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THE IMPACT OF THE ECONOMIC PARTNERSHIP AGREEMENT (EPA) ON FOOD SECURITY OF POOR KENYANS
LIST OF CONTENTS
ABBREVIATIONS ......................................................................................................................................................... 5 INTRODUCTION .......................................................................................................................................................... 6 I. THE CURRENT STATE OF FOOD SECURITY ................................................................................................ 6 II. KENYAN AGRICULTURAL PRODUCTION ................................................................................................ 12 III. AGRICULTURAL TRADE AND THE ECONOMIC PARTNERSHIP AGREEMENT WITHTHEEU(EPA) ............................................................................................................................................. 17 IV. CONCLUSION ...................................................................................................................................................... 22
ABBREVIATIONS
ACP ASAL COMESA EAC EBA EPA ETO FAO GSP ICC IDP IFPRI IGAD IPCC KHRC LDC MDG NFIDC WTO Africa, Caribbean and Pacific countries arid and semi-arid land Common Market for Eastern and Southern Africa East African Community Everything but Arms Economic Partnership Agreement Extra-territorial obligations Food and Agriculture Organization Generalised System of Preferences International Criminal Court Internally Displaced Person International Food Policy Research Institute Inter-Governmental Authority on Development Intergovernmental Panel on Climate Change Kenya Human Rights Commission Least Developed Country Millennium Development Goal Net-Food Importing Developing Countries World Trade Organization
INTRODUCTION
Kenya has the most advanced economy in East Africa today and, thanks in part to its geographical location, is also a regional business and financial centre. For years the surrounding world, beleaguered by a never-ending series of conflicts, regarded Kenya as a paragon of postcolonial success in the region. However, its reputation as a stable and prosperous country suffered considerably following the post-election violence Kenya faced at the end of 2007 and the beginning of 2008. Moreover, Kenya is also battling enormous corruption scandals that reach all the way up to the highest levels of political power. Nevertheless, the country continues to enjoy a dominant position and is the lone nation in East Africa that is not classified as a least developed country (LDC).1 The agricultural sector, which employs over 70% of the population, plays a key role in the Kenyan economy. Approximately 80% of the countrys population lives in rural areas and is therefore directly or indirectly connected with farming. The fact that crops rely mostly on rainwater causes Kenyans serious problems. As a result, each year a large part of the population suffers from a lack of food and is dependent on food aid. Estimates of the number of people living in these conditions range up to ten million,2 which is almost a quarter of the population of Kenya or about the same number of people living in the Czech Republic. The current problems related to ensuring food security are influenced by a myriad of factors, the most prominent of which are worse and more frequently occurring droughts, the high prices of local food due to high input costs and high food prices on international markets, the displacement of large numbers of farmers during the violence of 2008 and the low purchasing power of the majority of the population caused by poverty. Problems are also caused by the system of global agricultural trade and forced liberalization, which have proven
1 UN DESA. Available at: http://www.un.org/en/ development/desa/policy/cdp/ldc_info.shtml (27.7.2012) IFPRI. Available at: http://www.foodsecurityportal. org/kenya/food-security-report-prepared-kenyaagricultural-research-institute (27. 7. 2012)
detrimental to the development of poor nations. This study therefore focuses on food production in Kenya and the question of why food security in arelatively economically affluent country is such a serious problem. Attention will also be paid to the conditions of the Economic Partnership Agreement that Kenya refuses to sign with the EU over fears that its final version could have grave negative consequences for the countrys food security.
Main indicators
Area Population Population growth (annual) Rural population GDP GNP per capita GDP growth Agriculture in GDP Labor force in agriculture Poverty rate Education Access to safe water 580 000 km2 43 million (21 million in 1989) 2.6% 77.4% USD 31 billion USD 820 5% 21.5% 70% 45.9% 87% educated adults 54.8% (CIA World Factbook) (2012, odhad CIA) (2012, FAOSTAT) (2011, FAOSTAT) (2010, Rural poverty) (2011, World Bank) (2011, CIA) (2010, FAOSTAT) (2011, FAOSTAT) (2011, FAOSTAT) (2009, Rural Poverty) (2011, FAOSTAT)
curity are in the second borderline food insecure phase. By the autumn of 2012 up to 10% of the population had reached the crisis phase.4 The most threatened groups include pastoralists in the north, northeast and southwest parts of the country, former pastoralists relocated to urban centres, marginalized farmers on the east coast, lake fisherfolks, the urban poor and internally5 displaced persons.6
fell to fifty-fourth place on the list.7 Hunger in Kenya is assessed as a serious problem. Kenya does not even meet the requirements for reducing malnutrition as part of the first UN Millennium Development Goal (MDG 1).8
The acute phases of food instability are defined as generally food secure, borderline food insecure, acute food and livelihood crisis, humanitarian emergency and famine/humanitarian catastrophe. For more information, see: Integrated Food Security Phase Classification (IPC). Available at: www.fao.org/ docrep/010/i0275e/i0275e.pdf (27. 7. 2012) Internally displaced persons (IDP).
