Agricultural Sector Survey Kenya 254 (In Two Volumes) Vol 2

Repoirt No. 254a-KE L E COPY Agricultural Sector Survey Kenya 254 (In Two Volumes) Vol 2

Public Disclosure Authorized Volume 11 Annexes 8-20

December 20, 1973 Eastern Africa Projects Department Not for Public Use Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

Document of the International Bank for Reconstruction and Development Intermational Development Association -

This nrport was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept respon- sibilit;! for the accuracy or completeness of the report. 1 Kenya Pound (KE) = 20 KSh 1 KSh = 100 K cents

1 K1 = US$2.80 US$1 = 7.14 KSh

1 millimeter (mm) = 0.039 inches 1 meter (m) = 39.37 inches 1 kilometer (km) = 0.62 miles 1 hectare (ha) = 2.471 acres 2 1 square kilometer (km ) = 0.386 square miles 1 ton (metric) = 2,205 lb (1,000 kg) 1 quintal (q) 100 kg TABLE OF CONTENTS

Paragraph Number

VOLUME I

PREFACE

I. INTRODUCTION 1.1

1I. TIE POSITION TODAY 2.1 - 2.58

Public Outlays for Agriculture 2.3 - 2.6 The Common Market 2.7 - 2.8 Terms of Trade 2.9 - 2.11 Agricultural Output and Trade 2.12 - 2,20 The Ecological Potential 2.21 - 2.23 Population and Land Tenure 2.24 - 2.35 Employment, Income and Nutrition 2.36 - 2.41 Services to Agriculture 2.42 - 2.58

III. A PROPOSED DEVELOPMENT STRATEGY 3.01 - 3.15

TV. POLICY AND PROGRAM IMPROVEMENT 4.1 - 4.146

Product Emphasis 4.2 - 4.32 Development Areas and Program Orientation 4.33 - 4.57 Land Tenure 4.58 - 4.70 Pricing and Marketing 4.71 - 4.84 Irrigation 4.85 - 4.92 Soil and Water Conservation 4.93 - 4.97 Research and Extension 4.98 - 4.105 Mechanization 4.106 - 4.109 Improved Seed 4.110 - 4.111 Credit and Cooperatives 4.112 - 4.117 Rural Water Supplies 4.118 - 4.119 Nutrition 4.120 - 4.121

Rural Roads 4.122 - 4.125 Forestry 4.126 - 4.128 Fisheries 4.129 - 4.135 Taxation 4.136 - 4.140 Information for Planning 4.141 - 4.146

V. PUBLIC SERVICES ORGANIZATION 5.1 - 5.23

VI. PROJECT POSSIBILITIES FOR FOREIGN LENDERS 6.1 - 6.2 TABLE. Or, '3INT2NTS (Cont'd.)

MAPS

No. 10279 Communications and Agricultural Infrastructure No. 10280 Ecological Potential No. 10281R Livestock Infrastruccure, Nat-ional Parks and Game Reserves No. 10,82 Land Classificatio-ns and Forestry No. 10283 Location of Selected Cashi Crops and Irrigated Areas

ANNEX I Tihe Land Resource and Its Development Potential ANN E 2 The Outlook for Demand for Agricultural Products ANNEX 3 Land Tenure and Settlement NNEM 4 Expansion Possibillties in Crop Production and Processing AMV3-:N 5 Grazing Livestock and Wildlife: Production and Kaeqketing ANNEX 6 Improving Agricultural Research and Extension ANNEX / Agricultural Credit

VOLUME II

ANNEX 8 Local Planning and Participation in Rural Development ANNEX 9 Nutrition ANNEX 10 Forestry IANEX -lL Fisheries AXNm•E X 12 Irrigation ANNEX 13 Agriculture: General Summary and Recommendations of Recern_ UNDP/ILO Study Aiir'NFX 14 Pigs and Poultry AMEN 15 Wildlije and Tourism in Rural Development ANTt-.E,; 16 Rural Cooperatives A i XP 1 Raral Roads, Water Supplies and Electrification ANN;'?X; 18 Agricul-ural Taxes and Subsidies ANNEX 19 Selected Farm Inputs and Agro-Industries ANNEI: 20 Statistical Anmex ANNEX 8 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

LOCATL PLANNING AND PARTICIPATION IN RURAL DEVELOPMENT

Present Rural Development Systems para. 4 - 35 National Planning 5 7 Sector Planning 8- 9 The Special Rural Development Programme (SRDP) 10 - 18 Provincial Development Committees 19 - 20 District Development Committees 21 24 Physical Planning 25 - 26 Local Government 27 - 29 Self-Help Schemes 30 - 35

The Forthcoming Emphasis: District Planning 36 - 47 Thee District Development Officer 40 - 44 District Development Grants 45 - 46 District Development Centers 47

Issues and Recommendations 48 - 83 Levels of Planning 49 - 53 Central Organization for Rural Development 54 - 58 Participation by Local People 59 Plan Disaggregation 60 - 61 The Planning/Implementation Gap and District Prograrning 62 - 63 District Project and Program Identification 64 - 67 The Role of the DDO 68 - 72 Information Flows 73 - 74 Financing for District Plans 75 - 76 County Council and Self-Help Activities 77 - 80 SRDP and Exnerimentation 81 - 83

Table 1 Self-Help Projects, Capital Investment, 1966, 1971 Table 2 Estimated Expenditure on Self-Help Projects,. 1971

ANNEX 8 Page 1

LOCAL PLANNING AND PARTICIPATION IN RURAL DEVELOPMENT -/

1. In less than a decade, independent Kenya has experimented with a remarkable variety of innovative approaches to planning and implementation for rural development. Nevertheless, the problem is so complex that it requires much further attention. This Annex discusses three principal problems which the Government faces in trying to improve local planning and participation in rural development. They are:

(a) Centralization/decentralization: What responsibilities and powers for rural development planning and implementation should be assigned to the central government in Nairobi, to field staff of the operating ministries, to local government, and to the rural population? How is all this work to be related and integrated; In particular what can realistically be expected of local planning?

(b) Financing: What principles are to be used for financing capital and recurrent expenditures of rural development projects? Can financing mechanisms be used to overcome regional and group income disparities in rural areas?

(c) Innovation: How can Kenya develop a mechanism for the systematic testing of technologies and institutional arrangements appropriate to the needs of rural development?

2. Rural development, especially in a country such as Kenya must solve several difficult problems. First, the expression "rural development" itself is broad and somewhat vague, encompassing not only economic aspects (increase of marketable surplus, distribution of the increase among all rural families, provision of alternative employment opportunities) but also social ones (health, nutrition, schools, water supplies) which are often less quantifiable. These different concepts of rural development imply different

1/ It is difficult for an outsider to judge whether local planning is practical in Kenya at present, and this Annex does not attempt to do so. In principle, there is little doubt that a formalized relationship between rural communities and central institutions, along with an organized two-way flow of planning information, can improve resource use and help rural people realize their aspirations. On the other hiand, local government agencies are not now strong and henceumay not be effective in involving their citizens in planning, even after local planning officers have been trained and have acquired experience. For this reason the Annex leaves aside the question of the practicabiiity of local planning in the years just ahead, but discusses the major problems likely to arise when the task is undertaken and suggests some possible solutions drawn from experience in Kenya and elsewhere. ANNEX 8 Page 2 goals and objectives, sometimes complementary but sometimes divergent or even incompatible, and often providing benefits which are hard or impossible to measure. Second, in Kenya this situation is further complicated because the rural population is heterogeneous; it includes people living in widely different environments, with diverse cultures and languages, and representing a wide range of levels of development. Third, while the Government can help provide the conditions and stintuli, the development itself must come from the rural population; means muEt therefore be found for enlisting the participation and support of the ter! million Kenyans living in rural areas, notwithstanding the profound differences among them.

3. Many organizations take part in rural development. This Annex concentrates on the five functions listed below, as provided by the public service. It does not deal with the agencies which offer services to the farmer (extension, inputs, credit) nor with parastatal and private organizations, which are discussed in other Annexes. These functions will be taken up:

(a) Planning: The selection of priorities and the rational choice of means to achieve objectives.

(b) Information: The establishment of two-way information flows between national and local institutions in order to assess local problems and potentials and to permit sound decisions at the local level, but within the framework of national priorities.

(c) Implementations: Overcoming the common situation in which plans created at the national level bear little relation to what happens in the field. To do this, ministries engaged in rural development must plan for implementation and must allow the lessons learned during implementation to feed back into subsequent planning.

(d) Coordination: At both national and local levels, to ensure that conflicting objectives and programns are reconciled and that interdependent undertakings arc schedule- and conducted so as to provide mutual reinforcement.

(e) innovation: The selection of new institutional arrangements appropriate to the needs of rural Kenya, especially when new programs have objectives differing sharply froma those of previous programs (for example, giving the whole farming population access to input supplies and marketing services) and, as a corollary, a concern for replicability, so that those innovations which prove useful can be rapidly anid systematically spread more widely. ANNEX 8 Page 3

PRESENT RURAL DEVELOPMENT SYSTEMS

4. The Kenyan Government's machinery for rural development is in many ways relatively sophisticated, and the Government hag undertaken some inter- esting innovations.

National Planning

5. Several large programs were begun before Independence to help raise the standards of living of substantial segments of the rural population. 1/ After Independence, a growing concern for rural well-being led to Government support for the KERICHO Conference on Education, Employment, and Rural Development in September 1966. This landmark conference produced 112 conclusions, mostly urging new approaches to integrated rural development. These conclusions led to the idea of the Special Rural Development Programme (SRDP), in which the new approaches were to be tested on a pilot basis for subsequent use elsewhere in the country.

6. The establishment of the SRDP necessitated some form of interministerial coordinating mechanism. To meet this need, a National Rural Development Committee was set up in 1969; it was composed of the Permanent Secretaries of all the ministries concerned with rural development, and had broad advisory and consultative functions. This committee is no longer active. At the same time, however, a small secretariat (now called the Regional and Physical Planning Unit - RPPU) was established in the Ministry of Economic Planning and Development, charged with the planning and coordination of the SRDP and the preparation of working papers for the District Plan- ning exercise. It became the contact point in the Ministry for the Provincial Planning Officers (see below). This unit continues in operation; it is headed by a Kenyan Senior Planning Officer responsible to the Deputy Secretary (Planning), and its other two staff are a U.N. advisor and an administrative coordinator for SRDP, supplied under British technical assistance and due to leave in mid-1973.

7. The Second Five-Year Plan stressed the need to accelerate development efforts in rural Kenya. It recognized that inadequate organization of rural development was one of the great weaknesses of the First Five-Year Plan, which gave too little attention to the rural areas and did not sufficiently integrate rural development into overall planning. In trying to overcome the difficulties, the Second Plan stated, "the key strategy of this Plan is to direct an increasing share of the total resources available to the nation towards the rural areas...The Government plans to give new meaning to the phrase 'rural development', so that the principles of African Socialism involving the equitable distribution of the benefits of prosperity can be

1/ They include the Swynnerton Plan, the ALDEV schemes, and the Settlement Program started just before Independence (See Annex 3). ANNEX 8 Page 4 given greater reality in the nation enjoying a higher level of national prosperity." The Plan supported this statement through decisions to allocate a greater portion of resources to the agricultural sector, to construct rural roads and water supplies, to assist self-help in rural areas, and to initiate the SRDP, but it contained no suggestions about organization for planning and implementation of rural development.

Sector Planning

8. Since the Kenyan Government is organized in vertical ministries, generally along sectoral lines, sectoral planning by ministerial headquarters is an important task, even though the ministry may not have a separate planning section. However, sector planning has been minimal and its typical product has been a group of project proposals prepared by the various operational departments and divisions of the ministries concerned. The quality and completeness of these project proposals vary greatly, as does the extent to which they follow suggestions from Provincial and District Development Committees. Rural development, as defined above, cuts across ministerial responsibilities and so requires a degree of coordination in planning and implementation that scarcely exists in the Kenyan Government today.

9. Ministerial headquarters have been expected to make nearly all sector and project planning decisions, especially in recent years, in order to allocate scarce resources efficiently, to overcome possible centrifugal forces, to meet the preferences of aid donors, and to strengthen the capacities of the planning machinery and planners in Nairobi. Nevertheless, this centralization of planning makes it difficult to respond flexibly to local needs and initiatives and it tends to aggravate the planning implementation gap, since the lines of communication between Nairobi and the field are often long and cumbersome.

The Special Rural Development Programme (SRDP)

10. After the Kericho Conference, the University of Nairobi was asked to elaborate on the ideas of the conference, and produced a report entitled "PiLot Projects in Rural Areas." Its principal proposals were that:

(a) Several pilot integrated rural development programs should be undertaken in divisions selected to represent Kenya's diversity;

(b) A baselirne survey should be made of rural conditions in these divisions;

(d) The programs should be conducted through the existing government machinery and with only minimal additional resources. Hence, a primary aim of the programs was coordination of existing and proposed projects;

(e) A central coordinating body should be established in Nairobi;

(f) Foreign donors should be invited to participate, with full understanding of the previous points.

Appendix 1 lists the goals of the SRDP.

11. Fourteen divisions were selected for SRDP progrzms and baseline surveys were made. In March 1969, the National Rural Development Committee selected six divisions for Phase I (Kapenguria, Kwale, Mbere, Migorl., North Tetu, and Vihiaa). Five of these divisions are receiving technical and financial assistance, although for a variety of administrative reasons operational work did not effectively start until late 1970; in Kwale, programs and projects are only now getting started. The Government has more recently decided to continue these six SRDPs through fiscal 1976, but not to undertake the extension of the programs (an additional eight divisions (Phase II)). Appendix 2 summarizes activities in each of the six present divisions.

12. Continuous evaluation was built into the SRDP in order to monitor individual projects, evaluate progress toward goals, and permit selection of program elements for replicability. Evaluations have been made by teams from the Institute of Development Studies (IDS), some operating ministries, and donor agencies. It is too early for a full evaluation of the results of the SRDP experience, but several reports have already discussed lessons to be learned from less than two years of the SRDP.1/

13. These studies and other observations point to the following findings:

(a) SRDPs have been less experimental and innovative than was intended, their principal emphasis has been on coordinating and integrating existing programs rather than trying new methods. There have been a few exceptions, however: the extension experiments assisted by IDS in North Tetu (which have been valuable in suggesting ways of changing the use of Farmers' Training

1/ e.g. (a) "An overall Evaluation of the Special Rural Development Programme", Institute of Development Studies, Nairobi, 1972. (b) R. Rasmusson, "Kenyan Rural Development and Aid", SIDA, Stockholm, 1972. (c) The forthcoming report by N. Bedi as part of the IBRD's African Rural Development Study. ANNEX 8 Page 6

Centers)1/ and the maize credit program in Vihiga, basically a decentralized AFC operation, which has thus far been very expensive in relation to the number of farmers assisted (administrative costs appear to have been larger than volume of loans in 1971-72) and which has also lost some of its potential value by concentrating too heavily on large farmers.

(b) SRDP programs have been developed in the context of national policies which generally give little attention to the needs of the small farmer. Thus, agricultural research is seldom directed toward the technological problems faced by small holders; pricing and marketing policies continue to be geared to the large farm sector and the "progressive" smallholders; and the SRDPs have dore little to alter the existing pattern in which most delivery systems (for extension, inputs, marketing and credit) are devised mainly for those farmers who have already proved their ability to succeed in commercial terms. Since the raising of rural incomes depends on widespread participation in production, these conditions represent a serious weakness of the SRDP.

(c) Attainment of replicability in SRDP undertakings is jeopardized, not only by the facts noted above, but by the heavy pressure on SRDP managers for quick tangible results (which conflicts with the need for careful design of pilot projects to ensure replicability) and by the considerable financial and technical resources which have been contributed by donors in the SRDP areas, contrary to the intentions outlined after the Kericho Conference (para 10 (d) above).

14. While the SRDP has had to face these problems in reaching the goals set initially, it has also made some notable advances in pursuing rural development. Its most important contribution has been in reducing the planning implementation gap through a planning and management system that allows objectives to be set by local field offices, monitors progress in attaining these objectives, and facilitates cooperation among ministries performing related activities. The key elements in this system are area coordinators, "linkmen" in the operating ministries, and simple methods for programming and reporting.

15. The area coordinator is responsible both to the District Officer in charge of the division and to the Provincial Planning Officer (PPO). He draws up the program plans for the division in conjunction with field officers from the operating ministries and the technical assistance teams. He

1/ See "The Tetu Extension Pilot Project", by J. Ascroft et al, paper read at the Workshop on Strategies for Improving Rural Welfare, University of Nairobi, May 31 - June 3, 1971. ANNEX 8 Page 7 is also responsible for overseeing the implementation of the program, both by removing obstacles through contacts with the RPPU and the "linkmen" in operating ministries and by monitoring progress achieved by the field officers. The "linkmen" are relatively senior officers designated by each participating ministry to maintain liaison with the SRDPs and to act as contact points with the RPPU and the area coordinators, shortening lengthy bureaucratic proceiures when necessary (for example, when delay in releasing an Authorization to Incur Expenditure from a ministry in Nairobi is delaying a number of projects in one area.

16. The system for programming, operational control, and evaluation of rural development projects constitutes a major innovation in Kenya. In essence, this system takes the projects comprising the SRDP plan; programs them simply with regard to targets, timing, necessary inputs, and coordination between ministries, indicates who is responsible for what; and sets the information out in a series of wall charts that allows for easy monitoring and evaluation, both in the field and in Nairobi. The programming/reporting system allows monthly program checks against assigned goals, together with annual implementation and evaluation reviews. Through these tools each field officer helps establish his own target and is made aware of his precise responsibilities, as well as his progress toward his target. Such a system-- management by results--does not exist in operating ministries in Kenya.1/ Within the limitations indicated above, the SRDP areas have used the techniques of area coorclinators, "linkmen" and the programming/reporting system principally to avoid delays and obstacles, lessen the planning/implementation gap, coordinate the activities of various operating ministries at the local level, and establish a system for monitoring and evaluation. The results provide valuable lessons.

17, The transfer of the positive aspects of the SRDPs to district planning should be easy, since the RPPU coordinates both activities. In practice, however, the district planning exercise seems to have been undertaken with almost total disregard for the SRDPs. For example, district planning currently has little to do with implementation, yet it is in this latter area that the SRDPs can offer the most useful lessons. There are no plans to incorporate the programming/reporting system with other areas, nor is the idea of "linkmen" likely to be transferred to district planning.

18. Staff is also a problem for the SRDPs. The British technical assistance expert who now administers the program is due to leave Kenya in 1973. At the time of writing; no Kenyan counterpart had been appointed to succeed him, and the RPPU is already too burdened to assume this task without additional staff.

1/ For more description of this system, see "Programming, Operational Control and Evaluation for Rural Development Plans" by D. Belshaw and R. Chambers. IDS Staff Paper No. 111, "PIM": A Practical Management System for Imple- menting Rural Development Programmes and Projects, "Belshaw and Chambers, IDS, December 1972, and "A Management Systems Approach to Rural Development, "Belshaw and Chambers, IDS, January, 1973. ANNEX 8 Page 8

Provincial Development Committees

19. Below the national level, various committees are concerned with rural development. In the provinces, Provincial Development Committees are responsible for approving project proposals from lower administrative levels, coordinating provincial activities and monitoring project implementation. The PDCs consist of all the departmental heads of operating ministries, with the Provincial Commissioners as Chairmen and Provincial Planning Officer.s (appointed by and responsible to the Ministry of Finance and Planning) as executive secretaries. The functions of the PDCs are not clearly defined and their effectiveness varies among provinces, depending partly on the attitudes and energy of the Provincial Commissioners and Planning Officers concerned.

20. The PDCs can perform useful rural development functions in selecting projects and in following up implementation lags in projects which affect several ministries. Their weaknesses seems to include the lack of guidance from Nairobi about their responsibilities, activities, and procedures; their lack of financial power; the unwieldiness of some provinces as administrative units; the undefined lines of responsibility of the PPOs; and the lack of staff for those offices. (On the latter point, however, the Ministry of Finance and Economic Planning intends to recruit a cadre of Provincial Planning Assistants to aid the PPOs in reviewing project proposals, collection information, and assessing and coordinating project implementation.)

District Development Committees

21. Historically, the district has been an important administrative unit in Kenya. Its importance increased after Independence, as the Govern- ment's approach became more oriented towards rural development, since the district was in general a geographically, ecologically, and administratively manageable area and was usually the lowest level to which operating ministries could assign properly trained staff.

22. Numerous committees exist in the districts to plan and coordinate development activities. Most of them deal with specific sectors (e.g. District Agricultural Committees) and the District Commissioner is the chairman of most. Two former committees concerned with overall development of the di->-icts (District Development Committees made up of ministry representatives, :11d District Development Advisory Committees, composed of local citizens) were merged, shortly after the start of the Second Five-Year Plan, into a new District Development Committee (DDC) comprising both the technical officers of operating ministries and representatives of local opinion (including local MPs). The new DDC has been placed over all the other district committees, which report project proposals and major issues to it. The DDCs' functions are similar to those of PDCs: they select and assitn priorities to project proposals, ensure coordination between hinistry representatives, and express major issues at the district level. Unlike the PDCs they have no. equivalent of the PPO as executive secretary, but they do have public participation and some limited financial resources (see below). ANNEX 8 Page 9

23. Some efforts have been made to use the districts as a basis for planning. In 1968, for example, the Ministry of Planning and Economic Devel- opment asked the DDCs to submit lists of project proposals, but lack of guidelines (for priorities and financial possibilities) made this exercise a failure. Since then, a few more systematic efforts have been made to prepare illustrative district plans, with planning teams including both Kenyans and expatriates, and two district plans (Narok and Kitui) have been completed. The Narok plan is a good effort but has limited value as an example elsewhere, both because of the special characteristics of the district and because the Government has decided to attach the major segments of the plan to national programs (e.g. livestock), so that it will not be implemented as an integrated plan for the district. The Kitui plan was prepared hastily (six weeks); it contains much useful information on the district, but its section on future planning is little more than a catalog of project possibilities with no systematic assessment of priorities or costs.

24. In 1972 the Government decided to shift from its current SRDP emphasis to district planning in all districts as soon as possible. Its reasons included dissatisfaction with the inequity of concentrating only on the six SRDP divisions, a belief that district planning (with participation by the DDCs and the District Development Officers, DDOs) can contribute substantially to rural development, a desire to depend less on the expatriate technical assistance so prevalent in the SRDP, and recognition of the district's importance as an administrative unit in rural development. The RPPU has provided the staff work for district planning, with some assistance from the Project Identification and Evaluation Unit in the same ministry.

Physical Planning

25. The former Town Planning Department in the Ministry of Lands and Settlement has recently been renamed the Department of Urban and Regional Physical Planning (DURPP). It has three functions: urban design and planning for large towns, preparation of National and Regional Physical Plans (para 26) and assistance in preparing District Plans (e.g. Narok). It has also given some assistance to the SRDP, by designating a senior official as a "linkman" with SRDP (see para 15) and by providing mapping services and advice on the location of projects. DURPP headquarters in Nairobi has 11 professional staff, of whom two work on the national and regional physical plans, and there are also four Provincial Physical Planning Officers in the field, together with two assistants in Kakuru. In addition, some ten students are attending the University of Nairobi for a one-year diploma course to be followed by two years of in-service training.

26. Regional Physical Plans have been prepared for each province. They are not economic development plans, but collections of information about the natural resource base, demographic situation, main economic activities, and physical infrastructure. As such they provide a valuable data base for planning future rural development programs and projects. The National Physical Plan, to be completed by the end of 1973, should provide useful guidance for the future planning of infrastructure and growth centers ANNEX 8 Page 10

for rural development. Unfortunately, other government agencies seem to make little use of these DURPP products; many copies of the plans distributed to other agencies have simply disappeared. Since DURPP has no access to a computer, updating their material is a tedious process.

Local Government

27. Rural Kenya is divided into 38 County Councils, mostly having the same boundaries as districts. Before 1972, they were subdivided into urban and area councils, which were frequently delegated substantial powers by the County Councils. Those urban councils, which are large enough to take responsibility for county functions, have now been elevated to township authorities, independent of the counties. Elsewhere in the counties local councils have been created, with almost entirely advisory functions. The majority of members of councils are directly elected. The Ministry of Local Government supervises the County Councils.

28. County Councils perform functions that are primarily of local interest and are subject to local decisions and implementation. They have substantial powers of regulation over general environmental standards, local industry and commerce, and conservation of land and wildlife. They also provide a variety of public services, among which are centers for the inspection, grading and storage of agricultural produce, cattle dips and slaughter- houses, plants for animal by-products, operation of markets and bus services, and the provision of water supplies (see Annex 17). In 1970, however, the Central Government divested the County Councils of responsibility for matters concerning educal:ion, health, and roads, three activities which had previously occasioned by far the greater part of their expenditures. (Between 1969 and 1970, gross expenditures of the County Councils decreased from Kb 15.0 million to Kh 3.2 million.) At the same time, receipts from the Graduated Personal Tax and road grants were taken away from the County Councils.

29. Despite this reduction of functions and financing, the Government remains committed to participatory local democracy as represented by the County Councils. However, it is widely recognized that the quality of their service has been declining in late years, because of financial problems (local authorities currently have debts of about KE 4 million) and their inefficiency in financial management, aggravated by the difficulty of recruiting competent professional and administrative staff. Their administrative expenses are very high--36% of total expenditure in 1970. There are wide variations among the revenues of the different County Councils, which are naturally reflected in differences in standards of service.

Self-Help Schemes

30. The self-help movement in Kenya has proved valuable in mobilizing local people and resources for rural development. It is estimated that, between 1965 and 1971, some KE 13 million was raised for capital investment ANNEX 8 Page 11

in self-help projects enumerated by the Community Development Division in the Ministry of Cooperatives and Social Services. Table 1 shows the annual contributions over this period; Table 2 shows expenditures for different types of projects in 1971. These figures should be treated with caution: not all self-help projects are recorded by this Division; valuation of labor is difficult and imprecise; and some projects never reach completion. Indeed, several District Commissioners believe that it would be impossible to assess the value of self-help projects in their districts. Nevertheless, even these rough orders of magnitude suggest that the self-help movement is important for capital formation and construction of physical infrastructure in rural areas.

31. A complex hierarchy of commi.tees approves, coordinates, and implements self-help projects. For each project, a project committee composed of local citizens helps collect funds and initiate, implement, and operate the project; it also drafts regulations regarding contributions to and use of the project. After the project is approved, the District Commissioner issues a permit authorizing the project committee to collect contributions.

32. At each administrative level from sub-location to province, there are Community Development Committees composed of representatives from the committees at lower levels. These committees are responsible for assigning project priorities and coordinating projects. The District and Provincial Community Development Committees are subordinated respectively to t:he DDCs and PDCs, to which they must submit their recommendations on applications for government financial and technical assistance to self-help schemes. At the top of this hierarchy is the National Community Development Committee, under the supervision of the Ministry of Cooperatives and Social Services. It includes representatives from all the ministries operating in rural areas, and is responsible for establishing policies for the self-help movement. Community Development staff exist at all levels down to the sub-locations. Down to the District Community Development Officers, these persons are direct employees of the Ministry of Cooperatives and Social Services; below that level they are employed and paid by the County Councils. These officers serve as executive secretaries of the respective Community Development Committees.

33. One problem posed by the self-help movement is that of allocating Central Government resources, especially since the average size of self-help projects is increasing. (In 1967 nearly 40,000 projects were initiated; in 1971, with a larger total expenditure, the figure had fallen below 12,000.) Many projects, especially the larger ones, require techniclal assistance in design and construction, which the professional field staff of operating ministries sometimes cannot provide. Hence, many technical problems have arisen, especially in water supply projects. Most self-help schemes also require subsequent recurrent expenditure and trained staff, which must be furnished by the Central Government (particularly for health centers but also for primary and secondary schools, water supplies, and others). ANNEX 8 Page 12

34. An additional problem is that of ensuring that local priorities harmonize with national ones. The huge self-help Kandara water scheme, for example, has a low priority in national terms, but its size and local importance have caused the Government to divert technical assistance to it. Indeed, some self-help schemes appear to have been started mainly in order to preempt government financial and technical assistance.

