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Returns to investments in fertilizers production in Kenya

An analysis in support of the new “Agriculture Sector Growth and Transformation Strategy”

Year of publication 2019

Place of publication Rome, Italy ;

Pages 20 p.

Author Balié, J., Battaglia, L., Boulanger, P., Dudu, H., Ferrari, E. & Mainar Causapé, A.J.

Publisher FAO ;

Product type Booklet

Edition 1

Synopsis (short abstract) This report, jointly produced by the Joint Research Centre (JRC) and the FAO’s Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme, analyses alternative strategic interventions on the agricultural sector in Kenya to inform the drafting of the new Agriculture Sector Growth and Transformation Strategy (ASGTS) and a new National Agricultural Investment Plan (NAIP) of the country. The study reviews trends and composition of food and agricultural public expenditures for the 2006-2016 period based on the MAFAP methodology, and analyses, through a general equilibrium model framework, impacts of agricultural policies on economic and sectorial performances of the country, and on its food security situation. The results highlight that the share of public resources allocated to the sector has been declining over time. Moreover, the agriculture budget is dominated by extension services, inputs subsidies and agricultural research. Although invetments in extension should remain in place, as the potential positive effects on the Kenyan agriculture look significant, some rebalancing of the spending in favour of roads and marketing, together with a diversification of targeted commodities, could help maximize spending impacts. The CGE assessment confirms that while investing in fertilizer production is likely to have a positive effect on agricultural output and farmer livelihoods, such expenditures need to go hand in hand with improvements in the status of rural infrastructures and the quality of extension services. The adoption of an import tariff for fertilisers would have negative effects, through an expected increase in farmer production costs. Agricultural transformation can only be achieved by adopting coherent and well-balanced intervention packages.

Language English

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