IFPRI, Global Hunger Index 2012. Available at: http:// www.ifpri.org/sites/default/files/publications/ghi12.pdf (30. 7. 2012) IFPRI, Global Hunger Index 2011. Available at: http://www.ifpri.org/sites/default/files/publications/ ghi2011factskenya.pdf (30. 7. 2012)
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Security (2004).9 As such, hunger represents not only an obstacle to social, economic and political development; it is also a fundamental violation of human rights and human dignity.
certain Nairobi slums fluctuated in a range of 1050% between November 2010 and January 2011.13 In July 2011, with the entire Horn of Africa experiencing the worst drought in the past sixty years and the UN having declared a famine in parts of Somalia, the price of maize in Kenya was 160% higher than the previous year. Food prices are also impacted by the high price of oil (fuel, fertiliser production) and production inputs (seeds); inflation, which reached 32% in 2008, is another major factor.14
Like the majority of African countries, Kenya also suffers from very poor infrastructure. For example, high transport costs slow the distribution of food from regions with food production surpluses to those with a food deficit. The presence of a functioning infrastructure generally improves the access of households to production inputs and markets, which can have a major impact on their economic activity. Good infrastructure typically also saves people time and provides them better access to electricity, water, communication and roads, while also offering more economic opportunities.15
10 Tegemeo Institute, Pathway into and out of poverty: a study of rural household wealth dynamics in Kenya, 2010. Available at: http://www.tegemeo.org/ viewdocument.asp?ID=178 (2. 12. 2012) 11 UNICEF, Kenya at glance. . Available at: http://www.unicef.org/kenya/overview_4616.html (2. 12. 2012) 12 Food Security Portal. Available at: http://www.foodsecurityportal.org/kenya/resources (26.11.2012)
13 IFPRI, GHI 2011, Kenya fact sheet. 14 Food Security Portal. Available at: http://www.foodsecurityportal.org/kenya/resources (26.11.2012) 15 Tegemeo Institute, Pathway into and out of poverty: a study of rural household wealth dynamics in Kenya, 2010. Available at: http://www.tegemeo.org/ viewdocument.asp?ID=178 (2. 12. 2012)
An under-financed agricultural sector and poor agricultural infrastructure also have a profound influence on agricultural productivity. For example, since the 1980s there has been a dramatic decrease in investments in water management, and expenditures on agriculture have dropped below the 5% mark (Kenya recorded the highest level of agricultural expenditures 10% in the first half of the 1990s). The development of rural markets and irrigation systems are also seen as key steps.16 Despite having signed the 2010 Investment Plan for meeting the goals of the Maputo Declaration on Agriculture and Food Security (involving a commitment to increase agricultural production by 6% and to allocate 10% of the national budget to the agricultural sector), the Kenyan government has not yet reached these goals.17
have been concentrated in the rich, biodiverse area of the Tana River Delta for the purpose of growing sugar cane, jatropha, sunflowers and vegetables for export. According to the Eastern Africa Farmers Federation (EAFF), investors from Great Britain, Italy, Canada and Qatar are only active in this area.19 Estimates indicate that firms from Belgium, Japan and the USA have projects on a total area of 500,000 throughout the entire country.20 Therefore, similar projects cannot be regarded as part of the development of the agricultural sector due to the fact that they threaten the food security of smallholder Kenyan farmers, pastoralists and fisherfolks, while also hampering their right to food, the right to selfdetermination and the right to the development of the local population.21 And yet, the Kenyan government regards direct foreign investment as strategic and works to attract investors to the country.22 Food security in Kenya is also influenced by political developments in the East African region. Refugees have been fleeing foundering Somalia for more than two decades, over one-hundred thousand between June and September alone during the famine of 2011. Of the approximately 600,000 people living in Dadaab, the largest refugee camp in the world, 99% are Somalis. The current population of the camp is six times the intended capacity of 100,000. In October 2011 Kenya halted the process of mandatory registration and the admission of new refugees due to fears over infiltration by al-Shabaab Islamic militants seeking revenge for the deployment of Kenyan troops in south Somalia. Kenya is also a destination for refugees from the Democratic Republic of Congo, Rwanda and Uganda.23
Political barriers
Political and macroeconomic stability, good governance, the eradication of corruption and structural reforms represent key factors for food security. However, the type of attention political representatives pay to smallholder farmers is also important. For example, some prominent politicians attempt to weaken the pastoral way of life, instead promoting the development of larger livestock farms by prohibiting herd movement over trails used for centuries. The loss of mobility reduces the ability of pastoralists to deal with the growing pitfalls of food production, mainly due to the consequences of unpredictable weather (see below).18 The access of smallholder farmers to land and the necessary natural resources continues to be fundamental for the production of food. However, the wave of leases and acquisitions of agricultural land to wealthy investors a phenomenon known as land grabbing blocks the required access for many farmers. Large land investments in Kenya
16 IFPRI, Rural Investments to Accelerate Growth and Poverty Reduction in Kenya, 2007. Available at: http://www.ifpri.org/sites/default/files/publications/ ifpridp00723.pdf (7. 12. 2012) 17 CAADP. Available at: http://www.nepadkenya.org/ caadp.html (2. 12. 2012) 18 IFPRI, Global Food Policy Report 2011.