35. The elaborate coordinating mechanism (Community Development Committees, DDCs, PDCs) has been of some help in alleviating these problems; but the inadequacies of committee procedure and the frequent initiation of self-help projects without technical advice or standardized designs have lessened their effectiveness. On the whole, notwithstanding the solid achievements of the self-help movement, much effort is still needed to harness that movement to the attainment of national goals in rural development.

THE FORTHCOMING EMPHASIS: DISTRICT PLANNING

36. The Ndegwa Commission proposed that the process of plan formulation and implementation "must be extended down to the level of the District and even into the Division, where the administration comes to grips with local realities."1/ From this proposal and from recent Kenyan experience has evolved a tentative commitment to a concept called "district planning." It must be noted at the outset that this term does not imply that the allocation of resources should be decided at the district level. The Government has specifically dismissed the possibility of a unified district budget, and will maintain the ministerial system under which each ministry develops policy and program for its sector, with the budget divided into ministerial votes to support those policies and programs. Furthermore, as the SRDP has demon- strated, effective local programs and projects depend largely on the environment of national policy.

37. District planning is seen as an integral part of the process of national and sector planning. Its objective is to supplement existing planning by contributing greater knowledge of local conditions, potentials, and problems (needed because of Kenya's diversity and Nairobi's lack of awareness of local circumstances) and by providing a mechanism to coordinate the efforts of individual ministries at the local level (necessary for most rural development programs and projects). The ministerial system is compatible with greater participation by field staff and local people in preparing plans and identifying projects; but converting these ideas into an operational system is far from easy. Several questions must be answered: What is meant, precisely and realistically, by district planning? What are the components and time horizon of the exercise? Who will do the job? How will district planning relate to sector and national planning? Some staff work has been done on these fundamental questions, but further decision and clarification are needed before district planning can become concrete and valuable.

1/ Report of the Commission of Inquiry--The Public Service Structure and Remuneration Commission, May 1971. ANNEX 8 Page 13

38. Three possible functions of district planning can be defined, of which the first two are discussed in existing Government working papers:

(a) To extend national and sector planning to the district level by the "disaggregation" (segmentation) of sector plans on a district basis, allowing comments from the districts and filling gaps in the plan through district development grants and self-help activities. This approach will be termed "plan disaggregation."

(b) To allow field staff and local people to identify their needs in terms of the district's problems and potentials, and to identify local projects and programs within the framework of national policy and of a strategy for the district. This approach will be termed "project and program identification."

(c) To close the gap between sector and national plans and their implementation in the field through planning for implementation at the local level. This requires a management system to ensure proper phasing and coordination among ministerial activities in the district, and to locate and overcome obstacles to implementation. This approach will be termed "district programming."

39. Plan disaggregation is the approach most often considered in Govern- ment discussions of district planning. The Project Identification and Evaluation Unit (see para 24) is already preparing a disaggregated list of most development projects that fit within a district. There has also been considerable mention of project and program identification, but few details have been specified. In this approach, the field staff in the district are expected to develop a "plan" setting forth the outline of a broad development strategy, indicating activities to be established in the district and the measures required to develop natural resources and strengthen social and physical infrastructure. These district strategies would be cleared by the PDC and then forwarded, through the Ministry of Finance and Economic Planning, to the operating ministries. Final approval of district plans would be given by a Committee of Officials, to be established in accordance with a recommendation of the Ndegwa Commission in order to systematically coordinate all major development activities. The third approach, district programming, appears to be mostly neglected at present. Unless procedures are developed to ensure effective phasing, implementation, and follow-up of the various components of plans (whenever they are drawn up), district planning is in danger of consisting solely of another series of reports to take up the scarce time and technical attention of the district team. ANNEX 8 Page 14

The District Development Officer

40. As the functions of district planning become clarified, the DDO will become a key participant. The Ndegwa Commission proposed the creation of two new positions at the district level: a District Development Officer, responsible to the Office of the President, to be the right-hand man of the District Commissioner in coordinating and following up development projects, and a District Planning Officer, responsible to the Ministry of Finance and Economic Planning, to prepare district plans under the guidance of the DDO and in conjunction with technical officers of the operating ministries. The Government subsequently decided that this arrangement would cause duplication of effort and waste scarce trained manpower. It was therefore agreed that only DDOs should be appointed and that their duties should include acting as executive secretary of the DDC, providing liaison with the technical officers of the operating ministries.

41. The Government planned to recruit 20 DDOs in 1972, but found only 15 suitable candidates. They are mostly young Kenyans with first degrees in economics or related subjects and with little or no practical experience. The terms of reference issued for them by the Ministry of Finance and Economic Planning were very general, confined to a list of the functions mentioned in the previous paragraph. In October 1972, the 15 candidates started a 10-week training course organized by the Institute of Development Studies (IDS) in conjunction with the RPPU. The curriculum concentrated on the main functions of government and was rather weak in how the DDOs would actually work in the field. (This weakness in general seems to have stemmed from the lack of decisions about the nature of district planning and the consequent role of the DDOs; in addition, there was no suitable illustrative district plan, and the Rural Planning Manual drafted by IDS proved too complex and too mechanis- tic to meet the needs of RPPU.) After this course, the DDOs went to their field offices on January 1, 1973.

42. If district planning is to succeed, the DDOs will need a flow of information from Nairobi, as well as logistical support in the field. Nairobi has a considerable volume of information that would be helpful in preparing district plans. As was mentioned earlier, the Project Identifica- tion and Evaluation Unit will distribute lists of current and proposed projects, district by district. These lists will show development expenditures of fiscal years but will not show the rationale for each project nor how it relates to national plans. Also, the Statistics Division of the Ministry of Finance and Economic Planning is compiling on a district basis the available statistics on population, employment, household income, crop acreages, industrial production, and other matters. This information, too, will be distributed to the DDOs.

43. The DURPP is organizing the preparation of district maps, initially showing major physical features, infrastructure, and administrative boundaries. While preparing regional physical plans, this Department also collected a vast amount of information, broken down by districts, which could be used ANNEX 8 Page 15

by the DDOs, but little use has yet been made of this potential source of information. The DDOs will also need information on a whole range of government policies and programs if their activities are to fit with national priorities. One officer in the Project Identification and Evaluation Unit has been asked to produce digests of crop strategies and agricultural pricing policies, but there are no plans for providing similar information in other fields.

44. Logistical support for the DDOs is scanty. Until at least FY1974 they will have no staff, no secretarial or statistical assistance, and no transport, and meanwhile must depend on the District Commissioners for these items. They will, however, have a small budget for office operation, including stationery and telephone service.

District Development Grants

45. In FY 1972 the Government began to issue grants to the DDCs through the PDCs, at the rate of Kb 2,500 per year district. The DDCs determine the use of these funds, subject to approval by the PDCs and Nairobi. These grants were supposed to entail no subsequent recurrent expenditures; their use for schools, health centers, or roads was (with some later exceptions) excluded. In practice, however, most of the money from these grants has been used for rural water supplies, which of course do require operation and maintenance. The Ministry of Finance and Economic Planning intends to increase the grants until in the next plan period they will reach KE 20,000 per district annually, a total of Kb 4 million in district grants during the Third Five-Year Plan. This money will be appropriated in the development budget, from funds that would otherwise be allocated to ministerial votes.

46. District development grants can be useful by giving the DDCs financial power and authority; but, unless clear guiding principles and operating procedures are formulated in Nairobi, their rapid expansion can distort national priorities and may create problems for the operating ministries that have to carry out district projects.

District Development Centers

47. The courses at existing Farmers' Training Centers, run by the Department of Community Development and the County Councils, have been criticized for duplication of effort, insufficient utilization of facilities, instructors who are inadequately trained (especially in the arts of communication), and subject matter not adapted to the needs and conditions of the respective areas. To meet these criticisms and combine all rural training for adults under one administration, the Government intends to establish a Development Center in each district as an integral part of rural development efforts. This measure was called for by the Second Five-Year Plan. Two such centers were to be established during that Plan, but neither is yet in operation because of a jurisdictional dispute between the Board of Adult Education, which is supposed to formulate policies, and the Training Division ANNEX 8 Page 16 in the Ministry of Agriculture, which should be the operating agency. When established, the District Development Centers will provide short residential courses for local leaders, farmers, agricultural staff, and others.

ISSUES AND RECOMMENDATIONS

48. Paragraph 1 identified three principal issues facing the Government as it organizes to solve the problems of rural development. The preceding description of present institutions and future plans makes it possible to point out several important sub-issues.

(a) Centralization/Decentralization

(i) What responsibilities for planning, resource allocation, project identification, preparation, and implementation should be assigned to each major administrative level? How can these functions be related to form an integrated system?

(ii) What central authority is to be responsible for establishing policy and for coordinating and integrating the rural development effort? Where in the ministerial structure should this authority be located?

(iii) How should local people participate in decisions about rural development in their areas?

(iv) With the new emphasis on districts, what specifically should be the nature and functions of district plsnning? How can it be ensured that plans prepared in the districts will be something more than "shopping lists"?

(v) Wthat operational procedures are suitable for district planning activities? What information should flow between the Central Government, the district team, and the field staff?

(vi) What role in district planning is appropriate for the DDOs?

(vii) How can the gap between planning and implementation be reduced at the district level?

(b) Financing

(i) What changes in development financing methods are implied by the new stress on district planning? ANNEX 8 Page 17

(ii) What can District Development Grants achieve most effectively?

(iii) How can the resources of the County Councils and of the self-help movement be integrated into local planning for rural development?

(i) How can the Government best organize to conduct systematic experimentation on the institutional structures and relationships most appropriate to rural development?

(ii) How can the residual Special Rural Development Programme become a more effective aid to the Kenyan Government in attaining its rural development goals?

Levels of Planning

49. Planning in Kenya today is largely the result of interchange between the macro-economic planners in the Ministry of Finance and Planning and the officials who prepare project and sector proposals in the operating ministries. The Annual Budget is the critical focus of planning; its allocations to operating ministries may bear little relationship to those forecast in the current Five-Year Plan (for example, see the Ministry of Works case described in Annex 17). Planners in Nairobi should seek especially to establish a coherent development strategy and to improve the selection and implementation of major projects. The various Ministries are working toward these goals. But local knowledge and local people should also be involved in the planning process to improve the many activities occurring outside the major development projects, and local commitment should be encouraged. How can this be done?

50. The following comments are based on three premises:

(a) That reduction of the planning/implementation gap should receive high priority since, while the gap exists, planning at any level is purposeless.

(b) That district planning must consciously seek to avoid the shortcomings of most previous efforts at decentralization, such as the shopping-list approach, which can pr,oduce only frustration among both authors and beneficiaries of these plans. Likewise, authority to allocate resources should be granted only when there are guarantees that technical criteria will be given full consideration, that project implications for recurrent costs will be assessed, and that national priorities will be respected when projects may preempt government resources. ANhNEX 8 Page 18

(c) That the inexperience of most planners and particularly of the DDOs requires that there be concentration on a few feasible tasks rather than an attempt to do everything at once.

51. These postulates imply that careful attention must be paid to the phasing of the district planning exercise. In the first stage, plan disaggregation should have the highest priority. In preparing the next Five-Year Plan, it will be a valuable method for introducing district staff to the intricacies of project coordination and of initiating feedback from the districts to ministerial headqu.arters. Plan disaggregation is likely to take a great deal of time during 1973 for the operating ministries, the Project Identification and Evaluation Unit, and the district teams as the system is established and consideration is given to the full plan. In later years when annual budgets are being considered, plan disaggregation will take much less time and will become routine, since the number of major development projects in any district is limited. Time will then be freed at the district level for district programming, which depends on plan disaggregation as a first step but goes much further in managing local resources to meet national and sector objectives and where necessary to amend them. Finally, as experience is gained in district programming, it will become realistic to think of project and program identification by the districts.

52. For plan disaggregation, it is necessary to distinguish those programs and projects that are primarily national in character, such as major highways and higher education, from those which largely affect the districts and lower levels. The Ministry of Finance and Planning is already working on this job. Some conceptual and semantic problems remain, however. In particular, several so called "national" programs and projects are really concentrated in a few districts; for exaiple, the national livestock projects partly financed by IDA. It is recommended that these programs and projects should also be broken down on a district basis. Clear guidelines, based in these distinctions, should be prepared on the role that district starf can play in ameneing district components and planning their implementation, especially the linkages between different ministries' projects. In the first year of district planning it will be unrealistic to expect a D)DC to assess every project proposed in the district and the linkages among them. It is suggested that district planning should focus initially on agricultural production programs, roads, and rural water supplies, extending their scope as experience is gained and as working procedures are determined.

53. Both plan disaggregation and district programming depend on initiatives from operating ministries' headquarters, followed b- resporsse frmE field staff in the districts. The subsequent stage of proj-e, and prograr. identification on the other hand, will mostly utilize ideas 'rianirg ' the system from the districts to Nairobi. This stage will require charxges :n the planning and budgetary cycles in Nairobi so as to give tinie fotr i consideration and integration of projects originating in the districl:s. By the time the Fourth F'ive-Year Plan is prepared, sector programs of the operating ministries might consist of combinations of national projects with ANNEX 8 Page 19 selections from district proposals. By then, the planning process in Kenya might consist of the following steps:

(a) Determination of national objectives.

(b) Setting priorities.

(c) Defining national policies to orient the formulation of five-year plans and annual budgets. These three steps will be taken by the political leadership, with staff work by the civil service.

(d) Drafting of clear guidelines for planning and budgeting, to be prepared by the Ministry of Finance and Planning for the use of sector planners in the operating ministries and district teams. Guidelines would include the criteria for assessing the priority of programs and projects, the likely overall allocation of resources between development and recurrent expenditure over the plan period, rough estimates of the proportions of expenditure to be allocated to each functional heading, and the procedures and schedules for preparing the plan and budgets.

(e) (i) Determination of the magnitude and timing of national projects and programs, by the individual operating ministries in conjunction with the Project Identifi- cation and Evaluation Unit.

(ii) Simultaneously, preparation of district project and program proposals by the district teams, in accordance with specified criteria. They will be examined by the RPPU and the operating ministries for feasibility, internal consistency, contribution to national objectives, and relation to national programs and projects.

(f) Development of sector plan programs for each ministry, consisting of national projects and those district projects which were selected.

(g). Normal budgetary procedures, by operating ministries and the Ministry of Finance and Planning including consultations between these agencies and with the district teams. This step would culminate in the preparation of practicable and consistent plans and annual budgets.

Central Organization for Rural Development

54. The National Rural Development Committee, set up to guide the SRDP, has ceased to exist. As was mentioned above, the Ndegwa Commission has proposed a Committee of Officials to undertake the planned coordination of all development activity. Such a committee would have a few permanent members, ANNEX 8 Page 20 along with representatives of those ministries whose program areas are being considered. This proposal is, at the time of writing, before the National Assembly. On the assumption that it will be adopted, the committee will be a focal point for developing a Kenyan strategy of rural development and resolv- ing major inter-ministerial issues in its implementation. For this role, the committee would be composed of its permanent members, plus very senior officials from the ministries which have significant programs in rural areas: the Ministries of Agriculture, Lands and Settlement, Cooperation and Social Sciences, Natural Resources, Wildlife and Tourism, Local Government, Health, Education and Works. Since rural development is such a crucial part of the overall national development of Kenya, this composition of the Committee might be specifically designated as the Committee of Officials on Rural Development.

55. Several Government officials have suggested that such a committee can be effective only if it is provided with continuous staff support. This view is endorsed; it is further suggested that the support might take two forms. First, the Committee of Officials on Rural Development should be supported by a working group composed of senior officials (probably at the Assistant Secretary level) from the ministries represented on the Committee. This working party would be responsible for translating the general rural development strategy into concrete operating programs and procedures for the ministries concerned, and deciding day-to-day questions of iaterminis- terial coordination of work programs.

56. Second, it is recommended that the Committee of Officials on Rural Development should have a small permanent secretariat to do staff work particularly concerned with district planning for rural development. The RPPU in the Ministry of Finance and Economic Planning now has responsibility for this work and is performing it well, within the limits of staff constraints. It is recommended that, if the Committee is established, the director of the RPPU should act as executive secretary to the working party proposed above and should be responsible for coordinating staff work for the Committee of Officials on Rural Development, presenting strategic alternatives, and maintaining liaison with district planning teams. The importance of rural development and district planning justifies the enlargement and upgrading of the RPPU, which should eventually be expanded to include:

(a) An officer to work with the Project Identification and Evaluation Unit, the Statistics Section, and DURPP to provide an information flow to and from the provinces and districts. (See para 73 below.) He could also receive and act on comments on the disaggregated plan from field staff.

(b) An officer to supervise the district programming exercise, to draw up guidelines for this exercise in conjunction with other interested ministries, and to help solve problems at the district level concerning implementation, ANNEX 8 Page 21

coordination, and scheduling of integrated projects and programs.

(c) An officer to oversee and coordinate district project and program identification activities. Besides drawing up guidelines for this activity, he would make a preliminary review of proposals from the districts for consistency and feasibility.

Since the Government has given rural development such high priority, it is suggested that these posts be filled by experienced Kenyans and that their director should hold senior rank, perhaps at the A/S level. The Unit should be strengthened as soon as possible so that district planning can be started with the benefit of strong staff support in Nairobi.

57. Much attention needs to be paid to the relationships between the National Assembly, the Office of the President, and the Ministry of Finance and Planning concerning the organization of the district planning exercise. It would be very regrettable if this important instrument of development were impeded by misunderstandings among these three bodies about their respective roles. Fortunately, preparation of the necessary legislation based on the Ndegwa Commission report and subsequent Government decisions is now well in hand. This fact, coupled with the active involvement of Members of Parliament (as elected representatives of the people) in the expanded activities of the DDCs, is likely to give the National Assembly a sense of participation in the new venture. Additional information for the National Assembly about the aims and procedures of district planning and how it relates to the goals of overall rural development will help strengthen this feeling.

58. Similar information should also be provided to the operating ministries, and their active involvement in district planning should be solicited. The cooperation of headquarters and field staffs of these ministries will be essential to the effectiveness of the DDCs and of district planning.

Participation by Local People

59. "Centralization" and "decentralization" are usually thought of in terms of the relationship between the headquarters (Nairobi) and field offices of operating ministries. While district planning is being designed to respond more attentively to local problems and to reduce the planning/implementation gap, it remains true that the DDC is not a participatory body. Most of its members are line officers of the operating ministries and the rest are appointed as senior representatives of the local population. Many of them have a good knowledge of local problems and a keen feeling for local needs but there is still a danger that, if local people are not truly represented, their needs may be misinterpreted. The presence of MPs in the DDCs does not fully avoid this danger; some MPs have little time to attend ANNEX 8 Page 22

DDC meetings regularly, and others appear somewhat removed from the problems of local small producers. In this sense the County Council is a more representative and participating organization than the DDC. Consideration should be given to increasing the involvement of local people in the DDC and consequently in district planning perhaps by increasing the representation of the County Councils in the DDC or by appointing a number of chiefs to it. By so doing, local views would be better reflected in district planning and an additional channel would be provided to inform local people of purposes, programs, and projects. District project and program proposals should also be discussed with County Councils, divisional councils (where they exist) self-help groups and Community Development Councils. Such discussions would make these groups conscious of being part of the district planning process and would also be informative.

Plan Disaggregation

60. Since the disaggregation of national programs and projects on a district basis has already been started for the Third Five-Year Plan, it will form the heart of the district planning exercise for the first year. Thus, at the outset the DDCs and DDOs would concentrate on appraising the feasibility of projects proposed by Nairobi, in the light of resources at the district level, and on identifying the linkages between projects from various operating ministries. However, this activity does not fully satisfy proposals that planning for rural development should make use of local knowledge and should involve local people so as to strengthen their commitment. Moreover it does not substantially affect the many programs and other activities conducted by field staff outside the project framework.

6a. Most Government working papers on district planning assume that the DDCs a-r.d DDOs will focus attention on the location of physical infrastructure. The efforts of the Project Identification and Evaluation Unit to disaggregate development projects on a district basis seem to be aimed in this direction, since most development projects as defined in the Financial Orders of Kenya are those which include construction. However, the location of physical infrastructure is often a highly political question at the district level. For this reason and because the district planning exercise should be seen to serve the interests of all local people, it is suggested that the location of major infrastructure (such as hospitals and secondary schools) is not appro- prh-'te for final decisions by the district team at the outset. The DURPP and the Provincial Physical Planning Officers, being detached from direct local interests, seem to be the more suitable units to draw up, in conjunction w,th operating ministries, criteria for the location of major infrastructure and to provide advice on this subject, based on the Regional Physical Plans, to the operating ministries. ANNEX 8 Page 23

The Planning/Implementation Gap and District Programming

62. Planning for implementation can be initiated almost at once. It is recommended that reducing the planning-implementation gap should be viewed as an essential part of the district planning exercise. The key to reducing the gap is the introduction of systematic working procedures for operating ministry field staffs. Despite the relative success of the management system in SRDP (para 16), there is no evidence that it is being extended to the operating ministries. Yet a suitably modified version of this system would be extremely valuable in providing targets, phasing, and work programs to field staff; in facilitating interministerial coordination in the field; in allowing regular monitoring of project progress; and in permitting the identification and removal of delays in implenentation. It is recommemded that the Government should examine and adopt appropriate working procedures for the management of rural development activities as soon as possible. Major decisions should be taken by the Committee of Officials, and necessary amendments to the SRDP system could be worked out by the RPPU in conjunction with the Project Identification and Evaluation Unit and the Planning sections of the appropriate operating ministries. Necessary amendments to the present system include a reduction in paperwork and introduction of a means for taking account of resources devoted to self-help projects. Systems appropriate to the needs of each major operating ministry will eventually be required, although, in the interest of coordination between ministries at the field level, a single model should be used. Because agriculture is so important to Kenya and because the Ministry of Agriculture has administrative difficulties, the highest priority should be assigned to the development of a managerial system for that ministry. Some outline suggestions are made in the General Report.

63. One principal problem in implementing rural development projects is lack of sustained interest by field staff. In part, this reflects the lack of clear definition of their individual responsibilities and tasks and the lack of explanations of why particular projects were undertaken. This problem can be alleviated by the use of systematic working procedures in the new district planning, and the DDO can initiate and monitor such procedures. He should explain the needs and ideas to the district team, ensure that necessary forms and charts are prepared, look for linkages between ministerial activities, oversee monthly progress reports from district team members, and act to remedy delays during implementation. If the idea of Project Coordinators for projects affecting two or more ministries is adopted 1/, this system will be a useful tool for those officers.

District Project and Program Identification

64. Plan disaggregation and district programming are valuable means of reducing the planning/implementation gap. They do not, however, make full use of the potential of the district team. It is suggested that this potential can best be realized through the gradual development of a capacity for

1/ See Ndegwa Commission Report, paras 3.7.2 to 3.7.7. ANNEX 8 Page 24 district project and program identification. As experience is gained with the two prior activities, the district team will acquire much information about the district. If this information is collected and analyzed systematically, it will reveal the needs and potentials of the district. On this foundation the district team should be encouraged to submit proposals for projects and programs which will take advantage of the existing opportunities. Projects can be identified and forwarded to tne ministerial planning units in Nairobi. Programs using district staff (e.g. production and maintenance programs) can often be identified more clearly against the needs of the district, and built into the system of district programming. Thus, a rural strategy for each district (implying the analysis of needs and a set of proposals designed to meet those needs) could be developed in time for the preparation of the Fourth Five-Year Plan. Thereafter, the annual budget would provide for projects and programs to meet local needs, if they were feasible and fitted into national policies.

65. The prerequisites for such an exercise are:

(a) more descriptive information on the district, especially such aspects as access to transport for villages, farming systems and storage.

(b) the identification of simple feasible innovations that can contribute significantly to rural development in the district.

(d) the strengthening of the local capacity to plan for implementation.

Meeting these needs will require considerable staff work both in Nairobi and in the districts. It is essential that district project and program identification should focus on productive programs in agriculture and rural industry, with rural infrastructure included mainly to complement these productive programs. Otherwise the exercise will run the risk of consisting only of the programming of additional infrastructure, with heavy drains on recurrent expenditure which cannot be met from its own revenues. However, the relative emphasis will vary from area to area; indeed, one reason for seeking local contributions to planning is to help decide on local emphasis.

66. If such district efforts are to make a substantial contribution to more effective resource allocation, the Government must first establish ,he rules of the game for district planning. Its present procedures and requirements are too complicated, require too much and too detailed information, and do not set out enouglh technical criteria to ease the task of the district planning team. The RPPU and others will have to improve them. It is suggested that the final planning manual should be simply written and should cover the following major points: ANNEX 8 Page 25

(a) a statement of national objectives for rural development;

(b) a statement of national policies to meet those objectives, with short descriptions of the different emphasis being given to various ecological regions;

(c) a list of priorities for district activity based on national priorities, with a concise statement of the reasons for them;

(d) the working procedures to be followed in drawing up local programs and projects, including the data required, work sheets for presenting proposals, responsibilities of individual officers, and scheduling requirements;

(e) standard cost estimates for particular components of projects (not to be applied rigidly), together with guidelines on reasonable expenditure targets for each district;

(f, simple procedures for justifying projects;

(g) guidelines on the implications of project proposals for staffing recurrent expenditure and administration;

67. District planning is likely to be a disorderly activity in its early years. Planning and coordinating area programs for rural development are a relatively new venture for most countries. However, the initiatives which the Kenyan Government is taking are a commendable start, involving district planning in such a way that its benefits can progressively become fully realized.

The Role of the DDO

68. The most immediate task of the DDO when he arrives in the field will be as executive secretary of the DDC. As such, he will prepare the agenda for DDC meetings in conjunction with the District Commissioner, will prepare minutes of the meetings and will, under the direction of the District Commis- sioner, follow up on action resulting from the meetings. He will thus be the District Commissioner's right-hand man for DDC matters.

69. However, the principal justification for the position of DDO is not to add another District Officer to the staff but rather to help the district team learn better methods of planning and implementation for rural development. At first this duty will mean coordination of the district response to the disaggregated national plan. The tasks required are relatively simple: to compile the district team's responses to each ministry's plans; to discuss the disaggregated plan with the County Council self-help groups, and divisional councils; to see that scheduling and content are consistent among the various projects; and to guide the DDC in allocating District Development ANNEX 8 Page 26

Grants to "fill the gaps". This function will largely be performed in preparation for the Third Five-Year Plan; thereafter, there will be a simple job of updating in connection with the preparation of annual budgets (see para 51).

70. An even more important job for the DDO will be to help reduce the planning/implementation gap, analyze local needs, and then identify projects and programs. These tasks require prior decisions by the Government. For the first one, the operating ministries will also have to decide the details of the management system they will use for their field staff. Thereafter, however, the DDO could well use most of his time, during the first two years in post, in helping implement existing plans rather than in developing new district plans which may never be accepted. His principal duties would then be:

(a) to help introduce the concepts and procedures of the management system to the district team and subsequently to lower-ranking field staff. The DDO already has some training in the fundamentals of the system. With a suitable manual, he can qualify himself as an on-job trainer.

(b) to help identify and plan work which must be done jointly by different members of the district team (e.g. access roads for new agricultural projects).

(c) to report delays or failures in project implementation to the District Commissioner and the DDC. If the cause of these problems lies at the provincial level or in Nairobi, the RPPU should be brought in to make representations to the appropriate operating ministry.

(d) to coordinate self-help and County Council activities with those of the district team.

71. As the district planning activities become more sophisticated (see para 64), the DDO should perform some other tasks; as gaps in information become apparent, he should call upon appropriate members of the district team to fill them and as a "district strategy" is formulated, he may in some districts call the attention of local entrepreneurs (for example, in agricultural processing) to opportunities arising out of either new initiatives or further development of existing activities. In summary, the DDO will initiate the district planning process, establish a timetable, coordinate the efforts of field staff, and to be responsible for the production of the final plan.

