Mrs Hellen Kuto, a maize farmer at Tuigoin Village in Itigo, Nandi County, at her four-acre farm on June 07, 2016. PHOTO | JARED NYATAYA | NMG
Global food supply chains rely on stable, uninterrupted food production and flow.
The current inflation in Kenya can among other factors be directly attributed to food insecurity, which is affecting supply chain linkages between different market economies, business ecologies and communities.
The recent announcement by the Ministry of Agriculture to import maize to mitigate the shortage currently experienced in the country is a clear indication of how food insecure we are as a nation.
Food and Agriculture Organisation (FAO), estimates that global food production needs shall increase by 60 percent by 2050.
It argues that food security exists only when all people, at all times, have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and preferences for an active and healthy life.
According to the FAO, the root causes of food insecurity in most developing countries include poverty, war and civil conflict, corruption, national policies that do not promote equal access to food for all, environmental degradation, barriers to trade and insufficient agricultural development.
An economic outlook report by the Kenya National Bureau of Statistics says, this year, inflation jumped to a six-month high of 6.5 percent as of April, up from March’s 5.6 percent. Consequently, annual average inflation rose to 6.1 percent in April (March: 6.0 percent).
Consumer prices rose 1.69 percent in April on a seasonally-adjusted basis, markedly up from March’s 0.85 percent increase marking the strongest increase in over two years as a result of the exponential spike in prices of food, non-alcoholic beverages and transport.
Rising inflation means the public has to pay more for the same goods and services. Inflation raises the prices of products, and lowers the purchasing power, for instance, the prices of homes are likely to rise along with the rate of inflation, increases most mortgage interest rates, lowers the values of pensions, savings, Treasury bills and bonds and increases the cost financing the public debt, among other negative consequences.
There are several possible interventions through which improved food security could address the runaway inflation rate.
Key among them are tackling poverty and inequalities through commercial agricultural production, ensuring agricultural policies are pro-poor and inclusive, strengthening food environments and changing consumer behaviour, effective innovation and extension systems and reducing the ecological footprint of agriculture, and integrating humanitarian, development and peacebuilding policies in conflict-affected areas such as Turkana, Elgeyo Marakwet and parts of the northeastern counties.
A fiscal stabilisation programme, including measures on revenue and expenditure, should be instituted along with market liberalisation.
Price controls on products such as fuel are detrimental to the liberalisation and retard economic growth. Liberalisation should aim to eliminate price ceilings, open the financial sector, reform the labour market and eliminate barriers to international and domestic trade.