The impact of agricultural subsidies: The case of Siaya County
People are considered food secure when they have access to readily available and affordable food that is sufficient, safe and nutritious. Pursuant to Article 43(l)(c) of the Constitution of Kenya, every Kenyan, irrespective of their circumstance, has the right to be free from hunger and to have adequate food of acceptable quality. Kenya subsidises the production of food crops in order to achieve sustained levels of availability. Subsidising production means that the government procures agricultural inputs on behalf of farmers and distributes these inputs to farmers at lower rates than commercial outlets. The aim is to reduce the cost of farming thereby keeping the output prices fairly affordable and accessible to consumers. Examples of inputs that are subsidised are fertilisers, hybrid maize and sorghum seeds and land ploughing/tractor services.
Expenditure on subsidies in Siaya County
Since the devolution of agriculture in 2013, the Siaya County Government has rolled out a number of agricultural subsidies. In 2014, the county dispensed subsidised maize and sorghum seeds amounting to Ksh 4,938,000. During the same year, the county subsidised fertilisers to the value of Ksh 8,592,800. In 2015, the subsidies on maize seeds cost the county Ksh 3.6 million. In 2016, the county spent Ksh 19,980,000 purchasing planting and top-dressing fertilisers. During the past three years, the county has invested Ksh 37,110,800 in subsidies, not including significant costs incurred in procuring tractors for subsidised ploughing services.
Do subsidies equal more food?
The table below shows the production of maize as a staple crop from 2010 to 2015. The devolved system officially started in 2013. Before this, available records do not show any agricultural subsidies received from the central government.
|Metric Tons (MT)||100,145||117,818||130,682||129,818||145,955||146,818||–|
Source: Siaya County Department of Agriculture
From the figures above, there was an increase in production from the year 2010 to 2012 which can be attributed to farmers increasing acreage under the crop. The decline in 2013 could be linked to the impact of election campaigns and below average rainfall. In 2014, the county issued its first agricultural inputs subsidy (seeds and fertilisers) of Ksh 13,530,800 and managed to increase production by 16,137 MT. In the subsequent year, the subsidies stood at Ksh 3.6 million and the production of maize increased by 863 MT.
Despite Siaya County registering annual increases in production figures, caution must be exercised before concluding that fertiliser and seeds subsidies alone assist farmers in producing more food. To illustrate, even with the subsidies in 2014 and 2015, the addition of 863 MT in 2015 is too minimal to justify subsidies. Moreover, it could be argued that fertiliser subsidies lowered production as fertiliser application without sufficient moisture would only help to wither crops. Other factors such as the provision of irrigation infrastructure, functional supply driven extension services, soil sampling and testing services are critical to the production and availability of food.
According to Tegemeo Institute, since 2008, Kenya has imported 1,019,920 MT of fertilisers for the purpose of implementing a fertiliser subsidy programme. However, the country continues to struggle with food insecurity. Kenya is ranked 83rd out of 113 countries indexed on the Global Food Security Index (GFSI, The Economist Intelligence Unit, 2016). This illustrates that a holistic approach to agriculture is required to stimulate meaningful productivity. To achieve food security in Siaya – typically a food deficit county (Comprehensive Food Security and Vulnerability Survey, WFP, 2016) – more can be done to ensure maximum production and the subsequent availability and affordability of food at the source.
Making subsidies effective
Targeted subsidies. Subsidies are geared towards improving food security, especially amongst vulnerable households. Wealthier, mid to large-scale farmers can produce without subsidies and in theory, produce at lower costs to sell cheaply to small-scale farmers in Kenya who are – on average – net maize buyers. This is often not the case, because larger farm owners have the capacity to store produce until market prices are high. This makes the effect of subsidies on small-scale farmers, redundant. For the purposes of alleviating poverty and food insecurity, the best way would be to target resource-poor producers with these subsidies.
Soil sampling and testing. Small-scale farming is the basis of Siaya’s crop production. Adoption of soil sampling and testing technologies that measure soil pH and nutrient deficiencies has been slow. As a result, the kinds of fertilisers provided through subsidy programmes are not optimised for the soil types in the region. Continuous use of inorganic soil nutrients acidifies the soil and drastically lowers production if liming has not been done to improve the soil pH. An effective and responsible fertiliser subsidy programme would rely on regular soil sampling and testing to ascertain the type of fertilisers suitable for maximum food production.
Irrigation infrastructure. The irrigation component of crop production has not been given enough weight while rolling out subsidies. Research shows that food production is high in regions where rainfall is adequate or slightly above normal even without subsidies (Climate Change and Food Security in Kenya, J. K. Mariara & M. Kabara, 2015). Establishing a functional irrigation infrastructure that responds to the needs of small-scale farmers would improve livelihoods and food security to a great extent.
Extension services. Resource poor farmers do not possess comprehensive knowledge on how to use the fertilisers distributed in subsidy programmes. Traditionally, Kenya’s subsistence farmers have produced their food organically without the use of inorganic nutrients. Lack of supply-driven extension services in conjunction with subsidies has led to farmers misusing fertilisers to the detriment of their crop. For example, there are cases where a planting fertiliser is used for top dressing while that for top dressing is used for planting. A network of government employed extension workers who regularly visit and train farmers are a critical component of any agricultural plan for optimum production.
The case of Siaya County illustrates that subsidising food production is expensive and is not a silver bullet to increase the availability or affordability of food. Indeed, the high cost of food coupled with regular food shortages in Kenya call into question the meaningful impact of subsidy programmes. Subsidies can be effective in supporting counties to produce sufficient food for household consumption and surplus for the market. However, county governments must implement holistic, responsible and feasible programmes. Irrigation infrastructure is essential for any subsidy programme. Extension services, soil sampling and testing coupled with targeting resource-poor producers are key for the cumulative success of agricultural input subsidies.
By Booker Owuor. Booker supports the Route to Food initiative.
Image: Michael Ongech and Pitalis Olunde, Nyamninia Village, Siaya County. Photograph by Armstrong Too.