookside procures 100 per cent of all contracted milk volumes from its farmers, and does not ration supply, even in the seasons of surplus.

READ: Kenya’s ‘Omena’ Exports to China Surge, Reflecting Growing Trade Ties

In its efforts to promote sustainability and climate-smart practices, Mr. Kabaki highlighted that Brookside’s is actively promoting agroforestry on dairy farms by encouraging the planting of trees. He added that the company has established fodder resource centers in its raw milk bulking stations, including one in Kitale, for fodder multiplication and distribution to farmers, and to mitigate the impact of unpredictable weather patterns.

Mr. Kabaki urged farmers to conserve feed during the anticipated El-Niño rains for use during the dry season, adding that Brookside is piloting a semen and liquid nitrogen distribution program to enhance cow breeds, ultimately boosting milk production.


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Image Credit: Reddit

 

In a bold move to bolster Kenya’s economy, the Kenya Fish Marketing Authority (KFMA) has unveiled a plan to substantially elevate the fish industry’s contribution to the nation’s gross domestic product. The KFMA’s strategic vision is to expand the sector’s contribution by a staggering 80%, skyrocketing from its current $204.4 million to a remarkable $1 billion within the next five years. The plan is set to revolutionize Kenya’s fish and fisheries products sector, potentially becoming a transformative force in the country’s agricultural landscape.

The commitment to this target was ardently expressed by Martin Ogindo, Chair of the KFMA Board, who detailed the authority’s comprehensive approach to boosting fish production and consumption across the nation. With the world gradually recognizing the profound health benefits associated with fish, the consumption rate is still not very high in Kenya.

Drawing from previous experiences and industry reports, it’s evident that the challenges facing the fish industry in Kenya are not unique. Similar issues have plagued the tea industry, another vital agricultural sector in the country. Over the years, both industries have grappled with the need for innovative solutions to enhance production, minimize losses, and improve quality. The KFMA’s strategies align with these longstanding concerns, illustrating a dedication to learning from past experiences to drive future success.

KFMA’s outlined strategies include leveraging research and technical expertise for evidence-based decision-making, introducing innovative value-added fish products, reducing post-harvest losses, and enhancing quality assurance standards for fish products. This is a keen reflection of the importance of streamlining the industry’s value chains, in a quest for efficiency and quality.

There have been calls to explore opportunities for technology transfer in the blue economy sector, which encompasses fisheries resources, for better yields and product quality.

The Jomo Kenyatta University of Agriculture and Technology (JKUAT), through its College of Agriculture and Natural Resources (COANRE) has embarked on research efforts to promote sustainable exploitation of blue economy resources. This includes groundbreaking innovations in aquaculture and human capital development.

JKUAT will be collaborating with KFMA in upgrading the value chain of silver cyprinid fish, locally known as ‘omena’. This collaborative project is part of a broader regional initiative named “Strengthening Agricultural Knowledge and Innovation Ecosystem for Inclusive Rural Transformation and Livelihoods in Eastern Africa (AIRTEA),” funded by the EU and coordinated by the Forum for Agricultural Research in Africa (FARA). Noteworthy achievements from this partnership include the deployment of hybrid (solar and biomass) greenhouse fish drying units, effectively reducing post-harvest losses at various locations.

Despite the formidable challenges facing the sector, including low technology adoption, uneven distribution of gains, a lack of value-addition technologies, and poor beach access roads, fish production in Kenya reached 163,702 tons in 2021. However, per capita fish consumption remains at 4.5 kg/person/year, below both the African and global averages. This situation mirrors the hurdles that other producers face in terms of distribution, access to markets, and value addition.

The ongoing development of value-added silver cyprinid-based products under the EU-funded project, led by a team at JKUAT, is intended to stimulate fish consumption throughout the nation. Kenya’s 445 documented fish landing points offer vast potential for integrated product innovation and value addition in processing facilities across Kenya.


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Photo Credit: NMG

 

The Kenya Bureau of Standards (KEBS) has introduced stringent regulations governing the importation of sugar under the State’s recently gazetted duty-free import window, which came into effect on August 9, 2023. The move by KEBS is aimed at taming the sugar production deficit hounding the Kenyan market, and stabilizing sugar prices, which had soared to a record range of Ksh.225 to Ksh.250 per kilogram by mid-2023 due to a severe shortage of the commodity.

In response to these soaring prices, the Kenyan Cabinet authorized an extension of duty-free sugar imports as a temporary measure to mitigate the crisis. However, with the anticipated influx of substantial sugar consignments, KEBS has taken proactive measures to thwart potential exploitation by unscrupulous traders.

The new regulations will require all imported sugar shipments possessing Certificates of Conformity (CoCs) to undergo mandatory re-inspection and testing at the port of entry, a service that will be provided free of charge. This inspection will be carried out in the presence of the importer or their appointed agent and is aimed at verifying compliance with the relevant quality and safety standards.

In instances where sugar consignments are shipped from countries where KEBS has engaged inspection companies, but they lack the necessary CoCs, the imports will be subject to inspection upon arrival. This service will be offered at a fee equivalent to five percent of the approved customs values. Additionally, sugar imports originating from countries without appointed inspection agents will continue to undergo destination inspection, with the importer bearing the cost of inspection, equivalent to 0.6 percent of the approved customs value, along with any applicable testing fees.

READ: KTDA Directors Set to Approve Bonuses to Tea Farmers

This new development in the sugar industry follows the Agriculture and Food Authority’s decision to suspend sugar milling operations earlier in July to allow sugar factories to address the pressing issue of sugarcane shortages, which have had a cascading effect on the industry’s overall production.

The biting sugarcane crisis in the Western and Nyanza regions of Kenya is a consequence of neglect and inadequate support for the sugar industry by key stakeholders. The two regions support the bulk of commercial sugarcane production in Kenya, in addition to other areas such as the Rift Valley and Coastal areas. More than 300,000 farmers supply sugarcane to various millers, with over 94 percent of this supply coming from out-growers, while the remainder is sourced from nucleus estates owned by milling companies.

Kenya currently boasts 16 sugar mills with a collective processing capacity of 51,450 metric tons of sugarcane per day. However, the actual capacity utilization stands at a modest 56 percent, as indicated by projections from the Ministry of Agriculture. This underutilization reflects the industry’s inability to reach its full potential due to numerous challenges, including inadequate infrastructure, a lack of investment, and recurring sugarcane shortages, all systemic issues that have plagued the sugar industry in Kenya for years.


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In a significant stride towards enhancing trade relations and agricultural growth, the US government, in collaboration with Kenstate, a leading Kenyan coconut processing company, has announced a joint investment project amounting to $1.6 million. The project aims to not only expand Kenstate’s exports to the United States but also create substantial market opportunities for over 4,500 Kenyan coconut farmers.

Supported by Feed the Future and Prosper Africa funding, facilitated by the United States Agency for International Development, this strategic initiative is poised to uplift Kenstate’s processing capabilities by an impressive 67 percent, enabling the firm to process up to 50,000 coconuts daily.

Meg Whitman, the US Ambassador to Kenya, highlighted the transformative impact of such collaborations, stating, that partnerships like this enhance trade, transforms lives, and combats food waste and its impacts on climate change. Whitman also added that sustainable growth and international collaboration are key to the prosperity of both Kenya and the United States.

One of the project’s key objectives is to significantly reduce food loss and wastage. Over the next two years, the initiative seeks to eliminate a staggering 32,500 liters of wastage. At the same time, the project is set to generate approximately 90 full-time employment opportunities and enlist 1,500 new growers as suppliers, thus catalyzing economic opportunities for Kenyan farmers.

The collaboration also paves the way for Kentaste, the coconut processor, to establish strong ties with major US retailers. These retailers are poised to carry Kentaste’s premium coconut water products, thereby expanding access to the US market for Kenyan coconut offerings.

This strategic venture couldn’t come at a better time for Kenya, as the country experiences stable demand for local processing and export of coconuts. The United States is a primary importer of Kenyan nuts, followed by Germany and the Netherlands, underscoring the global demand for high-quality coconut products from the region.

The Kenyan coconut processor is known for producing and distributing an array of coconut-based products, including coconut milk, coconut cream, coconut flour, virgin coconut oil, and desiccated coconut. With a strong commitment to sustainable practices, Kentaste collaborates with a network of some 2,700 smallholder farmers, many of whom are organic and fair trade certified.

The collaboration resonates with the projected growth of the global coconut products market. According to Research and Markets, the market size is anticipated to reach an impressive $38.58 billion by 2030. This surge is primarily driven by the increasing demand for coconut products like coconut milk, coconut water, and desiccated coconut within the dynamic food and beverage industry.


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In recent times, Kenya’s agriculture sector has been grappling with a significant hurdle: the increase of interest rates for agricultural loans over the past years. According to Trading Economics, interest rates for agricultural loans in Kenya have spiked in the past year, which is the fastest increase since the early 1980s. This abrupt increase marks the fastest surge in the past decade, making it crucial to dissect its implications, especially for the least-profitable farmers who are bearing the brunt of this situation.

The sudden surge in interest rates has sent ripples of concern through Kenya’s agricultural landscape. and it poses a formidable challenge for farmers across the country.