19 Pauline Makutsa, Land Grab in Kenya, Implications for Small-holder Farmers. EAFF, 2010. 20 Friends of the Earth Europe, Africa up for grabs The scale and impact of land grabbing for agrofuels. 2010. 21 O. de Shutter. Large-scale land acquisitions and leases: A set of core principles and measures to address the human rights challenge. UN, 2009. 22 KenInvest. Available at: http://investmentkenya.com/ opportunities/agriculture (7. 12. 2012) 23 Whycliffe Songwa, Senior Liaison Officer UNHCR, Nairobi. Interview on 14 June 2012.
mated that up to 700,000 people were forced from their homes). In December 2010 the International Criminal Court (ICC) charged six highranking Kenyans with crimes against humanity in connection with these events, including the standing minister of education and the minister of industrial development. 26 A swift political solution was found thanks to a power-sharing agreement brokered by former UN Secretary Kofi Annan. Mwai Kibaki became president and the post of prime minister was renewed for Raila Odinga.27 With presidential elections approaching in March 2013, violence and ethnic conflicts have been recorded in parts of the country since the autumn of 2012, raising fears among Kenyans and on the international level at the UN.28
24 The Guardian, Post-election violence escalates in Kenya, 2. 1. 2008. Available at: http://www.guardian. co.uk/world/gallery/2008/jan/02/kenya#/?picture=3 31929246&index=9 (22. 11. 2012) 25 Sbastien Babaud, James Ndungu. Early Warning and Conflict Prevention by the EU: Learning lessons from the 2008 post-election violence in Kenya. Initiative for Peacebuilding. 2012.
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Dwindling natural resources, quickly progressing land degradation, desertification and a lack of water not only reduce production; they also create conflicts over resources, especially among pastoralists looking for new grazing lands for their herds. Pastoralism as a means of subsistence in fact originally spread in the arid and semi-arid parts29 of Kenya and the entire Horn of Africa (Ethiopia and Somalia) as a traditional method for dealing with drought. Thanks to vast and (formerly) rich areas, moving livestock from one place to another represented the lone chance of survival.30 However, the decrease in natural resources is at odds with needs of one of the fastest growing populations in the world (having more than tripled over the past thirty years).31 Inappropriate farming methods and the irresponsible treatment of natural resources are also serious problems. In the majority of cases, intensive, largescale agriculture focuses on the production of monocultures (i.e. a single crop over a vast area of land), an approach that has many drawbacks and is unsustainable in the long-term. Due to higher susceptibil-
ity to diseases and pests and to greater demands on the soil, this system of production requires the use of ever-increasing amounts chemicals; all the same, the yields of the given crop decline with the passing years. Moreover, forests are being cut down at an alarming rate, land is being over grazed and water sources are being polluted. Forests now cover only 2% of the land in Kenya. This is one of the reasons why Noble Peace Prize winner Wangari Maathai founded the Green Belt Movement, the goal of which is to protect the environment by means of tree-planting programs.32
29 So called ASAL (arid and semi-arid lands). 30 Mohamud Adan, Ruto Pkalya, Close to Progress. Practical Action, 2005. 31 IFAD, Enabling poor rural people to overcome poverty in Kenya, 2011. Available at: http://www. ifad.org/operations/projects/regions/pf/factsheets/ kenya.pdf (22. 11. 2012)
Photo 3: Tree seedlings in Tumutumu, Kenya, Green Belt Movement. Photo: Dagmar Milerova Praskova
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Perhaps most alarming of all, Kenyas outlook for the future with regard to the availability of nature resources is not overly bright. It is assumed that future access to water will be highly limited. For example, eleven out of the eighteen glaciers on Mt. Kenya, the highest peak in the country, have melted in recent years, reducing water levels in a number of rivers.33 The Intergovernmental Panel on Climate Change (IPCC) also named the eastern part of Africa as one of the most threatened regions as the result of the impacts of climate change and forecasted that food production could drop by up to 50% in the territory by the year 2020.34
from Malawi, Zambia and Tanzania. The largest suppliers of wheat to Kenya are Russia, Pakistan and Brazil, while the largest suppliers of rice are Pakistan, India and Vietnam.37 The standard Kenyan diet is composed of beans, potatoes, sweet potatoes and traditional crops such as cassava, millet, sorghum, arrow root and yams, which are grown on a smaller scale.
