“7 Facts Show Why Agriculture Is Kenya’s Economic Backbone” | (Kenya’s Agriculture: 7 Facts That Prove It’s the Backbone of Our Economy)

Most African countries benefit from favourable tropical climates, which provide ideal conditions for farming and make agriculture a key sector of their economies, and Kenya is no exception. The country’s rich soils, elaborate landscapes, and suitable weather patterns have made agriculture the backbone of its economy for decades. Kenya has long relied on its agricultural sector to sustain economic growth. As one of the largest contributors to food security and trade, agriculture continues to shape Kenya’s development while facing opportunities and challenges for the future.

TABLE OF CONTENTS

Kenya‘s economy has long depended on agriculture, with the sector playing a vital role in sustaining livelihoods, driving GDP growth, and supporting exports. From small-scale farmers to large agribusinesses, agriculture remains at the heart of the nation’s economic framework. This article will explore the importance of agriculture in Kenya and show why it is considered the backbone of Kenya’s economy.

What is the status of agriculture in Kenya?

Agriculture plays a crucial role in Kenya’s economy. Due to adequate fertility and rainfall, approximately 15–17 percent of the country’s land is arable, while only 7–8 percent is classified as high-quality land. By the end of the 2010s decade, nearly 75 percent of Kenyans relied on farming for their livelihoods, a decrease from 80 percent in 1980.

According to the Economic Survey (2022), the agriculture sector experienced a decline, with growth slowing from 5.2 percent in 2020 to a contraction of 0.1 percent in 2021. This downturn was primarily due to adverse weather conditions, negatively impacting crop and livestock production.

For instance, maize output fell from 42.1 million bags in 2020 to 36.7 million in 2021, ensuring food security. Similar decreases were observed in the production of beans, coffee, wheat, and tea. Contributing factors to this reduced output included rising costs of agricultural inputs, leaf rust infestations, and a shift in land use towards real estate development.

The sector continued to contract in 2022, with declines of 0.7 percent, 1.4 percent, and 0.6 percent recorded in the first, second, and third quarters, respectively. Monitoring price trends for agricultural commodities and overall sector output is essential due to the significant contribution of food to the Consumer Price Index (CPI) basket and agriculture’s critical role in the economy.

Furthermore, as the sector heavily relies on rain-fed farming, farmers face increased vulnerability to drought and erratic weather patterns exacerbated by climate change.

Although less than 8 percent of the land is dedicated to growing crops and feed, and less than 20 percent is suitable for agriculture, the country excels in producing tea and coffee. It also ranks as the third-largest exporter of fresh produce, including cabbages, tomatoes, onions, and mangoes.

Smallholder farms are primarily responsible for producing maize and growing potatoes, bananas, beans, peas, and chillies. Key Kenya agriculture products in Kenya include tea, coffee, horticulture, maize, and sugarcane.

Additionally, according to the Horticultural Crops Development Authority (HCDA), Kenya is the world’s third-largest exporter of cut flowers. Around half of the country’s 127 flower farms are situated near Lake Naivasha, 90 kilometres northwest of Nairobi. To facilitate the export of flowers and vegetables, Nairobi’s airport features a terminal specifically for these products.

7 Facts That Prove It’s the Backbone of Our Economy

Agriculture is undeniably a cornerstone of Kenya’s economy, playing a crucial role in its growth and development. This sector supports millions’ livelihoods and immensely contributes to national income, employment, and food security. Its effects extend across multiple economic areas, proving its importance for the country’s stability and overall prosperity.

Here are seven key facts illustrating agriculture’s vital role in Kenya’s economy.

1. Agriculture is the highest contributor to Kenya’s GDP

How profitable is agriculture in Kenya? In the second quarter of 2024, Kenya’s agricultural GDP contribution rose to 539,507 million KES, up from 516,295 million KES in the first quarter. This marks a significant increase, with the agricultural sector’s GDP averaging 382,058.16 million KES from 2009 to 2024.

The highest recorded GDP from Agriculture during this period reached 539,507 million KES in the second quarter of 2024, while the lowest was 267,871 million KES in the fourth quarter of 2009.

