How Kenya can increase productivity
The hype about the Big 4 agenda was witnessed at Trade Week 2018 held in Nairobi last week, organised by Trade and Industrialisation ministry.
One of the strategies unveiled at the event was the identification of eight sectors with the potential to up exports from eight per cent to 25 per cent of the Gross Domestic Product by 2022.
This can be achieved provided the State walks the talk and tackles hurdles that have impeded development for decades.
First, the bottlenecks holding back agricultural productivity need to be sorted out urgently.
A look at major cash crops with the exception of tea reveals that farmers get the raw deal when buying inputs and selling produce.
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The most notorious of these cash crops is coffee where cartels control the entire value chain.
The automation of the central coffee auctions is unlikely to bear fruit to farmers apart from giving them a false feeling of being part of the marketing process.
It has to be understood that cartels and their foot soldiers, middlemen who earn such huge profits will fight tooth and nail to retain the status quo.
This means the State may have to go back to the drawing board to strategise on the best ways of taking them out of the game.
The story that Ethiopia withheld its coffee sale to the US for two years till speciality coffee outlets agreed to market its product as Ethiopian coffee is a lesson Kenya needs to have a look at.
Kenya is unlikely to break monopolies in key cash crops until it dismantles cartels that have made non-coffee producing nations such as Germany and Switzerland earn ten times more from crop than local farmers.
Wrestling control of the crop’s value chain from foreigners would give it a valuable vantage-point to tackle endemic corruption routinely reported in the country’s co-operatives. It is at this point that the open thievery of farmers begins.
The process begins with the over-pricing of inputs and the padding of production costs at the factory level and at the milling plant where the farmers’ superior quality beans are swapped with poor quality ones.
This often results in factories in the same zone being paid different prices for their coffee.
Incidents, where farmers get sub-standard inputs and are charged exorbitant prices, are common. They should be taken to court and charged with economic sabotage. Selling quality in-puts to farmers and guiding them would up productivity. We should stop talking about value addition and do it.
[Mbatau Wa Ngai, [email protected]]