The most vulnerable group affected by the doubled interest rates are the least-profitable farmers. These farmers, who are already struggling to maintain their profitability, are now grappling with increased interest expenses that are taking a toll on their financial stability. This impact is deeply felt due to the higher debt levels per acre that these farmers typically carry, resulting in more significant annual interest payments per acre.

To navigating the financial landscape, all agricultural producers, regardless of their profitability and existing debt levels, are advised to brace themselves for elevated interest rates. Incorporating higher interest expenses into cash flow projections is a prudent step to take. The reality is that the historically low and stable interest rates that once benefited producer cash flows previously are no longer sustainable.

The financial vulnerability of the least-profitable farmers is further accentuated by their higher liabilities per crop acre farmed. This leaves them significantly more sensitive to rate increases. As interest rates climb, their interest costs per acre surge, placing even more strain on their already fragile cash flows and reducing overall profits.

Over the past decade, the gap between Kenya’s least-profitable growers and their more prosperous counterparts has been steadily widening. Since 2022, price increases have disproportionately affected the least-profitable producers. These farmers are less likely to benefit from bulk discounts, have limited working capital, and carry a heavy burden of debt.

Agriculture has also been hit by the relentless climb in farm production expenses. Since 2019, expenses have risen consistently, with sharp spikes observed in 2022 and the current year, underscoring the challenges that farmers face in managing their operational costs.

Looking Ahead: A Mixed Forecast

It is projected that the interest rate will be 10.50 percent by the end of the third quarter of 2023. While expenses are projected to decrease in the months ahead, this is juxtaposed with a decline in net farm income. This vital metric of profitability is expected to drop by a significant rate, signaling continued challenges for farmers as they strive to navigate the changing financial landscape.

The CEO of Eagmark and an expert in agricultural economics, Mr. Bonnie Oduor encourages farmers to stay informed, seek financial guidance, and explore innovative strategies to ensure the resilience and sustainability of Kenya’s agriculture sector amidst these challenging times.


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In a move aimed at stabilizing domestic prices and ensuring adequate availability, India, the world’s largest rice exporter, has imposed a ban on several categories of rice exports. Experts warn that this decision could have far-reaching consequences, driving up global prices of the grain and exacerbating existing concerns over food insecurity. The ban comes at a critical time when the world is already grappling with rising food prices and supply uncertainties.

India’s Importance in Global Rice Trade

India accounts for a substantial 40% share of the global rice trade, with its shipments reaching approximately 140 countries. The recent ban, announced by the government, was prompted by an 11.5% increase in prices over the past year and a further 3% rise in the past month. The ban, which became effective in July 2023, aims to ensure sufficient availability of non-basmati white rice in the Indian market and mitigate the inflationary pressures on domestic prices.

Impact on Global Prices

The ban’s implications extend beyond India’s borders, with experts warning that it could significantly impact global rice prices. By estimates, India used to export around 22.5 million tons of rice, but with the ban, approximately 10 million tons will be removed from the international market, representing nearly 40% of India’s rice exports.

Further Turmoil in Global Food Grain Markets

This development comes shortly after Russia withdrew support for Ukrainian wheat passage through the Black Sea, triggering warnings of surging prices. Consequently, the combination of India’s rice ban and the uncertainty around wheat supplies creates additional shocks in the global food grain markets.

Reasons Behind India’s Ban

While India is among the world’s largest rice producers and has sufficient stockpiles for its vast population, fears arise due to the possibility of an erratic monsoon season that could damage the paddy crop, planted in June and harvested in September. Recent heavy rains and floods in key rice-growing regions, such as Punjab and Haryana, have raised concerns. Additionally, deficient rains in southern states further contribute to uncertainty in rice production.

Potential Impact of El Nino

The “El Nino” effect, which brings hot, dry weather and lower rainfall to Asia, where most of the world’s rice is grown, adds to the worries over potential crop shortages. Considering rice’s status as a staple food for over 3 billion people globally, the Indian government’s cautious approach is understandable, aiming to avert any risks associated with food inflation.

Diplomacy and Political Considerations

The ban on rice exports excludes specific varieties primarily exported to Bangladesh and African nations, reflecting a diplomatic move to maintain good ties with neighboring countries and strengthen influence in Africa.

Global Consequences and Future Trends

Given India’s significant role in the rice market, the ban may lead to further disruptions. Countries like Benin, Africa’s largest rice importer, are already grappling with soaring food costs, raising further alarm about the potential consequences of India’s export ban. Furthermore, Vietnam and other major rice producers have been stockpiling rice in anticipation of shortages, further intensifying the global supply concerns.

India’s decision to impose the ban has historical precedence. In 2008, Vietnam banned rice exports, prompting other countries like India, China, and Cambodia to follow suit. According to a World Bank study, these export restrictions caused a significant 52% increase in global rice prices. Should other nations emulate India’s move and impose export restrictions, the effects on food prices could surpass those experienced in 2008.

As the global population grows and climate change continues to affect agricultural yields, the temptation for governments to resort to export restrictions to secure domestic food security may become more frequent. Rice, being a primary source of sustenance for nearly half of the world’s population, faces increased threats to its supply, which could potentially trigger more restrictive actions in the future.

With food insecurity becoming a pressing concern on the international stage, experts and policymakers will closely monitor the effects of India’s rice export ban. The situation calls for thoughtful and cooperative measures to ensure stable and affordable food supplies for vulnerable populations worldwide.


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The avocado trade is experiencing a significant boom, with the market witnessing robust growth over the past decade. As per the latest RaboResearch Report, the increasing demand for avocados, driven by their attractive product attributes, combined with higher profitability, has led to a surge in global production and trade. However, the soaring popularity of avocados has also intensified competition, prompting industry players to focus on efficiency and sustainability.

Avocado production has expanded by approximately 7% globally in the last ten years, with key regions like Mexico, Colombia, Peru, and Kenya leading the charge. Mexico, the largest avocado-producing country, has seen a 6% increase in production, accounting for 30% of the global output. In tandem, Colombia, Peru, and Kenya have experienced production growth rates of 15%, 12%, and 11%, respectively, collectively contributing 27% to global production. Notably, the United States, while previously a top 10 producer, has slipped in the rankings.

One crucial factor contributing to the year-round availability of avocados in key markets like the US, the EU, and some Asian countries is the complementary harvesting seasons of these countries. While Mexico maintains year-round production, it experiences a seasonal low in June and July when other major producers, like the US (California) and Peru, step in, ensuring a steady supply to the US market.

Mexico retains its position as the largest exporter, with exports growing at an average annual rate of approximately 8% over the past decade, surpassing 1 million metric tons in 2022. The primary destination for these exports is the US market, which continues to be the largest importer of avocados globally, witnessing an 8% increase in imports from 2012 to 2022. Moreover, countries like Peru, Spain, and Kenya have also seen significant growth in exports, primarily supplying the European market.

The commercial market value of fresh avocados reached an estimated USD 18 billion in 2022, and experts believe there is still ample room for growth, especially in regions with lower per capita consumption. Mexico and Chile lead in per capita avocado availability, with approximately 9kg and nearly 8kg of fresh avocados per person per year, respectively. Australia and the US also show considerable consumption, each with over 4kg per capita.

However, amidst this success story, sustainability concerns loom large, with water usage being a crucial issue for avocado producers. Recognizing the importance of preserving natural resources, avocado growers have been investing in advanced irrigation systems to enhance water efficiency.

In a significant development, the UN FAO has recognized Kenya as one of the major players in the global avocado industry, ranking among the top 15 avocado-producing countries. With a current production of 417,000 metric tons, Kenya leads other African countries and is set to boost production further by tapping into the Indian market. The country aims to double its avocado production in the next five years, with plans to expand farming land to over 50,000 hectares.

Kenya’s avocado production is not fully commercialized yet, with a substantial portion being grown by small-scale farmers for domestic consumption, local markets, and exports. However, there is a growing trend among farmers in regions like North Rift and South Rift to shift from traditional cash crops like maize and wheat to avocado farming due to its lucrative returns.

As the global avocado trade continues to thrive, it becomes essential for industry players to strike a balance between meeting the escalating demand and adopting sustainable practices. By embracing efficient technologies and environmentally responsible methods, the avocado industry can not only remain competitive but also contribute to a greener and more prosperous future.

Eagmark is proud to bring you this comprehensive report on the booming global avocado trade, combining insights from top agriculture economists, industry experts, and UN FAO data. Enroll to the Eagmark Avocado Production Course for more insights and comprehensive understanding of avocado cultivation and management.

 


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July 27, 2023 AGRI ECONOMICSBLOG0

Kenya’s economy has been on a roller coaster in recent years, recovering from multiple crises since 2013. In 2022, GDP growth softened to 4.8% from the previous year’s strong rebound of 7.5%, but remained in line with the country’s long-term growth trajectory according to a report by the World Bank.

The service sector was a key driver of growth, contributing around 80% of the increase in total GDP. The financial services, tourism, and transport sectors performed particularly well, helping Kenya’s GDP growth to outpace that of Sub-Saharan Africa as a whole.