In 2023, agriculture accounted for 21.3% of Kenya’s GDP, contributing approximately $4.75 billion, representing 17% of the total GDP from all sectors. This followed a contribution of $20.21 billion in 2022, marking a 9.5% increase from the previous year. In 2021, agriculture’s share of the GDP was 22.4%, one of the highest in Africa.

In comparison, the tourism sector generated $2.7 billion in earnings from international arrivals in 2023, showing a significant 32% increase from 2022. Looking ahead, the World Travel & Tourism Council (WTTC) forecasts that tourism will represent 7.4% of Kenya’s GDP by 2034 and could create over 2.2 million jobs.

In the manufacturing sector, Kenya’s agricultural products contributed to the country’s GDP, rising to 7.8% in 2022, according to Kenya’s Ministry of Trade and Industrialization. This was an improvement from 7.4% in 2021, and it marked the first increase in a decade for the manufacturing industry’s GDP share.

The revenue generated by the agricultural sector comes from several key activities. First, crop production is the largest contributor, with major cash crops such as tea, coffee, horticultural products, and floriculture generating substantial income domestically and through exports. For instance, Kenya is one of the world’s leading exporters of tea and flowers, with these commodities contributing billions of shillings to the national economy each year.

Second, livestock production also plays a significant role in raising GDP. Kenya’s livestock sector is vital for food security and income generation, particularly in pastoral communities. The production of meat, milk, and other animal products meets local demand and opens avenues for export, particularly to the Middle East and other regions.

Lastly, Agriculture drives expansion in interconnected sectors like processing, transportation, and retail. This growth generates employment opportunities and strengthens value chains, increasing income for the national economy. A prime example is the agro-processing sector, which transforms raw agricultural materials into finished products, enhancing revenue through value addition.

2. The industry offers employment to a significant portion of Kenyans

The agricultural sector employs a substantial portion of the population. As of 2022, agriculture accounted for 32.63% of total employment in the country, according to Statista. Additionally, the tea industry, one of the biggest in the country, employs over one million people in different organisations such as the Kenya Tea Development Agency (KTDA). This includes 350,000 informal workers and 70% women.

Despite a slight decrease from the previous year, agriculture remains the largest employer, engaging over 40% of the total population and more than 70% of those living in rural areas. The dependence on agriculture for jobs is especially notable in rural regions, where alternative employment options are often scarce.

Kenya’s agricultural sector comprises three primary areas: farming, processing, and distribution.

Farming

This sector is the most visible aspect of agriculture and includes a range of activities such as crop cultivation and livestock rearing. Smallholder farmers constitute about 75% of the agricultural workforce in Kenya, primarily engaging in subsistence farming to provide food for their families.

In addition, they grow cash crops like tea, coffee, and horticultural products for sale. Both men and women are involved in farming, with women playing significant roles in crop production, particularly on family-operated farms.

Companies such as Africa Plantation Capital, AgriEngine, Agricultural Market Development Trust, and Apollo Agriculture are just a few examples of big companies that manage agricultural trade in the country.

Processing

After harvesting, crops typically undergo processing to enhance their value before reaching consumers. The processing sector, which encompasses food processing plants, provides numerous job opportunities in canning, milling, packaging, and quality control.

Organisations like the Kenya Agricultural and Livestock Research Organization (KALRO) are instrumental in advancing innovative processing methods, which improve product quality and create additional employment.

Distribution

This segment focuses on transporting agricultural products from farms to markets domestically and internationally. The distribution network employs many people in logistics, transportation, and retail.

Cooperatives and various organisations play a critical role in this area by assisting farmers in accessing markets and ensuring that their products reach consumers efficiently. Jobs in distribution often include positions such as truck drivers, warehouse personnel, and sales agents.

3. Kenyan agriculture assures food security

Food security refers to a state where individuals have reliable physical, social, and economic access to enough safe and nutritious food to meet their dietary needs and preferences for an active and healthy lifestyle.

Food security is vital for economic health, as it influences public health, productivity, and the general well-being of the population. When food security is achieved, individuals can participate fully in economic activities, contribute positively to their communities, and foster national development.

Even though it’s yet to fully attain food security, Agriculture Kenya grants its people food security thanks to its above average production. According to the Food Crops Yearbook of Statistics 2024, Kenya reported an annual output of 6 million tons of food crops, 4.2 million tons of horticultural crops, and 500,000 tons of industrial crops.