72. The DDOs immediate administrative superior should be the District Commissioner for whom he serves as senior staff officer for development. He will be directly responsible for the District Commissioner when he acts as executive secretary of the DDC and as coordinator and facilitator for project implementation as well as in preparing the project proposals and district ANNEX 8 Page 27

plans (in representation of the district team). Nevertheless, his main channel of communication to Nairobi (especially in matters of planning and of breaking bottlenecks) will be through the PPO to the RPPU, and he will also receive information and guidelines for planning from that source. These relationships should be clearly recognized by all concerned. There is some danger that the DDOs effectiveness may be hampered if he is too dependent on the District Commissioner for logistical support; efforts should be made to provide each DDO with a vehicle and a clerk as soon as possible.

Information Flows

73. Good planning depends on adequate information. On the other hand, there is a real danger of diverting the DDO from his primary functions to the endless collection of data. District planning requires both information in national objectives and policies and data from the district on which to base feasible projects. The problem is to determine just what information is essential to district planning. It has been suggested (para 56) that one officer in the RPPU should be directly responsible for supplying the DDOs with summary information on national policies and priorities (expecially on such subjects as agricultural prices and marketing), details of ministerial programs and projects planned for the districts, and important statistical information. Guidelines about district planning contained in the planning manual (and amended when necessary) will also come from the RPPU. In addition, the DDOs should receive instruction in techniques of data collection and analysis and guidance in judging just what kinds of information are necessary for their particular purposes.

74. One important and often neglected component of information flow is that of response. It has two major aspects. On the one hand, the adequacy of the guidelines and information sent out from Nairobi needs to be verified with the DDOs. It is suggested that some RPPU staff should spend much of their time in the field with district teams to discover what information is proving useful. Field trips can be combined with periodic seminars in which DDOs meet with Nairobi officials to discuss issues related to planning for rural development. On the other hand, the DDOs should receive detailed responses to their project and program proposals, particularly to explain reasons for rejection.

Financing for District Plans

75. The Kenyan Government has decided against unified district budgets. Instead, district plans are expected to be formulated as part of the regular planning process and to be financed through ministerial votes, except for the expanded District Development Grants. It is recommended that the expansion of these grants be gradual and that it be synchronized with the issuance of guidelines for their use, so as to ensure that implementation capacity and funding for recurrent costs are available for the projects. Standardized designs and estimates of complementary requirements would be very helpful. District Development Grants should be used for "filling gaps" between projects proposed by the Central Government, especially when an integrated project is ANNEX 8 Page 28 delayed by the problems of transferring funds between ministries. However, the emphasis on the use of the grants for construction may bias the activities of the DDCs and DDOs away from the more acute need for production programs. Consequently, the Government should consider using part of these grants specifically for prototype programs to improve delivery systems for inputs and increase production by small entrepreneurs.

76. Many questions remain about appropriate methods of organizing input supplies and marketing facilities for small producers. (Several SRDP programs are designed to solve these problems.) Such prototype programs usually require funds, as well as staff time. In the districts, prototype programs possibilities could be identified by the DDC and DDO; advice on program design could be sought from IDS, the Research Department in the Ministry of Agriculture, and the Rural Industrial Development Centers; present field officers would have to provide most of the staff time to initiate and monitor the program; and additional funds could be supplied through District Develop- ment Grants. Such catalytic programs have been successful in other countries, when they adhered to general policies and guidelines set by the Central Government; in Kenya experimental guidelines could be provided by RPPU.

County Council and Self-Help Activities

77. The presence of more County Council representatives on the DDCs should help ensure closer collaboration between the two organizations. In view of the reduced functions of the County Councils since 1970, the principal areas in which they can now assist rural development are marketing and agriculture-related industries, land subdivision, and the provision of rural water supplies. Rural markets and industries are important to the overall development strategy, and the County Councils can play a valuable role in extending the operations of these activities and making opportunities knoum to present or potential entrepreneurs. With regard to rural water supplies, Annex 17 recommends that those now being constructed and operated by County Councils should be gradually transferred to the Water Department in order to allow proper technical supervision and maintenance. This suggestion combined with the extension of the District Water Teams should do away with problems of coordination in rural water supply operation at the district level.

78. The problems of providing sufficient financial and technical re- sourc.q to the County Councils remain acute. Among these problems are:

(a) The fact that many sources of County Council revenue depend on successful local development: for example, agricultural cesses. Since they are largely derived from cash sales in areas of high potential, County Councils in those areas usually have surpluses of income over expenditure and vice versa, so that rich areas usually provide better local government services than poor ones. The cesses are, in any event, an unsatisfactory revenue source. ANNEX 8 Page 29

(b) The excessively heavy burden of administrative costs in County Council expenditure. These costs are out of all proportion to the services performed, and contain many unnecessary or frivo- lous items.

(c) The difficulty of recruiting technical and professional staff for the County Councils, and the lack of an adequate pool of such officers in the Ministry of Local Government.

79. The preliminary studies for the forthcoming Five-Year Plan contain several recommendations for relieving thcse problems. The recommendations requiring additional resources should not be assigned the highest short-term priority. However, a rationalization and reduction of County Counc:ll administrative spending is urgently needed, along with ways of increasing the en- trepreneurial activities of the County Councils in rural marketing and industries. (These functions should be self-financing.) For the longer term, action should be taken along the lines proposed in the Plan, and, as the capacities of the County Councils increase, the Government might consider reallocating some additional functions to them.

80. The coordination of self-help activities create a dilemma for the Government. On the one hand, many self-help projects fail because of lack of technical advice or lack of provision for maintenance costs, while others divert Central Government resources from tasks of higher priority. On the other hand, self-help projects generate capital and bring in local people in a way which might be jeopardized by authoritarian supervision and regulation. The DDO can help to resolve this dilemma. The first necessity is to ensure that sufficient technical advice is available for each self-help project and that the operating ministry concerned is prepared to meet whatever recurrent costs may be entailed. This verification could be made at the time when application is made to the District Commissioner for a collection permit. This application should be accompanied by a description of the nature and scope of the proposed project, on the basis of which the DDO and other appropriate numbers of the district team could make a rough feasibility check. As the DDO becomes more familiar with his district and his job, he could begin to work more closely with the hierarchy of community development committees and the DDC to draw up priorities within the district and to prepare progress reporting forms so that the DDC can have some idea of how various projects are proceeding and where bottlenecks exist. Such a system should also be very useful to the Community Development Department of the Ministry of Cooperatives and Social Services. As the operating ministries plan their allocation of money and staff time, they should receive information about self-help project proposals and progress so that they can prepare criteria for! government assistance to such projects, to be implemented through the National Community Development Committee. The DDO can be a focal point both for collecting information in his district and for transmitting information about national priorities and likely government allocations, to the lower levels of the community development committee hierarchy. ANNEX 8 Page 30

SRDP and Experimentation

&1. Much work is still needed to identify the most appropriate smallholders' service systems; that is, which institutional arrangements are most suitable in particular circumstances for providing the majority of the rural population with access to credit, extension advice, inputs, marketing, arLd other facilities. Hence, an effective rural development strategy depends partly on a continuing series of prototype programs to determine what institutional arrangements work. The SRDP was originally established for this purpose. its record so far has been spotty--some successes, but an overall failure to work toward the goals of experimentation, evaluation, and replicability. Many SRDP projects will require more time for completion. The question therefore arises of what role the SRDP can play in helping improve the national strategy for Kenyan rural development. The SRDP has an administrative structure and a degree of local involvement which are likely to allow prototype inter-ministerial programs to be tested more quickly and systematically than under the incipient district planning exercise, with its inevitable start-up delays. It is therefore recommended that the Kenyan Govern- ment continue to support experimental programs in the six divisions until the end of the Third Five-Year Plan.

82. This recommendation, however, is subject to three conditions:

(a) That the organizations working with the SRDP should become more imbued with the spirit of experimentation and replicability. This condition applIes especially to the parastatal bodies such as the AFC, which have t:ended to undertake experimentation onrly when a donor gives them a blank check (as in the maize credit program in Vihiga).

(b) That more systematic procedures be followed, so that lessons from successful SRDP projects can be applied to the day-to-day operations of ministries concerned with rural development.

Tle first condition is emphasized in the IDS evaluation of SRDP and is indis- pensable if SRDP is to make an independent contribution to rural development. In order to meet this condition, the Government should consider involving the IDS more deeply in designing and monitoring prototype programs and projects. The second condition, calling for the translation of the results of prototype programs into normal governmental operating procedures, has also until now been neglected by the SRDP. To overcome this problem, evaluation procedures In the SRDP need to be clarified and improved. (Responsibility for evaluation is now scattered.) The Goverrment might consider a contract with IDS for continuing evaluation of the SRDP. As evaluation reports indicate success ANNEX 8 Page 31 in particular programs, the RPPU should prepare papers on the possible extension of the prototype. These papers could be discussed by the Committee of Officials and details worked out by the working party proposed earlier, in cooperation with the ministries concerned.

83. Institutional experimentation should not be confined to SRDP areas. On the contrary, the district planning exercise offers an opportunity to test prototype programs more broadly in varied areas after SRDP or other experimental projects have shown that the concept deserves further attention. This broader implementation could be organized by the DDC, using the DDI) as contact point. The DDC would select the site, with advice from the agency initiating the project, and the district team would provide enough staff time to implement the program. The District Development Centers can be useful in programs designed to introduce new ideas to the rural population. It is hoped that the jurisdictional disputes delaying establishment of these centers can be settled rapidly, and that the Kenyan Government will pursue its intention of creating centers in each district for the integrated training of adults in rural development. Table 1: SELF-HELP PROJECTS, CAPITAL INTNESI7, T. 1-966, 1971 People Is Year Contributions Central Government Local Governments Others Total

1966 1,1h8,65o 59,900 28,700 - 1,237,250 1967 1,831,800 60,000 29,4oo 330,200 2,251,)4OO 1968 2,522,300 75,000 28,200 36,500 2,662,000 1969 2,005,000 89,000 31,000 89,o00 2,214,000 1970 2,023,404 108,000 33,492 90,048 2,254,9h41. 1971 2,192,800 16h,390 21,124 116,536 2h494,850

Source: Department of Social Services ANNEX 8 Page 3

Table 2: ESTIMATED EXPENDITURE ON SELF4HELP PROJECTS, 1971

Type of Project U

Education 1,2 4B,,567 Nurseries 112,587 Health 116,969 Water Supplies 233,128

Agriculture 304,173

Social Welfare 75,O042 Transport and Comunmication 29,532

Building (other constructions and other projects) 275,176

Domestic Facili ties 138,974 Total 2,534,l148

Source: Department of Social Services

ANNEX 9 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

NUTRITION

The Nature of the Problem para. 2 - 10 Factors Influencing Food Consumption 8 - 10

Ongoing Nutritional Programs 11 - 16 Institutional Feeding 12 - 13 Education and Training 14 - 16

A Food and Nutrition Strategy 17 - 26

Seven Target Groups 27 - 55 Smallholders in Marginal Areas 29 - 34 Smallholders in Medium and High-Potential Areas 35 - 42 Smallholders with Cash Crops 43 - 44 Landless People and Estate Workers 45 - 46 Pastoralists 47 The Urban Poor 48 - 54 Pregnant Women and Young Children 55

Practical Improvement.Measures 56 - 63 Existing Programs. 57 - 58 Local Marketing Systems 59 Organization 60 - 63

Appendix 1 Studies on Nutritional Status Appendix 2 Patterns of Breast Feeding and Weaning Practices Appendix 3 Nutrition Programs

ANNEX 9 Page 1

NUTRITION

1. This annex summarizes the evidence on nutritional status, identifies the causes of deficiencies, discusses the groups of people most severely affected, and suggests how to tackle the problem.

THE NATURE OF THE PROBLEM

2. The smallholder in Kenya currently has limited resources and production capacity. The cash revenue to each of the more than one million small farms from sales of crops averages about KI 20 per year, to which may be added a further KI 3 per year from sales of livestock products. Even these averages conceal wide differences within this sub-sector. Some estimates suggest that small pastoralists obtain an average of K16 12 per family per year from sale of livestock. Furthermore, if a rough estimate of five acres is taken as the area of unirrigated cultivated land needed to provide subsistence requirements for an average family under traditional technologies, perhaps 50% of the small farms have less than this minimum.

3. The effects of these limitations in terms of inadequate nutrition are marked. Surveys show that mild forms of malnutrition affect from 25% to 45% of all young children, and that severe cases affect 1% to 3%. 1/ 2/ In some areas, the data are higher: Two surveys in Machakos District lndicate comparable figures of 55% to 65%, and 5%, respectively. 3/ The infant mortality rate, a crude indicator of nutritional status, is unofficially estimated to be at least 100 per 1,000. 4/

1/ Bohdal, M., Gibbs, N.E., and Simmons, W.K., Nutrition Survey and Campaign Against Malnutrition in Kenya 1964-1968, Report to the Ministry of Health of Kenya on the WHO/FAO/UNICEF Assisted Project. Blankhart, D.M., Human Nutrition in Kenya, Royal Tropical Institute, Amsterdam, Medical Research Center, Nairobi, Draft, May 1972.

2/ The difficult question of malnutrition criteria is discussed in Appendix 1.

3/ Reriani, J.N., Report on Community Diagnosis of P.C.M. in Kombo Subloca- tion, Iveti Location, Machakos District, November 1970, Dept. of Community Health, Faculty of Medicine, University of Nairobi, undated c. 1971. Meme, J.S., A Report on Nutritional and Social Economic Status at Misakwani Sublocation, Iveti Location, Machakos District, January 1971, Dept. of Community Health, Faculty of Medicine, University of Nairobi, undated c. 1971.

4/ May, J.M., Ecology of Malnutrition in Eastern Africa and Four Countries of West Africa, Studies in Medical Geography, Hafner, New York, 1971. ANNEX 9 Page 2

3. Studies of nutritional status are discussed in Appendix 1. In general, these show that many people do not get enough protein, calories and vitamins A, B (riboflavin) and C. Deficiencies of these vitamins can result in xeropht4'lmia, mouth lesions, and scurvy, and general debility. There is, of course, a growing recognition of the strong influence of nutrition on physical and intellectual development and hence on labor productivity. WHO surveys show that one-quarter to one-third of rural families consume less than 80% of recommended caloric allowances in the post-harvest period. 1/ About two-fifths of rural familes consume less than 80% of daily protein requirements on an average throughout the year, although there are fluctuations depending on harvests, supplementary income, and food prices.

4. These food consumption surveys were carried out in seven locations between May 1965 and July 1966 for one week. Approximately 175 families were studied and in some cases, the investigators returned for more evidence at other times of the year. Sampled areas were the high to medium potential lands of Central Province (in Nyeri and Muranga Districts); the medium to low potential lands of Eastern Province (Machakos and Kitui Districts); and the medium potential, high population zone lands in Nyanza Province (Kisumu and Siaya Districts). Food is maize with legumes, plus bananas and potatoes (Central Province), cassava and fish (in Nyanza), millet (Machakos) and, to a much lesser extent, fruit and vegetables. Consump- tion of meat and manufactured foods is generally low or nil. Food intake varies by season and region, depending on the quality of the land, and on the technology.

5. The one dietary survey made of the urban poor 2/ investigated a low income group in Nairobi. This showed an adequate average protein intake, but calorie intake was 30% of adequacy.

6. All nutrition surveys show that the intake of vitamin A is seriously deficient. Two studies of reasonably healthy and affluent groups in Central Province where intake of all other nutrients was generally satisfactory, indicate that vitamin A intake was not enough. 3/ 4/

1/ Bohdal, et. al, op. cit.

2/ Munoz, J.A., WHO Nutrition Survey, Kenya-9. Half-yearly report July- December 1962. 3/ Kasper, Li., Schaeffer, H.J. and Theermanri, P., A Contribution to Determine the Nutritional State of the People Living in the Central Province of Kenya, in Kraut, H. and Cremer, H.D. (eds.), Investigation into Health and Nutrition in East Africa, IFO-Institut fur Wirtschaftsforschung, Munchen, Afrika-Studien No. 42, 1969, pp. 277-240. 4/ Keller, W., Muskat, E., and Valder, E., Some Observations Regarding Economy, Diet and Nutritional Status of Kikuya Farmers in Kenya, in Kraut and Cremer, op. cit., pp. 241-266. ANNEX 9 Page 3

7. Regularity of the food supply is the basic nutritional problem of the nomadic pastoralists. In years of good rainfall, they may have a reasonable diet, based on milk, meat and blood, and sometimes a bit of millet or maize. Their movement depends on the rainfall patterns, and the locations of water and grass. In drought years, herds are decimated, and pastoralists often have to depend on relief supplies of food from the Government.

Factors Influencing Food Consumption

8. Food production is a major determinant of consumption; yet malnutrition can occur even if there is enough food at hand. For example, children probably remain on the breast too long, and are then weaned onto starchy foods. Breast feeding continues up to 18 months and the child tends to be weaned on maize flour and bananas. Beans are not introduced until later and then are poorly prepared for the infant. Green vegetables are rare in children's diets and eggs almost non-existent. Bottle feeding also causes problems because of sanitation conditions and milk quality. It is generally recognized that these poor weaning practices contribute to malnutrition. In many cases, however., the right foods are not available for the child.

9. Infectious and parasitic diseases also affect nutrition, as affected people need more nutrients merely to fight the diseases and to offset: losses in the effectiveness of the nutrients taken in. Improved health care and immunization can increase nutrient availability in the body; but seasonal and regional variations in nutrient supply and intake need priority attention in the health strategy at this time.

10. Although old, the available data show a consistent picture of too little food and inadequate nutrients for most poor people. In fact, the situation is one of the family as a whole being the vulnerable group nutritionally. The nutritional level of the poor may actually be deteriorating, because:

(a) Population pressure on land is increasing in both high and medium potential areas, and small farm technology is not improving much (except for maize and dairy cattle).

(b) Research workers know little about the basic food crops (except maize) and of farming systems, and extension workers have little useful to say to small farmers about such food crops as legumes, millet, fruits and vegetables (Annex 6).

(c) People are moving into marginal areas, particularly the eastern plateau, where the best way to farm is not known and where little research has been done. In these areas, with uncertain rainfall, maize is replacing the more nutritious and drought-resistant cereals such as millet and sorghums. ANNEX 9 Page 4

(d) Smallholders are taking up cash crops to make more money, and they then often reduce the labor put into food crops (one study indicates farmers who adopt cash crops do not improve their nutritional position, at least in the short run 1/).

(e) Urban populations are growing very rapidly (around 7% per annum) and are placing additional demands on the availability of nutritious foods.

ONGOING NUTRITIONAL PROGRAMS

11. The main nutrition-related programs underway today are famine relief, school feeding, training and education, research, dried milk production, and salt fortification (Appendix 3). These programs do not tackle many of the most serious nutritional problems, and coordination is poor; several are financed and administered by external agencies.

Institutional Feeding

12. Famine relief is coordinated by the Office of the President through a National Famine Relief Committee. The food is obtained through the Maize and Produce Board or gratis from USAID, the World Food Programme and charitable agencies. It is distributed by the provincial administrations. In a normal year from 5,000 to 10,000 people receive famine relief; in a famine year (e.g., 1970-71) the number may rise to 150,000 people, largely in the pastoral and marginal farming areas.

13. The Government started a National School Feeding Program six years ago. Some 35,000 children participated in 1972 (the number fluctuates considerably according to the supply of food which is available with the result that less children are fed during drought years when they are most needy). A charge is made for the food, but not enough to cover costs. Some 85,000 school children are reached in programs administered by the National School Feeding Council and Catholic Relief Services (CRS). At most, 150,000 children (or 5% of the school-age population) are in school-feeding programs. The Ministry of Cooperatives and Social Services run day care centers for 300,000 children from the ages of three to seven years (about one-tenth of the children under the age of seven). Of these, 62,000 are fed a lunch. However, these programs taken together are not having much effect, reaching only children in school and who can afford to pay for the lunch.

1/ Korte, R., The Nutritional and Health Status of the People Living on the Mwea-Tebere Irrigation Settlement, in Kraut and Cremer, op. cit. pp. 267-334. ANNEX 9 Page 5

Education and Training

14. The Ministries of Health, Agriculture, and Cooperatives and Social Services all have extension workers in nutrition and home economics. The Ministry of Health now has 100 nutrition workers in the field; they are nurses with a six-month formal training in nutrition and six months on the job. There are two per district, on average, and the aim is to have one at every health center.

15. The Ministry of Agriculture employs Assistant Home Economists; these are women who have taken a three-year course in agriculture and home economics at Egerton College. The first group of twenty graduated in December 1971. Sixty-five more will have graduated by 1975. Of the initial group, 15 were employed by the Training Division of the Ministry, the others going to the Crop or Animal Production Divisions. Since March 1970, 31 Home Economics Assistants have graduated with a two-year certificate course in Agriculture and Home Economics from Embu Institute of Agriculture. Over half are employed by the Training Division of the Ministry, usually attached to Farmers' Training Centers. There are also two or three Assistants in each province with the Ministry, with the exception of Nairobi K'one) and North Eastern (none). Others work in Special Rural Development Project (SRDP) areas (Annex 8), or with the Ministry of Labor, or at Training Insti- tutes.

16. There is also a considerable number of nutrition educators attached to local authorities. The Kenya Dairy Board and the Kenya Cooperative Creamer- ies are also active in this field, as are voluntary agencies such as the Freedom from Hunger Committee, OXPAM, Kenya Red Cross, CRS and mission hospitals. Nutrition is taught at the Homecraft Training Centers, run by the Community Development Department of the Ministry of Cooperatives and Social Services and at Karen and Kenyatta Colleges in Nairobi. This Department works with 200 women's clubs with approximately 20 women in each of the SRDP areas. The Programme for Better Family Living (PBFL) of the Food and Agriculture Organization integrates the field work of the several concerned ministries, and emphasizes nutrition and family planning. It is particularly active in the SRDP areas.

A FOOD AND NUTRITION STRATEGY

17. While these on-going nutritional programs form a useful part of the nutrition strategy, they should be regarded as secondary to the major thrust of raising the quantity and quality of food production, especially among the rural poor. The available evidence shows that malnutrition in Kenya stems largely from inadequate production among significant groups -- either of food for consumption on the farm or of other income-generating activities through which adequate diets can be purchased. This situation makes the family as a whole vulnerable nutritionally. In the absence of the ability to grow or buy nutritious foods, nutrition education is likely to have little visible impact on the problem, though it may be a useful component in providing the motivation for extra food production. Similarly, groups with nutritional deficiencies do not in general buy sufficient foods that could be fortified or manufactured to improve diets (with the exception of sugar and salt). Institutional feeding programs tend to be expensive with high administrative costs; they may not reach the most vulnerable groups; their scale of operation fluctuates with the amount of food available and they often cannot demonstrate to target groups what food they should have, because the foods simply are not at hand. It is often argued that changing intra-family food distribution patterns is essential to overcoming nutritional deficiencies among these two groups. However, this is likely to prove nearly impossible if the whole family faces food deficits.

18. For these reasons, an effective nutrition strategy must be viewed as an integral part of the agricultural strategy designed to increase the availability of nutritious foods to the vulnerable groups. This implies a fundamental re-orientation of the agricultural strategy. In the past, the latter has concentrated principally on export cash crops and on the large farms and "progressive" smallholders in high-potential areas. The corollary of this strategy has been a relative de-emphasis of food for local consumption, with a few exceptions such as maize and milk.

19. Adding nutrition as a component of the agricultural strategy implies correcting this imbalance within the sector. In particular, emphasis should be placed on:

(a) Increasing food production for on-farm consumption by smallholders;

(b) Raising the cash incomes of the rural poor (largely through cash crop production);

(d) Raising the nutrient qualities of (a) and (c).

20. Such a change in emphasis might be seen as being at the expense of cash crop production, particularly for export commodities. Certainly it will require the improved use of existing public services to agriculture together with additional resources for research and extension. Yet the complementar- ities between food and cash crops in smallholder farming must not be ignored. Smallholders generally give highest priority (in terms of allocation of labor and land) to food crops for their own consumption. If yields of these crops can be raised, then land and labor can be released for use of food crops for the market and other cash crops. But raising yields requires the use of purchased inputs, which means the smallholder must become part of the cash economy. Thus attention to subsistence production will, at the same time, provide both an incentive and an impetus to cash crop production. ANNEX 9 Page 7

21. A successful smallholder strategy in Kenya will, therefore, seek to increase production of both food and cash crops for all smallholders. In so doing, it will also contribute the most effective attack on the nutrition problem. This implies that research, extension, and other delivery mechanisms should be designed to treat the smallholding as a unit and farming as a system.

22. In terms of the nutrition component of the agricultural strategy, any attack must recognize six factors principally responsible for nutritional deficiencies:

(a) Overall food deficiencies for many families in seven target groups (discussed below);

(b) Specific deficiencies (especially calories, proteiris, and several vitamins);

(d) Seasonal factors, especially food shortages before the harvest;

(e) Periodicity - droughts mainly affecting the pastoralists and others in marginal areas;

(f) Consumption habits, especially affecting pregnant womern and pre-school age children.

A nutritional strategy should tackle all of these factors. Increasing cash incomes through greater concentration on cash crops is necessary but insufficient from the nutrition viewpoint. If a farmer puts a cash crop on acreage formerly used for subsistence crops, without adding inputs to increase the yield of the latter, then he must use part of his cash crop income to buy food. The net nutritional gain is likely to be minimal, particularly in the short run, as the tendency is to use the cash to buy cheap, low-quality foods, and to use most of it for school fees, bicycles, radios, and the like.

23. The necessary nutrition strategy will seek to:

(a) Improve yields for existing food crops and provide delivery systems for disseminating the needed production technologies, recognizing in production programs that women are responsible for much of the food crop farming;

(b) Introduce neu, crops and varieties (of higher nutritional quality) to overcome specific nutritional deficiencies; ANNEX 9 Page 8

(d) Treat farms as entities in which the several enterprises interact one with the other;

(e) Improve local marketing and storage;

(f) Improve famine relief procedures;

(g) Improve eating habits through education and more food production.

24. Kenya has an elaborate marketing structure for farm products. But only a minute proportion of the marketable surplus from smallholders passes through formal channels, including the Maize and Produce Board (MPB). Instead, most is sold on local markets, where prices fluctuate considerably. Improvements in these local markets could help increase food supplies and stabilize prices, thereby assisting the poor who rely on purchased food.

25. Most people in rural areas, with the exception of the pastoralists, consume little animal protein. As noted in Annex 14 there is a place for a small livestock production and marketing program. But progress will be slow, and the nutrition target groups in the medium-term will not benefit greatly. Typically poor people cannot afford much animal protein.

26. There are many foods which can help ease specific nutrient deficiencies. A food cereal/legume diet will provide protein, calories and calcium, all common deficiencies. Fruit and vegetables (green leaves, onion, cabbage, spinach, orange, pineapple and mango) will counter inadequacies in vitamins A and C. There may also be possibilities for increasing production and supplying acceptable consumer products from soybeans and sunflowers. 1/

SEVEN TARGET GROUPS

27. Within the overall population, seven groups have been identified as especially needy from a nutritional point of view. These target groups (of which the first is the most important) are described in terms of characteristics amenable to specific nutrition programs within the agricultural strategy. They are:

1/ The problem of amino-acid balance has been largely ignored in this Annex in order to concentrate on the more important problem of increasing total production of amino-acids. Increasing lysine in maize to improve protein quality is discussed, however. ANNEX 9 Page 9

(a) Smallholders in marginal (low potential) areas, particularly the eastern plateau. These are in Kwale and Kilifi (part of coast and all of hinterland division); Tana River (the farming settlements); Taita (Voi Division); Embu (Mbere Division); Kitui (all except Central Division); and Machakos (Central and Northern-Division). 1/ This area supports 1.25 million people and population growth in parts is as high as ten times the national average. Elgeyo Marakwet and Baringo (with about 0.33 million people) face the same problem of poor land, but not the inflow of people from other areas. Thus this group includes about 13% of the nation's people.