700 000 600 000 500 000 400 000 300 000 200 000 100 000 0
Staple crops35
Maize is the main crop for up to 90% of the population in Kenya and is also the key component of feedstuff for livestock. Other staple crops include wheat and rice, but since Kenya is not self-sufficient in the production of either, the country must import them from regional and international markets. Whats more, the production of wheat and rice is falling (the domestic production of wheat covers only 40% of national consumption, while for rice the figure is a mere 20%).36 Kenya imports maize
Wheat
Palm oil
Rice
Maize
Refined sugar
Beans
Cash crops
Kenya also produces exotic fruits and vegetables such as bananas, mango, papaya, pineapple, citrus fruits, melon, avocado, tomatoes, cabbage, carrots and broccoli. Kenya likewise produces various types of nuts (cashews, peanuts and macadamia nuts). The countrys main target export markets include Great Britain, France, the Netherlands and Spain, where French beans, peas, passion fruit, avocadoes, mangoes, artichokes, asparagus and baby carrots are most commonly sent. As recently as 2004 the share of smallholder farmers in the production of fruits and vegetables for export was 60%. After-
33 Francis Karin, Alex Wambua Mwaniki, Irrigation Agriculture in Kenya. HBS, 2011. 34 IPCC, Synthesis report, 2007. 35 For more information see Understanding Food Prices in Kenya, which was published as part of the EcoFair Trade Dialogue project (Booker Owour, 2012). 36 Tegemeo Institute. Trade and Agricultural Competitiveness: Wheat and Rice in Kenya. 2011.
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wards Kenya implemented higher standards for export products (demanded primarily with the arrival of British supermarket chains); today the share of smallholder farmers contribute only 30% of exported food.38 The production of fruits, vegetable, nuts and cut flower are regarded by the Kenyan ministry as the key to success of Kenya, since they contribute to food security and provide the main source of foreign income. The horticulture sector is composed of vegetables (44.6%), fruits (29.6%), flowers (20.3%), with the remainder being made up of nuts and medicinal plants. The main cut flowers grown in Kenya are roses, carnations and lilies.39 The majority of the flower production is sent to Europe, primarily the Netherlands, Great Britain and Germany.40
Kenya is also a leader in the production of tea. According to statistics from the Food and Agriculture Organization of the United Nations (FAO), Kenya was the third largest producer in 2010 behind China and India; Kenya was in fact the second largest exporter of tea after Sri Lanka and ahead of China. 41 The leading importers of Kenyan tea are Pakistan, Egypt and Great Britain, while others include Germany, Belgium, Sweden and Finland. However, as the tea is processed and packaged in the importing countries, the average European consumer buys the product under the label English tea. Kenya is likewise the third largest producer of coffee in Africa after Ethiopia and Uganda; the country is the eighteenth largest coffee grower in the world. In 2011 Kenya exported the greatest amount of its coffee to Switzerland, Great Britain, Germany, Sweden, the USA and Belgium. 42
38 Center on Globalization, Governance &Competitiveness, The Fruit and Vegetables Global Value Chain, 2011. 39 Kenya Ministry of Agriculture. National Horticulture Policy, 2012. 40 UN Comtrade. Available at: http://comtrade.un.org/ db/ce/ceSnapshot.aspx?cc=06&px=H3&r=404&y=2 010&rg=2 (12. 12. 2012)
41 FAOSTAT. Available at: http://faostat.fao.org/ (12.12.2012) 42 UN Comtrade. Available at: http://comtrade.un.org/ (12. 12. 2012)
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CASE STUDY: Growing flowers around Lake Naivasha Located 100 kilometres northwest of Nairobi, Lake Naivasha is the second largest freshwater lake in Kenya and the home of numerous bird species (over 350 species overall, including the Grey-capped Warbler, the Spectacled Weaver, the Brimstone Canary and the Redbilled Firefinch, an important population of mammals (including hippopotamus) and over 150 species of flowers. The lake has been declared an Important Bird Area. Smallholder farmers have settled in the upper and middle part of the lake. Large-scale agricultural projects, tourism, pastoralism and animal husbandry are developing in the middle part of the lake along the south shore and in the lower part. The flower industry has blossomed on the shores of the lake due to the natural bounty and water supplies. Greenhouse production from this region accounts for 70% of Kenyan flower exports, mainly to Europe. The flower sector employs a great number of people in the region, providing them permanent work compared to coffee growers, who hire help only at harvest time. The Lake Naivasha Nature Club43 is active in the area, drawing attention to the negative impacts of local cut flower production for export. For example, club members point out that papyrus no longer grows along the lake and that from time to time chemical pollution kills a large number of animals of a certain species (2002 witnessed large-scale fish deaths, 2011 the death of a large part of the pelican population). Growing flowers also requires a large amount of water, and intensive production exhausts the soil. Flower producers claim that the situation is changing and that they are now employing far more environmentally-friendly methods. Nevertheless, even supporters of the flower indus-
try, including Dr. Mbogo Kamau,44 understand that the lake is threatened by changes in the use of the soil, by the increasing number of people living in the area, by organic and chemical pollution, the over use of water, the destruction of the local ecosystems, excessive fishing and illegal fishing methods, new invasive animal species, wildlife poachers and the accumulation of silt on land impacted by erosion. However, they do not directly blame the flower industry. This story also illustrates the complexity of the problem. On one side are the employment opportunities for the local population, which on average reputedly earns three to four times as much as people elsewhere in the country. However, these figures are questionable, as are working conditions involving overtime and health problems connected with the handling of chemicals. On the other side is serious and sometimes even irreversible ecological damage. Hence, the negative impacts of flower production probably outweigh the benefits.
