Trade and Agricultural Competitiveness: A Case of Wheat and Rice Production in Kenya

 

Author(s):  Raphael Gitau, Samuel Mburu, Mary K. Mathenge and Melinda Smale
Introduction

The competitiveness of Kenya’s production systems compared to those of our trading partners’ remains a critical issue with regards to both economic development and food security. Self-sufficiency in major staples has remained elusive as Kenya continues to face structural deficits in both wheat and rice. The deficit is met through imports. Despite Kenya being a high cost producer of wheat and rice there are groups of farmers that are producing these crops competitively. Thus there is potential for growth of the wheat and rice sub-sector through replicating the success cases of competitive farmers and also addressing the inefficiencies that lies along the value chain. The inefficiencies identified in this research included low yields, high input costs, high operational costs, and poor infrastructure. To address these inefficiencies in the short run there is need to harmonize taxation across municipalities, reducing double taxation especially where commodities transcends municipal boundaries. Zero rating of agricultural machinery and removal of VAT on spare parts is recommended. Streamlining the importation, refinery and distribution of fuel to avoid the lag that creates artificial shortages is advised. Bulk importation of inputs would facilitate economies of scale. In the long-run, there is need to focus government expenditure on public investments such as improvement and rehabilitation of infrastructure (rail, road, ports markets and irrigation), alternative energy sources (wind,solar, nuclear) and increasing productivity (breeding high yielding seed, promoting variety turnover, extension services).

Trade and Agricultural Competitiveness: A Case of Wheat and Rice Production in Kenya