However, despite strong headline GDP growth, Kenya has continuously faced significant inflationary pressures amid commodity price volatility and tightening global financing conditions. The country’s exchange rate and foreign exchange reserves have been under pressure, exacerbated by the worst drought in four decades.

To address these challenges, macroeconomic policies were implemented in 2022, including greater exchange rate flexibility, fiscal consolidation, and a tighter monetary policy. Fiscal consolidation efforts, aimed at addressing mounting debt sustainability challenges, continued in 2022, contributing to the reduction of external and domestic imbalances.

The 2023 medium-term growth outlook for Kenya remains positive, with the economy expected to grow at around 5% in line with its pre-pandemic trend and estimated potential GDP growth rate. Real per capita incomes are projected to grow at approximately 3% in the medium term, and there are positive signs of poverty resuming its pre-pandemic downward trend.

However, the economic outlook is not without risks. Externally, Kenya is exposed to potential weaker growth in Europe, elevated global commodity prices that can increase the country’s import bill and inflation, and further tightening of financial conditions in advanced economies. Domestically, spending pressures to reduce the high cost of living and potential slowdowns in tax revenue collection pose additional challenges.

The intensifying global food crisis is taking a toll on Kenya’s economy, contributing to the surge in food price inflation both locally and internationally. This trend has been further exacerbated by the post-pandemic and Russia-Ukraine war-related shocks and trade frictions.

Kenyan supermarkets and food traders have raised prices of basic commodities due to increased taxes, shortages of essential items and increased costs of energy. Farmers are also feeling the pressure, grappling with unpredictable weather patterns, high input costs, and labor shortages. Many have been forced to exit the industry, which may lead to a drop in production this year.

The Kenyan government faces the daunting task of stabilizing the economy and mitigating the impact of rising food prices. The Finance Bill, 2023, has been passed to expand the tax base and raise revenues to meet the government’s ambitious budget for 2023/2024. However, critics argue that short-term reforms may not be enough to address the deeper complexities of Kenya’s food system and economic challenges.

As Kenya’s economy faces a myriad of challenges, concerns are rising about the possibility of stagflation. This dreaded economic condition is characterized by high inflation and low economic growth, and it can lead to a host of problems, including increased poverty, unemployment, and political instability.

There are a number of factors that could potentially push Kenya towards stagflation, with the most significant being the ongoing global food crisis, which was triggered by post-pandemic shocks and the war in Ukraine. Both factors have greatly contributed to the soaring global food prices, putting immense strain on Kenyan consumers and businesses alike. As a nation heavily reliant on food imports, Kenya has been particularly vulnerable to the ripple effects of these crises.

Not to mention the severe drought that has been experienced in some parts of the country, which has hampered agricultural production and led to food scarcity, driving up food prices further. For a nation where a significant portion of the population relies on agriculture for their livelihoods, the drought’s impact has been deeply felt, threatening both the economy and people’s well-being.

Kenya’s large fiscal deficit has also been a major contributing issue, resulting to increased international borrowing and inflationary pressures due to the government’s revenue shortfall compared to its expenditures. The mounting fiscal deficit has put immense pressure on the country’s currency, making it challenging to control inflation effectively.

The risk of stagflation is imminent for Kenya and the consequences could be devastating if no practical and impactful short-term and long-term economic reforms and policies are implemented. The already fragile economy could witness a decline in living standards as prices rise while economic growth stagnates. The country is already facing a surge in unemployment as businesses struggle to cope with rising costs, and this has led to job losses and increased hardship for many citizens. Stagflation has the potential to fuel political unrest, already being witnessed in Kenya by the anti-government demonstrations as people become frustrated with the government’s inability to address the economic challenges effectively.

While Kenya has not yet entered stagflation, it is crucial for the government to take immediate and proactive measures to avert such a scenario. Addressing the challenges of the rising global food crisis and the drought requires targeted support for the agricultural sector. Increasing food production and stabilizing prices can alleviate the pressure on the overall economy.

To tackle the fiscal deficit, the government must find ways to reduce spending responsibly. By prioritizing critical investments and optimizing public expenditures, it can gradually narrow the deficit and avoid further inflationary pressures.

By carefully managing interest rates, the Central Bank of Kenya (CBK) can help temper inflation while ensuring that the economy retains a conducive environment for growth.

The risk of stagflation is a serious one for Kenya, but it is not inevitable. The nation’s vulnerability to external and internal shocks necessitates comprehensive and multi-faceted approach, as well as proactive and decisive action to address the root causes of the country’s economic challenges, including inflation, food shortages, and high production costs. The government must work in unison with stakeholders to address the root causes of these challenges, ensure food security, and pursue prudent fiscal and monetary policies.

Being an agricultural powerhouse in the region, Kenya has a significant role to play in global efforts to decarbonize economies, while ensuring an inclusive approach that supports both development and productivity growth. By taking urgent steps to bolster the economy’s resilience, Kenya can navigate through these challenging times and secure a more stable and prosperous future for its people and agricultural sector.


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In the face of a deepening global food crisis, domestic food price inflation remains stubbornly high around the world, posing significant challenges for low- and middle-income countries. According to recent World Bank Food Security Update from February to May 2023, 61.1% of low-income countries, 79.1% of lower-middle-income countries, and 70% of upper-middle-income countries are experiencing food price inflation greater than 5%, with several facing double-digit inflation.

High-income countries are not immune to the effects, with 78.9% experiencing rising food prices. The situation is particularly dire in Africa, alongside regions like North America, Latin America, South Asia, Europe, and Central Asia. This alarming trend has raised concerns about the stability of global food security.

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The most recent agriculture market statistics paint a mixed picture. The agricultural and cereal price indexes have fallen by 4% and 12%, respectively, with maize prices falling by 21% compared to two weeks ago. Meanwhile, wheat prices have fallen by 3%, while rice prices have increased by 1% over the same time period. Maize and wheat prices are around 19% lower year on year, but rice prices are 16% higher. However, maize prices are down 4% from January 2021, while wheat and rice prices are up 1% and 3%, respectively.

The Agricultural Market Information System (AMIS) Market Monitor for July 2023 has expressed concern about geopolitical tensions that endanger the Black Sea Grain Initiative. Following the tragic collapse of the Nova Kakhovka dam in southern Ukraine, massive flooding has threatened drinking water supplies and hampered irrigation, affecting over 40,000 hectares of land as well as multiple cities and villages. The scenario is jeopardizing Ukraine’s agricultural productivity and might lead to the agreement’s termination, potentially limiting Black Sea exports and harming world grain supply.

To compound matters, the newly released Organization for Economic Cooperation and Development-Food and Agriculture Organization (OECD-FAO) Agricultural Outlook 2023-2032 identifies the rise in agricultural input prices as a serious danger to global food security. Food prices are projected to rise more as fertilizer costs rise. According to the analysis, every 1% increase in fertilizer prices could result in a 0.2% increase in agricultural product prices. Crops that rely significantly on fertilizers are projected to suffer more than livestock goods, with chicken and pig being particularly vulnerable due to their need on compound feed.

You may also want to read: What the Rising Food Prices and Shortages Mean for Kenya’s Agricultural Sector

In response to the mounting global food crisis and trade restrictions imposed by various countries, the World Bank announced a commitment of up to $30 billion over 15 months, with $12 billion committed to new projects, in April 2022. The funding will be used to improve food and nutrition security as well as food system resilience, with a particular emphasis on Africa, one of the hardest-hit regions.

Several noteworthy projects have already been initiated by the World Bank in collaboration with affected African nations. These include:

  1. West Africa Food Systems Resilience Program: A $766 million initiative designed to increase preparedness against food insecurity and enhance the resilience of food systems in West Africa. The program leverages digital advisory services for agriculture and food crisis prevention, invests in regional food market integration and trade, and builds the adaptive capacity of agricultural system actors. Additional funding of $345 million is under preparation for Senegal, Sierra Leone, and Togo.
  2. Support for Chad, Ghana, and Sierra Leone: A $315 million loan to increase their preparedness against food insecurity and improve the resilience of their food systems.
  3. Emergency Food Security and Resilience Support Project for Egypt: A $500 million project to ensure that poor and vulnerable households have continuous access to bread, strengthen the country’s resilience to food crises, and support reforms that improve nutritional outcomes.
  4. Aid for Tunisia: A $130 million loan to mitigate the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support for dairy production and smallholder farmers’ planting season.
  5. Food Systems Resilience Program for Eastern and Southern Africa: A $2.3 billion initiative aimed at enhancing food systems resilience, increasing agricultural production, and ensuring sustainable development of natural resources in the region.

In May, the World Bank Group and the G7 Presidency jointly established the Global Alliance for Food Security to address the unfolding global hunger crisis. The alliance has developed a publicly accessible Global Food and Nutrition Security Dashboard, offering timely information for global and local decision-makers to facilitate better coordination of policy and financial responses to the food crisis.

As the global food crisis deepens, concerted efforts by international organizations and nations alike are essential to mitigate its impact. The World Bank’s commitment to supporting food and nutrition security in Africa and beyond demonstrates the urgency with which stakeholders must act to safeguard the well-being of millions and secure the future of food systems worldwide.


