The fiscal budget for the year 2020/21 will be pronounced under harsh economic conditions when the world is reeling under the weight of the Covid-19 pandemic and the resultant economic recession.
It will also coincide with a grim picture where the number of acutely food‑insecure people in need of emergency food assistance increased to 2.6 million in 2019 from 1.1 million in 2015. Others include the familiar challenges of desert locusts, above normal rainfall and the resultant floods.
The National Treasury Cabinet Secretary Ukur Yatani promised prioritisation of food security fin the coming financial year thus raising expectations that the pangs of acute hunger will at least be tempered.
However, in the Budget Policy Statement (BPS) 2020/21 the proposed allocation is four percent less than the allocation in the 2019/20 financial year. In the same breath, the budgetary allocation to the Agriculture Rural and Urban Development (ARUD) sector is 49.4 percent of the sectoral requirements despite the major announcements made against food insecurity.
These pronouncements such as the ‘Big Four Agenda’ include food security as one of its pillars. Notwithstanding these policy pronouncements, Kenya has never come close to the Maputo Declaration target of allocating 10 percent of its national budget to agriculture despite the sector employing over 40 percent of the total population and more than 70 percent of the rural population.
The low budgetary allocation, which shows the commitment of government towards policy, overtime is replicated with allocation dwindling at 1.8 percent in 2020/21, 1.6 percent in 2019/20 and 1.5 percent in 2018/19 down from 3.4percentin 2013/14.
One would therefore expect this year’s budget to place emphasis on food and nutrition sector, with a goal to reduce the effect of acute food insecurity in the country by 50 percent as envisioned in the BPS. This would include budgetary consideration food security initiatives which was allocated 35.8 percent of the requirements according to the BPS.
Most people’s expectation is that this will be increased to 100 percent of requirement because it includes small-holder farmers who dominate the agricultural sector in a country where over 70 percent of national production is for household use.
Despite small-holder farmers being major players in food security, they are only remembered when markets and commerce fail as has been witnessed with the Covid-19 crisis.
The importance of small-holder farmers has been highlighted in building resilience in food systems post Covid-19 and hence the budget should focus on them. In the same light, more allocation should be focused to expanding rural infrastructure and rehabilitation of existing infrastructure especially in the wake of destruction caused by floods early this year.
The faster these investments are fixed the faster farmers will reconnect with the markets. While mobile banking has improved greatly over time, there is need to strengthen liquidity issues to enable self-help groups especially women groups to deposit and withdraw their savings by addressing the transaction costs involved.
Beyond cushioning farmers, the country needs to address social protection generally because every year millions of Kenyans face worse levels of acute food insecurity requiring humanitarian assistance and food aid.
The Special Programme sub-sector where Relief programmes falls was allocated Sh1 billion short of the required Sh7.3 billion in the FY2020/21.
The economic lockdown and cessation of movement caused by the Covid-19 means an even greater number is now vulnerable and requires food support. It is expected therefore coupled with locust invasion, and floods the funding should be increased to 100 percent.
Mr Yatani should consider increasing funding towards Livestock Products Value Addition and associated marketing from Sh 2 billion to at least Sh2.5 Billion (70 percent of requirement) to address the ever increasing livestock products demand.
The government should also consider reintroduction of extension services which are currently market driven and small-holder farmers cannot afford extension services and their products such as artificial insemination services as well as quality breeds.
The services should probably be offered in a Public Private Partnership model to enhance productivity in an environment of decreasing land sizes. In addition, the government should reassess the Tax Bill 2020 and revert to VAT exempt on materials and equipment for the construction of grain storage.
With a country already struggling with feeding its citizens as a result of post-harvest losses and aflatoxin poisoning, VAT standard rating negates the idea of food security. Alongside this, the budget should consider establishment of rural storage infrastructure which is an important aspect of the rural food supply chain.
This would take the form of cold storage, grain and tuber stores at the ward level to enable farmers hold their produce until prices improve. This will enhance household incomes, reduce post-harvest losses as well as availability of food during periods of crisis.
Another aspect that should be reviewed in the budget is the definition of bread in the Tax Bill 2020 which implies that bread of any other form mostly consumed by poor households attracts VAT. To navigate high prices of conventional bread and to navigate low prices of locally available tubers, communities had embarked on value addition by grinding locally available materials such as cassava, pumpkin and yam to make various forms of bread. Subjecting this “bread” to VAT means defeating these local food security innovations.
A farming system that depends on pesticide imports to meet the food needs of the country, deviates from the ultimate goal of food self-sufficiency and undermines the right of the people to define their own food and agriculture systems.
The budget should also offer maximum support to research leading to the availability of locally manufactured bio-control and bio-pesticide products, as well as of safer synthetic insecticides that have been fully tested with associated training in their safe and economical use.
Mr Gachoki is lecturer at Kenyatta University and a public policy expert.
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