agriculture and livelihood diversification in kenyan rural households simon c. kimenju and david...
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Agriculture and Livelihood Diversification Agriculture and Livelihood Diversification in Kenyan Rural Householdsin Kenyan Rural Households
Simon C. Kimenju Simon C. Kimenju
and and
David TschirleyDavid Tschirley
Tegemeo Institute Conference: Agriculture Productivity, Competitiveness and Rural Poverty in
Kenya-Laying the Foundation for V203017th-18th September 2008
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Outline What do we mean by diversification? Diversification/specialization and agricultural
development Key findings
Trends in hh portfolios and levels of diversification Regionally, by type of hh
Policy and programmatic implications
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Diversification and Specialization Diversification refers to how broadly a rural hh
distributes its economic efforts A diversified hh distributes its efforts across many
activities E.g., food crops, several cash crops, livestock, and off-farm
A specialized household distributes its efforts across few activities E.g., focuses on a few cash crops and buys most of its food
Diversification and specialization are the inverse of each other
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Diversification & Ag Development Many countries in Africa wish to promote greater
“diversification” among farmers Kenya’s government also promotes this in SRA:
“increasing the growth of the sector by encouraging farmers to diversify farming into non-traditional high value crops”
Yet Vision 2030 sees a problem in too much diversification: “The proliferation of enterprises … on a typical small-scale farm …
reflects lack of specialization due to risk and lack of organized marketing”
Vision 2030 recognizes that specialization is needed in long-run to drive income growth and reduce poverty
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Diversification & Ag Development (2) Bottom line
In early stages of ag development, hhs can benefit from greater diversification E.g., adding cash crops to the food crop portfolio E.g., adding off-farm to the farm portfolio
But as the economy develops, as cities grow, and as barriers to local, regional, and international are reduced, those farmers who can will increasingly specialize
Over time, those that do not specialize will either be pushed out of agriculture or will remain poor
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Diversification & Ag Development (3) Whether diversification is positive or negative for a
hh depends on the stage of development of the agricultural sector and the household’s position in it E.g., more isolated households may need to diversify But households near large markets probably want to
specialize to serve that market Understanding a country’s stage of ag development
is important for designing proper policies, programs, and technology packages
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Objectives Examine trends in portfolios to see which
enterprises are becoming important to rural hhs
Determine levels of diversification for different zones and types of households Using a Diversification Index
Highlight policy and programmatic implications
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Household income sources
1997 2000 2004 2007
Crop 40 50 46 44
Livestock 21 15 16 16
Business 13 17 17 21
Salaries 27 18 21 18
Share of household income from various sources
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Household income sources
1997 2000 2004 2007
Crop 40 50 46 44
Livestock 21 15 16 16
Business 13 17 17 21
Salaries 27 18 21 18
Share of household income from various sources
60/40 balance each year:No real change between ag and non-ag
61
40
60
39
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Household income sources
1997 2000 2004 2007
Crop 40 50 46 44
Livestock 21 15 16 16
Business 13 17 17 21
Salaries 27 18 21 18
Share of household income from various sources
Business has grown substantially
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Off-farm business (real income)
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Off-farm business (real income)
Rapidly and widely increasing earnings
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Off-farm business (real income)
Widely increased participation
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Mean number of cropsAgro-regional zones 2000 2004 2007
Coastal Lowlands 14.2 10.5 9.8
Eastern Lowlands 14.8 14.8 11.6
Western Lowlands 8.6 11.8 11.5
Western Transitional 12.1 12.3 9.8
High Potential Maize Zone 11.1 11.2 8.6
Western Highlands 11.6 14.6 13.5
Central Highlands 15 17.6 14.2
Marginal Rain Shadow 7.5 10.5 8.2
Overall 12.2 13.3 11.0
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Mean number of cropsAgro-regional zones 2000 2004 2007
Coastal Lowlands 14.2 10.5 9.8
Eastern Lowlands 14.8 14.8 11.6
Western Lowlands 8.6 11.8 11.5
Western Transitional 12.1 12.3 9.8
High Potential Maize Zone 11.1 11.2 8.6
Western Highlands 11.6 14.6 13.5
Central Highlands 15 17.6 14.2
Marginal Rain Shadow 7.5 10.5 8.2
Overall 12.2 13.3 11.0
Reduced number of crops in all zones – more specialization?