Maize

Maize stands out as the primary staple, widely consumed across both urban and rural households. The acreage dedicated to maize cultivation rose from 2,171,980 hectares in 2022 to 2,552,931 hectares in 2023, which translates to an 18% increase due to favourable maize prices in the previous year. Consequently, maize production surged to 4,376,389 metric tons in 2023, compared to 3,089,901 metric tons in 2022.

Wheat

Following maize, wheat is Kenya’s second-largest cereal crop. However, the area cultivated with wheat decreased from 123,090 hectares in 2022 to 104,440 hectares in 2023. This decline is primarily due to farmers shifting their focus to maize production, driven by its better pricing and ongoing land fragmentation.

Despite the reduction in acreage, wheat production improved from 270,700 metric tons in 2022 to 309,492 metric tons in 2023. This increase can be attributed to higher yields per hectare, facilitated by government fertiliser subsidies and favourable weather conditions. Wheat is cultivated in 15 counties, with Narok, Nakuru, Uasin Gishu, and Meru being the leading producers.

Rice

Rice cultivation in Kenya is predominantly conducted through irrigation in paddy schemes overseen by the National Irrigation Board, with a smaller fraction produced rain-fed. Kenya’s per capita rice consumption has escalated by an average of 12% annually, influenced by population growth, particularly in urban areas, and evolving dietary preferences.

As a result, imports have risen to meet 75% of the total consumption, with local production contributing only 25%. Rice production saw a 23.6% increase, climbing from 122,045 metric tons in 2022 to 150,819 in 2023.

Beans

Beans are Kenya’s most widely grown legume. Over the past five years, drought and excessive rainfall have adversely affected production, leading to reduced domestic stocks.

To compensate, Kenya imports beans from neighbouring countries such as Tanzania, Uganda, and Ethiopia. The area dedicated to bean cultivation rose by 3% from 1,252,315 hectares in 2022 to 1,290,216 hectares in 2023, with production increasing from 849,378 tons to 1,088,341 tons.

The productivity per hectare also improved from 7.53 (90 kg bags) in 2022 to 9.37 (90 kg bags) in 2023. The total value of beans produced locally surged from Kshs 81.1 billion in 2022 to Kshs 113.1 billion in 2023, which shows increased production and higher farm gate prices driven by local demand.

The wholesale price of beans rose from Kshs 9,189 to Kshs 13,075 within the same period, while imports grew from 48,400 metric tons in 2022 to 53,676 metric tons in 2023 due to strong local demand and favourable prices from exporting countries.

Potatoes

Potatoes are one of Kenya’s essential staple crops, second only to maize. They are cultivated under varying conditions, predominantly during the two rainy seasons: the long rains (April to August) and the short rains (September to January).

Thanks to newly registered improved potato varieties, small-scale and large-scale farmers now produce potatoes at altitudes between 1,200 and 3,000 meters above sea level. Large-scale producers also use irrigation, ensuring a consistent supply of quality potatoes, especially for processing.

In the review period, Irish potato production rose to 2,329,713 metric tons in 2023 from 2,040,471 metric tons in 2022. The area planted also expanded from 231,525 hectares in 2022 to 240,417 hectares in 2023. This production increase is attributed to enhanced potato value chain initiatives, better access to certified seeds, higher-yielding varieties, and favourable market prices.

Productivity per hectare increased from 8.5 metric tons in 2022 to 9.7 metric tons in 2023, with major production occurring in Nakuru, Elgeyo Marakwet, Meru, Nyandarua, Bungoma, Nyeri, Kiambu, Narok, Bomet, and Laikipia counties.

4. Agriculture brings huge export earnings

Kenya’s agricultural sector is crucial in generating foreign exchange for the country, with key exports comprising tea, coffee, horticultural products, and floriculture. The high-altitude areas of Kericho and Nandi Hills are particularly noted for producing premium tea that is highly sought after in international markets. Coffee, especially the Arabica variety, is another vital export known for its distinctive flavour and significant contribution to Kenya’s economy.

In 2022, agricultural exports from Kenya yielded approximately $2.7 billion. The breakdown of earnings is as follows: tea emerged as the leading export, bringing in $1.39 billion; horticultural products, including fruits, vegetables, and cut flowers, accounted for nearly $1.1 billion; and coffee contributed about $264 million to the agricultural trade. Other notable agricultural exports include palm oil, nuts, and roses.