Animal products
According to a study by the Intergovernmental Authority on Development (IGAD), animal products make up just under half of the agricultural gross domestic product (43 %). Three-quarters of this amount is milk production. Although Kenya is the largest milk producer in East Africa, roughly only one-third of production is recorded in trade statistics. Following the crisis period during the liberalization of the dairy sector in the 1990s, which saw production drop by 70 %, milk production is enjoying a boom today. Smallholder farmers produce 80 % of the milk, and Kenyans export their production both formally and informally, mainly to Uganda, Tanzania and Rwanda.45 Beef is the leading meat product, 80% of which comes from pastoralists, either directly in Kenya or
44 Interview at Naivasha on 12 June 2012. 45 ILRI, Milk markets as the great equalizer in East Africa? Available at: http://www.ilri.org/ilrinews/ index.php/archives/tag/smallholder-dairy-project (31. 1. 2013)
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Agroecologocal regions
in neighbouring countries. Unlike Ethiopia, Sudan or Somalia, Kenya is not entirely self-sufficient in the production of meat, and estimates indicate that approximately one-fifth of meat comes from neighbouring states (as most trade is informal, official statistics are missing). In addition to cattle, goats, sheep and camels are mainly raised in Kenya. 46
Agroecological regions
Kenya is divided into two main agricultural production systems. A total of 16 % of the land is arable, while the remaining 84 % is arid and semi-arid land (ASAL) on which about 35 % of the Kenyan population lives.47 Due to a reliance on rainwater, which, as the result of climate change and increasingly frequent unpredictable weather fluctuations, is not the most reliable source, food production in these regions is seriously complicated. This has led to pastoralism as a strategy for securing subsistence. The northeast and coastal regions have the highest share of people living in poverty, whereas the agriculturally productive Central Province has the lowest poverty rates. 48
Arid (0-450 mm) Semi-Arid (450-870 mm) High Rainfall (870-1983 mm) Urban
Irrigation
On average 4% of the farm land in Sub-Saharan Africa is irrigated, a figure that drops to a mere 1.8 % in Kenya. The Food and Agriculture Organization of the United Nations, however, suggests that land irrigation has the potential to quadruple production.49 Only 17 % of Kenyan land is located in zones that receive more than 1000 mm of annual precipitation and does not requires supplemental irrigation. Currently only
Arid zone 1 Arid zone 2 Semi arid zone 1 Semi arid zone 2 Semi arid zone 3 High rainfall zone 1 High rainfall zone 2 High rainfall zone 3 47 Landesa, World Resources Institute. Focus on Land in Africa Brief: Kenya. 2011. 48 Tegemeo Institute, Pathway into and out of poverty: a study of rural household wealth dynamics in Kenya, 2010. Available at: http://www.tegemeo.org/ viewdocument.asp?ID=178 (31. 1. 2013) 49 Michael Glantz, Ren Gommes, Selvaraju Ramasamy. Coping with a changing climate: considerations for adaptation and mitigation in agriculture. FAO, 2009.
HR3
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Seasonal Calendar
Peak hunger season SE and coastal mixed farming areas Peak hunger season pastoral areas
Long rains pastoral areas and SE coastal cropping lowlands Short-rains harvest Long rains central and eastern highlands
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
125,000 hectares out of a total of 1.3 million hectares are irrigated, 82% of which represents large farms focused on large-scale production for export or local supermarkets. The greatest potential exists in water harvesting and in the efficient use of water sources.50
Post-harvest losses
Losses that occur in the post-harvest period are estimated to be up to 30% of all production. There are several reasons for this situation. For one, while it is better to harvest crops in dry weather, climate changes have recently produced rain during harvests. Another problem is that farmers do not employ the proper technology for drying their harvested crops. For example, the fact that threequarters of all farmers leave their crops to dry on the floor causes problems. In this damp environment the crops are susceptible to a wide range of diseases and pests. Moreover, mechanical harvesting can damage crops, leading directly to a higher percentage of losses and other negative impacts. Also influencing the proper drying process is the use of material such a plastic sacks, which cause the cereals to cake. 52
Seasonal calendar
Kenya has two rainy seasons: a short period that usually lasts from October to December, and a long season that typically lasts from March to July. As a result, farmers can harvest their crops twice a year, assuming that this pattern is not disrupted by unpredictable weather. Maize is planted for the first time around March and is harvested in August or September. The second crop is planted in October and is harvested at the end of January and the beginning of February. The first bean and potato crop is planted in March and harvested in July, the second in September with a harvest at the end of the year. On the other hand, the advantage of traditional crops such as arrow root, yams and cassava is that they are stored beneath the ground as long as necessary.51
50 Francis Karin, Alex Wambua Mwaniki, Irrigation Agriculture in Kenya, Henrich Boell Stiftung Kenya 2011. 51 Interview in the Mathira Constituency in Nyeri District, Central Province, Kenya. Julius Ngahu Githaiga, 11 June 2012..