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Share of area to tea, coffee and sugarcaneShare of area to tea, coffee and sugarcaneZone 1997 2000 2004 2007
Tea
High Potential Maize Zone 0.05 0.04 0.04 0.05
Western Highlands 0.08 0.07 0.08 0.08
Central Highlands 0.16 0.17 0.17 0.17
Total 0.05 0.05 0.05 0.05
Coffee
Eastern Lowlands 0.06 0.04 0.04 0.03
High Potential Maize Zone 0.00 0.01 0.01 0.01
Western Highlands 0.17 0.22 0.11 0.10
Central Highlands 0.16 0.17 0.16 0.17
Total 0.06 0.06 0.05 0.05
Sugarcane
Western Lowlands 0.10 0.09 0.09 0.07
Western Transitional 0.40 0.36 0.37 0.41
Total 0.06 0.05 0.05 0.06
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Share of area to tea, coffee and sugarcaneShare of area to tea, coffee and sugarcaneZone 1997 2000 2004 2007
Tea
High Potential Maize Zone 0.05 0.04 0.04 0.05
Western Highlands 0.08 0.07 0.08 0.08
Central Highlands 0.16 0.17 0.17 0.17
Total 0.05 0.05 0.05 0.05
Coffee
Eastern Lowlands 0.06 0.04 0.04 0.03
High Potential Maize Zone 0.00 0.01 0.01 0.01
Western Highlands 0.17 0.22 0.11 0.10
Central Highlands 0.16 0.17 0.16 0.17
Total 0.06 0.06 0.05 0.05
Sugarcane
Western Lowlands 0.10 0.09 0.09 0.07
Western Transitional 0.40 0.36 0.37 0.41
Total 0.06 0.05 0.05 0.06
Steady throughout
Falling
Falling
Steady
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Share of area to fodderShare of area to fodder
Zone 1997 2000 2004 2007
Coastal Lowlands 0 0 0 0
Eastern Lowlands 0.02 0.06 0.09 0.23
Western Lowlands 0 0 0 0.01
Western Transitional 0.01 0.02 0.01 0.05
High Potential Maize Zone 0.02 0.03 0.05 0.09
Western Highlands 0.04 0.12 0.12 0.11
Central Highlands 0.09 0.17 0.15 0.22
Marginal Rain Shadow 0.01 0.11 0.10 0.34
Overall 0.03 0.06 0.07 0.12
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Share of area to fodderShare of area to fodder
Zone 1997 2000 2004 2007
Coastal Lowlands 0 0 0 0
Eastern Lowlands 0.02 0.06 0.09 0.23
Western Lowlands 0 0 0 0.01
Western Transitional 0.01 0.02 0.01 0.05
High Potential Maize Zone 0.02 0.03 0.05 0.09
Western Highlands 0.04 0.12 0.12 0.11
Central Highlands 0.09 0.17 0.15 0.22
Marginal Rain Shadow 0.01 0.11 0.10 0.34
Overall 0.03 0.06 0.07 0.12
Rapid growth in all zones apart from Coastal Lowlands
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Proportion of Improved CattleProportion of Improved Cattle
Zone 1997 2000 2004 2007
Coastal Lowlands 0.00 0.00 0.17 0.13
Eastern Lowlands 0.23 0.28 0.45 0.36
Western Lowlands 0.02 0.03 0.01 0.00
Western Transitional 0.18 0.23 0.24 0.27
High Potential Maize Zone 0.70 0.81 0.81 0.82
Western Highlands 0.29 0.61 0.62 0.67
Central Highlands 0.94 0.96 0.95 0.95
Marginal Rain Shadow 0.58 0.72 0.71 0.79
Total 0.52 0.61 0.62 0.61
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Proportion of Improved CattleProportion of Improved Cattle
Zone 1997 2000 2004 2007
Coastal Lowlands 0.00 0.00 0.17 0.13
Eastern Lowlands 0.23 0.28 0.45 0.36
Western Lowlands 0.02 0.03 0.01 0.00
Western Transitional 0.18 0.23 0.24 0.27
High Potential Maize Zone 0.70 0.81 0.81 0.82
Western Highlands 0.29 0.61 0.62 0.67
Central Highlands 0.94 0.96 0.95 0.95
Marginal Rain Shadow 0.58 0.72 0.71 0.79
Total 0.52 0.61 0.62 0.61
Proportion highest in Central Highlands, HPMZ, and MRS
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Proportion of Improved CattleProportion of Improved Cattle
Zone 1997 2000 2004 2007
Coastal Lowlands 0.00 0.00 0.17 0.13
Eastern Lowlands 0.23 0.28 0.45 0.36
Western Lowlands 0.02 0.03 0.01 0.00
Western Transitional 0.18 0.23 0.24 0.27
High Potential Maize Zone 0.70 0.81 0.81 0.82
Western Highlands 0.29 0.61 0.62 0.67
Central Highlands 0.94 0.96 0.95 0.95
Marginal Rain Shadow 0.58 0.72 0.71 0.79
Total 0.52 0.61 0.62 0.61