(b) Smallholders in high and medium potential areas. These include many farms with female heads of household, and many which are short of labor. More than one in four registered holdings have less than one ha.

(c) Smallholders who produce mainly cash crops and who have reduced food crop production. These smallholders have cash incomes and access to modern inputs.

(d) Regular and casual farm workers, probably about 600,000, of whom an unknown proportion also own land, plus perhaps 100,000 employed in rural non-agricultural enterprises. This group should be defined to include landless workers.

(e) The pastoralists of the arid and semi-arid areas (the population of the north and northeast, and of the southern arid zone is about 800,000).

(f) The poorer urban people. Total urban population numbers about 1.5 million now, and is expected to grow to 3.8 million by 1985.

(g) Pregnant mothers and small children in all of the groups, who have special nutritional needs and may suffer from poor intro-family distribution of food.

28. With regard to individual components of the strategies, it must be stressed that they are discussed on the basis of the observations and judgments of the mission. A more quantitative investigation to calculate costs and benefits should precede firm policy decision in these areas, along the lines indicated in paragraph 57.

Smallholders in Marginal Areas

29. Smallholders in marginal areas lack a productive farming system and technology, and modern inputs. It is essential to develop higher yielding varieties of sorghum, bulrush millet and finger millet, building on work

1/ Mbithi, P.M., and Wisner B., Drought and Famine in Kenya - Magnitude and Attempted Solutions, IDS Working Paper, University of Nairobi, July 1972. ANNEX 9 Page 10 in progress at EAAFRO. These cereals are now grown mainly for local beer production. In drought periods they are the only grains likely to prouride a worthwhile return to labor. It will take some years to get good planting material; as of now the Ministry of Agriculture does not even test new strains in the drought-prone areas. Work on short season, dfrought-resistent varieties of maize is underway at Katumani research station and should be broadened and speeded up. Wherever possible, small-scale irrigation projects should be developed (Annex 12).

30. The Government should pay vastly more attention to legume (pulse) development. This is as necessary for the high and medium potential areas as it is for marginal lands. The work should be integrated with on-going research in order to deal with the problem of farming systems involving legumes. As additional staff and resources become available, work at Thika and Embu on legumes for local consumption should be strengthened and then integrated into work at the Katumani Research Station in Machakos (for marginal areas) and the Kakamega Research Station in Western Province (for high-potential areas). 1/

31. The Government should seek close cooperation with Makerere Univer- sity, ICRISAT (Institute for Crop Research in the Semi Arid Tropics), and IARI (Indian Agricultural Research Institute) in New Delhi. Testing varieties for yield, palatability and placement in farming systems should be stressed. Research is also needed on the best way to intercrop legumes with maize and millets. The labor constraint must also be kept in mind. Quick maturing varieties that reduce labor peaks, fit into slack periods in the agricultural year, or can be double-cropped as needed. Current yields of Roscoco beans, the most popular for human consumption, average 600 kg per hectare for a crop that in Central Province can be double cropped -- from mid-October to the end of January and from mid-March to July. Other varieties yield more highly but tend to be sold rather than eaten (these include Canadian Wonder, Mexican 142 and Uganda 189). Mwezi Moja is an early maturing variety (2-1/2 months) and yields 1,500 kg per hectare. No new varieties of pigeon pea, cow pea or grams have been introduced despite the fact that higher yielding varieties (in terms of total production and of protein) are being grown in other countries.

32. In the marginal areas it may be possible to develop small stock, particularly goats (Annex 5). In some areas goats are now important sources of meat, and in a few places, milk.

33. Research is only one part of the task. Another is to get smallholders to adopt improved varieties and practices. Pew smallholders in the marginal areas are growing cash crops, so cash for inputs is not available,

1/ A Grain Legume Research Station is not necessary, contrary to the proposal put forth in the 1970-74 Development Plan (p. 242). ANNEX 9 Page 11

nor are delivery systems. Cotton and groundnuts may offer prospects as cash crops (see Annex 4), but much greater attention needs to be paid to yields and the place of these crops in the farming system. Institutions and infrastructure have also been neglected in marginal areas; these should be built up along with production technologies and farming systems. Rural water supplies are of special interest, as they encourage small stock development and increase the time women can devote to farm work.

34. Another possibility is to help smallholders in the marginal areas to expand output of their subsistence crops, such as millets, sorghums and short-season maize, to cash crop status. The appropriate components of a package to do this job would require careful testing. One other step also needs study. If suitable varieties are available, the subsidized distribution of legume seeds may help ease the nutrition problem if complementary inputs are not vitally necessary to the variety.

Smallholders in Medium and High-Potential Areas

35. These people face problems different from those just discussed. They have a better infrastructure, higher quality land, more reliable rainfall, and are less handicapped by the technology constraint. The problem is that holdings are so small that risk carrying capacity is limited, as is cash crop income with which to buy inputs. The problems of extension are similar to those for the previous group, and the need for attention to the farming system is paramount. There are three possible remedial measures, in addition to essential efforts to raise yields of the food crops already produced.

36. Lysine is deficient in maize; its increase would improve the utilization of other amino acids in the protein and of amino acids in other foods. Research is being carried on at Kitale on high lysine maize. Among the problems are:

(a) yields of opaque maize (which contains 3 to 4% lysine, 2 to 3," methionine) are still 10% less under research station conditions than present improved maize types (which contain 1.5 to 27% lvsine and 0.5% methionine);

(b) the high yields for high-lysine maize can only be achieved with a change in cultural practices, i.e., a 20% greater plant population;

(d) although a white opaque can be bred, no tests have been carried out on its acceptabilit:y '(either taste or color); ANNEX 9 Page 12

(e) its storing quality is unknown;

(f) methods of cooking and preparation are lacking.

37. WJhile work on improving protein quality should in no way substitute for the more important activity of raising maize yields per acre, the lysine research is a useful part of the nutrition strategy, and does not require much time or money. The Kitale station should be strengthened to get on with the job.

38. The second remedial measure is to stress fruits and vegetables, which provide vitamins A and C. Rural people do not regard these crops highly and education is necessary to increase their popularity. A program to promote fruit trees might pay off.

39. Particular products and areas of production are: oranges and tangerines (Rift Valley, Naivasha and Trans Nzoia); limes (Coastal strip); mangoes (Coast and hinterland and around Voi); avocadoes, in all coffee growing areas; guava in lower foothills around Thika, Meru and Embu; and papaya which will grow in areas up to 2,000 m.

40. Onions, tomatoes and spinach should all be more common in the diet than they are at present. (Spinach is said to be losing out to cabbage.) For example, there is a need to breed a large leafed variety of spinach. There are no production data on these crops, although tney are sold in most markets, particularly in Central and Eastern Province.

41. The Horticultural Crops Development Authority (HCDA) and the Horticultural Cooperative Union (HCU) have the job of developing fruit and vegetables, but their main concern is with production for export. Their impact on domestic consumption has been limited. The HCDA might properly be given the job of encouraging production for local markets, including school gardens in liaison with the National School Feeding Programme or local extension officers. A complementary step would be to teach extension workers something about food and nutrition, and to integrate their efforts in this field with the staff of other agencies. If District Development Centers get underway (Annex 8), they might undertake to sell seeds and cuttings for suitable fruits and vegetables, and the County Councils and District Committees could improve local markets; this type of program would have to be centrully designed and monitored.1/

I/ lianey bees Are of some imnortRncP ni1triti)n--f4ae in certain areas. Most Honey is aow used for. ieer; tae process destroys the orood and wastes tne wax. The industry is being developed with the help of Canadian technical assistance. The Kenya bee is industrious but difficult to handle, and a breeding program is underway to produce gentle strains of bees using artificial in8emination. A honey collection system is being organized. A processing plant and beehive Droduction is beinR developed at Thika, along with extension work. A research apiary is operating at Ngong (among the many practical questions needing attention is the effect of bees on crop yields through better pollination). Honey imports averaged Ki 38,000 per year over the past four years. Australian honey retails at KSh 11.8 per kg in Nairobi, the local product of high quality at KSh per kg. ANNEX 9 Page 13

42. Annex 6 discusses the research needs of these crops.

Smallholders with Cash Crops

43. This group comprises a "new elite" of smallholders who took up tea, coffee and pyrethrum within the last ten years. In some cases this expansion has been at the expense of food crops, and nutritional levels may have deteriorated. Much potential exists here for increasing food production and hence marketable surplus. This is potentially the easiest group to deal with, since its farmers have cash incomes and use modern inputs. Furthermore, they can provide surpluses for market as well as satisfying their own nutrition needs. Many of the research needs mentioned above are also valid for this group, in particular, the relationships between cash crops and food crops in farming systems. There are several foo.. crop technologies available for these areas, as well as cash to purchase inputs. However, public sponsorship for integrated farm planning and operations has yet to become general. This is partly because the major export crops are all handled by single-purpose parastatal agencies which typically prefer to continue to center activity on the key task rather than taking on the development of other crops. Many export crops are now well established, and the functions of these parastatal bodies could perhaps be broadened to include concern for food production, nutritional improvement, and rural development. The job to be done need not necessarily overburden parastatal bodies as the KTDA, the Pyrethrum Board and the Coffee Marketing Board, together with the cooperative organizations. These agencies could assist in providing credit and inputs, through their existing outlets, for food crops in addition to cash crops, and their extension work could include food crops suitable for the same environment. For example, fruit can be grown in many areas, and the listed agencies could sell seedlings in these rural areas for a nominal cost, and provide production guidance. Experience has shown that such a program can be self-supporting. The Coffee Board, which supervises and licenses coffee nurseries could also produce and sell avocado planting materials to coffee growers through its coffee cooperative network. Since stock has to be grafted, development of a sufficient stock would take about five years. Stock of other fruits could be developed at Thika, Molo and Mtwapwa research stations and distributed through the coffee channels. Orange and guava also require grafting; stock is available in the Central Province and in Kitale for distribution to other parts of the country, but the promotion is lacking.

44. Most smallholders have a "backyard" poultry enterprise, with flocks of less than 100 birds. The main bottleneck is the lack of a delivery system for inputs. A small producer is unlikely to be able to get commercially prepared feeds until the local market is of considerable size. Methods of improving smallholder poultry production developed in other countries should be assessed. Extension could be carried out by the Animal Production Division of the Ministry of Agriculture and the County Councils could help develop marketing.l/

1/ Rabbits are often mentioned as a possible enterprise in cash crop areas. Production is being promoted by the 4-K Clubs, mainly for home consumption. The pelts have a very limited market, and the feed conversion ratio compares unfavorably with poultry (Rabbit meat retails in Nairobi at KSh 9 to KSh 12 per kg.). ANNVX 9 Page 14

Landless People and Estate Workers

45. An estate worker gets an annual income of less the KE 50, not enough for an adequate diet for a family. However, some estate workers have smallholdings to supplement their cash incomes, although the numbers are not- known.

46. It is difficult to devise strategies for these groups. However, they would benefit nutritionally from the measures proposed above, because some estate workers have smallholdings and because the proposals would make available more and better foods on the local markets. Beyond this, the traditional techniques may be appropriate on the larger estates. For example, to raise labor productivity, more estate owners might be persuaded to provide a suitable foods program for their workers, in addition to the present cash wage; many already do this. Ministry of Health fieldworkers might offer nutritional instruction for the families of estate workers.

Pastoralists

47. There is no apparent alternative to famine relief for the pastoralists in times of drought. In normal times advances in cattle husbandry (mainly reduced stocking to increase the yield of milk per cow) and better varieties of millet and sorghum are the main possibilities for improving nutritional levels. However, only a few can take up cereal production as an enterprise. There are some possibilities for small-scale irrigation in these areas (Annex 12). Providing the infrastructure for these innovations is likely to be expensive. But there are no options at hand, as, in the main, pastoralists will have to rely on improved production and marketing techniques to generate more income with which to purchase food. On the relief side, the Maize and Produce Board should undertake through a storage program to stabilize the price of maize, thereby avoiding excessively high prices in pastoral areas during times of bad crops and shortages.

The Urban Poor

48. As noted above, the only evidence on the urban poor is a survey of ten years ago. At that time families were able to purchase an adequate diet for between KSh 1.2 and KSh 1.5 per head per day. Few data exist on income levels in cities and so it is difficult to identify vulnerable groups. There is also little information on how much food grown on family farms reaches towns outside of market channels. Household expenditure surveys carried out in three urban areas in 1971 show that between 27% and 35% of total expenditures are on food but there is no information on these populations by income level though comparable studies elsewhere indicate that the income level must have been relatively high. A high proportion of the expenditure on food (about 40%) was on milk and meat products.

49. As for other groups, increased national food production must form the core of the nutrition strategy. This must be accompanied by development (particularly for legumes, fruits and vegetables) to draw increasing amounts ANNEX 9 Page 15 of the marketable surplus from the rural areas to the towns, thereby helping hold down food prices.

50. Urban people buy food in the market. This makes it feasible to use programs such as food fortification and institutional feeding to improve nutrition. The National School Feeding Program (NSFP) should concentrate on the urban poor in the large rural centers, and Program capacity should be built up. An indication of potential outlays by the Program is that the cost of serving one million children for one school term would be close to Kb 1 million, and even this would not reach the children in greatest need. The NSFP also has the task of trying to reach the mothers and younger sib- lings as well as the school children. The mother as well as the child needs to kcnow more about nutrition. Some countries are experimenting with foods prepared specifically for the younger sibling, which the school child can take home. The difficuLty is in designing a low-cost weaning food that will not be consumed by other family members. The Government might consider solic- iting bilateral assistance for a pilot project in this area. In any case, although the impact of school feeding programs has been limited, they have a potential, particularly for the urban poor.

51. Urban outlets for manufactured and fortified foods will grow rapidly. The Government should consider an assisted project to determine what the production and marketing possibilities are in the medium term, in technological and financial terms. Similarly, blended foods have possibilities. For example, the Government could subsidize the food blend (85% sifted maize and 15% skimmed milk powder) which is currentlv being retailed by a mille. at KSh 2 per kilo. Bags of milled maize weighing 2 kg are retailed at KSh 2. This sifted maize has a protein content of 6.5%. Bags of skimmed milk powder are also available on the market but are expensive.1t Private industry has the expertise and equipment to blend foods. They cannot get prices down, however, mainly because miller margins are fixed by the !NPB. UNGA Feeds, which mills 40,000 bags of maize per month -- about 40% of the MPB marketings -- has Lest marketed a number of products, including the ones mentioned above, and mainly in urban areas. Price was found to be the main constraint on sales. Although there is an unexploited potential in this area, the fact remains that this approach is inherently expensive, of a "shotgun" nature, and difficult to focus on the vulnerable groups.

52. For food fortification to be a success, the product must be consumed in regular and constant quantities by the target population; its taste and color must be left unchanged; it must be biochemically possible to fortify; it must be produced in a few central units; and the process must be inexpensive. One possibility in Kenya is the fortification of sugar with vitamin A. The poor consume sugar, although the unrefined jaggery is also popular. Cost of fortifying sugar with vitamin A might approximate KSh 0.20 to KSh 0.30 per child per year, based on a consumption of 30 grams per day. If feasible, sugar fortification would have the main impact in urbaut aruaa, where refilled

1/ A subsidized price would be preferable to the present policy of exporting dairy by-products at a loss. ANNEX 9 Page 16

sugar consumption per capita is about five times as much as in rural zones. Sugar is produced at four locations, making it easy to administer fortification. However, considerable quantities will continue to be imported, thereby complicating the fortification task. The costs and benefits of fortifying imported sugar might be investigated by the East African Industrial Research Organization.

53. Salt is now fortified with iodate. Fortification with iron to combat anemia has not yet been successfully tested in scale, although possibilities are good.

54. It should be remembered that the need for controls on food quality increases with the complexity of the foods being placed on the market.

Pregnant Women and Young Children

55. Preschool children and pregnant and lactating women are particularly difficult to reach with nutritional programs. This is because of their special needs, poor weaning and sanitation practices, intro-family distribution of food, beliefs about foods, child care practices, and incidence of infectious diseases. These groups can be helped indirectly through increasing the amount and quality of food available to the family as a whole, since this lessens the harshness of choices to be made about intro-family distribution and makes nutrition education feasible. Beyond this, however, there is a strong case for integrating existing programs on nutrition, health, rural water supply, and agricultural extension. The woman and her young children can be given more explicit attention than is generally the case at present.

PRACTICAL IMPROVEMENT MEASURES

56. These observations suggest that there is no apparent justification for a large-scale expansion of the ongoing programs. Instead, their emphasis should be altered, and they should be consolidated and coordinated.

Existing Programs

57. The starting point for coordination is the establishment of a food and nutrition policy, and the issuance of guidelines to agencies working in nutrition so that priorities and practices of all are in harmony. To design a good policy and program requires, an evaluation of the feasible alternatives to the existing nutrition improvement effort. This could be done by Karen College or by the Nutrition group in the Department of Home Economics at Kenyatta College and the Department of Community Health at the University of Nairobi. Assistance in the design and analysis of the study should be sought from IDS, and financial assistance from donors now participating in nutrition programs as well as from the Government. Particular attention needs to be paid to the most needy groups. ANNEX 9 Page 17

58. The training of nutrition workers also needs attent:ic-n, particularly to assure that the several needed disciplines are offered io students (the PBFL may provide a useful model, in principle). Joint refresher courses for field workers from the Minlstries of Agriculture and Health an well as the County Councils are needed, perhaps at Kenyatta College. The aim should be to make nutrition training more similar throughout Keniya.

Local Marketing Systems

59. Private traders and farm women handle the great bulk of the farm products marketed, including maize, legumes, vegetables, eggs and fruits. They should be helped to do a better job. County 'Councils can assist with marketing sites, stalls and water points where few exist. Training and credit could be given to entrepreneurs in food marketing. This is a fruit- ful area for more investigation and fot 4oint pilot programs involving such institutions as the village polytechnics, the proposed District Development Centers, and the 1rilnistry of Commerce and Industry.

Orga.i zation

60. Many agencies are involved in one or more aspects of nutrition - including the-Ministries of Agriculture, Health, Local Government, Commerce and Industry and the parastatal bodies. For this reason, some belie've that a National Nutrition Council or a similar body should be set up to provide overall policy direction and coordination.

61. The experiences in other countries with this sort of coordinating, semi-autonomous body have been disappointing, mainly because nutrition quickly ramifies into many other areas. For example, ir Kenya it involves the question of the need to realign development policy towards the smaller farmers and underprivileged people. A Council is unlikely to be of much practical use.

62. For the present, the responsibility for nutrition should not be vested in any one Ministry. Instead, it should be assigned to the Committee of Officials proposed in the Ndegwa Report (Anne:: 8). To prepare the ground, a Working Party, chaired by the Office of the President, and made up of senior officials from the concerned ministries should be set up. A senioz representative of the parastatal bodies and the Nutrition Subcommittee of the Freedom from Hunger Committee should participate. The executive secretary of the Working Party might be the Assistant Secretary for Human Resources in the Ministry of Finance and Economic Planning. The terms of reference of the Working Party should include: (a) the preparation of alternative food and nutrition strategies with special reference to discovering the benefits and costs of these alternatives, and the distribution of benefits among the needy. Funds should be provided to the working party to enable it to integrate research in other institutions on this; (b) consolidation of existing nutrition programs; (c) selection of target groups for nutrition programs; (d) the evaluation of food and nutrition programs, and the monitoring of progress. ANNEX 9 Page 18

63. The work of the voluntary agencies and external donors should continue to be coordinated by the Nutrition Subcommittee mentioned above, subject to the policy guidelines established by the Committee of Officials and the Working Party. Ultimately, it may be desirable to design a permanent body to coordinate nutrition work, with this body receiving a single vote, and allocating its funds among operating agencies in the most cost-effective way. AUHEX 9 Appe-ndix 1 Page 1

STUIES O NUTRITIONAL STATUS

1. This note presents the detail of the nutritional studies which were. discvssed In outline in Annex 9.

WHO Surve

2. A WHO/FA/UNICEF-assisted project directed by robdal and others carried Oltt a food consumption survey in sever rural locations betwcsn May 1965 and July 1966 for a period of one week. in three areas: a second survey was carried out at a different season of the year and in one Pf these, a third survey was conducted. The results were compared with an urban survey carried otxt in Dondeni in Nairobi in August 1962. Approxi-mately 175 fml.ies were sampled (the inclusion of some famil.les in a -urv'ey but not In repeat surveys makes estimation of exact number of families difficult) in i.he following areas: Ng,-uwa and Ihururu in Nyeri district, Gitugi in Muranga district, West Koguta and Masumbi in Kisumu district, Uthiuni in Machakos district, and Nyaani in Kitui district. A number of biochemical procedures were also carried out: bl.ood samples were t..kn from five surveys in order to assess such parameters as hemoglobin, and blood protein levels. Creatinine, urea nitrogen, and inorganic 2ulphate su2.phur, and hydroxyproline estimations were made on urine. Chemical examinations on. children up to five ycars, children 5-16 years, and adults were made in five sub-locations. Anthropo- metric data (age and sax) specific wei-ht for height, skinfold over triceps, mid-arm circumference) were collected for all seven sublocations. The results of the survey in terms of consumption and adequacy of calories, protein, vitamin A,. thiamine, riboflavin, niacin, calcium, iron and vitamin C are summarized in Tables 1,2 and 3, The quantities and types of food eaten are summarized in Tables 4 and 5.

3. With respect to results, the following comments apply only to intake at family level. Out of the 13 surveys made at different times of the year, only five showed sufficient caloric intake, while consumption of protein was adequate in eight. 1/ All surveys showed vitamin A to be in chronically short supply, thiamine intake was uniformly satisfactoryD and riboflavin and vitamin C both inadequate. Intake of niacin was adequate in eight surveys out of 13 and only slightly inadequate in the others, which was surprising

1/ The question of nutritional standards is highly controversial; the standards for these findings, and those set out below, are specified in detail in the (cited) publications from which they are drawn. Bohdal et al relied mainly on FAO food requirement data and on the U.S. Interdepartmental Committee on Nutrition for National Defense standards for biochemical data. Their weight-for-height standards were derived from D.J. Jelliffe: The Assessment of Nutritional Standards of the Community (WHO, Geneva, 1966). The work of Kraut and Kremer (quoted below) was also Based on FAO requirements and standards derived from Jelliffe. A weight-for-age of between 60% and 80% of the standard is interpreted in this Annex as being 'mild' malnutrition and less than 60% as being 'severe' malnutrition. ANNEX 9 Appendix 1 Page 2

because maize-based diets tend to be deficient in this vitamin. So that the level of nutrition revealed by each survey can be seen in perspective, it is discussed below in relation to the local ecology.

4. Ngamwa in Central Province is densely settled with high rainfall, the heaviest coming in April and May and the shortfalls being in October to November. A second crop ie possible, and the survey was carried out in June 1965 between the two harvests. Half of the farms in the area were under 2.5 ha in size and the predominant cash crops were pineapple, cotton, a-d coffee and the main food crops were pulses, maize and potatoes; the average size of the farms in the survey was 3.5 acres (ranging from 0.4 ha to 10 ha). Nine of the 21 families surveyed had a wage earner, usually working away from home. Maize was the only food product eaten by every family on every day of the survey and was the principal source of nutrients. Meals consisted of maize meal or maize/bean or potato/banana mixtures. This diet was below requirements in calories, protein, calcium, vitamin A, and riboflavin.

5. No biochemical data or clinical examination information were collected from Ngamwa, but anthropometric data indicated some problems of malnutrition.

6. Ten percent of the under-five-year-old children in Ngamwa had achieved less than 80% normal weight for height; only 6% of the children six to 15 years of age were beneath this standard. Unfortunately, the number of children below 60% weight for height is not given. A random sample carried out on 221 people in Ngamwa by the Departmernt of Insect-Borne Diseases of the Ministry of Health found one-quarter of those examined to be infected with Ascaris.

7. Gitugi is also in Central Province, in a mountainous area. The average size of holding was 2.2 ha (ranging from 0.4 ha to 6 ha). Three families had no domestic animals but on average each had a cow, a goat, a sheep, and four chicken. Six of the 21 families had a wage earner. There are two harvests per year, although in the areas below 5,000 feet the short rains crop is lost in one year out of three. Three surveys were carried out -- in July 1965 after the pulse harvest when the situation was highly satisfactory, with the exception of intake of Vitamin A; in September 1965 after the maize harvest when the situation was less satisfactory; and in January 1966 before the maize harvest when the situation was much improved. However, in this last survey the harvest was early and the beans were again being harvested and so presented a picture similar to the first survey. The average protein intake was high in all surveys due to the high legume consumption. Vitamin C was generally inadequate throughout.

8. In Gitugi, 13% of the under-five-year-old children were deficient with respect to their hemoglobin level. Six percent of the under-fives were in the deficient range with respect to their serum protein. Seventeen percent of Gitugi's under-five-year-old children had a weight-for-height ratio of between 70% and 79%, none less than 70%. Six percent of the six to 15 year olds were below the 70% ratio. Only 10% of the under-fives showed oedema of the legs -- a common clinical sign of malnutrition. ANUEX )

Paget 3

9. Another location was Ihururu, a village in CenLral Province built during the 1952a-5f Man- Msla emergency. The village ha: a piped watessupply with a central draw point Twith six taps and public laundry area. Very little information was calle-ttd on farm size, although all houses had a 1/2-acre garden near the house. Thirteen out of the 73 families had wage earners. The survey was carried out in October 1965. The diet was below requirements in calories, protein, calcium, vitamin A, and riboflavin. It is not k.nown how much the people depended on their small gardens or on their outside sources of income for food. Three of the families owned cows, and the following foods were eaten tr mwore than 50% of the families: beans, fresh milk, green maize, Fmn1glish potatoes, maize flour, sugar, fat, tea, onions, cabbage, and green leaves.

10. In Ihururu no data were collected on biochemical parametere or on clinical signs. None of the under-fives had a weight-for-height ratio of less thar. 80% of the normal; 11% of the six-to-1S-year-old age group had a ratio between 70% and 79%.

11. In Nyanza Province, surveys were carried out at West Koguta (twice -- in August 1965 and February 1966) and at Masumbi (twice -- in October 1965 and February 1966). West Koguta is on the Kano plains and bor- ders the shores of Lake Victoria. The only harvest of the year, usually of maize, cassava, sorghum, and rice, is gathered in July and August so the surveys xwere conducted immediately after harvest and six months after that. The sample size was 20 families and no useful information was obtained on farm size. The area is seriously overgrazed with very poor quality stock. Fcurteen of the families averaged five cows each. Seven families had wage earners, two of whlom were fishermen. In both surveys, the diet was found to be below requirem.ents in calories, protein, calcium, vitamin A, and riboflavin. Further, the first survey showed a below-requirement intake of 'vitamin C and the second survey showed inadequate intake of niacin. The diet was generally poorer than that found in Central Proviiice and, surprisingly, the seasonal variation did not have a very marked effect on the overall nutrient content. Seventeen percent of the under-fives were in the deficient range for hemoglobin and 4% of the same target group were in the 'low' range for cerum albumin. Only 4% of the under-fives were less than 70% of the normal weight- for-height ratio; only 4% more were between 70% and 79%.

12. Masumbi is a sub-location that has two harvests per year -- in July/ August and January/February. The surveys were therefore conducted two to three months after the harvest and then again soon after the short rains harvest period. Information on landholdings was again difficult to obtain. Only one of the 21 families surveyed was growing a cash crop. In nine of the families, the male head was a wage earner. In both surveys the diet was adequate in all nutrients investigated with the exception of vitamin A and riboflavin. The protein quality was particularly good and calcium intake very high, probably due to a relativ-ely high consumption of fish (which makes the deficiency of vitamin A surprising). Both surveys were conducted in periods of relative food adequacv -- soon after harvests. In the sublocation, among the timder-fives, 9% weze in the deficie.a range for hemoglobin, 10% were 'low' on earurm albu- ANNEX 9 AppendiK 1 Page 4 min, 5' were below 80% normal weight-for-height, and few clinical signs of malnutrition were present. In a sevarate survey. 1/ 59% of a samole of 135 persons were found to be infected with Ascaris. -

13. Two areas of Eastern Province were surveyed -- Uthiumi in Machakos District (once in December 1965i and Nyaami in Kitui District (twice - in February 1966 and March 1966). Twenty families were sampled in Uthiumi during a time when the people (the Kamba) were receiving imported yellow corn as famine relief. Caloric and protein intake were extremely low. Intake of calcium, vitamin A, riboflavin and niacin was inadequate. Among the children aged one to five, 8% were in the deficient range and 4% were in the 'low' range on hemoglobin levels; 5% were in the 'deficient' range and 10% were in the 'low' range with respect to serum albumin; 4% were less than 70% of the normal weight-for-height ratio and 19% were between 70% and 79%.