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Rotten cocoa pods after torrential rains experienced from mid-May, affecting cocoa production in all regions, at Akressi village in the Aboisso region, Ivory Coast. Image source: REUTERS

In a significant development impacting the global cocoa market, the Ivorian Cocoa Coffee Council (CCC) has announced the suspension of cocoa futures sales for the 2023/2024 campaign until further notice. The decision comes in light of ongoing uncertainties surrounding the cocoa supply chain, exacerbated by adverse weather conditions and the outbreak of brown rot disease.

Yves Brahima Kone, the director general of CCC, revealed that concerns over the availability of an adequate quantity of raw materials from production areas to cover sales, combined with heavy rains between May 15 and July 10, have severely affected cocoa production. The persistent humidity has also provided ideal conditions for the proliferation of brown rot, a fungal disease that poses a threat to cocoa trees. CCC acknowledged the disease’s rapid spread across many plantations and is promptly assessing the situation to gain a comprehensive understanding.

Mr. Kone expressed apprehension about the cocoa harvest in the initial stages of the main season, expecting a considerable decline compared to the current year. He emphasized the importance of the production from January to March in offsetting potential volume imbalances. Currently, the cocoa sales have already exceeded one million tonnes, accounting for approximately 50% of the projected harvest of 2.2 million tonnes.

The impact of the brown rot outbreak and the suspension of cocoa sales will be felt by various stakeholders, including major commodities trading houses such as Cargill, Olam, and prominent chocolate manufacturers like Barry Callebaut, Hershey, and Nestle. Furthermore, this development represents a significant blow to Ivory Coast, a nation heavily reliant on cocoa, with the United Nations estimating that it contributes 40% of the country’s export earnings. Ivory Coast and other major cocoa producers including Ghana, Nigeria and Cameroon that account for around 70% of global production, have witnessed heavy tropical downpours in recent weeks.

Farmers, cocoa pod counters, and exporters based in Ivory Coast are bracing for a notable decline in cocoa output during the initial phase of the main harvest. The CCC’s initial projection for the current season was a total cocoa output of 2.2 million tonnes.

Ivory Coast, recognized as the world’s leading cocoa-producing country, supplying 45% of global cocoa, is aiming to increase domestic cocoa processing. The country plans to process 49% of its production starting from October by adding several new processing plants. Currently, approximately 35-40% of cocoa is processed within the country, with the remainder exported. However, the government intends to raise the domestic processing share to at least 50%.

To support this goal, Ivory Coast has entered into contracts with the United Arab Emirates for the construction of a new plant in San Pedro, with a grinding capacity of 120,000 tonnes, and China for the construction of two factories, each with a production capacity of 50,000 tonnes. Upon completion, these new facilities will enable the country to process over 1 million tonnes of cocoa annually, solidifying its position as the world’s leading cocoa grinder.

The global cocoa market will closely monitor the situation in Ivory Coast as stakeholders navigate the challenges posed by the supply chain uncertainties and the brown rot outbreak. Eagmark will continue to report on the developments and their potential ramifications for the international cocoa industry.


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  • Kenya’s Milk Production Improves to New Heights as Taita Taveta County Reports Promising Increase in Milk Output, Boosting Agricultural Sector

Taita Taveta County’s Department of Livestock in Kenya has announced a significant rise in milk production thanks to the implementation of subsidized artificial insemination (AI) services, enhanced livestock disease and pest control, and the adoption of improved animal feeds and management practices. The county is now on track to reach an annual milk production of 30 million liters.

Erickson Kyongo, the County Executive Committee Member in charge of Agriculture, Livestock, Fisheries, and Irrigation, expressed optimism about the county’s progress. He highlighted the efforts made to provide affordable and high-quality AI services, as well as support for best practices in animal feed management and disease control.

“Our continuous efforts to make cheap and high-quality AI services accessible, along with the promotion of best practices in animal feed management and disease control, are driving us towards achieving an annual milk production of 30 million liters,” stated Kyongo.

He further projected that by the end of 2023, farmers in the county would have produced at least 20 million liters of milk before the onset of the dry season, which typically slows down production.

The journey towards this significant milestone began in 2018 when the county leadership signed a Memorandum of Understanding (MoU) with the Kenya Animal Genetic Resources Center, leading to a substantial reduction in the price of AI services. The cost per animal dropped from between Sh1,500 and Sh2,000 to an affordable Sh200.

Dr. Margaret Kibogy, the Managing Director of the Kenya Dairy Board, provided insight into the broader national dairy industry. She noted that Kenya’s dairy sector has been experiencing an estimated annual growth rate of 5%, with current milk production standing at 5.2 billion liters per year.

Dr. Kibogy emphasized the importance of the dairy industry, stating, “Kenya’s dairy sector contributes 4% to the national GDP, 12% to the agriculture GDP, and 44% to the livestock GDP. Approximately 1.8 million smallholder farmers depend on dairy production for their livelihoods.”

Meanwhile, the government has pledged support for dairy farmers through various interventions as part of its agricultural reformation efforts, aiming to create wealth and expand job opportunities within the sector. Cooperative union members have expressed optimism about the transformative initiatives of the government and have vowed to leverage them to advocate for and reform the dairy industry in the country.

During the launch of the Meru Central Dairy Cooperative Union Factory Phase, President William Ruto made commitments to further support the dairy sector. He pledged to reduce the cost of semen from the current Sh8,000 to Sh1,500, along with plans to establish a Sh400 million plant producing 500,000 doses of semen locally, eliminating the need for imports.

According to the 2020 Kenya National Bureau of Statistics Food Balance Sheet report, milk and its related products have the highest per capita consumption in Kenya, with 93.3 kilograms per person annually. This is followed by maize (69.5 kg), wheat (41.3 kg), and vegetables (32.6 kg).

The rise in milk production in Taita Taveta County and the government’s commitment to supporting the dairy sector are encouraging signs for the agricultural industry in Kenya. As the nation continues to prioritize the dairy sector’s growth, it will contribute to improved livelihoods for smallholder farmers, increased economic prosperity, and enhanced food security.


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Walking through Kenyan supermarkets recently, it has become evident that the cost of food shopping has surged significantly. According to a recent Kenya National Bureau of Statistics (KNBS) recent report, food inflation in the country reached 8% in May 2023, up from 7.9% in April 2023, one of the highest levels recorded in recent months. This is mainly attributed to the increase in prices of food commodities, coupled with other mounting cost-of-living pressures, such as skyrocketing energy bills, transport and soaring rents, which is making Kenyan citizens to truly feel the economic strain.

According to the Central Bank of Kenya, the highest inflation rate recorded in Kenya was 9.5% in November 2022, which slowed for the second consecutive month to 9.1% in December 2022, the lowest since August 2022. Just to put it into perspective, the inflation rate in Kenya increased from 5.8% in November 2021 to 9.5% in November 2022, the highest since June 2017. The inflation rate in Kenya is the measure of price variations in goods and services compared to the same month one year earlier.

In response to this pressing issue, the government recently announced measures it will take to stabilize the economy and normalize the situation. This includes the Finance Bill, 2023 that proposes various tax changes and amendments to the existing tax laws in Kenya. The bill was tabled in Parliament on 4 May 2023 and is expected to be passed into law by 30 June 2023. The National Treasury submitted the Bill to the National Assembly for consideration and enactment into the Finance Act 3.

The bill proposes a raft of tax changes which are geared towards expanding the tax base and raising revenues to meet the government’s ambitious budget of KES 3.6 trillion for the year 2023/2024.

While consumers may perceive an unprecedented rise in daily living expenses, it is important to note that low-income earners in Kenyan households allocate a higher portion of their income to food compared to their higher-income counterparts. Knowing this too well, most supermarkets in Kenya employ highly competitive pricing strategies, offering enticing loss-leading products to attract customers.

The rising cost of living is motivated by the scarcity of essential items experienced earlier this year. Unfavorable weather conditions across the continent, combined with the surge in energy prices, led to shortages of staple crops, fresh fruits, and vegetables. The Russia-Ukraine war-related shocks and the global trade friction has further exacerbated the situation. All these factors have resulted in Kenyan supermarkets and other food traders raising prices of basic commodities.

Farmers, too, are grappling with these challenges. Unpredictable weather patterns, attributed to the effects of climate change, have eroded the confidence of arable growers. Additionally, the escalating costs of energy have forced many producer operations to cease, while outbreaks of animal diseases have negatively impacted the crops, livestock meat and poultry sectors. Notably, Kenya witnessed a drop in production last year due to diseases and high input costs. As a consequence, consumers are facing the ripple effects.

Notwithstanding, the rising food prices do not translate into increased earnings for farmers. Several studies conducted previously revealed that farmers receive less than their production investment costs due to the extensive losses incurred in long supply chains, as well as the competitive pricing strategies adopted by most retail buyers. Conversely, studies have also indicated that farmers receive a more substantial share of the revenue when their produce is sold directly to consumers through smaller, independent shops.

These mounting pressures have compelled numerous farmers to exit the industry, particularly due to an increase in input costs, labor shortages and reduced earnings. Consequent to these challenges experienced, it is highly likely that a drop in production will be witnessed in the farms this year due to a lack of incentive.