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III. AGRICULTURAL TRADE AND THE ECONOMIC PARTNERSHIP AGREEMENT WITH THE EU (EPA)
As mentioned in the Introduction, Kenya is the only country in East Africa that is not classified as a least developed country; it is, however, rated as a NetFood Importing Developing Country (NFIDC) by the FAO, which only underscores the fragile food security of the majority of Kenyans and the importance of agricultural trade for the country.
and the subsequent sale of products are limited and that small producers have information on the price trends of specific products. In general the entire export sector faces barriers such as high electricity prices and frequent power outages, poor transportation infrastructure, poorly equipped ports, broken contracts, low work productivity, an undeveloped processing sector, border conflicts and poor public administration. 53 Kenya is a member of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Intergovernmental Authority on Development (IGAD). In addition to economic cooperation, the main goal of African integration is the development of the continent, one of the main tools of which is trade. However, integration is hampered by several factors such as the weak organization of the aforementioned groups, integration projects that are often at odds with one another and an unwillingness to implement ratified protocols. Although Europe remains the largest export market for Sub-Saharan Africa, exports within the internal African market are growing. Since the turn of the new millennium, continental exports by the East African Community, including Kenya, have surpassed the amount of products exported to Eu53 ODI, KIPPRA, IDS University of Nairobi. Trade Policy and Poverty Linkages in Kenya. 2007.
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rope, 90% of which are only unprocessed products and crops. Hence, trade between Africa countries alone represents great potential.54
Negotiations of Economic Partnership Agreements began in 2002 and were to be concluded by 2007 (the WTO granted the EU an exemption for the preferential regime with ACP countries until that deadline); however, no agreements were signed by that date. The European Commission began talks with individual countries within regional trade blocks, originally with six, currently with seven (five African, the Caribbean and Pacific). Kenya fell under the South and East Africa block, which was subsequently divided in 2007; today EPAs are being negotiated with EAC countries jointly with Burundi, Rwanda, Tanzania and Uganda. Under growing pressure and a target date for concluding EPAs that passed years ago, the European Commission is now threatening to rescind existing advantages from countries that do not sign the agreement, who will then be relegated to the Generalised System of Preferences (GSP) beginning in 2014.
54 South Centre. Sub-Saharan Africas Export Trends and the EPAs. 2010. 55 EC, Economic partnerships. Available at: http://ec.europa.eu/trade/wider-agenda/ development/economic-partnerships/ (3. 1. 2013) 56 Tradecraft. Economic Partnership Agreements still pushing the wrong deal for Africa? 2012.
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ing countries lack the legal expertise for analyzing the potential consequences and the negotiation method does not give them much room for manoeuvring. Some analyses have also pointed out the threat that the Economic Partnership Agreements will divide ACP countries, not only because of the economic differences that already exist among them but by the various trade regimes that will be established. Differences in economic performance are also visible between countries in a single negotiating group. Although the EAC is relatively heterogeneous and its members are export-orientated to a similar degree, Tanzania, for example, is not a member of the Common Market for Eastern and Southern Africa (COMESA) but instead belongs to the South African Customs Union (SACU). Furthermore, African nations have very different ideas about regional integration than those promoted by the EU. The African approach includes cooperation in the areas of food production, the development infrastructure, the harmonisation of trade and strengthening security, which contrasts with the European emphasis on trade liberalization as such. A key distinction is whether the African nations are classified as least developed countries (LDC) or not. LDCs are guaranteed a preferential regime (duty-free and quota-free) with the EU as part of the Everything but Arms (EBA) program, regardless of the trade regime valid after 2007 (according to the original plan), or beginning in 2014 (due to the ongoing negotiation process). If these countries were to refuse to sign a new form of cooperation with the EU as an EPA and the other countries opened their markets, African integration inside individual blocks could be disrupted. Critics therefore point out how Economic Partnership Agreements divide states into winners and losers.58 In reality there neednt be such great differences between LDCs and non-LDCs. Kenya, for example, met the criteria for being classified as an LDC in 1997, but was evaluated by the UN Committee for Development Planning as a borderline case, and, unlike Madagascar, was not recommended for inclusion in the LDC group. However, if it had been listed as an LDC, it is highly likely that would remain in this category to this day since it could not qualify for a re-evaluation. Advanced countries such as