14. In Nyaami the people are semi-pastoralists, each family in the survey of 35 families owning an average of 17 cows. They graze on land up to 20-30 miles away from the farm around the house. Two consecutive surveys carried out on different groups of families showed inadequate intake of calcium, vitamin A, riboflavin, and vitamin C. Protein intake was barely acceptable. During the second survey, involving 17 families, famine relief in the form of yellow maize and tinned pork was distributed. However, they did not have a significant effect on the intake of those sampled. Among the under-five-year- old children, 5% were in the 'low' range for hemoglobin, 10% were in the 'low' range for serum albumin, and 5% were less than 70% normal weight-for-height.

15. This 1965-1966 survey was preceded by another WHO survey: 2/ 3/ 4/ which will not be reported here in any detail as its findings are updated by the later survey. However, a survey carried out by that team in Bondeni Location in Nairobi 4/ in 1962 will be discussed as it represents the only picture of urban nutrition. Bondeni is an African housing estate situated 2 miles from the center of the city. With only a few exceptions, there was no piped water supply. Sixteen families were sampled over a three-day period and the sample was biased so that members of the vulnerable groups (i.e., children and/or pregnant or lactating women) were included.

1/ By the Department of Insect-Borne Diseases, Ministry of Health.

2/ Munoz, J.A., Socfinaf Survey, WHO Nutrition Survey, 1963. 3/ Munoz, J.A., Report on the Nutritional Status of Children in Pumwani and Thika Youth Centers, WHO Nutrition Survey, 1962. 4/ Munoz, J.A. and Burroughs, A.L., Report on the Dietary Findings in Twenty Families in Kericho District, WHO Nutrition Survey, 1962. 5/ Munoz, J.A., WHO Nutrition Survey, Kenya-9. Half-yearly report, July- December, 1962. ANNEX 9 Appendix 1 Page K

16. The diet was inadequate with respect to calories, calciunt vitamin A, and riboflavin. The diet was costed according to local retail prices and, assuming that all food eaten was purchased, the average cost per person per day was KSh 1.25. The top 25% of the families with the most exFeisive diets were all above average percentage in adequacy of calories, although only two were above 100% adequacy, Other indications, however, suggest that spending more money does not provide the most nutritious diet. Using the same criteria for protein, four families in the top half of expenditure are above 100% adequacy, an1 three families are adequate in zhe ootton half of expenditure.

17. Compared to rural areas, the variety of foods is greater,, particularly in legumes, green vegetables, and fruit, and there is increased consumption of meat, milk, fat, bread, and rice. Maize is still an important item of diet but less so than in rural areas.

The Work of the IO-Institute for Economic Research of Munich

18. The IFO-Irstitute for Economic Research, assisted financiallv by the F'ritz Thyssen Foundation, has carried out a broad study of socUo-economic conditions in East Africa, including a major nutrition study. 1/ Three surveys were carried out: in Kenya -- outpatients in Central Province Hcspital in Nyeri in the second half of 1965, 2/ households in Kiamariga and Ichuga in Central Prov:.nce in autumn 1965, 3/ and settlers living on the Mwea-Tebere Irrigation Scheme in Kirinyaga District of Central Province in 1966. 4/

19. Nutrliional anamnesis (dietary recalls) were made, which are not particularly accurate as means of assessing nutrient intake. Physical examinations were made, blood samples were taken, and the amount of total protein in the serum wzas measured, as well as levels of vitamin A and carotene.

20. The persons examined were recruited from two different social classes:

"The first one, which is largely influenced by civilization, lives on agriculture and cattle breeding, while the second

1/ Kraut, a. and Cremer, H.D. (eds.), Investigation into Health and Nutrition in East Africa, IFO-Institut fur Wirtschaft-Forschung, Muncherl, Afrika- Studien No. 42, 1969. 2/ Kasper, H., Schaeffer, H.J. and 'Theerman, P., A Contribution to Determine the Nutritional State of the People Living in the Central Province of Kenya, in Kraut and Cremer op. cit., pp. 227-240. 3/ Keller, W., Muskat, E., and Valder, E., Some Observations Regarding Economy, Diet, and Nutritional Status of Kikuyu Farmers in Kenya, in Kraut and Cremer, op.cit., pp. 241-266. 4/ Korte, R., The Nutritional and Health Status of the People Li-ing on the Mwea-Tebere Irrigation Settlement, in Kraut and Cremer, op.cit., pp. 267-334. ANNEX 9 Appendix 1 Page 6

group was recruited from persons with a permanent income... Because of their higher income, they had other habits of nutrition than the persons of the first group. The Hindus, who settled in this region as traders were also examined and questioned in the same way." 1/

21. The examined Bantus and Hindus were divided into groups according to the amount of animal protein in their food as detected by nutritional anamnesis. In three of the Bantu groups: those that had regular uptake of animal protein (group A), those that had meat once or twice a month and 300-500 ml of milk every day (B), and those that had regular consumption of milk in small amounts (at least 250 milliliters daily) (C), there was virtually no difference in adequacy of calorie intake -- approximately 75%. In a group which consumed no animal protein (D), the calorie adequacy was 62%. Each group included a subgroup of women who had just delivered. In group A, protein intake was adequate, almost adequate in B, and less than 50% adequate in C and D. Consumption of vitamin A was low, but there was no evidence of deficiency in relation to the condition of the eyes or skin. The Ilindus were divided into two groups: those who had consumed more than 150 milliliters of milk a day and those who had consumed less.

22. The total protein in the serum for all groups was in the healthy range and, surprisingly, the albumin level of group D, which consumed no animal protein, indicated no risk.

23. Keller and others carried out a survey in autumn 1965 in Ichuga and Kiamariga in Central Province. They visited 66 households with a general aim of investigating the "impact of agricultural market production and diversification of a former subsistence economy on the state of nutrition of the rural population." The altitude in this area is between 4,500 and 6,300 feet and market production consists of coffee, pyrethrum, onions, potatoes, bananas, and tomatoes. The highest points of the sloping land were grassland, with terraces of coffee and bananas below and a mixed cultivation of corn at the bottom. The region is ideal for coffee growing and most of the farmers questioned were cattle raisers as well. Food intake for one day was calculated and skinfold thickness were measured. The average nutrient intake, expressed as adequacy in percentage, were as follows, although large differences occurred among families: calories, 94%; protein, 164%; calcium, 44%; iron, 169%; vitamin A, 28%; thiamine, 485%; riboflavin, 143%; niacin, 126%; and vitamin C, 89%. (The requirements of thiamine, riboflavin, and niacin are based on minimum values rather than recommended allowances.)

24. The survey was carried out for one day only, so the findings have to be interpreted with care. The investigators found that, assuming 100% caloric adequacy, the present type of diet is able to meet the requirements for protein (172%) and iron (178%), while thiamine, riboflavin, and niacin remain deficient, and vitamin A, vitamin C, and possibly calcium intakes are not satisfactory. This diet, in terms of frequency of goods served, is based on maize and maize flour, beans, milk, sugar, and potatoes.

1/ Kasper et al, op. cit., p. 229. Table 1: INTAKE AND ADEQUACY OF CALORIES, PROTEIN AND VITAMIN A IN SELECTED R-L A' A'EdS *IN '709.5 tAiNLD l 996 ANDl IN N AI ROBji&ilDI.> 1962

Calories Protein Vitamin A No Daily Daily Daily Eating Consumption Adequacy Consuimition Adequacy Consumptionl Adequacy Sublocation District Units Per Person % g/person % 1../Person Central Province Ngamwa ('65 June) Nyeri 24 1727 87 48 79 1538 44 Gitugi I ('65 July) Muranga 23 2370 109 109 166 354 10 Gitugi II ('65 Sept.) Muranga 19 1702 76 66 109 167 5 Gitugi III ('66 Jan.) Muranga 21 1728 80 78 125 524 13 Iluhuru ('65 Oct.) Nyeri 24 1558 75 56 96 527 14 Western & Eastern Province W. Koguta I ('65 Aug.) Kisumu 24 1671 80 55 88 596 15 W. Koguta II (;66 Feb.) Kisumu 25 1487 72 52 87 705 19 Masumbi I ('65 Oct.) Kisumu 24 2498 115 73 117 1305 30 Masumbi II ('66 Feb.) Kisumu 22 2471 118 86 142 1179 Uthiuni 30 ('65 Dec.) Machakos 22 1426 77 45 77 1036 30 Nyaani I ('66 Feb.) Kitui 21 2103 107 64 104 225 5 Nyaani II ('66 Mar.) Kitui 21 2426 109 76 119 540 13 Nairobi ('62 Aug.) 16 1790 81 62 102 1327 34 SOURCE: Bohdal, M; Gibbs, N.E.; and Simmons, W.K., Nutrition Survey and Campaing Against Malnutrition in Kenya, 1964-1968 Report to the Ministry of Health in Kenya on the WHO/FAO/UNICEF-assisted project. Based on Tables 63, 65, and 71 on pp. 110-115. Table 2: INTAKE AND ADEQUACY OF VITAMIN B COMPLEX (THIAMIN (B,), RIBOFLAVIN (B2 ) AND NIACIN) IN SELECTED RURAL AREAS IN 1965 AND 1966 AND IN NAIROBI IN 1962

Thiamine Riboflavin Niacin No. Daily Daily Daily Eating Consumption Adequacy Consumption Adequacy Consumption Adequacy Sublocation District Units Mg/persoi-7% Mg/person Mg/person % Central Province Ngamwa June) ('65 Nyeri 24 1.38 136 0.85 69 9.7 95 Gitugi I ('65 July) Muranga 23 2.70 246 1.12 86 14.0 130 Gitugi II ('65 Sept.) Muranga 19 1.75 159 0.81 64 10.2 98 Gitugi III ('66 Jan.) Muranga 21 1.95 179 0.94 75 10.2 94 Iluhuru ('65 Oct.) Nyeri 24 1.63 158 0.85 68 11.5 110 Western & Eastern Province W. Koguta I ('65 Aug.) Kisumu 24 1.47 142 0.68 54 13.4 128. W. Koguta II ('66 Feb.) Kisumu 25 1.14 109 0.65 52 8.6 82 Masumbi I ('65 Oct.) Kisumu 24 1.80 163 0.90 71 15.0 120 Masumbi II ('66 Feb.) Kisumu 22 1.90 190 1.20 94 13.7 130 Uthiuni ('65 Dec.) Machakos 22 1.20 116 0.64 52 7.5 74 Nyaani I ('66 Feb.) Kitui 21 1.92 190 0.78 64 11.6 115 Nyaani II ('66 Mar.) Kitui 21 2.25 201 1.10 82 14.0 123 Nairobi > ('62 Aug.) 16 1.80 165 1.17 90 12.0 110 (D m SOURCE: Bohdal, M.; Gibbs, N.E.; and Simmons, W.K., Nutrition Survey and Campaing Against Malnutrition m in Kenya, 1964-1968 Report to the Ministry of Health in Kenya on the WHO/FAO/UNICEF-assisted project. Based on tables 73, 75, and 77 on pp. 116-117. Table 3 : ANTTATE,AMnD,EQ-ACY OF CALCIT., IRON, AM V0ITIN C I SEECE i'uAL iREAS IN 1965 AND 1966 IN NAIROBI IN 1962

Vitamin C Calcium Iron No. Daily Daily Daily Eating Consumption Adequacy Consumption Adequacy Consumption Adequacy Sublocation ^Disitrict - -Units Mg/person 7, Mg/person % Mg/person 7, Central Province Ngamwa ('65 June) Nyeri - 24 130 211 259 53 17 158 Gitugi I ('65 July) Muranga 23 51 87 451 88 36 334 Gitugi II ('65 Sept.) Muranga 19 22 39 276 49 19 174 Gitugi III ('66 Jan.) Muranga 21 53 80 446 86 27 254 Iluhuru ('65 Oct.) Nyeri 24 90 145 313 65 18 173 Western & Eastern Province W. Koguta I ('65 Aug.) Kisumu 24 52 82 338 65 15 140 W. Koguta II ('66 Oct.) Kisumu 25 81 132 326 65 13 113 Masumbi I ('65 Oct.) Kisumu 24 87 130 987 188 27 254 Masumbi II ('66 Feb.) Kisumu 22 69 105 534 111 23 210 Uthiuni ('65 Dec.) Machakos - 21- - 84 131 250 49 15 140 Nyaani I ('66 Feb.) Kitui 21 5 6 263 54 17 158 Nyaani II ('66 Mar.) Kitui 21 3 6 263 54 17 158 Nairobi ~0 ('62 Aug.) 16 81 124 510 93 17 158 m 10

SOURCE: Bohdal, M.; Gibbs, N.E.; and Simmons, W.K., Nutrition Survey and Campaign Against Malnutrition in Kenya, 1964-1968 Report to the Ministry of Health in Kenya on the WHO/FAO/UNICEF-assisted project. Based on Table 79 (pp. 118) and derived from general text. ANNEX 9 Appendix 1 Page 10

25. Anthropometric data was obtained from 449 persons, one-fifth of whom were below five years of age and slightly less than two-thirds under 15 years of age. Very little deviation from normalcy, with respect to recognized growth standards, was found in the weight-for-height ratios.

26. Korte investigated the general economic and health status of 104 families living on the Mwea-Tebere irrigation scheme during June/July 1966. The scheme is considered to be an economic success, providing most of Kenya's supply of locally grown rice and having substantially raised the income of its inhabitants (Annex 12). A review of outpatient clinic records in this period showed an incidence of malnutrition of 0.3% in the non-scheme areas and of 1.5% in the scheme areas (since this figure is representative only of those who visited the clinics, incidence of malnutrition in others may have been different). Infant mortality in the scheme areas (children one year and younger) was 7.5% of total born and was 11.6% outside. Other data also shows a considerably higher standard of living on the scheme compared to outside. A health survey conducted at the same time as the nutrition survey found that, out of a total of 342 people examined (60% being under nine years of age), 14% were infected with Ascaris and 7% with Schistosoma mansoni, both being found more often in the small children (about 25% infection rate). Since the settlers had only recently moved to an infected area, they might not yet have developed serious disease symptoms.

27. The nurtition survey was conducted among 30 households in Mahigaine and Kirogo villages of Tebere Block for a seven-day period. In addition, 87 families of the immediate surroundings were studied. The average income of the tenants in 1966 in Mahigaine was KSh 2,467 and in Kirogo it was KSh 3,165. The villages of Kangai and Kiarukungu outside the scheme were surveyed in larch 1967. On the scheme, the survey (conducted a few weeks after the payout and at the beginning of the new harvest) showed an average caloric adequacy of 127% (range 62% to 190%). An average intake of 2,604 calories clearly surpassed an average requirement of 2,058 calories. However, apart from the seasonal reasons for so high a figure, it is believed that anthropometric data refuted its accuracy. Average adequacy of protein intake was calculated to be 209%, ranging from 1227. to as high as 327%.

28. Again the author documents a number of reasons why he feels this figure is too high. 1/ Other average adequacy values were: calcium, 62% (range 38-101'u); iron, 2647a (163-410%o); vitamin2 A, !3 (1-24%); thiamine, 210` (196-2907); riboflavin, 67,o (50-86%.); niacin, 119% (100-181%); and vitamin C, 33, ((,-146,'). The iron intake is high, although the high incidence of intestinal parasites will increase loss from the body. As found in other surveys, vitamins A and C and riboflavin were in short supply in these villages.

1/ Kraut and Cremer, op. cit., p. 300. ANNEX 9 Appendix 1 Page II

29. A large number of different types of anthropometric measurements were made. In addition to the 30 households included in the food consumption survey, a group of 31 children in Kirego and 29 in Mahigaine, all under rhree years of age, were examined, as well as, 158 other school children aged eight to 12 years. The weight-for-height of the 371 children measured was 95% + of a standard based on well-fed Western children, as no special Kikuyu standard has yet been established. No statistical significance was found between age groups. Weight-for-age was low, 82% + 24% of the standard, however, indicating possible undernutrition.

30. No clinical signs of severe protein calorie malnutrition were found but there were some signs of vitamin D deficiency. Xerosis of the skin was found in 30% of the preschoolers and over half of the school age children and there were some clinical signs of riboflavin deficiency. Hemoglobin levels among 376 people of all age groups examined were low but not deficient. Anemia, however, was common, affecting 25 to 30% of the sample, but this must have been a mild incidence in view of the hemoglobin figures. Total serum- protein levels were normal in the 185 people (138 of whom were nine years of age o-L less) examined.

31. Although farmers joining the scheme have seen their income increase from KSh 500 to KSh 2,500 per year, the quality of the diet has remained almost unchanged. Korte 1/ reaches this conclusion by comparing the frequency distribution of foods eaten outside the scheme in March 1967 and inside the scheme in July 1966. Assuming that all foodstuffs except rice are bought by the scheme families, then just over KSh 500 are spent per annum per family on food, but it is not clear whether this includes an allowance for subsistence production, as most of the settlers did cultivate maize and beans outside of the scheme. The survey found that KSh 210 per annum were spent on food by the people outside of the scheme. From these data, one can tentatively suggest that, for the settlers, income quadrupled on average, food expenditure doubled, and yet nutrient intake appeared to be unchanged, although seemingly adequate. Data on body measurements and disease incidence suggests nutrition is poor among certain groups.

32. Inside the scheme, the mortality rate is under half of that in surrounding villages and there are no longer intermittent periods of famine, since rice is available to fill the gap when all other foodstuffs have been consumed. It also becomes the single staple before the distribution of earnings in January or May. Yet, maize and beans still constitute the staple foods of the scheme population, and no attempt had been made at the time of the survey to add foodstuffs of higher quality. The increased income was spent on such items as radios (16% of families in the scheme owned this item, versus 2% in the non-scheme sample population), bicycles (65% versus 15%), and tables and chairs (71% versus 14%). More money is spent on primary and secondary education in the scheme sample population.

1/ Korte, op. cit., p. 296. ANNEX 9 Appendix 1 Page 12

Additional Investigations into Nutritional Status in Kenya

33. Additional studies have been carried out by the Wellcome Trust Researoh T-aboratories, the Dutch Royal Tropical Institute in the Medical Research Center, and the Department of Community Health of the University of Na4robi.

34, H. Foy and A. Kondi of the Wellcome Trust have carried otut art impressive volumne of research on anemias, their incidence, classification, and th--erapy in connection with deficiencies of iron and vitamins and with hookworm ±rl-estations.

35. Blankhart of the Medical Research Center sampled children under three years of age and their mothers for incidence of malnutrition in >fb1jiuni in Nachakcs ir June 1969 1/ and found that one-third of the children had a weig'ht of less than 80% of the standard, whereas a negligible percentage had subnormal height. This indicates a recent and current bout with malnutrition, suggesting perhaps seasonal hunger. Other surveys carried out by Blankhart 2/ show an incidence of low weight loss than 80% in Coast Province in December 1970, and of between 3% (among prosperoua farmers) to 66% in poor areas. His continuing work in Machakos shdws an incidence of between 25% and 35% of low weight .,nd an incidence of 65% among 40 children on famine, relief in Turkana in February 1972.

36. Three surveys have been carried out in Iveti Location of Machakos District by students of the Department of Community Health of the University of Nairobi. in July 1971, Chege 3/ found that 29% of 184 ciildrer. un&r three years of age were below 80% of normal weight. In Kombo sublocation, Reriani, 4/ in November and December 1970, found that 55% of znder-Lhree-year olds had a weight-fc;r-age of less than 85% of the accepted standard. nr: Misak-,wani sublocation in January 1971, iMeme 5/ found 31.6% of chil.drei^ ;.low 80% and' 5.3,%' below 60%. of the normal weight. Lt was also shown tha: the incidence o£ malnutrition increased with age.

1/ BlaJtkhart, D.M., Outline for a Survey of the Feeding and the Nutritional Status of Children under Three Yeara of Age and Their M'others, k7urnal or TEopicai Pediatrics and Environmental Child Health, December, 97i., 2/ Blankhart, D.1., Human Nutrition in Kenya, Nddical Research Council, Draft, May 1972, 3/ Chege, .-".W., Report on the Assessment of Nutritional Status at K?,singa Sublocation - iveti Location - Machakos District, Dept. of Community Health, raculty of Medicine, University of Nairobi, Undated c., 1972. 4/ Reriani, J.N., Report on Community Diagnosis of P.C.M. in Kombo Subloca- tilon, Iveti Location, Machakos District, November 1970, Dept. o.f Community Health, Faculty of Medicine, University of Nairobi, undated cr 197' 5/ Meme, J.S., A Report on Nutritional and Social Economic Status at Misakwani Sublocation, Iveti Location, Machakos District, January 1971, Dept. of Comimunity Health, Faculty of Medicine, University of Nairob, aundated C. 1971. ANNEX 9 Appendix 2 Page I

PATTERNS OF BREAST FEEDING AND WEANING PRACTICES

1. This appendix assembles the evidence on weaning practices in Kenya, based on work carried out by WHO and in the Mwea-Tebere area. The data, shown in the attached Table 1, indicate that breast feeding is prolonged; one- quarter of all families at Mwea-Tebere had not introduced their children to a full diet by the beginning of the third year. In the large major:ity of the cases, no special nutritious foods were added to the diet. The children usually had first choice at meal, although they did not receive the most nutritious foods, which were probably reserved for older family members.

2. The data indicate that these poor weaning practices contribute to mal-nutrition but there is no indication whether children are beinR denied the right foods because of custom or because of lack of availability. The poor practices shown in the Mwea-Tebere sample, which is a group that has become recently affluent, suggests that with rising levels of living and food availability, these particular problems may still persist and be a cause for a nutrition education program. It is possible that a short breast feeding period is also not indicative of good nutrition practices since bottle feeding may be used after the initial period. ANNEX 9 Appendix 2 Page 2

Table 1: WEANING CHARACTERISTICS IN MWEA-TEBRERR AREA. JUNE 1966

(A) Length of Breast. Feedi ' (7D households)

Feeding up to: 6 months 12.months 18-month& 24 weeks

Scheme 2/ 12 46 13 11

Non-scheme 3/ 38 35 20 7

(B) Introduction First Food Supplements 1/ (% households) Age Child (months) 0-3 4-6 7-12

Scheme 20 74 6

Non-scheme 22 67 11

Age Child: 1st year 2nd- rea 3rd.year

Scheme 22 54 24

Non-scheme 32 42 26 ANNEX 9 Appendix 2 Page 3

(D) Addition of Special Foods 1/ (% households)

Foods Introduced: No Special Food Starchy Foods Animal Products Vegetables

Scheme 16 67 14 3

Non-scheme 48 42 0 10

(E) First Choice at Meal (% households)

Family Member: Children Mother Father None in Particular

Scheme 75 2 16 7

Non-scheme 71 6 23 0

(F) Weaning Characteristics as Shown by WHO Survey 4/

(Months Ngamwa All Other Total of Age) Interview Surveys Number %

1-3 0 1 1 0.3

4-6 28 6 34 11.7

7-12 108 38 146 50.3

13-18 32 14 46 15.9

19-24 16 37 53 18.3

24 7 3 10 3.5

Total 191 99 290 100.0 ANNEX 9 Appendix 2 Page 4

(G) Age at Introducing Food Other than Breast Milk - WHO Survey 4/

(Months Ngamwa All Other Total of Ase) Interview Surveys No. % ------No. of Children ------

1-3 90 36 126 38.6

4-6 100 48 148 45.4

7-12 28 21 49 15.0

13-24 0 3 3 1.0

Total No. 218 108 326 100.0

% 66.9 33.1

1/ Korte, R., op. cit., derived from pp. 286-287. 2/ Number of cases, 124. 3/ Number of cases, 87. 4/ Calculated from Bohdal, et. al., op. cit., pp. 148-149. ANNEX 9 Apipendix 3 Page i

NUTRITION PROGRAMS

This note enlarges the description of nutrition programs which was given in the main part of the annex.

Education and Training

The Ministry of Health aidministers a Better Living Institute at Kitui. Th4s was started in January 1961 and has held some 300 short courses for 15,000 students. Courses are run for two weeks to one month and are attended by husbands, who receive instruction in farming, and wives, who are taught nutrition.

3. The Kenya Red Cross is responsible for Kirathimo Model Village in Enutru in Kiambu District where mothers with children suffering from malnutrition are resident for a two-week course in nutrition, food preparation using local foods, hygenia, first aid and family planning. The Village is now in its f°fth year of operation and up to February 1972 366 mothers had attended, with a total of 792 children. These children are those suffering fro;r malnutrition in addition to the preschool children. The progryi was recently evaluated by IDA 1/ which concluded that, although the Village had considerable impact on the participants, it was rather isolated within the comrr.unity.

_nstitutional Feeding

4. Much of the Institutional Feeding is carried out under the auspices ox PL 480 Title II funds. This is summarized in Table 1. The National School Feeding Program was initiated in December 1966 with the cooperation of OXFPAN and other voluntary agencies, with the aip of providing a supplementary midday meal throughout the school year within the economic means of the parents and based on 4 locally produced high protein and vitamin food. The program gathered momentum in 1968-69, feeding 4,000 children in Coast Frovince (Mombasa and Taita), Eastern Province (Embu) and Central Province (Kiambu). The charge for the meal at that time was KSh 6.50 per child per zenm, with 65 feeding days, i.e., 10 cents per child per day; hawever, the real cost to the NSFC was 16 cents per child per day, the difference being the administrative cost, which was borne by OXAM. In 1970 the charge was

I/ Gachuhi, J.M., Chege, F.E., and Ascroft, J., Kirathimo Model Village of the Kenya Red Cross Sopiety, an Evaluation Report, IDS., Upiversity of Nairobi, August, 1972. ANNEX 9 Appendix 3 Page 2 raised to KSh 9 per term (14 cents per day) although by this time the costs of the program (operational and administrative) had run to KSh 25 per term (or 25 cents per day). 1/

5. By 1970, 60,000 children were participating in the Program (with at least one District per province and Central Province.almost entirely covered) but in the famine year of 1971, beans became,unobtainable and the number of participants dropped to 35,000 in the, first term and 24,000 in the second. In the first term of 1972, 294 primary schools and 35,700;primary school children were participating.

1/ Made up as follows.: Cost of food purchase; 11 cents Dis.tribution 4 Adminis.tration 10 WIhen beans were 6OSh/9Okg bag maize 4OSh/9Okg bag Supro 6OSh/44kg bag, WSB (Wheat-soy-blend) donated from CARE, NSFP. pays transportation. ANNEX 9 Appendix 3 Page 3

Table 1: PL 480 TITLE II ACTIVITIES.

FY 1971 Actual Amount Recipients US$'000 Number

Child Feeding 1,050 116512

A. Maternal and child Feeding. 520 42,700

CRS (Catholic Relief Services) (520) (42,700)

B. School Feeding 384 41,926

CRS (384) (41,926)

C. Other Child Feeding 146 31,886

CRS (109) (11,886) CARE ( 37) (20,000)

Food for Work 5 1,300

CRS (5) ( 1,300)

Other 58 6,220

CRS - Institutions ( 5) ( 220) CRS - Famine Relief (53) ( 6,000) Total 1,113 124,032

CRS (1,076) (94,032) CARE ( 37) (20,000)

SOURCE: USAID, Nairobi ANNEX 9 Appendix 3 Page 4

6. The primary school children receive a meal of 4 counces of beans, 1 ounce of maize and one-half ounce of supro (a mixture of milk, yeast and barley) in three-quarters pint of liquid. The children at the day care center run by the Ministry of Cooperatives and Social Services receive wheat- soy blend mixed in uji (maize-meal gruel). This is donated free from CARE and NSFP pays only transportation charges. The Council receives no government subsidy so much voluntary effort is required through the Parent-Teacher Associations. The meal is deficient in absorbic acid and vitamin A, and the content of calcium, niac4n and riboflavin is low.