Kenya’s primary export markets are the United States, Uganda, Pakistan, the Netherlands, and Rwanda. Recent years have shown a fluctuating yet promising global demand for Kenyan agricultural goods. Growing awareness of health and nutrition has spurred an increased appetite for fresh fruits, vegetables, and organic products, prompting Kenyan exporters to refine their production methods and enhance quality to comply with international standards.

Despite these opportunities, the agricultural export market faces several challenges. Climate change, trade regulations, and variations in global commodity prices pose significant risks to Kenya’s agricultural exports.

5. Kenyan agriculture promotes innovation and technology

In recent years, the agricultural sector in Kenya has experienced a significant technological transformation, driven by the increasing adoption of innovation and technology. The rise of Agri-tech in Kenya, including mobile applications, precision farming, and data analytics has changed the way farmers operate. It has also enabled them to increase efficiency and productivity while promoting sustainable practices.

For instance, digital platforms have emerged as vital tools in Kenya’s agricultural sector, thanks to the significance of agriculture to the nation. These platforms facilitate the integration of technology into farming practices. For instance, platforms such as iCow connect livestock farmers with scientific research and development, enabling them to implement best practices in raising cows and chickens.

These platforms also allow farmers to track their cows’ gestation periods via mobile devices. In iCow, for instance, the Mashauri feature sends weekly SMS updates, offering insights on breeding, nutrition, health, and other essential practices. This helps to address the lack of accessible verified agricultural information.

Similarly, the Kenya Agricultural Observatory Platform (KAOP), which is a subdivision within the Kenya Agriculture Livestock and Research Organization (KALRO), offers farmers access to geospatial data and agronomic recommendations. By utilising satellite geo-data, KAOP provides localised weather observations and forecasts, along with dynamic charts for the upcoming two weeks.

Additionally, it delivers real-time, location-specific agronomic advisories that encompass guidance on crop selection, soil preparation, irrigation, and fertilisation.

Technological advancements in agriculture also include adopting drip irrigation systems designed to conserve water while maximising crop productivity. These systems enable targeted water delivery directly to the plant roots, minimising waste significantly. The influence of technology on Kenyan agriculture is extensive.

Precision farming, for instance, optimises resource usage by allowing for more efficient application of fertilisers, pesticides, and water. This method decreases environmental impact and reduces costs, leading to increased profit margins.

Furthermore, technology promotes collaboration and knowledge sharing among farmers. Platforms that connect farmers with agricultural experts and peer networks facilitate the exchange of innovative practices and solutions.

Additionally, technology plays a crucial role in reducing post-harvest losses, a major challenge in the sector. Advances in storage, transportation, and processing enhance food quality and decrease waste, ensuring that a greater volume of produce reaches both markets and consumers.

6. Agriculture attracts investments in Kenya

Kenyan agriculture attracts investors worldwide, including interest from public bodies such as the International Fund for Agricultural Development (IFAD). According to Fitch Solutions, Kenya is the leading destination for agritech investments in Africa. The continent is home to numerous agritech startups, with a vast majority in Kenya, Nigeria, South Africa, and Egypt. Noteworthy Kenyan agritech startups include Apollo Agriculture, iProcure, and Twiga Foods.

A critical factor driving this investment is the country’s pressing food security issues. Between 2019 and the first quarter of 2022, Twiga Foods and Apollo Agriculture raised substantial funding, securing $80 million and $40 million, respectively.

The Fitch Solutions report identifies two main reasons for Kenya’s prominence in agritech. First, agriculture is vital to the Kenyan economy. Second, the ongoing efforts to address food security have attracted investments in the agritech sector.

Apollo Agriculture recently raised $40 million in a Series B funding round led by Softbank Vision Fund 2, with additional contributions from Yara Growth Ventures, Endeavor Catalyst, and the Chan Zuckerberg Initiative. The funds were intended for operations and developing new products that would increase the profitability of small-scale farmers.

In November 2021, Twiga Foods announced a successful $50 million Series C funding round, led by Creadev and supported by TLcom, IFC Ventures, DOB Equity, and Goldman Sachs’ spinoff, Juven. This round followed a $30 million Series B funding secured in 2019.