58 ODI, Economic Partnership Agreements (EPAs): Where We Are, 2006.
Norway are aware of this situation and therefore provide Kenya and other low-income countries (not classified as LDCs) a preferential regime that is duty- and quota-free.59 Moreover, the majority of Sub-Saharan states produce only a small number of commodities, primarily unprocessed agricultural products or minerals, and therefore there is a general consensus that the path to sustainable development is the structural transformation of the African economy. Industrialization and the processing industry produce more flexible demand, lower price volatility, potential for wage growth and hence higher domestic consumption and greater internal connection between individual economies. African academics and a wide range of organizations, including the United Nations Conference on Trade and Development (UNCTAD) argue that the elimination of the dependence on agriculture and the diversification of production offer the best hope for the development of the continent.60 Nevertheless, critics claim that Economic Partnership Agreements do not contain adequate support for the diversification of individual economies, despite naming it as one of their main goals. Likewise, the development aspect of the European Unions cooperation with less developed countries cannot be ignored. Trade alone is not enough for development. As several studies have shown, a higher level of trade integration among ACP countries alone does not increase economic performance. In order for EPAs to foster development, it is not enough to simply increase the volume of trade and support economic growth. It is also necessary to devote attention to the distribution of profits and to prevent all the gains from trade going to a single group of people. 61 The concept of policy coherence for development was therefore introduced in this context. Article 208 of the Treaty on the Functioning of the European Union states that The Union shall take account of the objectives of development cooperation in the policies that it implements which are likely
59 South Centre. Analysis of options for EAC member states in the EPA negotiations. 2012. 60 EcoNews Africa, Seatini and Tradecraft. Economic Partnership Agreements: Building or shattering African regional integration. 2007. 61 ODI, The Development Dimension: Matching Problems and Solutions, 2006.
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to affect developing countries. Therefore, the aims and fulfilment of any EU policies, including those concerning trade and agriculture, must not conflict with the main development goal of the EU, which is to reduce and eventually eliminate poverty. 62 And finally, no trade relations are to interfere with human rights. For years Olivier de Schutter, United Nations Special Rapporteur on the right to food, has stressed that if trade is to help development and satisfy the right to food, it must recognize the special nature of agricultural commodities and treat them with greater sensitivity than common trade goods.63 Less developed countries should be given the opportunity to protect themselves against producers from industrialized countries not only due to their inability to compete against them but also due to the fundamental role that agriculture plays in eliminating hunger and poverty (80% of those suffering hunger are smallholder farmers, pastoralists, fisherfolks and other people tied to the production of food in general). Moreover, as international human rights agreements state that countries have the responsibility to respect, protect and fulfil human rights even beyond their own borders (i.e. the extraterritorial human rights obligations of states ETOs), threats to the right to food in developing countries from trade policies should be perceived as a violation of international law.64
the right of nations to self-determination .... and the exercise of their inalienable right to full sovereignty over their wealth and resources.66 This also includes participation in public affairs and the right to information, which was violated by the Kenya Ministry of Trade and Industry when it excluded Kenyan civic groups from negotiations on agreements. Similarly, cheap subsidized imports that force smallholder farmers out of business violate the right to work. All of these rights are established in the Universal Declaration of Human Rights (1948), the International Covenant on Economic, Social and Cultural Rights (1966) and the African Charter on Human and Peoples' Rights (1981).67 Without the ratification of an EPA, Kenya, a country that is not classified as an LDC, would be treated by the EU as a common developing country and would have the same regime for the export of goods to the EU as Brazil, India and South Africa, i.e. countries with more advanced agriculture. For current Kenyan exports this would mean duty rates that are several percentage points higher. Duty rates would be 17.5% higher for cut flowers, 9.5% higher for beans, 15.7% higher for pineapples and up to 20.5% for certain types of fish. Duty rates on tea and coffee would remain at zero, which only shows how strategic these commodities are for European countries.68 If Kenya were to sign the EPA, the country would face increased competition from products imported from the EU, especially wheat, maize, dairy products and meat, whose production in Kenya (and in the EAC region) is limited by high production costs, low productivity, the low education of farmers and an undeveloped processing industry. In the scenario that Kenya would be the only East African state to sign an agreement, the country would face a drop in trade in the EAC, an increase in the smuggling of goods across borders, the weakening of integration and the occurrence of political problems in the EAC. Duty-free goods imported to Kenya from the EU could be re-exported to the other EAC states, thus directly reducing the income of the other members of this customs union.