The Kenyan government has faced criticism for its financial policies, with accusations directed at the top leadership, for being “cavalier and offhand” with any short-term reforms and changes that can yield substantive and tangible results. The top leadership brass opines that the rising cost of living and surging cost of production will be less significant when the country enjoys true financial autonomy and “free trade” and movement of goods across the African continent and globally.

Moreover, farmers are anticipating reduced subsidies from the government as the basic cost of inputs and taxes continue to increase. Support from the NGO world and other institutions is also proving to be minimal since it is gradually being replaced with environmentally-focused programs. Many farmers have come to a realization that the new schemes do not compensate for the shortfall in their previous harvest seasons, potentially rendering some farms financially unviable.

All these factors highlight the multitude of complexities within Kenya’s food system. Regrettably, high prices and shortages do not appear likely to subside in the near future. Addressing these challenges will require a comprehensive and multi-faceted approach from policymakers, industry stakeholders, and the government, to ensure a sustainable and resilient agricultural sector for Kenya.


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In a world where citrus production is facing various challenges and fluctuations, South Africa’s mandarin industry is defying the odds and reaching new heights. Looking at the global citrus production outlook, South Africa’s higher citrus production, coupled with strong overseas demand will increase its exports of tangerines/mandarins by approximately 8 percent by the end of 2023 season, reaching an unprecedented record of 560,000 tons.

The European Union and the United Kingdom are the primary recipients of South Africa’s citrus bounty, accounting for 45 percent of total exports. Following closely behind are Russia and the United States, each representing 10 percent of the export market. South Africa’s fruitful partnership with the United States under the African Growth and Opportunity Act (AGOA) has been a key driver behind the exponential growth of mandarin exports to the American market. Over the past five years, exports to the US have quadrupled, soaring to nearly 50,000 tons in the previous season.

Global Citrus Outlook

Source: The USDA Foreign Agricultural Service – Global Citrus Production Outlook

This upward trend is expected to continue as consumer preference for tangerines/mandarins in the United States continues to rise, bolstered by the ongoing duty-free market access provided by AGOA. While local consumption of tangerines/mandarins remains relatively smaller compared to oranges, the industry’s focus on export markets and the implementation of pest management netting have resulted in higher quality produce and reduced surplus fruit. However, there is a niche market within the country, where high-end retail chains cater to domestic consumers by offering export-grade citrus.

Looking ahead to the 2023 season, the outlook for South Africa’s citrus production is remarkably optimistic. Tangerines/mandarins are expected to see a 6 percent increase in production, reaching a total of 670,000 tons. This growth can be attributed to favorable weather conditions and the increasing number of newly planted orchards entering full production.

Over the past seven years, the area dedicated to tangerines/mandarins has experienced significant expansion, driven by global demand for seedless varieties and the comparatively higher profit margins they offer. However, this rapid growth in planted area is anticipated to slow down in the upcoming season due to concerns of softening demand and rising costs. Economic growth projections indicate potential weakening in key markets such as the European Union and the United Kingdom, accompanied by inflationary pressures that may dampen consumer spending on imported fruit.

Furthermore, challenges related to rising farm input costs, higher shipping rates, infrastructure inefficiencies, ineffective port operations, and deteriorating road networks have started to impact the industry’s profitability, limiting further investment. As a result, the forecasted growth in the area planted for tangerines/mandarins in the 2023 season is only 1 percent, amounting to approximately 28,225 hectares compared to the previous year’s estimated 7-percent growth.

Within South Africa, the Western Cape province dominates tangerine/mandarin production, accounting for 37 percent of the country’s total output. Following closely behind are the Limpopo and Eastern Cape provinces, contributing 28 percent and 25 percent, respectively. With more than 50 percent of the orchards in the country being younger than 5 years, there is a substantial potential for increased production in the coming years.

While South Africa stands at the forefront of mandarin production and export, the global outlook for citrus, including oranges, grapefruit, and lemons/limes, is experiencing fluctuations and challenges of its own.

Source: The USDA Foreign Agricultural Service

For oranges, global production in the 2023 season is estimated to decrease by 5 percent, reaching 47.5 million tons. Lower production in the European Union and the United States is only partially offset by a larger crop in Egypt. In the United States, citrus production has been significantly impacted by several factors, including the spread of citrus greening disease and extreme weather events such as hurricanes.

In the European Union, citrus production is projected to decline due to unfavorable weather conditions and disease outbreaks. Spain, one of the largest citrus producers in the region, has been particularly affected by adverse weather patterns, leading to a decrease in orange production. Additionally, the spread of the citrus black spot disease has resulted in stricter import regulations imposed by the European Union, affecting the availability and trade of citrus products.

The United States, another major player in the global citrus market, has been grappling with the challenges posed by citrus greening disease. This devastating bacterial infection has significantly impacted citrus trees, leading to a decline in production and the need for extensive pest management efforts. The state of Florida, which historically produced a significant portion of the country’s oranges, has been heavily affected by citrus greening, resulting in a notable reduction in orange output.

Source: The USDA Foreign Agricultural Service

To compensate for the decrease in production in traditional citrus-growing regions, Egypt has emerged as a key player in the global orange market. The country has experienced a significant increase in orange production, driven by favorable weather conditions and expanding cultivation areas. Egypt’s strategic location, allowing for convenient access to major markets in Europe, the Middle East, and Asia, has further strengthened its position as a major citrus exporter.

Despite the challenges faced by the global orange industry, demand for citrus products remains strong. Oranges are a popular fruit worldwide, consumed both fresh and in processed forms such as juices and concentrates. The nutritional benefits and versatile uses of oranges continue to drive consumer demand, contributing to a steady market for orange producers.

In addition to oranges, other citrus fruits like grapefruit and lemons/limes also face their own set of challenges. Grapefruit production has been declining in several countries, including the United States, due to factors such as disease pressure, competition from other citrus varieties, and changing consumer preferences. The popularity of grapefruit has waned in some markets, leading to decreased demand.

Global Citrus Outlook

Source: The USDA Foreign Agricultural Service

Lemons and limes, on the other hand, have seen a relatively stable global production trend. These citrus fruits are widely used in culinary applications, beverages, and various consumer products. However, fluctuations in production and trade can occur due to factors such as weather conditions, disease outbreaks, and market dynamics.

Source: The USDA Foreign Agricultural Service

While the global citrus industry is navigating a complex landscape of challenges and opportunities, it is crucial for citrus producers to adapt to changing market conditions, invest in research and innovation, and implement effective pest and disease management strategies to ensure the long-term sustainability and profitability of the industry.

Read Full Report on the Global Citrus Production Outlook from the The USDA Foreign Agricultural Service

 

 


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The US Meat Export Federation (USMEF) is actively working to overcome supply chain challenges in Africa to tap into the region’s potential as a major market for U.S. meat exports. According to USMEF President and CEO Dan Halstrom, Africa has the world’s youngest demographic and a growing spending power, making it a promising market for American meat products.

According to Halstrom, Africa as a continent and specific countries such as South Africa, Angola, Ghana, Congo and Senegal prove to be valid markets for US beef and pork exports.

To achieve this goal, USMEF is collaborating with individual exporters and packers to introduce sample products to key customers throughout Africa. Developing relationships with key players in the region is seen as critical for the U.S. to fully realize Africa’s market potential, according to Matt Copeland, USMEF Africa representative.

He further added that in the past, Southern, West, and East Africa have been “dumping grounds” for protein products from around the world, with trading companies taking advantage of these routes. To overcome this, USMEF is working to engineer trust and integrity within those trade routes back to the United States.

Currently, Africa is a solid market for variety meat exports, and beef variety meats are already popular, but there is additional opportunity for growth potential in exports of U.S. pork and beef muscle cuts. USMEF’s efforts to overcome supply chain challenges and develop relationships in Africa are expected to benefit American meat exporters and help them tap into this promising market.

Source: Brownfield News


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Picture this – you are a farmer based in the country side, a remote underserved and underdeveloped rural village with ownership of less than an acre under your name, subdivided into several portions for your homestead, with the rest set aside to grow crops and rear a handful of livestock, all these mostly for subsistence. You however try to make ends meet and venture into some less-capital intensive but viable agricultural pursuits like poultry farming, cultivation of some cash crop (sugarcane, tea, coffee, avocado, et cetera) or any other “high-potential”  farming initiative that take months to reach maturity and harvesting, not to mention the long hours spent tending to the crops or flock, as well as input costs incurred to ensure the product is of premium-quality to meet the market and consumers’ expectations before they can fetch somewhat, a fair price for you – which in most cases doesn’t happen and you end up unable to break-even or at a negative, just because of the “artificial” forces and odds that are always working against you!

Well, unfortunately, this is the situation most smallholder farmers in Africa are in and seldom, the circumstances change for the better despite agriculture being the backbone of many African economies – providing livelihoods for millions of people across the continent.

Putting Our Money Where Our Mouth Is!

Smallholder farmers in African often struggle to get a just compensation for their products and effort, with many facing significant challenges that limit their productivity, profitability, and ability to access markets.