7. Preschool age and other feeding programs are administered under the auspices of CARE. Tnis program nas 20,000 beneficiaries (at June 1972). Catholic Relief Ser!!ces (CRS) reach approximately 96,700 recipients (in FY 1971-72) of wAhich just under half are preschool children. Table 2 documents their ac.ivity.

8. Mothers of preschool age children pay KSh 2 per child per month; this covers the cost of transportinig and handling the food. The food itself (bulgur wheat, nilk and uil) is provided gratis, (by PL 480 aid). Of the 152 primary day scIhool feeding centers 72 come under the Nairobi City Council and Nakuru Municipal Council. Recipients only of these centers pay KSh 5 per month to cover handling costs of GRS supplies, the procurement of other foods bought locally, and administrative costs of the program. Other centers and all other child feeding facilities over their costs from overall fees paid by the children enrolled at these centers. The institutions through which adults receive food include one lepresarium and three homes for the aged and no special fees are charged.

Table 2: CATHOLIC RELIEF SERVICES (CRS) SUMMARY STATEMENT OF CRS-SPONSCRED FEEDING PROGRAMS IN KENYA, FY 1971-72

Number of Number of Ration per person per month Category of Program Recipients Centers Bulgur Wheat Milk Oil

1. Mothers/Pre-School Children 42,700 76 5 lbs 2 lbs 1 lb 2. School feeding-day 31,546 152 5 lbs 1-1/2 " 1/2 lb 3. Boarding School 10,380 97 5 lbs 2 lbs 1 lb 4. Other Child feeding (Nurseries, Orphanages, etc.) 11,886 141 5 lbs 2 lbs 1 lb 5. Institutions (Adults) 220 4 5 lbs - 1 lb

TOTALS 96,732 470

Source: CRS Nairobi AN14EX 9 Appendix 'x Page 5

9-. In thle years 1960-61, 1965, and 1971 Kenya has suffered from d~rought9 thie most severely hit areas being in the three Northern provinces-T . Marsabit, and Isiolo districts, the northern part of Tana River, anid me.os of N.i.E Province. Famine Relief is coordinated by the Office of the Pe-dn throu'g11' a Nat-ional Famine Relief Committee which includes various of)~t,he.

vo.luntary, agencies - CARE, CRS, OXFAM in conjunction with AID. Tlle SootdJ, '. '*spse.^sed,throuJgh the Provincial Administrations. Some funds are ailecated fro-m lie, Ot Eice of the President and some are raised by appeal; in 1971, X17 40,000 was allocated, and donations were received from appeals lcl'ea abroad. Food i-s bought from the Maize and Produce Board, if available5 or is obt,"ained gratis from AID/World Food Program. In a normal year about. >-0,000 people are served by the program; in a famine year this, mayJr.eL '; 70,000. for example, in 1970-71, there was an average of 100,000 rle :rec 7pients i-n 22 districts every month for a year. The relief is nn t.1 o.mo.~ raltionus vziven each week, or cooked in soup kitchens.

Cc!-t-irol 34casures Aanst Endemic Goitre

10. ^fvtieTdlO survey carried out in 1962-64 found that 30.2,' of the <9X,0004 school children examined in 14 districts had some form of e-ndeTrmic goitre. Table 3 summarizes the incidence data. In 1969 the Government, teooK prevent-ative measures and all common salt locally produced for 'ftvmat

e-.onsu-mption is now iodised and only iodised salt can now be imported . ,A surv-ey to evaluiate the effectiveness of this-program is due to be carrie-d ouit soon by the Medical Research Council. ANNEX 9 Appendix 3 Page 6

Table 3: INCIDENCE OF GOITRE IN SCHOOL CHILDREN ACCORDING TO THE DISTRICTS OF KENYA IN 1962-64 1/

Grades* District Number Number of % of children I II III Examined Goitres with goitre

Kericho 932 675 72.4 397 214 64 Nand-i Hills 3,426 2,233 65.2 1,221 813 199 Kiam,bu 342 152 44.4 136 15 1 N!veri 2,935 1,063 36.2 754 284 25 Kakaniega 780 251 32.2 215 36 0 Nakuru 3,121 952 30.5 731 198 23 Tai-a H-ills 1,033 292 28.3 282 10 0 Central Nyanza 2,700 730 27.0 615 110 5 E.nLu 414 90 21.7 56 31 3 Machos 182 39 21.4 39 0 0 Mo :basa 5,335 954 17.9 755 197 2 Nairobi 6,039 998 16.5 887 110 1 Nanyuici 67 10 14.9 8 2 0 Narok 1,196 179 15.0 161 15 3

crades. 1st Degree: Persons with palpable goitre 2nd Degree: Persons with visible goitre 3rd Degree: Persons with disfigured neck or goitre causing mechanical discomfort

Dried Sk'm Milk Production

11. UNICEF has supported the development of rural dairies, mllk cooking cern:ezrn and dry milk processing plants since 1963, although the scheme is now beinia pliased out as part of UNICEF's activities. Aid has also been provided ;:o the KHenya Cooperative Creameries (KCC), the Mariakani Milk Scheme near Mombasa, .he Dairy Training School at Naivasha, Egerton College and Emibu Tns~:i:.te of Agriculture. its scheme in rural areas was intended to promote the Lirles and provide skim milk as a source of protein for children and pregnaLnt -- Jomen. The scheme provided milk separaters, delivered butterfat -o C'- andi manufactured ghee locally. The resulting skim milk was treated as repa5n.-tent for the equipment provided and made available free to local clinics5 health centers, and schools. This did not work well and the scheme, wnere in existence, nowq buys skim milk powder from KCC and distributes it aC'cOrdf, lIgly.

l/ ~Boldal et al op. cit., P. 103. ANNEX 9 Appendix 3 Page 7

Resea-ch Activities _I.) 1;. Nutrition research is carried out by the Medical Research Center> the Departmenit of Community Health, and Department of Home Economics at Kenyatta College. Most of this work consists of nutrition surveys aad detection of malnutrition.

ANNEX 10 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

FORESTRY

The Forest Resource para. 2 - 8 Indigenous 3 Exotic Softwood Plantations 4 - 6 Rural Afforestation and County Council worest r- .cbeTies 7 - 8

Domestic Demand and Foreign Trade .9 -19 Exports 13 - 17 Imports 18 - 19

The Forest Industries 20 - 24

The Public Services to Forestry 25 - 33 Education and Training 26 - 27 Research 28 Public Expenditures and Revenues 29 - 32 Foreign Assistance 33

Issues and Judgments 34 - 52 Catchment Protection and Afforestation 35 - 43 Developing Export Markets for Sawn Lumber 44 - 50 Charcoal Production and Exports 51 - 52

Project Possibilities and Needed Studies 53 - 55

Table 1 Distribution of.Land Under Forest, by Type of Forest, by Ownership, 1961, 1965, and 1970

Table 2 Forest Land Plantation Area, 1961-1971

Table 3 Area Under Forest Plantations, 1972, and 1978 Target

Table 4 Investment Costs and Returns for Softwood Plantation Crops on Average Sites in the Highlands

Table 5 Plantation Yield Schedule for Average boftwood Crops in the Highlands

Table 6 Planned Versus Actual Public Expenditures on Forestry, 1969-70 through 1971-72 ANNEX 10 Page ii

Table 7 Imports and Exports of Main Forest Products, 1971

Table 8 Public Expenditures in Forestry, 1969-73

Table 9 World Consumption of Selected Forest Products, Past Trends and Projections to 1985

Table 10 Sawn Lumber Exports, by Destination, 1965-70

Table 11 Exports of Sawnwood by Species, Volume and Destination, 1970

Table 12 Sawnwood Exports by Value and Destination, 1970

Table 13 Volume, Value and Average FOB Prices of Cypress Sawn- wood Exports, by Destination, 1972

Table 14 Average FOB Prices for Sawn Softwood Exports, 1970

Table 15 Average Selling Prices at Licensed Sawmills, Sawnwood, 1959-70

Appendix 1 Organization of Kenya Forest Department ANNEX 10 Page 1

FORESTRY

1. Forestry and forest industries taken together have accounted for some 2% of GDP in recent years. Imports of forest products are about twice as large as exports. Both domestic and foreign demand are growing rapidly, and if skillfully managed the forestry sector can contribute a great deal to economic growth in the decades ahead-both through direct production and, most important, through soil and water conservation.

nhE FOREST RESOURCE

2. Almost entirely publicly owned, land in forests is made up of the indigenous forest area, the exotic softwood plantation and rural afforestation schemes.

Indigenous

3. The indigenous forest areas cover about 1.7 million ha, equivalent to approximately 3% of the country's total land area and to about 16% of the higher rainfall area (Map 10280). Over the last 50 years, these forests have been systematically exploited for the production of sawn lumber and, more recently, peeler logs for the plywood industry. The main economically acces- sible reserves of commercially valuable species, (Podocarpus gracilior, Podocarpus milanjianus, Juniperus procera, Ocotea sgM., Oleai M.), have been cut out. Some areas such as Mount Kenya and Masai Mau still have significant quantities of merchantable timber. The wndigenous forests are estimated to have a potential production of 150,000 m per annum for the next 20 years. Apart from their timber production potential, the indigenous forests have a number of other indirect functions, including provision of dry weather grazing, protection of water catchment areas, and the generation of revenues from sports, hunting and tourist game-viewing lodges.

Exotic Softwood Plantations

4. The indigenous forests are slow-growing and take between 60 and 100 years to produce timber of usable size. Because of this the Government over the last 30 years has been replacing these slow-growing forests with faster- growing exotic plantation species such as Cupressus lusitanica, Pinus radiata and Pinus patula. Up.to 1972, a total of about 120,000 ha'of industrial plantations had been established. 1/

1/ The plantations to date have usually been established by the "shamba" system--forest workers grow maize, potatoes, or other crops for two or three years on the indigenous forest land, and trees are then planted. Unionized labor or mechanized operations would probably raise costs. ANX 10 Page 2

5. Of this, about 6,500 ha have been set aside as pulpwood plautations to supply a pulp and paper mill under construction at Broderick Falls (see below). The balance is being managed for the production of sawlogs and peeler logs for the plywood industry. The pulpwood plantations are being established in the Turbo region within a 40 mile radius of the Broderick Falls pulp mill site. Planting is at the rate of about 6,000 ha a year, of which 4,800 ha is new planting and about 1,200 ha replanting of plantation areas being clear felled for production of industrial wood. The Government's targets for 1980 are 20,000 ha of pulpwood plantations and 140,000 ha of sawlog plantations.

6. Kenya's potential for the low-cost production of industrial wood is one of the main reasons behind the Government's extensive forestry program. Costs are currently low compared with many countries, primarily because of more favoiable climate and soil conditions. Faster growth rites in Kenya, e.g. 17 m /ha, than in temperate countries, e.g. Sweden (4 m /ha) and shorter wood hauls, result in lower wood costs, say, US$6lm3 for pulpwood delivered to Kenya millsite compared with US$12 to US$15/m3 in Scandinavia. Never- theless, Kenya faces problems in the industrial plantation field. These include the poor quality of sawn timber currently being produced from young pine plantations; the need to ensure more systematic pruning of crops which are to produce sawn lumber for export markets; plantation establishment problems due to poor soil conditions in the Turbo pulpwood plantation area; and damage to young Pinus radiata plantations caused by the fungal disease Dothistroma. The Government's Forestry Department is studying these problems; in fact, the Turbo establishment problem may already have been overcome. The Dothistroma fingus has been controlled by spraying, but only the better sites may be able to support the cost; a switch to species other than Pinus radiata will be adopted wherever possible. The pruning and maintenance of young crops can be adequately handled only if the Forest Department's budget and staffing are kept at suitable levels.

Rural Afforestation and County Council Forestry Schemes

7. About 1% of the Forestry Department's current budget is devoted to promotion of rural afforestation, i.e. production of building poles and fuel- wJood on private farmlands in the rural areas. An additional 8% of the budget is allocated to Local Afforestation Schemes, i.e. the planting of hilltops and marginal lands in the rural areas. These schemes are in forest owned by the County Councils and managed by the Forest Department. The Government ;lans to give more attention to these activities. To extend the rural arforestation scheme to all administration districts would require opening about 40 Forestry Extension Offices. The scheme relies mainly on making tree seedlings available at subsidized rates to farmers, backed up by an extension service to advise on selection of species, tree planting methods, etc. Five extension foresters have been posted to Meru, Narok, Bungoma, S. Nyanza and Machakos. ANNEX 10 Page 3

8. The demand for fuelwood and building poles in the rural areas far exceeds the requirements for all other forms of 3roundwood. It is reasonable to guess that each rural family consumes five m of fuelwood and poles a year.1/ If all this had to be supplied from farm forest plantations an area of one million ha would be needed to supply estimated 1980 requirements on a sustained yield basis. Clearly land is not available for a program of this size. But the calculation shows the magnitude of the problem, and suggests that there must ultimately be a shift to other forms of fuel. However, wood will remain the main source of fuel for most rural households for many years to come, and the planned increase in Government expenditure on rural afforestation is justified.

DOMESTIC DEMAND AND FOREIGN TRADE

9. Domestic demand for all types of forest products has grown sharply in recent years. Consumption estimates for 1960 and 1970 are:

Unit 1960 1970

Sawn lumber thousand m (s) (sawn) 105 141

Woodbased panels (ply- thousand m3 wood, fiberboard, (of manufactured particle board) product) 2 14

Other wood based panels 4

Pulp and paper thousand products metric tons 18 45

Building poles & other thousand industrial roundwood (roundwood) (transmission poles, etc.) 300 400

Fuelwood million m (r) (roundwood) 8 11

10. Sawn lumber is used mainly for construction. Rural households consume about 40% of all sawn lumber. The main plywood markets are for tea chests, and shuttering for buildings; both markets are expanding and domestic market prospects appear good. Domestic consumption of pulp paper

1/ Uthere wood is not readily available, alternative fuels, mainly animal dung, are used. ANNEX 10 Page 4

and paperboard products increased about 10% annually from 1960 to 1970, and is expected to continue growing rapidly. Industrial paper and paperboard has been in particularly strong demand, mainly because of the increasing use of corrugated containers and paper sacks for packaging.

11. Expressed in terms of roundwood equivalent, d mestic consumption of forest products was equivalent to about 12 million m of roundwood in 1970: 1/ 3 Million m (r) _

Fuelwood 11.0 92

Poles 0.4 3

Sawnwood 0.3 3

Pulp and paper products 0.2 !

Plywood and other wood based panels 0.1 1

Total 12.0 100

12. As noted above, fuelwood is by far the major outlet for forest products. It comes mainly from natural bush, farms, forest plantations or County Council forests in the rural areas. The Government's objective is to meet most of the country's industrial wood requirements mainly from the industrial plantations, now being established in the Government owned or County Council forest areas, and fuelwood and building pole requirements from privately owned farm woods lots.

Exports

13. The annual value of forest product exports rose by over K6 2 million between 1965 and 1970, and in 1971 reached about K6 4 million (equivalent to about 5% by value of all exports).

14. Exports of manufactured paper and paperboard products (mainly pack- ag,.-) were value at KD 2.4 million in 1971 of which exports to Uganda and Tanzania accounted for 60%. The packaging industry uses primarily imported paner. The prospects for future exports will depend partly on the extent to whiCh the new pulp and paper mill at Broderick Falls can produce paper and paperboard of acceptable qualitv at internationally competitive prices.

1/ FAO, Report to the Government of Kenya, Development of the Forest Sector, 1972. ANNEX 1 0 Page 5

15. Charcoal exports increased dramatically in the last five years, from about 10,000 tons in 1967 to over 50,000 tons in 1971. In the latter year, exports were valued at KE 0.8 million. The main export markets are the Middle East (Iraq, Iran and Kuwait account for 80%) and Uganda. Market prospects are favorable.

16. Sawn lumber exports increased from 23,000 m in 1967 to 43,000 m3 valued at KI 640,000 in 1971. A recent FAO report concludes that export demand prospects are favorable over the long term if quality can be improved and transport costs reduced. 1/ Exports of wood carvings increased from KE 250,000 in 1967 to K6 340,000 in 1971. Prospects for a steady expansion of this trade are favorable.

17. The high degree of dependence on Uganda and Tanzania markets is the fundamental weakness of the present export trading pattern. An effort should be made to expand exports to other markets.

Imports

18. Imports of the main forest products were valued at more than K1 9.0 million in 1971. This created an adverse trade balance in forestry products in excess of KE 5 million. This is mainly because of paper and paperboard imports, which were valued at more than KE 8 million in 1971. The pulp and paper mill at Broderick Falls should reduce imports of paper and paperboard products by some KE 4 million by about 1975.

19. The other main imported items are plywood, fiberboard and particle board (about KE 0.7 mill on a year), and sawn hardwood from Uganda and Tanzania (about 15,000 m yearly) used mainly for high quality interior construction work. Imports of plywood have declined since two local plywood mills came into operation a few years ago.

THE FOREST INDUSTRIES

20. Fifty sawmills are operating in the Government forests, and about 120 sawmills in private or County Council locations. The sawmills are widely dispersed, typically small (there are only 5 mills with an annual capacity of over 30j000 m3 of sawn output), simple in design, tractor or diesel powered and on a one shift basis. They are well sited to provide sawn lumber for the growing rural market. However, product quality is generally low and not acceptable for shipment abroad. In contrast, the larger mills with high speed bank saws and kiln drying equipment can meet the quality requirements of overseas markets. Recognizing the quality problem, the Government has tried in its industrial plantation program to plant blocks of at least 4,000 ha each; these can support a sawmill with a minimum output of

1/ FAO, Sawnwood and Pulp Wood Marketing Survey, FAO, 1971. ANNEX 10 Page 6

30,000 m of sawnwood per annum. 1/ These bigger mills now account for about 50% of saxqn softwood exports, and they must be improved to assure that the groxing supplies of sawlog material are processed into exportable sawn lumber. The Forest Department is under considerable pressure to reallocate the few large industrial concessions to smaller operators; this must be resisted. 2/

21. - The two plywood mills, one at Elburgon and one at Elgeyo, together produced about one million m of plywood in 1971. A thi5d mill is under construction at Eldoret with a capacity of 1.5 million m . Two more mills are planned for the 1973-78 Plan period, one in the Mount Kenya area and one in Masai Mau forest.

22. The main markets for plywood are for tea chests, furniture manufacture, and shuttering for buildings. The supply of high quality plantation- produced softwood peeler logs is not yet sufficient to meet the industry's requirements. To help meet this problem, several indigenous species are being used for peeler logs (mainly for tea chests).

23. The pulp and paper mill at Broderick Falls will be one of Kenya's largest industrial enterprises. It will have an output capacity of 50,000 tons per annum and will produce both bleached and industrial grades of paper and paperboard. The mill will draw its wood supplies from Government forests situated within a 100 mile radius of the mill.

24. Expansion of the forest industries will have a very limited effect on the demand for labor. The forestry sector currently employs some 20,000 workers, of whom 8,000 are resident forest workers. A further 10,000 are employed in the forest based industries. Forest and forest industries account for about 6% of non-agricultural employment, or 3% of total employment including agriculture. The sawmilling and logging industries currently rank fifth in the nation in terms of numbers of industrially employed persons. The other wood based industries (such as pulp and paper, and furniture) rank twelfth. Earnings ir forestry and logging in 1970 amounted to about K1 1.6 millicn (enuivalenr to about 10% of all earnings from agriculture, forestry, hunting and fishing). Forest induxstrial earnings amounted to a further KE 4.0 million (equivalent to about 13% of all earnings derived from manufacturing).

1/ This policy reflects the findings of a committee which sat in the 1950's to formulate development strategy for the sawn lumber industry. The committee position became known as the "Craib" Plan. 2/ 11he Government owns and operates one of the 5 large sawmills in the country in conjunction with its Forest Industrial TraiLing Center (FITC) at Nakuru; also a logging unit which does subcontract logging for private sawmills. FITC also operates a prefabricated wooden housing plant in which experimental work is car:ied out on new house design, and methods of lumber preservation. ANNEX 1 0 Page 7

THE PUBLIC SERVICES TO FORESTRY

25. The Government's forestry programs are planned and implemented by the Forest Department of the Ministry of Natural Resources. The organization is shown in Appendix 1. The Department has a staff of about 1,800 of which 37 are graduate forestry officers, 1120 diploma trained foresters, 200 forest rangers, 1,000 forest guards, and the balance clerks, drivers, etc. 1/ For purposes of administration, the country is divided into 3 Conservancies, 12 Divisions and about 100 Forest Districts.

Education and Training

26. The 37 graduate forest officers currently in post are all overseas trained. The Department is up to full strength in its graduate officer requirement. Since 1962 diploma grade foresters (sub-professionals) have been trained at Egerton College, and in recent years about 20 have graduated each year. As there is now no shortage of these officers, the Egerton course has been dis- continued. The Forestry Training School at Londiani trains both forest rangers and foresters. The number of students accepted for training depends on the openings available to graduates of the institution.

27. The Forest Industrial Training Center in Nakuru offers training for sawmill work (logging, saw doctoring, mill engineering and sawmill management). The mill operators sponsor the students, paying only living costs. There is an urgent need to make this service available to small sawmill operators who are unable to take advantage of the facilities at Nakuru. The Forest Depart- ment has started a small project to do this, working in close conjunction with ICDC which makes available loans to small sawmill business operators. However, the Department is short of staff for this purpose.

Research

28. The Forest Department researches both silvicultural and forest industrial problems. Its research program broadly reflects appropriate priorities. EAAFRO (The East African Agriculture and Forestry Research Organ- ization) based in Muguga carries out longer-term research of common interest to the three East African countries, such an entomological and mycological diseases. At times the EAAFRO has difficulty in getting agreement on research priorities, and in promoting the use of its findings (particularly on forest catchment areas). Its current research is weak on the economic side, and should be strengthened.

1/ Administrative and technical staffing levels in industrial plantation areas are high compared with many other countries. This, has been justified mainly on the, grounds that forestry staff have a number of other functions apart from the direct supervision and management of the industrial plantations. These include management of the indigenous protection forests, collection of grazing fees and extension work in adjacent farming areas. ANNEX 10 Page 8

Public Expenditures and Revenues

29. Total public expenditure on forestry was about Kh6 1.0 million in 1969-70. Expenditure during the period 1972-74 is now expected to exceed the 1970-74 Plan estimates by approximately K1 0.9 million. The main items accounting for this increase are the expanded Rural Afforestation Scheme, the cost of purchasing additional agricultural land for the Turbo Pulpwood Afforestation Project and additions to the Forest Industrial Training Center. The plantation schemes account for about 50% of expenditures, with the construction of forest roads and operation of the Forest Industrial Training Centre and logging unit absorbing the rest.

30. Revenues derived from sales of timber, firewood and poles from Government forests amounted to approximately KIh 180,000 in 1968 and are expected to rise to Kh 350,000 in 1974. Revenues from Government logging and sawmilling operations are estimated at an additional K16 500,000 during the current Plan period (1970-74); if attained, this would cover the cost of the Forest Industrial Training Centre's logging, sawmilling and training operations.

31. The sales of logs to sawmillers are mjde in accordance with royalty rates (ve y low) which vary from KSh 6.80 per m for the best hard woods too KSh 6.5 m for the cheapest soft woods. The royalties for planted soft woods are being raised by 10% per annu during the current Plan period; they will 3 ultimately reach KSh 17.50 per m for 15-year 3old thinnings, KSh 22.80 per m for 22-year old thinnings and KSh 26.30 per m for clear felling. The royalties for non-plantation timber are based on the average selling price of sawn timber.

32. The total direct revenue received from sale of Government forest products is less than Government expenditure in the sector by about K6 1.3 milllion per annum (at current levels). The Government intent is to make its royalty revenues cover both its capital investment and maintenance expendi- tuires on forest plantations.

ForeiRn Assistance

33. An IDA credit of US$2.6 million in 1969 helped finance the current afforestation program aimed at establishing about 24,000 ha of industrial plantations in 1970-75. The credit became effective in 1970 and disbursement is likely to be completed by 1975. During the last five years Kenya received techr.Ical assistance from Canada, New Zealand and Sweden. A Canadian team carried out a forest inventory of the indigenous and exotic plantation areas, and estimated present and future volumes of wood likely to be available. The project included a training component for local forest inventory and survey specialists. The New Zealand industrial training program provided experts to assist in setting up the Department's Forest Industrial Training Centre and initiated the operations of the Department's logging unit. Training was given to local logging and sawmill operators. A Swedish mission evaluated the overall forestry development program. It made various recommendations for reorientation of the afforestation program towards industrial development, ANNEX 10 Page 9

and discussed marketing problems which may arise as a result of possible overproduction of saw logs. An FAO mission assisted the Government in preparing a loan request to the Bank for financing of the above-mentioned afforestation project. FAO also prepared a report on the technical and economic feasibility of the fiberboard plant now under construction; it also assisted in the technical development of the plywood industry and carried out studies on export market prospects for sawn lumber.

ISSUES AND JUDGMENTS

34. A main issue is how to assure preservation of forest water catchment areas in the face of acute population pressure. Water for agriculture and domestic use is the most valuable product of the forests. A second issue is how to develop and service export markets for forest products. A third is how to organize the charcoal industry to sustain exports wAithout excessive removal of vegetative cover and consequent erosion.

Catchment Protection and Afforestation

35. Of the total Government forest estate of 1.7 million ha, over 1.3 million ha have been set aside as catchment protection forests. This land is in the high rainfall area and, apart from topography, much of it has high potential for agriculture. During the last five years, net gazetted excisions of forest land for agricultural settlement has totalled about 30,000 ha; another 20,000 ha has gone for national park development. However, in addition illegal spontaneous settlement and continuous maize cropping is taking place on a substantial but unquantified scale in such areas as the South slopes of Mount Elgon, Cherangani, and the South West M4au forest reserves. Under these conditions an increase in surface runoff leading to the irrever- sible process of soil erosion seems inevitable. Further, continuing excision of the protective forest will foster the deterioration of water catchments and will jeopardize perennial river flow over wide areas.

36. Only about 4% of the land area of East Africa can expect to receive in four years out of five as much as 1,500 mm of rain a year. It is only from this very small area that perennial rivers originate; these rivers make agriculture possible in the drier marginal areas. Removal of the natural forest cover followed by uncontrolled grazing and cropping has already resulted in.excessive soil erosion and to deterioration in stream flows in Kenya. One of the best illustrations of this is an area of 200 square miles in the Kondoa- Irangi region.

37. EAAFRO began catchment studies in 1957 to discover the effect of different vegetative covers on total water yield and on wet versus dry weather stream flow. Various methods of soil and water conservation under different types of cropping were also studied. These studies confirm that the natural indigenous forest cover is highly effective in regulating stream flow. Ilowever, certain agricultural crops such as tea and bananas appear to ANNEX 1 0 Page 10 he acceptable for catchment cover under ce,rtain conditions if combined with adequate soil conservation measures along with,storage dams below the catchment area to even out dry weather stream flow.

38. These findings underline the need for increased attention to forest water catchment areas. The Government should take immedia,te steps to:

(a) Activate the Inter-Ministerial Land Use Committee (discussed elsewhere in this report), and give it the necessary capacity and power to adjudicate fo,rest land use issues;

(b) Prevent further illegal and uncontrolled settlement in-the forest catchment areas;

(c) Mount further studies of the cropping possibilities and of the soil conservation measures and storage dam capacity needed to ensure adequate protection of forest catchment areas now coming under heavy population pressure,-and in which conversion of some of the forest area to agriculture may be inevitable at some future date. One possible way of unde-rtaking these studies might be to make them an integral part of small settlemen,t projects located within catchment areas on an experimental basis. This would permit an effective control over infrastructure, cropping patterns, and soil conservation measures, and the collection of data on the resulting catchment water yield and stream flows.

