Livestock’s contribution to the Kenyan economy is two and a half times larger than official estimates, according to a new study based on the data collected in the 2009 national census, which has estimated livestock incomes at some Sh320bn a year with informal sales, by-products and asset values included.
The study on the Contribution of Livestock to the Kenyan Economy by the Inter-Governmental Authority on Development (IGAD) Livestock Policy Initiative (LPI), has found that the contribution of livestock to agricultural GDP is only slightly less than the Sh399bn earned from crops and horticulture, which have traditionally been believed to be the prime drivers of the agricultural sector.
Using figures from the census, the IGAD study estimated the amount of physical product generated, on average, by a given population of animals and valued this output at producer prices. By contrast, the lower, official estimates of the economic importance of livestock are based on recorded sales of livestock and livestock products.
However, because only a small portion of Kenya’s livestock production is exchanged through recorded channels, these figures undercount the size and economic significance of the livestock sector.
According to the revised estimates, milk is far and away Kenya’s most economically important livestock product, with a value of Sh257.8bn in 2009, or about 70 per cent of the total value of livestock’s contribution to the agricultural sector.
The disparity on the milk figures between the official sales and the census-based figures was particularly wide, with officially recorded milk production standing at just one twentieth of total re-estimated milk production in 2009.
The study also found much greater benefits from the livestock owned by rural dairy farmers who keep 85per cent of the livestock in Kenya, with the previously calculated benefits of milk and meat supplemented by manure for fertilising crop fields, traction for pulling ploughs, and through using livestock as a means of savings, credit and insurance.
For pastoralists, for example, the value of livestock includes the ability to get assistance from fellow pastoralists in times of need. Collective schemes for sharing risk within pastoral communities see large herd owners donating animals and less well-off pastoralists drawing support in the form of livestock received as gifts, or on loan. Recent research suggests that about 10.5 per cent of pastoral animals in Kenya are involved in livestock sharing networks of this kind. With the total capital value of pastoral livestock in Kenya valued at Sh295.2bn, the collective insurance value of pastoral herds is alone estimated at Sh31bn.
“What we have is a massively untapped investment opportunity in these regions and I am glad a few of the insurance companies and financial institutions are now seeing this. The recently launched index insurance scheme which UAP and Equity Bank are involved in is a step in the right direction,” said Dan Kithi a financial Consultant with Financial Rise East Africa.
The report comes at a time when government institutions, research centers and private institutions have heightened their commitment to increasing the productivity of livestock and encouraging more uptake.
This is translating into considerable investment in the area. Typical is the IFAD-funded Smallholder Dairy Commercialisation Programme (SDCP), which has been hailed as key in moving dairy farmers from producing milk just for consumption towards looking for markets for their milk. The programme is helping farmers build profitable small dairy enterprises that can be sustained throughout the year.
It begins by expanding and strengthening farmers’ organisations. Groups are encouraged to assess their needs and identify viable goals. Training then teaches the importance of feed, breed and zero-grazing, as well as animal health and disease awareness, business training and marketing.
Nor have these drives been confined to cattle. Recently, the Kenya Agricultural Research Institute launched a project of encouraging the uptake of free range chicken by as many rural Kenyans as possible, which has recorded an impressive uptake of 60 per cent in its first year.
The project hopes to provide a source of income for rural Kenyans with the lowest costs, in that these chickens can source food for themselves, unlike the labour and capital intensive broiler breeds.
The same institute has also developed a new, cheaper, and convenient poultry vaccine to end out the Newcastle disease which is responsible for over 90 per cent of livestock deaths in Kenya, mostly of free range animals.
“With only Sh3000, a farmer has a chance to rear about50 indigenous chicken, which within 3-4 months can start laying eggs with the market for indigenous eggs being bigger and better paying than the broiler market.
This has made for turnarounds in farmers’ economic lives very fast,” said Dr. Ann Mumbi from KARI, who has been involved in the indigenious chicken rearing programme in KARI. Currently there are 26m free range chickens reared in the country worth about Sh7bn in meat and eggs.
Written by Bob Koigi for African Laughter
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