Action needs to be taken to support these hardworking farmers, rather than just talking about the importance of agriculture and its potential for economic development while seated in posh “air-conditioned” offices. We must have concrete solutions and investment to address the challenges faced by farmers in accessing markets, finance, and technical skills, among other issues.

In this article, we explore some of the key factors that contribute to this situation and discuss possible solutions.

  1. Limited Access to Markets

One of the biggest challenges facing African farmers is limited access to markets. Many farmers struggle to connect with buyers who are willing to pay fair prices for their products due to inadequate transportation infrastructure, high transaction costs, and limited access to market information. This makes it difficult for farmers to earn a decent income and limits their ability to invest in their farms.

For this reason, Eagmark has developed an eCommerce Marketplace where farmers and agricultural professionals can purchase agricultural inputs at competitive prices and sell their farm produce at fair prices. This platform also connects farmers with consumers and food processors directly, helping in managing the supply chain effectively and therefore reducing the chances of food waste.

  1. Limited Access to Finance

Access to finance is essential for small-scale farmers to purchase inputs, machinery, and equipment. However, African farmers often have limited access to credit due to lack of collateral, high-interest rates, and limited farmer-oriented financial institutions. This makes it difficult for farmers to invest in their farms, improve their productivity, and access higher-value markets.

To mitigate this challenge, Eagmark’s innovative financing solution “FarmBoost”, provides financing for farmers and agribusinesses, ensuring fair access to capital and promotes social development in the sector. By providing bespoke financial lending processes and requirements, the platform aims to level the playing field and provide equal opportunities for all farmers.

  1. Lack of Technical Skills

Many African farmers lack the technical skills required to produce high-quality crops, add value to their products, and manage their farms efficiently. This often leads to low yields, poor-quality products, and difficulty in accessing higher-value markets. There is a need for improved training and extension services to help farmers improve their skills and productivity.

Thanks to solutions such as the Online Learning Campus (OLC) developed by Eagmark and dedicated to provide valuable learning resources for agricultural students, farm apprentices, farmers, and farm managers.

  1. Climate Change

Climate change is increasingly affecting agricultural productivity in Africa. Erratic rainfall patterns, droughts, and floods can damage crops, reduce yields, and affect food security. This can lead to lower incomes for farmers and make it difficult for them to get a fair deal. There is a need for climate-smart agriculture practices and technologies to help farmers adapt to the changing climate.

  1. Dependence on Middlemen

Many African farmers are dependent on middlemen to sell their products. These middlemen often exploit their lack of market knowledge and bargaining power, leading to lower prices for their products. Improved market information systems and support for farmer-led marketing initiatives can help farmers connect with buyers and improve their bargaining power. The Eagmark eCommerce Marketplace does just that by cutting the middlemen off the supply chain to try and enable fair market competition and fair market prices for farmers.

  1. Limited Access to Inputs

Many African farmers have limited access to high-quality seeds, fertilizers, and other inputs. Most often than not, this results to lower yields, lower quality products, and difficulty in accessing higher-value markets. Improving access to inputs and support for farmer-led seed production and distribution systems are some of the initiatives that can be initiated through capacitated farmer organizations.

  1. Poor Infrastructure

Poor infrastructure, such as inadequate storage facilities, lack of electricity, and poor transportation networks, can make it difficult for farmers to get their products to the market in a timely and cost-effective manner. This can lead to spoilage and damage, reducing the quality of their products and lowering their income. Prioritizing investments that improved infrastructure can leapfrog agricultural development.

Governments need to intervene and build well-networked transport infrastructure which can play a great role in ensuring farm produce take the shortest possible time to reach consumers when they are still fresh, thereby reducing the cost of investment on expensive storage equipment, and for those who cannot afford these storage facilities, which is always the case with most small-scale farmers, and their products end up going bad leading to food waste and devastating losses.

  1. Lack of Land Tenure Security

In many African countries, land tenure is insecure, with farmers having limited rights to their land. This makes it difficult for them to invest in their farms and obtain credit, and can also lead to conflicts with larger landholders or the government. With proper government interventions, here can be improved land tenure security and support for community-led land governance systems.

  1. Unfair Trade Policies

Agricultural trade policies in many countries are biased against small-scale farmers. Subsidies, tariffs, and other trade barriers can make it difficult for African farmers to compete in global markets and earn a fair price for their products. Legislation must be put in place to ensure that there is improvement in trade policies that support small-scale farmers and promote fair trade practices.

  1. Inadequate Research and Development

The infrastructure for agricultural research and development is weak in many African nations. Lack of access to cutting-edge technology, industry best practices, and market data may result from this.

In Africa’s agriculture industry, the lack of access to new technologies and techniques reduces productivity and profitability, making it more challenging for farmers to obtain a fair price. Farmers find it difficult to compete in international markets and unable to produce the right quantity or quality of crops required to earn a stable income without access to the most recent technologies. Similarly, without access to market information, farmers cannot make well-informed decisions about what crops to grow, when to sell, and how much to charge.

To address these issues, African governments and international organizations must invest in research and development infrastructure and make it more accessible to small-scale farmers. This can involve providing funding for research institutions, promoting collaboration between researchers and farmers, and disseminating information on best practices and new technologies through extension services.

Promoting public-private partnerships (PPPs) is also another strategy that can bring together government, industry, and academia to drive innovation and create sustainable value chains. PPPs can help address the gap in technology development and innovation by combining the knowledge and resources of different stakeholders.

  1. Lack of Proper Coordination among Farmers

The problem of market fragmentation is somehow a reflection of how poorly disorganized and uncoordinated African farmers are among themselves. It is a well-known fact that when farmer groups come together, they stand a chance and are in a better position to negotiate better prices for their products, as buyers would find it difficult to find alternatives elsewhere.

We have created a curriculum on “The Power of Farmer Organizations: Building a Farmers Community” available on the Eagmark Online Learning Campus (OLC). This course is designed to explore the importance of farmer organizations in building a strong and resilient farming community. It introduces the concept of farmer organizations and the key benefits they offer to farmers, including increased bargaining power, access to information and resources, and the ability to participate in policy-making processes.

  1. Gender Inequality

Putting the buzzwords and all the conundrum aside, women farmers in Africa have often faced significant barriers to accessing resources, such as land, credit, and market information.

According to a study by the World Economic Forum (WEF), women account for nearly half of the world’s smallholder farmers and produce 70% of Africa’s food. However, less than 20% of land in the world is owned by women and over 65% of land in Kenya is governed by customary laws that discriminate against women, limiting their land and property rights – something to critically think about! The WEF study highlights the perspective, but we believe that women truly form the majority or smallholder farmers in Sub-Saharan Africa (SSA).

These circumstances have continuously limited women’s farm productivity and profitability, and has led to lower incomes and fewer opportunities to improve their economic status.

Additionally, women farmers are often discriminated against in terms of access to productive resources, such as land, credit, and training. Women typically have less access to these resources than men, which limits their productivity and profitability. This gender inequality affects not only the women themselves but also their families and communities.

In recent times, however, there have been efforts and initiatives across many institutions, organizations and programs to promote gender equality and empower women farmers through policies and programs that promote their access to productive resources.

Eagmark Online Learning Campus (OLC) is offering a “Gender Mainstreaming in Agriculture” course that aims to equip participants with knowledge and skills on how to integrate gender considerations into agricultural policies and programs. The course is open to anyone interested in gender mainstreaming in agriculture, including policymakers, program managers, researchers, and development practitioners.

  1. Insufficient Extension Services

Extension services, such as training in new farming techniques, access to credit, and market information, are often limited in many African countries. This can limit farmers’ ability to adopt new technologies and practices and take advantage of market opportunities.

Extension services play a crucial role in supporting farmers to improve their productivity and profitability. However, they are often limited in many African countries due to inadequate funding, limited human resources, and poor infrastructure. It is therefore essential to invest in extension services and ensure that they are adequately funded, staffed, and equipped to meet the needs of farmers.

  1. Environmental Degradation

Environmental degradation, such as soil erosion, deforestation, and water pollution, is a major hindrance to full productivity of African farms and reduces their profitability. This has led to lower incomes for farmers and makes it more difficult for them to get a fair deal.

Environmental degradation affects not only the immediate productivity of farms but also the long-term sustainability of agricultural production. It is therefore essential to promote sustainable agriculture practices and invest in environmental conservation efforts to ensure that African farmers can continue to produce food and earn a fair income in the long run.

Summing It All Up

All of these factors contribute to the challenges faced by African farmers in getting a fair outcome based on their efforts and toil. While some of these issues may be difficult to address all at once, there are steps that can be taken to help farmers improve their competitiveness and position in the market, just like we are doing through Eagmark’s initiatives – plans into action – and with the right strategic partners and support, such small efforts can be compounded to make greater impacts for the betterment of the farming community and the society’s wellbeing at large – with less talk, and more action!


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Governments often use agricultural subvention as a policy tool to assist farmers in increasing their agricultural productivity. Subsidies can take various forms, such as direct payments, price supports, and tax breaks, to name a few. The primary aim of agricultural subvention is to promote food security, sustainable agriculture, and rural development.