But improving in almost all zones
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Proportion of Improved CattleProportion of Improved Cattle
Zone 1997 2000 2004 2007
Coastal Lowlands 0.00 0.00 0.17 0.13
Eastern Lowlands 0.23 0.28 0.45 0.36
Western Lowlands 0.02 0.03 0.01 0.00
Western Transitional 0.18 0.23 0.24 0.27
High Potential Maize Zone 0.70 0.81 0.81 0.82
Western Highlands 0.29 0.61 0.62 0.67
Central Highlands 0.94 0.96 0.95 0.95
Marginal Rain Shadow 0.58 0.72 0.71 0.79
Total 0.52 0.61 0.62 0.61
(Not shown) Also higher for higher income households (70-79% vs. 26-33%) but improving for all income groups
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Diversification Indices Crop diversification
Number of crop categories and share of each in gross value
Agricultural diversification Number of crop + livestock categories and share of each
in gross value Livelihood diversification
Number of crop + livestock + off-farm categories and share of each in gross value
We will focus just on crop and livelihood
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Diversification Indices (2)
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1997 2000 2004 2007
Year
Div
ers
ific
ati
on
In
de
x
Crop diversification-Increases, then falls-Begins of crop specialization
Livelihood diversification- Increases throughout
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Specializing zones (in crops)
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Diversifying zones (in crops)
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Richer HHs are more specialized
- Each year, higher income = less diversification (more specialization)
-Richer hhs specialized more dramatically than others between 2004 and 2007
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Additional findings Better local infrastructure allows households
that were far from roads and services to benefit through diversification …
While proximity to a major market (large city) is an important driver of crop specialization Opportunity to sell large quantities of fresh
produce or other crops
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Policy & programmatic implications Kenya may be at a turning point in crop ag
From increasing diversification to increasing specialization Previously, most hhs benefited from diversification But in future more will benefit by specializing, in
response to policy liberalization and urbanization
So policies and programs need to change in response to this turning point
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Policy & programmatic implications (2) Policies for “an innovative, commercially
oriented and modern agricultural sector” More high yielding tech packages even if more
risky Extension messages more finely tuned to each farmer
Access to the right inputs at the right time Be sure that government programs do not undermine
private sector input development More collaboration with private sector
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Policy & programmatic implications (3) More supply chain efficiencies
Market information Physical market places Cold chains Must be conceived and implemented in a highly
collaborative fashion with private sector Better risk management
Forward contracts Commodity exchanges Early warning for pest and disease infestations Crop insurance
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Policy & programmatic implications (4) While specialization is beginning in ag,
diversification continues into non-ag Micro-credit, training for SME Primary and secondary education
Other research shows that individuals need secondary education, not just primary, to take advantage of off-farm opportunities