The distinct offerings of these agritech startups significantly attract investors. Apollo Agriculture focuses on smallholder farmers, providing access to loans, insurance, and farming inputs. Meanwhile, Twiga Foods connects smallholder farmers with retailers, enhancing the agricultural value chain.

Other innovative Kenyan agritech startups are also making strides. DigiFarm, launched in 2017, has over 1.4 million users, while MobiGrow, established in 2018 by the Central Bank of Kenya, specifically aims to support smallholder farmers.

7. Agriculture is vital in combating climate change

As the country’s biggest and most important industry, Kenya has been trying to practise agriculture sustainably to fight climate change. As such, the country, through the Ministry of Agriculture, Livestock, Fisheries, and Cooperatives (Kenya), is implementing various strategies within its agricultural sector to combat this global challenge.

In 2013, the Kenyan parliament developed the Crops Act of 2013. This legislation aims to enhance agricultural productivity and farmers’ incomes while reducing regulatory hurdles and taxes within the crop sector. Notable provisions of the Act include a 5% per annum cap on interest rates for loans secured by coffee factories against growers’ assets and the requirement for most growers to approve any loan or advance taken by a factory or society.

Additionally, farmers in Kenya are increasingly adopting climate-smart agriculture (CSA), which combines agricultural practices with development initiatives and climate adaptation measures. This approach seeks to enhance productivity, decrease greenhouse gas emissions, and foster resilience against climate change.

What are the main types of farming in Kenya?

In Kenya, the main types of farming include mixed, commercial, domestic, and several other methods. Mixed farming involves growing crops and raising animals on the same land, a practice adopted by 60.9% of Kenyan households as of 2019. Commercial farming focuses on cultivating crops and livestock for export, including products like tea, coffee, sugarcane, cut flowers, and vegetables.

What is the main problem facing agriculture in Kenya?

The biggest challenge in Kenya’s agriculture is Climate change. The sector is increasingly vulnerable to extreme weather events and growing weather variability.

Final word

Agriculture is the backbone of Kenya’s economy. The sector provides employment for over 40% of the population, particularly in rural areas, and plays a crucial role in food security, producing staple crops like maize and beans. Despite challenges such as adverse weather conditions and rising input costs, Kenya remains a leading exporter of tea, coffee, and horticultural products, contributing significantly to both domestic and international markets.

Tuko.co.ke also published an article about French beans farming in Kenya, providing an in-depth guide on how to cultivate this profitable export crop. Learn about the ideal growing conditions, harvesting tips, potential earnings per acre, and where to sell your produce. If you’re looking to tap into Kenya’s export market and grow a high-demand crop, this guide is a must-read!

Source: TUKO.co.ke

Many African nations enjoy warm tropical climates that promote farming, and Kenya is one of those countries. The nation has fertile soils, varied landscapes, and appropriate weather conditions, making agriculture a crucial part of its economy for many years. Agriculture has been essential for Kenya’s economic growth and plays a significant role in food security and trade, shaping the country’s development while facing various challenges and opportunities in the future.

TABLE OF CONTENTS

Kenya‘s economy has a long-standing reliance on agriculture, essential for livelihoods, economic growth, and exports. Ranging from small farmers to large companies, agriculture is central to the country’s economy. This article will discuss the significance of agriculture in Kenya, highlighting why it is regarded as the backbone of the nation’s economy.

What is the status of agriculture in Kenya?

Agriculture significantly impacts Kenya’s economy. About 15-17% of the country’s land is suitable for farming, with only 7-8% considered high-quality land. By the end of the 2010s, nearly 75% of Kenyans depended on farming for their livelihoods, down from 80% in 1980.

According to the Economic Survey (2022), the agricultural sector faced a downturn, with its growth decreasing from 5.2% in 2020 to -0.1% in 2021. This decline was mainly due to unfavorable weather, which negatively affected both crop and livestock production.

For example, maize production dropped from 42.1 million bags in 2020 to 36.7 million in 2021, affecting food security. Similar declines were noted in the production of beans, coffee, wheat, and tea. Factors causing the drop included rising costs of farming inputs, leaf rust diseases, and a shift towards real estate development.