Agricultural subvention has the effect of enhancing agricultural productivity. By reducing production costs, subsidies make it more affordable for farmers to obtain necessary inputs, such as fertilizers, seeds, and farm equipment. Farmers can also invest in advanced technologies that enhance crop yields, reduce waste, and promote food safety.

In addition, agricultural subventions encourage investment in the agricultural sector by incentivizing farmers to expand their operations, resulting in increased production levels and improved supply chain efficiency. This increased production leads to a more stable or even lower price of agricultural products, which benefits consumers by making healthy and affordable food more accessible.

Moreover, agricultural subventions create employment opportunities, especially in rural areas, where farming is a major source of income. Higher agricultural productivity leads to additional labor demand, resulting in job creation and economic growth in rural areas.

According to the World Bank, growth in the agriculture sector is two to four times more effective in raising incomes among the poorest compared to other sectors.

Agricultural subvention is a form of financial assistance given to farmers by the government to help them produce more food. While subventions can help farmers increase their productivity, there are also concerns that they can lead to overproduction and lower prices for farmers.

However, there are potential downsides to agricultural subvention. For instance, it may lead to overproduction, which can cause market surpluses and reduced prices, harming farmers in developing countries who rely on agriculture for their livelihoods. Additionally, agricultural subvention can be expensive for governments, which may find it more beneficial to invest funds in other sectors. Thus, it is crucial to ensure that subsidies are well-targeted and efficiently allocated to encourage agricultural productivity and promote long-term sustainability.

Agricultural subventions can be an effective tool for increasing productivity and reducing poverty among farmers. However, it’s important to ensure that subventions are used in a way that promotes sustainable agriculture practices and doesn’t lead to overproduction or environmental degradation. By providing farmers with the resources they need to produce more food sustainably, we can help ensure that everyone has access to healthy and nutritious food while also protecting our planet.


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January 6, 2023 AGRI ECONOMICSBLOG0

The high global food prices in the 21st century is causing concern about the potential for a global nutrition crisis. A study of over 1.27 million children in 44 low and middle-income countries found that exposure to food inflation during pregnancy and early childhood is associated with a higher risk of child wasting in the short term and stunting in the long term.

Poor and landless rural households are particularly at risk for child wasting due to food inflation. These findings emphasize the importance of policies that improve maternal and young child nutrition and address food price volatility and access to nutritious foods.

Food prices have been highly volatile in recent years, with three international price spikes occurring in the past 15 years, including the current COVID-19 pandemic and the invasion of Ukraine. Domestic food inflation in low and middle-income countries remains high, with countries facing economic issues, conflict, or poor governance being particularly affected.

The negative impacts of food price crises on nutrition are particularly concerning given their frequency and increasing intensity in the 21st century. The UN Food and Agriculture Organization’s international food price index reached an all-time high in March 2022, 116% higher than its 2000 value. This is higher than even the peak of the 2007-2008 crisis.

While international prices have recently decreased, domestic food inflation in low and middle-income countries remains high by historical standards, particularly in countries facing economic mismanagement, conflict, or poor governance. It is crucial to address these food price crises and their effects on nutrition, particularly for vulnerable populations such as poor and landless rural households and young children.

Image Source: IPFRI Blog

The impact of Inflation

International food price increases pose a threat to the welfare of the poor, particularly in light of the severe impacts of COVID-19 on poverty and malnutrition. Simulation models from the International Food Policy Research Institute (IFPRI) suggest that increases in food, fuel, and fertilizer prices are linked to short-term increases in poverty, even if rural economies may benefit from higher prices in the long run. However, little is known about the effects of food inflation on child nutrition in the short or long term.

Optimal maternal nutrition during pregnancy and proper child-feeding practices in early life are crucial for promoting development and protecting health and nutrition at all stages of life. Therefore, as food prices rise and households’ access to nutritious foods and healthy diets decreases, it is a major concern that the nutrition of pregnant and lactating women and their young infants, who have high nutrient requirements, may suffer the most.

A study using data from 130 Demographic Health Surveys in 44 low and middle-income countries found that food inflation is associated with higher risks of wasting and severe wasting in children, particularly in infants under 5 months of age, potentially due to a maternal nutrition pathway during pregnancy. Food inflation was also linked to poor dietary diversity in children aged 6-23 months, suggesting an additional postnatal pathway.

For stunting, a measure of long-term or chronic malnutrition, we test the effects of food price changes in the year before measurement. Those predicted risks are shown in Figure 3 for all stunting (in black) and severe stunting (in blue), by child age. Food inflation is again associated with higher risks for stunting and severe stunting, and the effect size is large and robust across ages. Across all children 0-59 months of age, a 5% increase in the real price of food is associated with a 7% higher risk of stunting and a 10% higher risk of severe stunting.

These results demonstrate the negative impacts of food inflation on child nutrition, particularly for wasting in the short term and stunting in the long term. They also highlight the importance of addressing food price volatility and improving access to nutritious foods in order to protect the nutrition of vulnerable populations such as pregnant and lactating women and young children. It is crucial to implement policies focused on improving maternal and young child nutrition, as well as broader actions to reduce food price volatility and increase access to nutritious foods.

Image Source: IPFRI Blog

Which groups are most vulnerable to the negative impacts of food inflation?

Previous research has shown that poor, rural, and landless households are often more vulnerable to inflation shocks, while male infants are more vulnerable to shocks than females according to nutrition-focused studies. The current study also found that male children, rural children, and children from asset-poor and landless households are at higher risk for wasting due to food inflation, particularly for male children and children from asset-poor and landless households. These findings demonstrate the disproportionate impact of food inflation on vulnerable populations and the need for targeted policies to protect their nutrition.

The long-term effects of short-term economic shocks on nutrition

Even brief periods of poor nutrition can have lasting impacts on child growth and development, particularly during the first 1000 days of life when the foundations for optimal nutrition, health, and development are established. The study found that price increases during pregnancy and the first year of life were linked to a higher risk of stunting at age 3-5 years, with stronger effects for severe stunting. These results show the significant and long-lasting consequences of nutritional insults during critical periods of development.

Image Source: IPFRI Blog

Image Source: IPFRI Blog

Policies and programs to protect young children and mothers

IFPRI’S study suggested some implications. The impacts of food inflation on nutrition during the critical period of the first 1000 days of life, including pregnancy and infancy, and the disproportionate impact on poor and landless rural households highlight the urgent need for policies and programs to protect these vulnerable populations.

The IFPRI’s study suggested that Maternal and child food or cash transfers, possibly with health and nutrition-related conditions, can provide protection throughout the first 1000 days and beyond, particularly if they are targeted at the poorest groups and combined with nutrition and health-focused social behavior change communication and adjusted for inflation.

The publication suggested that investing in multi-dimensional early warning systems and programs to prevent and manage severe acute malnutrition is also important in an era of increased food price volatility and extreme weather events. Additionally, food policies should aim to stabilize food prices and increase the affordability of nutritious foods.

The study recommended the following scaling up investments in climate-smart and nutrition-smart agricultural research and development, implementing new approaches to grain reserves, more closely regulating biofuels policies, reforming trade to prevent export restrictions, and adapting and making social protection programs more nutrition-sensitive to protect the incomes and diets of high-risk populations. closely regulating biofuels policies, reforming trade to prevent export restrictions, and adapting and making social protection programs more nutrition-sensitive to protect the incomes and diets of high-risk populations.

Read full article on IFPRI’s Blog


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December 5, 2022 AGRI ECONOMICSBLOG0

The majority of people in sub-Saharan Africa reside in rural areas, which are also the areas with the lowest levels of human development. Growing agriculture has the dual benefits of reducing poverty in such areas and improving access to food and nutrition security because most rural households are agricultural in nature and the sector makes a significant contribution to the overall economy.

Given that agriculture is responsible for up to almost 70% of domestic employment and 75% of domestic trade on the continent, it makes sense to focus all support on the industry. Because agriculture was a vital sector for socioeconomic growth during Asia’s Green Revolution, widespread rural poverty in Africa offers a chance to do the same and build on that success.

The Bottlenecks

Despite the numerous opportunities for rural livelihood offered by agriculture, many young people, regrettably, find it unappealing and view it as the employment of last resort. This is due to two primary factors. First, many young people think agriculture is not glamorous, lucrative, or has “snub appeal.”

Second, due to a lack of appropriate facilities, institutions, and policies that support agriculture in rural areas, such as financial options and markets. As a result, rural-to-urban migration has increased, poverty has increased, and agriculture has remained undesirable and unattractive to youth. This scenario puts food security at risk and could collapse rural economies that rely mostly on agriculture. As a result, farmers are getting older on average and younger people are less likely to take over for older farmers, creating a “generation gap” in food production.

Because of their negative perception of agriculture, many young people prefer to move to cities and towns in search of white-collar jobs. This is the reason for the generation gap in agriculture. This makes a test for the mechanical headway of farming as more seasoned ages are less acquainted with new developments.

