Business Can Fight Poverty

Published on 26th July 2005

Rock Stars have had their CDs hit high on the charts, and they are all smiling as they go to the bank. The Commission for Africa is happy, it achieved the objective of making Africans want money and positioned the G-8 to pledge to provide the money. Exactly what can Africa do to avoid exporting her problems to other people who are only interested in using her plight to further their own interests?

Africa, most of whose population are farmers, is unable to feed herself. The number of chronically undernourished people has risen from 173 million in 1990-1992 to some 200 million in 1997-1999. Of this; 194 million are in Sub-Sahara Africa. In Kenya, the agricultural sector has been performing poorly in the recent past. In the last decade (1990 – 2000), the sector grew at an average rate of 1.3% compared with 3.21% in Tanzania, 3.7% in Uganda, 4.1% in China and 4.8% in India.

Agriculture in Kenya is predominantly carried out by low resource farmers. They account for 75% of the total agricultural output. However most of the low resource farmers who form a bulk of Kenya’s population, continue to face many challenges such as lack of finances and unreliable rainfall that hinder their potential for expansion and ultimate contribution to economic growth. Reduced agricultural output is attributable to frequent droughts and floods, ineffective extension services, inadequate markets and marketing infrastructure, multiple taxes, pests and diseases among others. I interacted, with the farming community in Machakos, Makueni and Kitui between the months of January and May, and was encouraged by their keenness to produce enough food and avoid the indignity of food aid. If somebody brought water to Ukambani, these farmers would be the happiest people. The farmers want strategies that facilitate making poverty history through productivity.

Over 100 low resource farmers converged in Machakos to strategize on how businesses can facilitate the fight against poverty. Building on a recent pilot study conducted by the Inter Region Economic Network (IREN Kenya) entitled Commercial Farming for Low Resource Farmers; a farmer’s network that will oversee the linkage between business, the academia, Non Governmental Organizations, and Community Based Organizations to improve food security in Eastern Kenya was formed. Low resource farmers have the potential to drive the economy of Kenya to the next level. By employing commercial approaches; farming is going to be appealing to the youth hence will be more open to innovation.

The concept is simple. Farmers voluntarily agree to work together through land amalgamation and networking without loosing title to their land; business people are provided with strategies on how to ‘grow the market’. That is, by investing in projects that make farmers more productive and increase their purchasing power. The youth, through university network, volunteer to teach and reach out to farmers in laying out commercial strategies. Similar efforts are buttressed by Non Governmental Organizations; Community based Organizations, women and men’s groups. Farmers choose which activities to carry out on their farms with a strategy of producing food and surplus for the market. The government strictly plays a supervisory role. On the other hand, the business linkage facilitates efficiency in farming practice.

The first companies to come on board in this initiative included Syngenta East Africa, Dry Land Seeds, K-Rep Bank, SISDO Micro Finance, Popular Steel Works & Agricultural Implements, and over ten community based groups. Through this effort, it is expected that the productivity in Eastern will grow tremendously when farming constraints are addressed from a business perspective. It will be a win-win situation that will reduce the aid and beggar approach that has been going on for over a century. Farmers’ horizons will be expanded through networking. The government can assist farmers by offering tax breaks to companies that are willing to facilitate water supply networks and improving communication infrastructure.

The Ukambani case illustrates the importance of having people come out of their cocoons of impoverishment in order to tackle their problems. Employing entrepreneurial approaches that provide incentives to investors is the best way to go. Whereas business people want a market, consumers want an income in order to make purchases. To get the income they too must offer a product to the world. On the other hand limiting the market horizon for Africans through tariffs endangers the quest to fight poverty. Intra Africa trade barriers are appalling,   for instance in 1997, agricultural exports in Sub Sahara Africa encountered an average tariff of 33.6% in other Sub Sahara countries. East Asian exports to Sub Sahara encountered only 19% and European exports 12.7%. It makes no sense for Africans to keep blaming droughts when they can not even offer basic incentives to get their low resource farmers feeding each other whenever nature works against them.

By increasing commercial activity among the low resource farmers, rural – urban migration will be reduced, more and more people locked up in the agricultural sector will be released to other sectors such as the service industry due to increase in demand for marketers. It is also expected to expand agro-based industries in rural areas and improve the countries’ food security. Kenyan youth must learn how to create jobs; the agricultural sector is a place to start. Policy makers on the other hand, must position Africans not to crave for aid and turn Kenyan villagers into guinea pigs but promote sound environment for business.

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