39. The increasing competition for land gives rise to a related question, i.e., afforestation in marginal areas. Over 90% of the forest areas planted by the Forest Department during the last thirty years is in the wetter highland areas on high potential agricultural land. Some assert that this land should be released for agriculture and that afforestation be restricted to the drier marginal areas below 1,500 m which have less than 500 mm rainfall and an erratic rainfall distribution pattern.

40. Such relocation of forestry plantations would present major problems. The erratic rainfall typical of the marginal areas and the high evapo- transpiration rate would make it necessary to use very slow growing hardwood snecies (60 to 80 years to produce timber compared with 25 to 30 years in the wetter highlands). To produce a 10% internal rate of return on such plantations would require that the royalty rate for the timber grown in the drier marginal areas be increased to ten times the current level. At this price it would be cheaper to import softwood from Canada or Scandinavia than to grow industrial wood in Kenya. 1/

1/ Fuelwood and building pole plantations are viable enterprises in the drier marginal areas; these are now being established tinder the Govern- ment's Rurai Afforestation Scheme. The Scheme should be continued. ANNEX 10 Page 11

41. A second suggestion commonly put forth on afforestation is that it should be in the alpine regions above 3,500 m with rainfall in excess of 1,000 mm. However, the technical problems of growing timber above the 3,500 m contour have not been resolved (after some 15 years of experimental work) and it is questionable as to whether a satisfactory technique will ever be devised.

42. In summary, acceptable rates of growth and financial return are only likely to be achieved between the 1,500 and 3,000 m contours and in areas with a minimum of 1,000 mm rainfall; this land is of medium or high agricultural potential. 1/ This judgment, of course, does not necessarily mean that the ontimum use of this land is in forestry. If a strong upward trend in world timber prices is assumed, along with a very low discount rate, indicative calculations suggest that intensively managed industrial timber plantations may Possibly yield competitively with annual crops, at least in areas which require substantial outlays for conservation if cropped annually. However, this presumptive judgment needs to be confirmed by careful analysis of the probable rates of return to alternative uses of this land, keeping in mind thc. need to shadow price both labor and foreign exchange. This analysis shiould be repeated from time to time as national and foreign conditions change. The implications are important, because the validity of the national objective of being self-sufficient in industrial roundwood supplies and expanding exports of sawn softwood timber is at stake. It is already clear that these goals cannot be attained unless some of the plantation areas are on high potential agricultural land.

43. Meanwhile, afforestation in the drier marginal areas should aim mainly at the production of fuelwood and building poles for the local people, and, within the highland forest areas, planting should be concentrated on steeper slones on poor agricultural land to the economic extent. A review of the present planting program should be carried out to identify such areas.

Developing Export Markets for Sawn Lumber

44. Kenya is compgtitive in some 10 countriSs in sawn lumber. Exports increased from 23,000 m in 1965 to some 42,000 m in 1971. Of total 1970 exports, about 80% went to Uganda and Tanzania and the balance to overseas countries-. A notable trend in sawn cypress exports, which increased from 18% of total sawn lumber exports in 1960 to 82% in 1970.

1/ It should be noted that, within the Government forest reserves located in the highlands, there are some hilltop or vallev areas which are either too steen for agriculture or which have thin, poor soils. In such areas, tecitnical considerations suggest that forest plantations would be a more logical form of land use than agriculture. However,'these areas are widely scattered, and costs of plantation establishment and management in such scattered blocks would be high. Exploitation mav nonetheLess be profitable, although the economic return is unlikely to be high and the incremental contribution to national output not verY significant. ANNEX 10 Page 12

45. Demand prospects are good. The areas of Tanzania and Uganda around Lake Victoria should continue to be good markets, partly because of the location of softwood areas. However, both of these countries are establishing industrial plantations with the long-run intent of becoming self-sufficient in timber. On balance, Kenya can probably expect a steady but rather slow rise in the volumes exported to Uganda, and, to a lesser extent, to Tanzania, in the decade or so ahead. But the magnitude of the trade is unlikely to ever get very big. If it grew at an average of 5% per3 year, an optimistic assumption, it would3 still amount to less than 30,000 m (s) in 1980, and to only about 45,000 m (s) in 1990.

46. Zambia is also a Dossible market for limited volumes. Although Zambia has underway a softwood afforestation scheme, this will not begin to meet its needs until 3the 1990's. In the interim, it is likely to need imports of at least 50,000 m of sawn softwood per year. Much of this will be for the mining industry, which requires special lengths, sizes and qualities. But a growing share will be for construction timbers of the types Kenya can produce, and which Zambia now imports mainly from South Africa. The high costs of transport across Tanzania raise Kenya prices above the South African level. Improvements in road and rail services in Tanzania might, in time, bring transport costs down. But by 1980 there will be production of these required grades of softwoods in both southern Tanzania and in Malawi, and they are likely to be competing in the Zambian market. Kenya's prospects are likely to be better with high priced products which can more easily absorb the transport costs, such as good grades of cypress and plywood. But the trade is likely to be modest in amount.

47. The countries around the west end of the Indian Ocean, such as Miauritius, Somalia, Saudi Arabia, Yemen, Bahrein and Kuwait, probably offer the best prospects for Kenyan exports of sawqn softwoods of the qualities likely to be available. Import statistics for manv of these countries are3 incomplete, but it would appear that they imported in 1970 about 200,000 m of savn softwood, and at least an equal volume of sawn hardwood. The sawn softwood comes mainly from Austria, Romania and Sweden. M'ost of the sawn hardwood comes from Singapore. Much of the oresent importation is for the oil enclaves or the developments associated with them, and import growth has been sharp. If imports were to grow at 5%' per vear over the next two deSades, .he aggregate import of sawn softwood by 1980 would be between 275,000 m and 375,000 m 3 ; and perhaps as much as 600,000 m3 by 1990. Very little information is available about the grades and qualities imported into this area but most appears to be the cheaper and low grade products. A more important consideration for Kenya is its poor shinping links with these potential markets. flowever, this could probably be overcome by chartering.

43. Another group of countries, incluiding the UAR, Sudan, Israel, Jordan, iran and Iraa which import both through Indian Ocean and other ports, constitutes a much larger market. The bulk of their sawn softwood imDorts come from the USSR and Romania. Market development by Kenya would have to .ecognize that certain localized markets are better served from Indian Ocean ports, and that sharp competicion on quality and price is likely. ANNEX 10 Page 13

49. One of Kenya's most promising Droducts is prime grade cypress. This is being exported to western Europe, where it is used for the manufacture of joinery. It should be possible to increase these exports, as the volume of the cypress cut rises.

50. Several steps should be taken to help assure that economic export onportunities are fully exploited. Lumber quality should be improved, particularly by the smaller sawmills. The few remaining larger sawmills should be retained and expanded to assure a regular supply of low-cost high quality lumber needed in opening new markets, Integration between sawmilling and pulp- mill operations in the Broderick Falls area is needed to make use of sawmill waste residues and reduce sawn lumnber Droduction costs (the Government is already studying this problem). It is particularly important that technical and business management trairing of smaller sawmill operators be stepped up. Moreover, the few larger sawmilling enterprises, equipped with high speed band saws and kiln seasoning facilities should continue to be assigned a leading role in penetrating new export markets. The Government in its forest con- cession decisions should continuie tco guarantee these few large enterprises the long-term security of tenure raquired to justify the heavy investment in processing and seasoning plant.

Charcoal Production and Export_

51. Kenya has rapidly expanded exports of charcoal, particularly to the Middle East, during the last five years. This has been mainly produced by private contractors using indigenous bush timber from the region between Voi and Mtackinnon Road. Aa noted t,oove, exports expanded from about 10,000 tons in 1967 to over 50,000 tons in 1971; total value of charcoal exports in 1971 reached Kb 800,000 (compared with ', 480,000 from lumber). The future market prospects in the Gulf are believed to be favorable, although a market study is required. 1/

52. A main issue is whether the present level of exports can be maintained without further wholesale removal of indigenous bush cover in the coast hinterland and the resultant risk of serious soil erosion. By 1970 erosion in that area had become so aerious that the Government introduced an embargo on cutting. To sustain exports, it may be possible to base the charcoal industry on systematic exploitation of the indigenous forests, preferably coupled with a program of plantation reestablishment for production of timber or other forest products. The m7st obvious potential for doing this lies in the conversion of the Arabuko Sokoke forest area (located in the coastal strip about 100 km north of Mombasa). This is an area of some 35,000 ha of indigenous forest with a production potential of some 30,000 tons of charcoal a year for the next 10 years. A reslanting program of 2,250 ha a year with

1/ The urban domestic market will contin-ue to compete with exports for supplies. This market probably absorbs some 100,000 tons of charcoal a year. (No detailed survey of urban charcoal consumption has been carried out.) Most of this is produced by small business contractors operating in the forest areas close to the main towns. ANNEX 1 0 Page 14

fast growing pines or eucalyptus appears technically feasible, judging from the findings of the Forest Department's experimental program in this area over the last ten years. Part of the cost of clearing the .ar.ea for afforesita- *tion should be covered by revenue from the charcoal industry. Output from an afforested area of 25,000 ha in pine would find a ready outlet in the lumber market.

PROJECT POSSIBILITIES AND NEEDED STUDIES

53. The main project possibility is a second phase of the IDA project mentioned above, perhaps starting in 1975. This phase should include a rural afforestation and County Council afforestation component. A second six-year tranche based on a total planting program of about 6,000 ha a year, plus a rural afforestation.extension service component would require a total investment of between US$6.0 and US$7.0 million. Dependent on the outcome of further study, the project might also include a charcoal production element. The studies needed to enable project preparation should begin now.

54. A second project possibility is small-scale forest industries. This might be a component in a loan *to the ICDC for financing the development of small-scale industries. The proposed component, if feasible, would help imDrove the production of small businesses in sawn lumber, furniture, joinery and pre-fabricated lumber for housing; a target of KE 1.0 million of lending over a five-year period may be reasonable.

55. A study of the forestry catchment areas likely to come under population pressure in the coming decade.-is,needed. This should include an appraisal of the cropping potential, and it should determine the soil conservation measures and dam storage capacity which would be needed in the event that agricultural settlement becomes inevitable. A second study should explore the charcoal,market prospects in the Middle East, production prospects in the Arubuko Sokoke coast mangrove forests, and ways of organizing the swamp charcoal industry in the Lamu area. ANNEX 10 Table i: DISTRIBUTION OF LAND UNDER FCREST, BY TYPE CF Page 15 FCREST, BY OWNER",HIP, 1961, 1965, AND 1970

3963. 1965 1970 --- Thousand Ha ------Type of Forest /

Closed Central Government 718 721 706 County Council 210 190 356 Subtotal 928 911 1,062

Woodland Central Government 284 273 103 County Council 106 117 195 Subtotal 390 390 298

Bamboo Central Government 136 136 69 County Council 47 46 251 Subtotal 183 182 320

Grassland Central Government 180 171 129 County Council 61 50 130 Subtotal 242 221 259

M4angroves Central Government 54 45 45

Total 1,796 1,749 1,984

Ownership 1/ Central Government Gazetted 1,366 1,345 934 Other 6 1 118 Subtotal 1,372 1,346 1,052

County Council Gazetted 363 364 871 Other 61 39 61 Subtotal 424 403 932

Total 1,796 1,749 1,984

Private Forests 128 117 124

1/ Excluding private forest land.

Source: Statist-ical Abstract, 1971 ANNEX 10 Page 16

Table 2: FOREST LAND PLANTATION AREA 1961-1971-

1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 ------Thousand Ha --- TL-----

Indigenous Softwoods 5 5 5 5 5 4 4 4 5 5 5

Indigenous Hardwoods 4 4 4 4 4 4 4 4 4 4 5 Exotic Softwoods

Cypress 26 28 29 31 33 35 37 40 43 49 47 Pines 31 34 36 36 38 40 42 47 50 51 52 Exotic Hardwoods

Timber 3 3 3 3 3 3 3 2 3 2 2 Fuel 9 7 7 6 6 6 6 7 7 9 9

Total 78 81 84 85 89 92 96 104 112 120 120

'/ Total area of Forest Department Plantation at end of year:

Sources: Forest Department and Statistics Division, cited in Statistical Abstract 1971, and Economic Sturvey 1972. ANNEhX 10 Page 17

ThL"e 3: AREA UNDER FOREST PIANTATIONS, 1972, AND 1978 TARGET

Area under Targets Area under Forest Forest plantations Planting Clear felled planted forests Division December 1972 1973-78 1973-78 December 1978 ------_____--_ _a___------___Ha------

Nyeri 1o,480 1,820 1,490 10,810

EFn)u 2,980 530 430 3,080

Nairobi 17,870 2,100 2,500 17,470

Coast 1,45o 750 220 1,980 Southern 3,450 900goo 3,870

Londiani 19,850 4,920 3,070 21,700

Elburgon 23,310 5,580 3,630 25,260

Thconson's Falls 7,270 5,100 1,160 11,210

Kitale 6,950 1,440 1,110 7,280

Kismmu 4,670 1,500 370 5,800

Elcloret 18,110 5,760 3,960 19,910

Turbo 6,100 9,720 - 15,820

Total 122,490 40,120 18,420 "1.4,190

Sou.rce: Ministry of Natural Resources ANNEX 10 Page 18 Table L: INVEST3NT COSTS AND RETURNS FOR SOF¶OD pLANTATION CROPS ON AVERAGE SITES IN THE HIGHIANDS

Pul2wood Sawlogs Expenditure Revenue Expenditure Revenue K- per Ha------^------

1 15.0 37.5 2 2.5 1.0 3:1 2.5 1.0 4 2.5 5.0 5 2.5 1.0 6 2.5 7.5 7 15.0 1.0 8 2.5 7.5 9 2.5 1.0 10 2.5 12.5 11 2.5 1.0 12 2.5 1.0 13 2.5 1.0 1i 2.5 1.0 15 2.5 1.0 62.5 16 -2,3 2340 1.0 17 1.0 18 1.0 19 1.0 20 1.0 21 1.0 22 1.0 80.0 23 1.0 24 1.0 25 1.0 26 1.0 27 1.0 28 1.0 29 1.0 30 1.0 562.5 9?7-0_ 705.0

Assumptions 1. Planting for pulpwood on grassland or cleared agricultural land as at Turbo. 2. Planting lor sawlogs in indigenous forest with infrastructure (roads, buildings etc.) 3. Pruning of pulpwood crop in 7th year and of sawlog crops in 4th, 6th, 8th and 10th year. 4. One unsalable thinning operation in sawlog crop at 10 years. 5. Yields as per table shown on next page. 6. Royalty rates: KSh 17.50 per m3 for pulpwood and 15-year old thinnings. KSh 22.80 per m3 for 22 year thinnings. KSh 26.30 per m3 for 30 year clear feling.

Source: Mission AbNEX 10 Page 19

Table 5: PLANTATION YIELD SCHEDULE FOR AVERAGE SOFTWOOD CROPS IN THE HIGHLANDS

Pulpwood Per acre Per hectare

Number of stems per acre 680 1,700

Nniioer of thinnings Nil -

Assumed mean annual increment (over bark) 250 cubic feet 17m3 per annum per annum

Assumed rotation 15 years 15 years

Assumed clear felling yield 3,750 cubic feet 268

Sawlogs

Number of stems per acre 680 1,700

Age of first non-commercial (unsalable) thinning 10 years 10 years.

Age of first commercial (unsalable) thinning 17 years 17 years

Estimated salable yield at 15 years 1,000 cubic feet 70m3 over bark

Age of second commercial thinning 22 years 22 years

Estimated salable yield at 22 years 1,000 cubic feet 70m3 over bark

Age of clear felling 30 years 30 years

Estimated yield at 30 years 6,000 cubic feet 428m3

Total yield over rotation of 8,000 cubic feet 568m3 30 years

Mean annual increment over 30 years 266 cubic feet/Acre/ 18m3 /Ha/Annum Annum

Source: Mission ANNbA. 10 Page 20

Table 6: PLANNED VERSUS ACTUAL PUBLIC EXPENDITURES ON FORESTRY, 1969-70 THROUGH 1971-72

1969-73/1971-72 Planned Actual K6 Thousan------

Plantation Development Recurrent 1,278 1,233

Forest Development Non-Recurrent 366 338

Local Afforestation Scheme Recurrent 271 24h

Local Afforestation Scheme Non-Recurrent 67 43

Logging Units 47 31

Forest Industrial Training .Centre 258 269

Miscellaneous Projects 13 20

Masai Forest Development 30 _

Turbo Afforestation Scheme 596 600

Extraction Roads 477 366

Coast Forestry Development 15 10

Market Feasibility Studies 3 12.8

Rural Afforestation Extension Scheme 39.5

Re,^-,forestation of Burnt Plant ations 72.5

Special Rural Development - 1

TOTAL 3,421 3,279.8

Source: Ministry of Natural Resources Table 7: IMPORTS AND EXPORTS OF MAIN FOREST PRODUCTS, 1971

Item Exports _ nport3 Quantity- Va.ue Main Markets Vali.,3 KL Thousand KL Thousand 3 Sawn Limber 43,000 m 6h0 Uganda and Tanzania, 80% Balance to 20 Overseas Countries

Charcoal 55, 000 tons 800 Middle East Market (Mainly Kuwait, Iran, Iraq) 80% Uganda, 12X Balance to Durope

Paper and Paper- 2,400 Uganda, 20'S board Products Tanzania, 40% (Mainly packaging) Overseas Markets, 40%

Wood Carvings 342 Worldwide

Total 4,182 Paper and Paperboard 8,313 Manufactures

Plywood and Veneer panels fibreboard and particle board 690

Wood and Cork Manufactures including sawn hardwood, boxes, crates and builders woodwork 277

Total -2 2 0

Source: Miniistry of Cormanrce and Industry. AN 10 sage 22 Table 8: FJBLI C fpEiITURZS F0RESTRY, 1969-73

1969/70 1970/71 1571/72 1972/73 - - Thousandc______-- --

PLAITATION DRVELOPME-NT Recurrent 406 426 446 466 FOREST DE=EIDPrE0t` Non-recurrent Staff Housing 53 73 105 133 Offices, Stores and Ancillary Buildings 8 9 10 13 Water Supplies 5 6 7 7 Roads 9 10 U1 12 Additional Vehicles and equipment 18 20 22 24 LOCAL AFFrRE3S.3AT1CKi SCIE,.2S Recurrent 87 90 94 98 Non-recurrent Works and Bu-ildings 16 18 19 21 Additionol Vehicles and equipment It 5 5 5

LOGGDZG UNITS Vchicles and Ecuipment - 5 5 5 Operation Costs 11 13 13 13

FOREST TIDUSTRDAL TRANING CE;TRE work s and Buildings 1 -4 4 4 Vehicles n,d Ecuipmant 15 18 7 8 operating Costs 68 73 68 68

1ITSCELLA14EaS PROJECTS Forest Inventory 6 - - - Forest, Training, Schiool Improvements 7 - - -

M.SAI FOREST DEVE1LPIXIT 10 10 10 10

TURBO hFFORESTATIOiN SCHEM Purchase of Lard 79 - - - Payments for Agricultural Vehicles, Equipment and Buildirngs 31 126 66 6,' Payments for viorking Capital 8 17 - - Worics and Buildings 6 10 11 114 Vehicles and Ecuipment 4 11 4 2 Operatir.g Costs 56 83 84 85

EXTRACTION ROADS i.orks ar.d 1.iuildirngs 2 3 3 4 Vehicles and Fzuiprnent 15 6 50 50 Operation Costs 133 130 135 1l4o

COAST FORESTRY DEVELOPMENT 4 5 6 7

~X L; ' . A 1' 1 ;.L i ii lD J'i'UiI_S 1 1 1 1 TOTAL 1,063 1,172 1,186 1,255

1/ Pro7isional

Source: Ministry of Natural Resources Table 9: WORLD CONSUMPTION OF SELECTED FOREST PRODUCTS, PAST TRENDS AND PROJECTIONS TO 1985

-~~ / 21 Actual Proliected 1961-63 1964-66 1966-65 1968 1975 19i0 195 Unit Average Average Average - -

Sawnwood 349.7 Softwood Million m3 (s) 267.2 288.0 292.9 301.3 317.6 333.8 134.8 Hardwcod " 74.o 84.1 87.0 87.6 106.2 119.6 wood-based Panels Plywood and veneer Million m3 21.7 24.7 27.8 na 43.0 53.5 na Fiberboard and particle board Million tons 7.8 10.8 13.5 15.6 26.9 38.5 na 209.4 271.7 Paper and Paperb6ard Million tons 79.6 98.0 107.9 112.3 161.7

1964-66 and 1966-68 1/ Data for "plywood and veneer" and "Wood-based Panels (aggregate)" - 1961-63 from IWP; from FOI. Hi-storical data for alU other items based on Yearbook. for 2/ All projections for wood-based panel products for 1975 and 1980 are based on FOI. All other projections paperboard for 1980 1975 and all projections for 1985 are based on IWP. Projections for sawnwood and paper and are inteqrpolations by mission.

Sources: FAO publications as follows:

Yearbooks - Yearbook of Forest Products, various issues. IWP - Provisional Indicative World Plan for Agricultural Development, Vol. I, Rome 1970. FOI - FAO Committee on Wood-based Panel Products, 3rd Session (Rome, December 2, 1970), A Reappraisal K of the Outlook for the Future 1968 to 1980 (FOI: WPP/70/3,3) 0 ANNEX 10 Page 94

Table 10: SAWN LUMBER EXPORTS, BY DESTMIATION, 1965-70

Tanzania Uganda Europe Others T o t a 1 ______------m3(s)------

1965 5,945 5,305 7,630 4,470 23,350

1966 7,580 5,720 4,760 1,940 20,000

1967 8,410 7,955 3,770 1,460 21,595

1968 13,055 10,485 2,970 1,890 28,4oo

1969 13,110 12,400 2,480 2,580 30,570

1970 12,560 9,840 2,230 5,060 29,690

1968-1970 Average 12,908 10,908 2,560 3,177 29,553

Percentage of total (43.7) (36.9) (8.7) (10.7) (100)

------m3 (r) equivalents------

1968-70 Average 32,275 27,275 6,400 7,940 73,890

Source: FAO, Kenya: Sawlog and Pulpwood Marketing Study, 1971. ANNEX 10 Page 25

Table 11: EXPORTS OF SAWNWOOD BY SPECIES, VOLUME AND DESTINATION, 1970

Destination Total - yress Podo Cedar Other ______,______------3(s)------

Tanzania 12,560 11.,o54 527 531 448

Uganda 9,840 8,436 772 285 347

Reunicn 1,348 1,169 53 23 103

Zambia 1,057 931 28 78 20

Soma ia5 779 690 25 23 41 United Kingdom 704 283 116 68 237

Rwanda 526 526 _ _

Norway 424 402 6 _ 16

Federal Republic of Germany 269 29 61 179 _

Hong Kong 269 24 245 - _

Seychelles 244 76 42 38 88

Italy 242 28 - 86 128

Netherlands 195 61 33 73 28

Spain 185 - 185 _ Greece 88 32 4o 16 _

Saudi hrabia 65 65

France 58 57 _ _ 1

Belgium- 39 - 39 -

United States 30 30 - - _

Eire 28 - 28 - -

Mauritius 15 15 - - -

Japan 6 - - 6 -

Others 719 332 4 _ 383

Total 29,690 24,240 1,980 1,630 1,840

Source: FAO. Sawlog and Pulpwood Marketing Study, 1971. AEX 10 Page 26 1970 Table12 SAWhNOOD EXPORTS BY VAIDE AND DESTINATION,

Hiardwood Destination Total Softwood ------Thousand US$------18.8 Tanzania 489.1 470.3 11.1 Uganda 401.8 390.7

Reunion 69.0 69.0

Za.moia 50.8 50.8 23.1 United Kingdom 50.4 27.3 3.4 Somalia 45.1 41.7

Federal Republic of Germarq 32.4 32.4 1.7 Norway 27.5 25.8

Spain 26.2 26.2

Rwanda 25.1 25.1 13.5 Italy 21.7 8.2 8.5 Seychelles 20.9 12.4 11.9 2.8 Netherlands 14.7

Hong Kong 1L4.3 14.3

Greece 5.4 5.4 0.1 France 4.4 4.3

Saudi Arabia 3.8 3.8

Belgium 2.2 2.2 .5 United States 1.5 1 1.5 Eire 1.5

Japan 0.8 o.8

Mauritius 0.7 0.7 17.7 Others 38.3 20.6 100.7 TOTAL 1,347.6 1,246.9

Source: FAO Sawlog and Pulpwood Marketing Study, 1971 ANNEX 10 Page 27 1Tabie 13: VOLUME., VAIUE, AND AVERAGE FOB PRICES OF CYPRESS SAWN'WOOD EXPORTS, BY DESTINATION, 197P

Average Destination Volume Value FOB Prices m>(S) (USr TimOusand) (US$ per m3(S) Tanzania 11,054 418.5 37.86

Uganda 8,436 341.1 40.44

Europe 892 55.2 61.88

Reunion 1,169 59.1 50.56 zambia 931 43.5 46.72

Somalia 690 38.0 55.07

Rwanda 526 25.5 48.48

Others 542 31.6

Total 24,240 1,012.5 41.77

Note: In terms of volume, in 1960 Cypress accounted for 18% of sawnwDod exports; Podo, 38%; and other species, 44%. In 1970 the comparable figures were 82%, 6% and 12%.

Source: Ministry of Comnmerce and Industry ANNEX 10 Page 28

Table 114: ATLRAGE FOB PRICES FOR SANv1 SOFTWOOD EXPORTS, 1970

Cedar 1/ Podo Cypres3 ----- U37(s -

Tanzania 43.59 47.82 37.86 UJganda 43.62 40.90 40.44 Reunion 100.0 50.99 50.56 Zambia 75.20 54.32 46.72 Somalia 84.99 72.16 55.07 :wanda - 147.77 2/ United Kingdom 66.o 64.33 54.23 Norway - 71.73 63.13 Hong Kong - 52.86 -55.32 Netherlands 69.28 67.68 75.78 Seychelles 92.70 101.80 59.64 Fed. Rep. of Germany 67.16 51.14 68.88 Italy 74.28 _ 65.25 Greece 74.31 62.02 55.32 Saudi Arabia - - 59.36 France - 74.16 Belgiun 57.84 United States - - 50.22

Eire - 53.20 _ Mauritius 147.90

i/ Exclhding pencil slats.

2/ Also reported, at 48.48.

Source: Forest Department ANNEX 10 Page 29

Table 15: AVERAGE SELLING PRICES AT LICENSED SAWMILLS, SAWNWOOD, 1959-70

Year Cedar Podo Cypress Pine ______------US$/m (s)------

1959-60 35.30 32.18 23.04 25.36

1960-61 37.82 31.54 23.43 12.75

1961-62 38.36 31.69 23.38 12.66

1962-63 35.00 29.56 22.64 24.32

1963-64 38.46 30.65 24.12 24.32

1966-65 38.31 29.76 25.71 19.58

1965-66 39.74 31.59 24.96 91.26

1966-67 38.46 35.39 26.40 21.85

1967-68 42.91 39.99 29.51 23.78

1968-69 44.10 41.43 31.09 28.77

1969-70 41.87 42.96 30.70 29.31

Source: Forest Department

ANNEX 10 Appendix 1 Page 1

ORGANIZATION

KENYA FOREST DEPARTMENT

Chief Conservator of Forests Deputy Chief Conservator

Regional Conservancies Special Conservancies

Wakuri East Research and Forest Indbstrial tPlan ning | [Develooment

Forest Districts

Eldoret Thompson Falls Nairobi Working plans Utilization

Kitale Elburgon Nyeri Economics Marketing

Kisumu Londiani Machakos Training School Road Unit

Turbo Coast Research Training Centre Silviculture Entomology Pathology

Surveying

ANNEX 11 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

FISHERIES

Basic Features para. 2 - 6

Public Services 7 - 14

Lake Victoria 15 - 34 Marketing 20 - 22 Issues and Recommendations 23 - 34 The Environment 27 - 29 Trawl Fishing 30 - 31 Rural Infrastructure 32 - 34

Lake Rudolf 35 - 39 Judgments 39

Other Fresh Water Fisheries 40 - 43 Judgments 42 - 43

Marine Fisheries 44 - 57 Coastal Fisheries 49 Crustaceans 50 - 52 Judgments 53 Sport Fishing 54 - 57

Table 1 Quantity and Value of Fish Landed, 1965-71 Table 2 Production of Fish and Shellfish, Coastal Province, 1967-71 Table 3 Average Fish Prices Received by Fishermen, by Species and Area, 1971 Table 4 Imports and Exports of Fish and Fish Products, 1967-71 Table 5 Catches per 5-Inch Gill Net in the Nyanza Gulf Fishery, 1905-68 Table 6 Landings and Disposition of Fish, Lake Victoria, 1968-69

Map 10318 Lake Victoria Map 10320 1970 World Tuna Catches by Area and Species Chart 7332 World Tuna Catch, Catchment/GMT, and Fleet Capacity, 1958-70 Map 10319 Catch Distribution of Tunas and Billfishes by Long Line Vessels in the Indian Ocean in Summer Months (July) and Winter Months (December)

hNNEX 11 Page 1

FISHERIES

1. Estimates of the magnitude of the fisheries resource vary widely. This makes it difficult to design developmental policy and programs, as does the essentially traditional and rural-oriented nature of the industry.