Prospects

Despite these challenges, there is a chance to make agriculture more appealing to the younger generation. Younger generations were born and raised in a technological era where they are surrounded by technologies like smartphones, software programs, and other devices that are used everywhere in the world. Africa presents an expansion opportunity because it has the most uncultivated land in the world. Through mechanization, market access resulting from regional integration, business opportunities, roads, and general rural development, agriculture can be made sustainable in light of a growing population, technological advancements like ICT, and the development of infrastructure.

Recommendation for the future

Making better use of agricultural technologies will make it easier for the next generation to manage agriculture. It will not only inspire the new generation to become involved in agriculture, but it will also assist them in becoming farmers. Furthermore, there is the need to change farming unrefined components into modern items and this will rely progressively upon the limit of African business visionaries to partake and contend in worldwide, provincial, and neighborhood esteem chains.

In order to accomplish this, it will be necessary to support agricultural start-ups with assistance from entrepreneurship development platforms. This will address the market and financial constraints that prevent young people from participating in the agriculture value chain. One methodology toward this path would incorporate business brooding administrations which will uphold youthful agribusiness business visionaries through the arrangement of direction in regions, for example, business arranging, giving research and development framework offices, model turn of events and testing, item approval, business advancement, and working with monetary help through obligation and value. This is in line with the United Nations’ statement that “Africa needs to embrace economic diversification, but also needs to focus on agribusiness to lift the continent out of poverty and put it on the path to prosperity.”

At the policy level, the role of youth in the agricultural development agenda on the continent needs to be emphasized once more. This will serve as the foundation for thinking about how to incorporate gender equality into the agricultural development processes on the continent to get policymakers to be more committed.

Despite organizations like Eagmark’s efforts to correct the imbalance, it is necessary to identify the key success factors and devise strategies for scaling them. Eagmark is actively pursuing means of aligning its implementation by consolidating and forging new programs on youth empowerment in light of the recent rollout of the Science Agenda for Africa Agriculture (S3A), which outlines the guiding principles to help Africa take charge of Science, Technology, and Innovation (STI) to transform its agriculture.


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The increase in price of fuel, including diesel, petrol and kerosene (all components of oil and natural gas) as proposed by Energy and Petroleum Regulatory Authority (EPRA) has triggered jitters among Kenyans and the consequence will likely keep agricultural inputs at higher levels. The new pump prices will retail higher by Ksh.20.18 for super petrol, Ksh.25. for diesel and Ksh.20 for kerosene, respectively. The changes currently being witnessed in the way energy moves will not help our energy prices in the short term, obviously, and this will be compounded by the ongoing tensions between Russia and Ukraine which will add pressure to agricultural input prices.

The new price changes by EPRA come a day after President William Ruto declared that a 50kg fertilizer bag will retail at Ksh.3,500 down from the current Ksh.6,500 beginning the week of 19th September 2022. However, the price of fertilizers like nitrogen, diammonium phosphate (DAP) and potash are typically influenced by energy markets. Fertilizer is very energy intensive and for nitrogen, the main input in natural gas, it will definitely soar. So, if the price of oil goes up and natural gas goes up, that tends to put an upward pressure on fertilizer prices. Despite the new anticipated subsidized fertilizer costs, the new proposed energy prices will most likely keep the cost of fertilizer upward in the long run.

READ: Global Fertilizer Markets Respond to Surging Energy Prices

Since the beginning of 2022, the price of fertilizer has continued to rise with nearly 50% following the previous year’s surge. The soaring prices are driven by a combination of factors, including surging input costs, supply disruptions caused by the market volatility.

The record-high input costs have not only been witnessed in Kenya, but also globally. In places like Europe, the rising natural gas prices has led to widespread production cutbacks in ammonia which is an important input for nitrogen-based fertilizers.  Similarly, the increasing prices of coal, the main feedstock for ammonia production in China production at some point forced fertilizer factories to reduce production, which contributed to the increase in urea prices. The higher prices of ammonia and sulfur resulted to the rise in phosphate fertilizer prices as well.

The situation as it presents itself can however be a double-edged sword for large-scale Kenyan grain farmers because it would likely cause an increase in both input and grain prices.


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The Global Food Donation Policy Atlas (GFDPA) reports that each year, approximately 40% of the food produced in Kenya goes to waste amounting to an estimated Ksh.72 billion (USD 654,545,448) a year. At the same time, approximately 36.5% of the population is food insecure. In 2020, Kenya faced the worst locust invasion it has experienced in 70 years, further increasing food insecurity up to 38%.

The Kenyan government has prioritized hunger reduction and food security in its national policy agenda. The Constitution provides that the government must take legislative and policy initiatives to progressively realize the right to food in Kenya. In 2011, Kenya adopted a National Food and Nutrition Security Policy to improve nutrition and the quality of food available to Kenyans. In 2017, Kenya adopted a National Food and Nutrition Security Policy Implementation Framework to implement the National Food and Nutrition Security Policy to ensure that everyone has access to affordable and nutritious food. Further, Kenya instituted Vision 2030 and the Big Four Agenda, which identify food security as a priority. Nonetheless, Kenya is yet to adopt a national law to promote food donation or prevent food loss and waste. Notwithstanding, Kenya holds initiatives to create awareness about food loss and waste and discuss the gaps in policy and implementation that are hindering progress in reducing food loss and waste. In 2017, Kenya hosted the first ever All Africa Post-Harvest Congress. In 2020, the Ministry of Agriculture, Livestock and Fisheries participated in the first International Day of Awareness of Food Loss and Waste. In addition to the government-led responses to food loss and waste, private sector actors including food banks are actively promoting food rescue and donation of surplus food to mitigate hunger and food insecurity.

KENYA FOOD DONATION POLICY HIGHLIGHTS

DATE LABELING: Kenya’s date labeling scheme is set out in the Food, Drugs and Chemical Substances (Food Hygiene) Regulations, 1978, the Specification of Products to Be Marked with Last Date Sale, 1988, the Food, Drugs and Chemical Substances (Food Labelling, Additives and Standards) Regulations and the Labelling of Pre-packaged Foods – General Requirements under the FDCSA. The Labelling of Prepackaged Foods – General Requirements establish a dual date labeling scheme for prepackaged foods, which distinguishes between safety-based and quality-based labels. Specifically, the Labelling of Prepackaged Foods – General Requirements require all pre-packaged foods to feature either a “date of minimum durability” also expressed as “best before” date, or a “use-by” date also expressed as the “recommended last consumption date” or “expiration date,” depending on the type of food product.

ACTION OPPORTUNITY: Despite aligning with the best practice of having standard labels for quality versus safety as provided in the 2018 update to the Codex Alimentarius General Standard for the Labeling of Prepackaged Foods. None of the regulations governing date labeling in Kenya expressly permit past-date donation of food with a quality date. Kenya should amend the Labelling of Pre-packaged Foods – General Requirements under the Food, Drugs and Chemical Substances Act to explicitly permit the donation of food after the quality-based date. In addition, the government could promote education and awareness on the meaning of date labels.

KENYA FOOD DONATION POLICY OPPORTUNITIES

TAX INCENTIVES AND BARRIERS: Kenya’s Income Tax Act (Cap. 470) does not provide any incentives for in-kind donations, such as donations of food. The Income Tax Act only allows corporate and individual donors to claim a deduction for any cash donation of income to a registered qualifying charitable organization. Further, for most commercial transactions, including the sale of food, vendors must incorporate VAT. Kenya’s VAT system provides two categories of exceptions to taxable supplies that directly impact food products, which is exempt and zero-rated supplies. Certain foods in Kenya are exempt or zero-rated, while some food products are both exempt and zero-rated.

ACTION OPPORTUNITY: To ensure businesses (both donors and distributors) receive proper tax incentives and sufficient information to participate in food donation, the Kenyan government should expand Kenya’s Income Tax Act’s income tax deduction to include in-kind donations to food recovery organizations. As an alternative, the government could offer tax credits for food donations made to food recovery organizations and intermediaries. In addition, Kenya should categorize food donation as a zero-rated supply under the Value Added Tax Act and provide a tax deduction for activities associated with the storage, transportation and delivery of donated food. Lastly, the Kenyan government could develop tax guidance for food donors and food recovery organizations clarifying exemptions.

FOOD SAFETY FOR FOOD DONATIONS: In Kenya, food safety laws are mostly contained in the Public Health Act (PHA) and the Food, Drugs, and Chemical Substances Act (FDCSA). While the PHA and FDCSA do not explicitly include food donation in its scope, existing food safety rules are broad in scope and presumably apply to food donations. However, food donations are not explicitly mentioned in law or guidance.

ACTION OPPORTUNITY: Kenya should amend the Food, Drugs and Chemical Substances Act (FDCSA) to feature a donation-specific chapter or draft regulations related to the FDCSA that elaborate on food safety for donations. The Kenyan government could also produce and disseminate clarifying guidance on food safety requirements relevant to donation.

LIABILITY PROTECTION FOR FOOD DONATIONS: Kenya does not provide explicit legal protections for food donors and food recovery organizations. Generally, claims of harm arising from goods, including food may be brought under the Competition Act and the Consumer Protection Act.

Report courtesy of the Global Food Donation Policy Atlas (https://atlas.foodbanking.org/).

Download Full Report HERE.





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