66 United Nations Declaration on the Right to Development, Article. 1 (2), 1986. 67 Kenya Human Rights Commission. Trading our lives with Europe. 2010. 68 South Centre. Analysis of options for EAC member states in the EPA negotiations. 2012.
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Photo 5: Meeting on EPAs of farmers and NGOs in Eldoret, Kenya. Photo Blanka Krivankova
Essentially all smallholder farmers in Kenya have taken a stand against the Economic Partnership Agreement. Hellen Yego, a Kenyan dairy and maize producer, points out that this wouldnt be the first time Kenyans faced cheap food imports from the European Union (made possible by subsidies for European farmers), for example, powdered milk. As a result, it was far less expensive to mix imported powdered milk with water and to sell it as regular milk, which, on one hand wiped out domestic production and, on the other,
did not match the quality and nutritional value of fresh milk. Under pressure from producers, the government increased import tariffs, a tool that would be lost if the EPA is signed. According to Hellen Yego, the structure of trade is also a factor. Kenya exports mainly unprocessed products which end up back on the Kenyan market as processed goods with added value. For example, instant coffee is too expensive for the average Kenyan, despite the fact that the country is a coffee-growing giant. 69
69 Interview with Hellen Yego conducted in Berlin, 18.1.2013. The Impact of the EPA on Food Security of Poor Kenyans
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IV. CONCLUSION
Food security, one of the main problems facing Kenya, involves a great number of factors such as poverty, high food price volatility, poor infrastructure, an under-financed agricultural sector, fragile political stability, changing climatic conditions and dwindling natural resources needed for the production of food. Also influencing food security is the structure of agricultural production and a focus on growing export crops such as tea and coffee, an area on which Kenya has concentrated due to its comparative advantages in international trade. However, since the country exports unprocessed agricultural commodities without further added value, the profits from this type of trade are not great, and are in fact minimal for the most threatened group smallscale food producers. With regard to trade relations with the European Union and negotiations on an Economic Partnership Agreement, small-scale food producers, a group that makes up a majority of those living below the poverty line, will face negative impacts regardless of whether it is signed or rejected. Should Kenya sign the EPA and open its market to European exporters, there is a threat that the country will be flooded with cheap, subsidized imports and, moreover, will lose revenue from the import duties that normally make up a substantial part of the budget of less developed countries. In the case that Kenya does not sign the EPA and the EU carries out its threat to drop Kenya as a state not classified as an LDC into the standard trade regime under the Generalized System of Preferences, exports will become even less advantageous due to higher duties. The top priority must be the fulfilment of human rights and, above all, the right to food. Kenya should direct more resources toward agriculture and use them efficiently, strengthen the standing of small producers of food (farmers and herdsmen alike), support local rural agricultural associations, ensure a stable political environment and introduce adaptation and mitigation measures in response to climate change. Agriculture and small-scale food production must be treated as a priority sector that must react to changing natural conditions and the needs of the Kenyan population. The European Union and the other global actors must also re-evaluate their behaviour. A growing number of European politicians are acknowledging the detrimental aspects of EPAs, and 2013 represents a critical junction for deciding which direction trade relations between the EU and less developed countries will take. The EU must not forget its original goal of cooperation and development of its former colonies. The European Union must pursue domestic and foreign policies (mainly trade, agriculture and energy) that are coherent with established development goals. The EU should also increase the responsibility of private European actors and promote the adoption of binding international rules for responsible investment in the agricultural sector.
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Interviews
Hellen Yego, Berlin 18. 1. 2013. Julius Ngahu Githaiga, community in Mathira Nyeri, Central Kenya 11. 6. 2012. Lake Naivasha Nature Club, Naivasha 12. 6. 2012. Whycliffe Songwa, Senior Liaison Officer UNHCR, Nairobi 14. 6. 2012.
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Food Security and Agricultural Trade in Kenya The Impact of the Economic Partnership Agreement (EPA) on Food Security of Poor Kenyans Publisher: Glopolis, Prague, February 2013 First edition Dagmar Milerov Prkov Ingrid Mitkov Hellen Yego Creative heroes (www.creativeheroes.cz) Agentura David Centrum Glopolis Soukenick 23 110 00 Prague 1 Tel./fax: +420 272 661 132 www.glopolis.org Glopolis 2013
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Founded in 2004, Glopolis is an independent think-tank focusing on global development and the response of the Czech Republic and EU to its challenges. We engage with opinion-, decision- and policy-makers to enhance political culture and facilitate transformations towards smart and responsible economy, energy and food systems. Glopolis provides analysis, vision and consultancy, builds networks, stimulates debates and challenges thinking. For more information go to our website: www.glopolis.org.
This document has been produced with the financial assistance of the European Union within the project EcoFair Trade Dialogue. The contents of this document are the sole responsibility of Prague Global Policy Institute - Glopolis and can under no circumstances be regarded as reflecting the position of the European Union.
ISBN 978-80-87753-12-5
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