In 2022, the agricultural sector continued to shrink, with reductions of 0.7%, 1.4%, and 0.6% in the first three quarters. Monitoring trends in agricultural prices and output is essential due to the significant role of food in the Consumer Price Index (CPI) basket and agriculture’s importance to the economy.

Furthermore, most farming in Kenya depends on rain, leaving farmers vulnerable to drought and unpredictable weather changes caused by climate change.

Despite only about 8% of land being used for crops and less than 20% being good for farming, Kenya is a leading producer of tea and coffee. It is also the third-largest exporter of fresh produce, including cabbages, tomatoes, onions, and mangoes.

Smallholder farms mainly grow maize and other crops such as potatoes, bananas, beans, peas, and chillies. Key agricultural products in Kenya include tea, coffee, horticultural items, maize, and sugarcane.

According to the Horticultural Crops Development Authority (HCDA), Kenya is the world’s third-largest exporter of cut flowers. Nearly half of its 127 flower farms are located near Lake Naivasha, about 90 kilometers northwest of Nairobi. Nairobi’s airport has a dedicated terminal for exporting flowers and vegetables.

7 Facts That Prove It’s the Backbone of Our Economy

Agriculture is indeed a fundamental part of Kenya’s economy, crucial for growth and development. It supports the livelihoods of millions and significantly affects national income, employment, and food security, benefiting the country’s overall stability and prosperity.

Here are seven important facts illustrating agriculture’s role in Kenya’s economy.

1. Agriculture is the highest contributor to Kenya’s GDP

How profitable is agriculture in Kenya? By the second quarter of 2024, the GDP contribution from agriculture climbed to 539,507 million KES, up from 516,295 million KES in the first quarter. This represents a considerable increase, with the average agricultural GDP standing at 382,058.16 million KES from 2009 to 2024.

In 2023, agriculture accounted for 21.3% of Kenya’s GDP, contributing around $4.75 billion or 17% of the total GDP from all sectors, marking a 9.5% increase from the previous year. In contrast, the tourism sector earned $2.7 billion from international arrivals in 2023, showing significant growth compared to agriculture.

In the manufacturing sector, agricultural products also contributed to the GDP, rising to 7.8% in 2022 from 7.4% in 2021, illustrating the industry’s increasing importance.

Key activities in agriculture include crop production (the largest revenue source), livestock production, and support for processing, transportation, and retail sectors, creating jobs and boosting the economy.

2. The industry offers employment to a significant portion of Kenyans

The agricultural sector employs a large percentage of the population. By 2022, agriculture accounted for about 32.63% of total employment in Kenya, employing over 40% of the population and more than 70% of those in rural areas.

Farming

This area involves various activities like cultivating crops and raising livestock, with smallholder farmers making up about 75% of the workforce.

They also grow cash crops such as tea and coffee, with both men and women actively participating in farming activities.

Processing

Crops are processed to add value before reaching consumers, providing jobs in areas such as canning, milling, packaging, and quality control.

Distribution

This part handles transporting agricultural products to markets, employing many in logistics and retail.

3. Kenyan agriculture assures food security

Food security means people have reliable access to safe and nutritious food for a healthy lifestyle. Agriculture in Kenya is vital for food security, producing significant amounts of staple crops.

4. Agriculture brings huge export earnings

Agriculture generates significant foreign income through exports like tea, coffee, and horticultural products, which are in high demand globally.

5. Kenyan agriculture promotes innovation and technology

The sector has embraced technological changes, leading to improved productivity and efficiency through various innovations like Agri-tech solutions.

6. Agriculture attracts investments in Kenya

Kenya’s agricultural sector has attracted substantial investments, driven by the need for food security and innovative agritech solutions to enhance productivity.

7. Agriculture is vital in combating climate change

Kenya is adopting sustainable agricultural practices to address climate change, including legislation and climate-smart agriculture to enhance productivity and resilience.

Final word

Agriculture is indeed the backbone of Kenya’s economy, providing livelihoods for many, supporting food security, and contributing significantly to national and international markets. Despite challenges like climate change, Kenya maintains a strong position as a leading exporter of tea, coffee, and horticultural products.

Tuko.co.ke also published an article about French beans farming in Kenya, offering a detailed guide on how to cultivate this profitable export crop. This resource outlines ideal growing conditions, harvesting techniques, and potential earnings.

Source: TUKO.co.ke