Digital solutions enhance resilience of Kenya’s agriculture sector amid Covid-19 pressures
Kenya’s farmers are currently facing two distinct crises: coronavirus and a locust invasion. However, the ongoing uptake of digital solutions is helping to strengthen resilience in the agriculture sector and ensure that fresh produce can still reach consumers.
The broader impacts of the crises are already being felt: in a report published in mid-April, pan-African credit rating agency Agusto & Company said it expected growth in Kenya to decelerate to 3.5% in 2020, down from 5.6% last year, as measured by the IMF.
As well as disruption to agriculture as a result of Covid-19 and the locust invasion, downside risks cited by the agency included heavy external borrowings, a significant budget deficit, high debt distress levels and low tourism demand.
On the plus side, the report praised Kenya’s macroeconomic fundamentals, diversified economy and relatively stable currency, and noted that the country remains the leading business hub in the East African Community.
Kenya’s vibrant economy has faced significant disruption since the country reported its first Covid-19 case on March 13.
Lockdown measures were imposed on March 15, and progressively expanded following that date. As of April 22, 303 cases of Covid-19 and 14 fatalities related to the virus have been reported.
Multiple challenges to agriculture
Millions of smallholder farmers across Africa have seen access to export markets reduced due to border and transport restrictions.
Kenya is one of the African countries that stands to be most affected by a reduction in agricultural exports, particularly as fresh-cut flower exports to Europe contribute significantly to GDP.
In 2018 the country exported $625m of flowers, of which 76% went to the EU. Since the onset of Covid-19, exports have dropped by 50%, and tens of thousands of workers have lost their daily income.
In addition, around 50% of Kenya’s fruit, fresh vegetables and nut exports also go to the EU. Although demand for grocery items remains high in Europe, production and supply chain disruption pose risks for this labour-intensive segment, which is dependent on efficient logistics due to the high perishability rate of produce.
The Covid-19 outbreak has caused bottlenecks in national supply chains, with many producers saying they are already late for the planting season due to a lack of inputs.
There have been also problems moving existing stock from producers to consumers within the country. Small, independent transporters predominate and they have been hit hard by lockdown measures, while the open-air markets that were the cornerstone of the distribution system have been closed.
However, the Ministry of Agriculture has recently classified the transport of foodstuffs as an essential service, which should improve supply in urban areas.
In terms of imports, the principal foodstuffs are wheat, rice and potatoes. It is estimated that Kenya imports around 90% of total rice demand and around 75% of wheat.
Disruption to international supply chains thus poses a challenge to Kenya’s food security. Food imports, particularly from neighbouring countries, have grown steadily in recent years as the country’s over-reliance on rain-fed agriculture has left it vulnerable to prolonged periods of dry weather.
Further to this, the Covid-19 fallout must be set against the backdrop of the locust invasion that began in December last year. Since then, swarms of locusts have been sweeping across the country on an unprecedented scale.
While the first wave has subsided, the locusts have continued to breed and new swarms are expected to emerge soon, looming as an additional threat to Kenya’s food security.
Digital solutions take the lead
Prior to these twin crises, Kenya had already made considerable progress in developing a digital ecosystem to support and streamline agriculture. This has stood the country in good stead for mitigating unexpected shocks to the sector and the wider economy.
There are some 40m internet subscribers in the country, according to the latest data from the Communications Authority of Kenya, constituting a potentially huge market for producers.
Hundreds of Kenya’s smallholders are now selling their produce online, both as individuals and as part of collectives.
Established online marketplaces have ramped up their operations in response to the Covid-19 outbreak. These include Twiga Foods, Selina Wamucii, M-Farm, Farmers Market Kenya, Farmbiz Africa and Mkulima Young.
Alongside this, many digital start-ups are investing in agricultural data management. DigiCow Dairy App, for example, provides a free accounting tool that enables farmers to make data-supported decisions, while established laboratory Cropnuts offers a range of accessible agricultural technology services.
Post-Covid-19, it is likely that this shift towards digital processes will continue as more producers and consumers will have grown accustomed to online transactions facilitated by Kenya’s strong mobile money and cashless technology ecosystem.
Overhauling the sector structure
One key advantage of e-commerce is that it cuts out the middlemen and brokers who have long been recognised as a problematic aspect of the supply chain.
It is also hoped that direct contact with consumers may prompt more smallholder farmers to form collectives and cooperatives.
These changes align with other attempts to streamline and better regulate the sector.
For example, in its 2020 regulations for the dairy industry published on April 20, the Ministry of Agriculture, Livestock, Fisheries and Cooperatives announced that it was to start setting farm-gate prices, thereby preventing producers from doing so arbitrarily.
Similarly, the government recently committed to an audit of the Kenya Tea Development Agency, which is expected to lead to an overhaul of how the segment is structured.
Collectively, measures to improve the regulatory framework and expand agricultural technology solutions should continue reshaping the agriculture sector long after the locust and Covid-19 crises have been overcome.