BASIC FEATURES

2. The average annual production of fish and fish products in the 1968-70 period was 31,280 tons mainly from fresh water:

Tons

Fresh Water Fish 24,490 Marine Fish 6,570 Crustaceans 160 Other Marine Products 60 Total 31,280

Of the marine catch, shrimp and lobster Droduction totalled about 130 tons in 1968, and 275 tons in 1971. Because of their high value and potential for growth, these species are important for the future. The marine catch is almost entirely in inshore waters (some marine gamefish are caught up to 200 km from shore but the species composition of the catch does not suggest surface resources of commercial importance).

3. Exports of fish and fish products totalled 3,000 tons in 1971. Im- ports in the same year were 4,600 tonis. These data exclude much of the con- sicderable local border trade in dried, smoked and salted fish, because firm estimates are not available.

4. The production and trade estimates suggest there are about 3 kg of fish available per person per year, less than a third of neighboring Uganda. Demand in Kenya appears to be strengthening, perhaps partly because of a campaign to improve marketing, and the prices of better quality table grade fish have risen rapidly.

5. Fishing is carried out almost completely in traditional ways, in shlallow waters (less than 15 m), and by very labor-intensive methods. Although modern multi-filament synthetic gill nets have been in use for almost a decade, few changes have occurred in the traditional methods, in the style of boats used and in the strategy of fishermen. In some places, particularly on Lake Victoria, sail powered boats are used. There are a fexw motorized fishing boats on the larger lakes, and at the coast where they are capable of fishing in waters up to 25 m with modern fishing trawls. AN~NEX 11 Page 2

6. The number of people who fish for a livelihood is growing rapidly. In 1950 there were about 25,000 fishermen on Lake Victoria; on a full or part- time basis, there are now about that many fishing only along the Kenya shore.

PUBLIC SERVICES

7. The Fisheries Department of the Ministry for Tourism and Wildlife is responsible for fisheries. It has three main branches: research and development; inland fisheries; and marine fisheries. It is staffed mainly by officers trained in the biological sciences. Staffing is insufficient to meet all the needs of the fisheries sector. In common with other government agencies, the Fisheries Department rotates its field staff at frequent intervals. While this familiarizes staff with a greater range of problems, it also means that the continuity of research and other progsams is broken. Research is also hampered by lack of clear guidance on research priorities. The Department does limited econotnic research, except in conjunction with the East African Fresh Water Fisheries Research Organization (EAAFRO) on Lake Victoria. Only when priorities have been clearly determined should the question of appropriate staffing and equipment to meet these needs to be tackleds

8. Lack of practical research findings hampers the Department's extension efforts. Nevertheless, the extension work on fish preservation (through sanitary and efficient drying, salting, and smoking) appears to be highly successful.

9. Regulations affecting most important aspects of fisheries exist on paper (e.g., on mesh size of nets for Lake Victoria, beach seining, poaching, etc.). These regulations do not, however, appear to be enforced properly, despite the increase in staff that has taken place in the Fisheries Department since 1964. There are, apparently, no statistics on prosecution or convictions under Fisheries regulations. Furthermore, occasional corruption among fish scouts nas been reported.

10. Given the limited fisheries resources, an effective development program must depend on systematic regulation of these resources. The first step that needs to be taken is improvement in the knowledge base so that regulations appropriate to the existing and potential needs can be developed. Thus'. a major priority must be to `improve statistics so as to be able to evaluate more effectively the consequienices of various regulatory measures on the size of off-take and population stocks of fish, and on the numbers of fishermen emploved. It is unfortunate that the officer trained to implement a proper statistical reporting and analysis program has resigned. A replacement should be considered as the highest priority in staffing needs.

11. At the same time that the appropriateness of existing regulations is being assessed, a major effort needs to be made to improve the efficiency ANNEX l1. Page 3

of utilization of existing staff and equipment of the Fisheries Department. This is a question of management. More attention needs to be given to t:he establishment of objectives and definition of functions for field staff, the system of reporting of activities and results, and supervision of junior staff. A management system along the lines presented in Annex 8 would be a useful tool in helping to correct these deficiencies.

12. As soon as these two steps are firmly underway, long-term plans for more staff and equipment for extension work should be made.

13. Kenya claims jurisdiction over fishery resources in the Indian Ocean to the limit of 12 nautical miles. The boundaries between Kenya, Uganda, and Tanzania in Lake Victoria are well defined (Map 10318), although no specific agreements exist on the harvesting and processing of fish from the deeper waters of the lake. A Lake Victoria Fisheries Commission could make such agreements, if present plans to form such a Commission materialize.

14. Kenya is a member of the Indian Ocean Fisheries Commission, the Inter-Governmental Oceanographic Commission, and participates in EAAFRO and the East African Marine Fisheries Research Organization (EAMFRO) as well as in a technical committee formed by the East African Natural Resources Research Council.

LAKE VICTORIA

15. The Kenya shore of the lake is the shortest one of the three countries surrounding the lake, but most studies agree that Kenya's Kavirondo Gulf is one of its most productive parts. The cichlid fish family is the most numerous with Tilapia and Haplochromis predominating. Only a few species of Tilapia are important but over 150 species of Haplochromis have been identified. The three fishing zones are shallow, 0-10 m depth; mid- depth, 10-20 m; deeper, 20-65 m, beyond which few fish are caught. Almost the entire catch is taken in the shallow zone and in the mouths and lower reaches of the rivers. Most Tilapia are found in this zone because they build nests in shallow water and establish a defined territory around their nests. While the data are inadequate, there is some evidence of overfishing in this zone, as total catch is at best stable (and may be declining), as catch per unit of effort declines (Table 5) and as the average size of fish seems to decline (with Haplochromis being substituted for Tilapia as ANNEX 11 Page 4 the latter, with much higher wholesale prices, become harder to find). Table 6 shows the latest data available for the recorded catch, by species.

16. Little fishing is done in the mid-depth zone (the traditional zone between inshore Tilapia and the offshore Haplochromis) because it is too deep for the gear operated by most fishermen. Trawl fishing trials by the Department of Fisheries produced catches between 28 kg and 69 kg per hour with a small trawl net. Catches by the UNDP/FAO vessel "Ibis", with a larger net, were as high as 350 kg per hour. The catch was composed of familiar commercial varieties; although there are no migration studies, these resources should not be regarded as different from those now fished by gill nets. It is probable that the fish from mid-depth zone waters contribute significantly to the present catch; even so, the zone could probably contribute an additional 10,000 tons per year to production.

17. Experimental trawling by EAAFRO (assisted by FAO/UNDP) indicates that there are very substantial resources of a number of species of Haplochromis in the deeper waters on the lake. Indicative estimates of the annual sustainable yield from the whole lake are about 200,000 tons per annum. However, the small fraction of deeper waters within Kenyan territory means that only a small proportion of this yield would accrue to Kenya.

1/ Overfishing is hard to evaluate in the absence of good data about fish stocks, reproduction patterns, size and types of catch and prices and costs in the industry. It includes economic and technical aspects. In economic terms, overfishing implies that a unit of additional investment in the fisheries industry does not increase total catch, even, though, for the individual fisherman, the investment may be profitable at the expense of those already in the industry. This question is complicated when the investment costs of entry into the industry are low (a canoe plus nets) and when the alternative uses of this investment and the fisherman's labor are very limited. In a technical sense, the fisheries resource can be destroyed over time if increased competition in harvesting leads to catching of so many potential breeding fish that replacement rates are endangered. Many observers suspect that this is happening with Tilapia in the Kenyan portion of Lake Victoria. What is clear is that more information is required on returns over costs in the industry (taking into account the higher value of larger fish) and of the interactions between species in order to determine policy objectives for off-takes of the various species. ANNEX 1i Page 5

13(? , The Kenya recorded catch and ex-vessel value has been fairly stable. The data are:

Thousand Tons KSh Million

1964 12.0 13.4 1965 13.0 14.5 1966 15.2 17.0 1967 15.5 17.2 1968 16.1 14.2 1969 17.4 16.0 1970 16.4 15.4 1971 14.9 15.3

In 1971 there were some 25,000 fishermen with 6,000 small boats landing fish at about 1,000 beaches. No census of the fisherman population is available, but perhaps between 60% and 80% of the fishermen are full time, depending almost entirely on fishing for their livelihood; the rest supplement their income by farming or other work. On this estimate, about 1% of the people of Nyanza Province are fishermen and between 5% and 10% of the population depend upon fishing for a major part of their livelihood.

19. The Department of Roads of the Ministry of Works is building feeder roads to fish landing places. The Cooperative Department is helping to set up fishermen's cooperatives providing credit and market outlets. Five societies are now active, with another five trying to start. Weak management and the laclc of effective contact at the working level between the Departments of Fisheries and Cooperatives are serious problems, as is loan repayment. Some fishermen take credit and then sell to private traders to avoid the deductions made by cooperatives to service the loans.

Mlarketing

20. There is a substantial but unknown amount of trade in fish (principally salted, sun-dried and smoked) in the Lake Victoria region. While the statistics are poor, there are indications of rising fish prices in recent years. Since production has been fairly stable and imports of dried fish from Tanzania are high and may be rising, this probably indicates that demand is rising, both for high quality fish for urban markets and for fish for local markets. There are five companies drying and marketing fish. These import fish when needed to meet demand. They also export small quantities of dried fish, primarily to Uganda and Zaire. Tilapia Fisheries Ltd. deals exclusively in the distribution of fresh and fillet fish to the larger towns, such as Kisumu. This company normally imports substantial amounts of fresh Tilapia from Lake Kyoga in Uganda.

21. The annual catch of Haplochromis (6,400 tons in 1969) appears to be replacing Tilapia in local fish markets in large measure because its ANNEX 11 Page 6

prices are much lower. Lack of infrastructure may serve to keep fish p rices above what they .night otherwise be. However, the local marketing system for the lake hinterland seems to be competitive and relatively efficient. It certainly employs a large number of people as petty traders and middlemen. No economic analysis has been uindertaken of the effect of improved infrastructure or more centralized marketing on fish prices or on enployment in the industry.

22. The large quantities of Haplochromis in the deeper waters could provide the basis for a fishmeal industry. (In whole weiglht terms one -,on of fishmeal requires 5-6 tons of landings.) However, UNDP/FAO studies do not suggest that such an investment is justified; this view implies judgments on price trends for fishmeal, of course; these are difficult to make. Given the jurisdictional division of the Lake, a viable industry would depend on cooperation and suitable agreements between the three East African countrries. This is an issue that could be addressed by the proposed Lake Victoria Fisheries Commission.

Issues and Recommendations

23. Three basic questions must be answered before fisheries on Lake Victoria can be developed:

(a) Whc is to benefit from the industry: the existing fishermen, or those few who could participate in a modern industry;

(b) How, can the present fisheries resource be managed to ensure a oustainable high catch from the shallow and medium-depth zones;

(c) What measures would facilitate equitable and profitable development of the H.aplochromis resources in the deeper water zone.

24. It is essential that the development plan provide for an order2.y transition from current traditional fishing methods to a moderr fishing industry over the long term. The rate of transition must be consistent with the emergence of alternative employment opportunitles for moat of those now engaged in fishing. If new employment opportunittes are not forthcoming, most fishermen must continue in this activity and modernization of the industry must be delayed.

25. The Lake Victoria fishery has been the subject of many regulations ancd studies. 'iany have called for steps to regulate the physical hzrv-st in order to limit the threat of overfishing. These measures sought on'Ly to resul1ote the total catch, leaving the individual fisherman -;with an inctnr.ive to increase his catch at the expense of his neighbor. This has cenided to ne-ate regulation. It is recommended that a full package of maragenmeiit devices be implemented, including a limit on entry of gear aad fishermen, ANNEX 11 Page 7 habitat improvement, and the .protection from fishing of selected spawning grounds and possibly selected spawning rivers. In the longer term, management decisions and implementation should be made jointly by Government and fishing cooperatives and, until such cooperatives become effective, by systematic consultation.

26. The number of fishermen, their gear, vessel sizes and numbers can be adjusted by licensing. A limited entry concept creates equity for the fishermen who have access to the fishery. This equity can lead to wide support for the needed management programs because the benefits go to the equity holders. At the same time, the effective threat of suspension or confiscation of licenses for infringements of regulations would be a powerful sanction for enforcement. Limited entry is also central to getting higher yields in the inshore areas. Studies should be done to devise a feasible licensing system, in concert with attempts to strengthen the cooperative societies. The plan must call for an upper limit on gear. Boats, measures in gross capacity, offer a possible unit in which to express the system. Gill nets, should also be regulated, as should the number of fishermen. If a fisherman wants to use a new boat, he must show a valid license and demonstrate that the boat previously licensed is no longer serviceable. If the fisherman wishes a larger boat, he may purchase at market value the license of another fisherman, and combine that on a discounted basis with his own license, to get authority. For example, two 5 ton licenses might be required to construct one 8 ton boat. This provision reduces the overall effort operating on the fishery, and increases catch per effort. If at any time there is believed to be scope for additional tonnage the Government can auction the expansion. The Gpvernment could also repur- chase licenses if additional information shows fishing to be excessive. Too, the number of nets, the size of mesh and the material used should all be standardized for the fishery. (Gill netting will continue to be a major method of fishing for a long time, because it is easy to use and cheap. The single mesh system of 5 inch mesh with which the gill net fishery started on Lake Victoria, despite the early efforts made.to adhere to it, has now changed to multi-mesh fleets of mesh sizes ranging from 2-1/2 inches to 7 inches.)

27. The Environment. If management of the fishermen is to be worthwhile, fish stocks and total catch must be increased. A means needs to be found to improve the escapement of young fish in-the breeding areas and the subsequent growth rates. A number of fairly simple management methods have been proposed; among these, the setting aside of a few bays and rivers as protected spawning areas should have priority. In some parts of Lake Victoria this could be easily done by adding scrap steel, car bodies, bed springs, etc. to the'spawning beds, thereby making the setting of nets hazardous. In other cases more elaborate methods might be needed.

28. An effective habitat improvement program would require that the Fisheries Department and the Cooperatives work closely together, along with the Department of Harbors. More fisheries staff would be needed to plan, operate, and monitor the program. ANNEX 11 Page 8

29. This program might raise the annual sustainable catch from the shallow water zone to some 18,000 tons, and increase the proportion of Tilapia. Credit to fisheries cooperatives within a licensing system could also help increase the mid-depth catch to some 10,000 tons per year, mainly Haplochromis. Expansion into the deeper water zone within the territorial limits could perhaps provide another 3,000 tons of Haplochromis and 1,000 tons of mixed species. In total, then, the annual sustainable production may be roughly on the order of 32,000 tons.

30. Traxwl Fishing. Greater exploitation of the mid-depth and deeper water zones requires boats large enough to operate a trawl. UNDP/FAO estimates that a 12 m trawler with a crew of 4 or 5 would today catch 6 tons of fish in a 60-hour portal to portal trip. To catch the same amount in the same time by sailing gill netters, with 60 gill nets of 3,000 yards of webbing (in total) set for 20 hours, would require 125 canoes with 375 men. These data make clear the danger in mechanization, and the need to assure a gradual transition from existing methods to mechanized fishing. The granting of licenses for trawlers must jibe with the number of jobs opening up for those fishermen being displaced. The cooperative societies must play a role in this, in supplying credit and technical advice for the gradual conversion of units of canoe gear to units of trawl gear, and in ensuring that trawlers do not interfere with cooperative members by fishing in inshore waters. 1/ The UNDP/FAO data show that a trawler license should only be granted when the prospective owner has been able to purchase the licenses of 125 canoes and 7,500 units of gill nets.

31. Since only a small part of Lake Victoria is within Kenya, the future of its trawl fishing is dependent on agreements between the East African countries which share the lake. Resolution of all pertinent international issues is important, since otherwise Kenya may not share in the benefits of harvesting Haplochromis in deeper waters, and different apDroaches to management may have serious long-term consequences for the prodtuctivity of the whole lake. There has been some discussion on the formation of a joint Fisheries Commission for Lake Victoria, following on the current joint approach to research. However, there are also indications of a desire for individual country projects.

32. Rural Infrastructure. Small amounts of assistance for rural infrastructure has had a high rate of return in fisheries in several East African countries. Such programs are a natural adjunct to the management programs outlined above and can often be done through self-help. Some improvements have already been made in the Lake Victoria area with apparently good results.

1/ Inshore Tilapia fishing could be encouraged by the price of Tilapia, much higher than Haplochromis. ANNEX 11 Page 9

33. Rural roads can have an immediate impact on the fishermen communities, providing access to money markets for the valuable fish species.

34. Natural landing places, or fishing ports (often only a clear beach) provide sites for the development of small market centers for fish and other products. Operating under self-help, the construction of small jetties and a concrete slab with a covered roof can provide a hygienic and inexpensive place to display fish for sale, sometimes leading to higher quality and prices; this type of activity should be continued, and possibly accelerated.

LAKE RUDOLF

35. Lake Rudolf lies in an almost completely barren desert on poor soils. Because the lake has no outlet it is highly alkaline with a pH of aLoout 9.5 to 9.7. Various investigators have reported a unique fauna, several new (to science) fish species, and the absence of any molluscan life (hence no schistosomiasis). At places the lake is about 100 m deep, alth,ugh 80% of the area is less than 40 m. Commercial fishing by traditional methods, gill nets, plunge baskets, and traps began in the 1960's, when Turkana tribesmen were settled to try to alleviate famine.

36. The apparent richness of the almost unfished lake, coupled with the discovery of a market for salted sun-dried fish in Zaire led to a rapid expansion of fishing. The catch reached 5,000 tons in 1970 according to rough estimates. The data are:

Tons

1964 850 1965 1,000 1966 1,500 1967 1,700 1968 2,000 1969 3,500 1970 5,000 1971 3,500

37. An investigator reported in the mid-1960's that the lake had a potential sustainable production of 50,000 to 160,000 tons of fish per annum. And fishing officers reported that one 30-foot oar propelled canoe could bring in over one ton of fish in a night. These reports were widely circulated; they now appear to be gross exaggerations. In 1972, the catch rate was 0-20 kg per canoe per night. One recent estimate places the maximum sustainable yield at 10,000 tons per annum. The decline in catch per unit of effort might even indicate that the present total catch (including commercial and subsistence) of 4,500 to 5,000 tons is already the annual maximum sustainable yield. AYNEX 1 . Page 10

38. Two bilateral assistance teams are at work in the area: a U.K. te,m in research to help quantify the fisheries potential of the lake, and a .orwegiar. L:eam to help modernize catch and use methods. BDth efforts were begun when the lake was believed to be capable of vas'-ly gre&ator yIelds than now seen probable.

Judgmen-ts

39. Deci4sions on the best way to manage the Rudolf restejuce willla'!e to wait until. results ot the ongoing research effurts are available and the resource *,stimates are firm. Even though new Z-Lthing in, Oeeper w'aters way be Jeveloemd on the basis of forthcoming research evidence, the in ai management issue on Lake Rudolf is likely to be much the same as that on Lake Victorf.a, na:aely one of providing for the interests of the traditional fisherme::. I1 particular, a very caut-ious apprcacht to me/hanrzation shotuld be adop ted, keeping in mind that the very great i-aitial expectatiors. ret gardiag the catchy, t:he isolated location, and the,telatively rew trad-iti.onal fishermen are fragile foundatioris for a modern'-'zed fishery oi. The la';e

OTHER. KRFSh WATER FISHEIUES

42. Tnere are demonstration fish ponds at the DeparuLient of rlshe--P- field s--a~:ons. clud.-Iing KiSLutiu and Sagana -ka.e- -r, the De.r-tme.t has :2; ,;ollec.ed manv prcduc ion-er-are ta, an` oaly aZ cornparativc- data have been accumilated on local f}Inh suitab!. _or ccuraU.r or family fa.7x. nrcduct-on. Irstead, the Departme-i nas sp^-nt much t1me c-n researTh- -r 2xotiac fis.. f rom at iCad.In the ,163:6.arl; t-h;- :i.ser-i.. Department iidicated that there i.._re 30,000 flnh -o-ds. T'hesE repre ent 4mporj:ant pottential for develo-,gnert especially in the w:araer p-rts of the counr:cy. There is alreLdy, some k:ic-,ledge of fish pcnd cuis-r Thro-ighout .eul-a for exam'l?e, the Portland C-rmeat Fac.:: Ji Imaa Ps fish (`'Lirtly Tilat 4-a} i.i; simall ir-n p .nds anc, appar2ntrly L- conversion ratio of coa.centrates to fish, givi-ng.v hig'li )r t'iio sirce ti-c iish sell at KShi 4.35 pea .. 'rhe probrer L _o ".i l-ssu: inforTuation systeLmatically, asess priorities und pov-enti.als. .-rt de,,)'clop zn effective e;xztension ffoat on. thc bas; of th± . inf anmatio6ad tlm results of rese.arch, particularly on lecal -.arietie-s of fisai - en t-'.? ei'tw : a large number of fish ponds, the returns to t-.his .ktiv.:.v ovea- ti ncxt several ea- s could be high.

41. SoTme fisheries of a traditional type are nri-T carraa-ci out In thf brackisha wraters of major stre--ms ss-vstems along The coast. in the neat decade, the areas nou utilieed primarily as so-arces of mTaternlis N-`ur cha..rcoal may offer potential for iclturci 3hrimp, both fresh water and SalSt .;ater varieties. eimp~ t techniques fo3: ce.lture unier Keayan na iev bsornme avaiSa:,le aS a retUilt of researeh now being ca-,rie-: out in ThJ.Th 5 Nolc;rsta and(i the Pl4flipp1ines ANNEX 11 Page 11

Judgments

42. Better research is essential. The research staff should be augmented by highly competent personnel, and assigned to fish pond research at one of the stations, with adequate career opportunity and supporting equipment and operating funds being made available. More research on the yield per unit area of some of the more desirable food fish is urgently needed. The effect of alternative levels of supplemental fertilizer and of feeds on yield also neecis more study. There are species such as the catfish Clarius which may offer promising opportunities for intensive pond culture in areas near urban centers; these species need investigation, including the'lr acceptance in the market. Clarius keeps well in confined areas, and can be kept in small buckets, thereby eliminating the need for refrigeration and simplifying problems of transport and distribution. Other local species also merit experimentation. In cooperation with these researclh efforts, an effective extension service for fish farmers is needed. ThiE could lead to a fairly rapid expatnsion in the output of cultured fish in farm ponds and streams if combined with implementation of the comprehensive fish pond program developed by FAO/TJNDP.

43. In the future, as modifications are made to the river systems, particularly the Tana River, the environmental conditions at the river mouths may change. At that time, it may be feasible to explore the economics of designing and operating a large tract to grow shrimps under controlled conditions.

MARINE FISHERIES

44. Landings of lobsters and prawns increased from about KSh O.5 million in 1968 to KSh 1.4 million in 1971 (Table 2). However, for the traditional table grade fish, there was a marked decline in catch per effort in this period. Total production has increased slightly but only by means of harvesting more distant grounds and by harvesting familiar grounds more intensely.

45. Pioneered by the Japanese after World War II, tuna caught by long line methods in the Indian Ocean are now being harvested by vessels from Japan, Taiwan and the Republic of Korea. Kenya Fishery Industries, Ltd. financed by a consortia of Japanese, English and Kenyan public and private sources, has an 1,800 ton capacity cold storage and freezing facility at Mombasa, Kenya. The purpone of this facility is to service the fleets and to provide a transshipment facility. In 1971, in the first six months of operation, almost 4,000 tons of fish were landed. It is estimated that annual landings and transshipments may average between 12,000 tons and 18,880 tons in 1972-73.

46. Some argue that this arrangemer.t provides little economic benefit to Kenya, whereas Kenyan vessels in the long-line fishery could be an ANNEX 11 Page 12

important source of foreign exchange. It is also argued that Kenyan vessels could operate more economically from Mombasa than Korean vessels from Korea. The other side of the argument is that Kenya does not have an advantage over Korean labor, if skills are taken into account. Operating under a variety of marketing agreements and joint venture ag:eements, the Korea fishing fleet is largely replacing the Japanese; the operating costs of Japanese vessels have risen sharply in response to increased labor costs.

47. The outlook for the catch is critical in assessing the opportunities for Kenyan vessels. Map 10320 and Chart 7332 respectively show the distribution by area and species cf the 1970 world catch of tuna, and the 1958-70 fleet capacity, catch, and catch per effort of the world tuna fleets. Map 10319 shows the distribution or tuna and billfish catches, from Japanese data, up to about 1968 in the Indian Ocean summer and winter season. The catch from the Indian Ocean is the smallest of the three major areas of long-line fishitg. Recent data show hook rates for yellowfin and bigeye to be hetween 1.4 and 2.4 fish per 100 hooks. These hook rates are below levels needed for profitab:lity. The costs of entry are great in relation to potential catch, and indeed greater now than when competitor nations capitalized their vessels. The distribution of valuable species is not concentrated along the coast but is distributed in a wide zone extending East-West for very great distances; this reduces the advantage of small coastal vessals. The probability that catches would be sufficient to offset operating costs would be particularly reduced in the northern summer season because the fishing grounds are so remote. The evidence suggests that Kenya should not invest in tuna long-line vessels at this time. However, consideration could be given to providing facilities to can the catch if the foreign flag vessels are believed likely to land between 10,000 and 18,000 tons per annum at the Mombasa freezing facility. The cannery w7ould from the outset have to be able to meet or exceeed international quality standards. The market for canned tuna of high quality is -ood, and it is growing in Japan, the U.S., and Western Europe.

48. The success of a canning facility would depend on agreements with suppliers to insure a continued delivery of tuna, and on the use of technical assistance in the early stages of design and operation to ansure quality standards. High quality is essential. 1/

1/ It is worth adding that the competition, and the technical and economic problems faced by such enterprises are often severe. The major tuna importers, Japan, U.S.A., and Italy, buy mainly frozen tuna as raw material for their packing industries. The U.S.A. has a global quota on imports of foreign canned tuna, and imposes quality standards which even Japan finds troublesome. Even though located near tuna fishing grounds, many countries have chosen to limit themselves to freezing, and transshipment to foreign tuna canning facilities. Among them are Fiji, Tahiti, New Hebrides, Indonesia, New Caledonia, Malaysia, Maldive, Mauritius, Panama, Ghana, Canary Islands, Ecuador and Singapore. ANNEX 11 Page 13

Coastal Fisheries

49. About 1,500 fishing vessels operate along the coast; of these 60 are motorized, 300 are sailing dhows, and the rest are canoes or other types of very small craft. Firm data are not available on the catch per unit of effort. Knowledgeable industry representatives indicate that the catch per effort declined in the last few years, and particularly in the last year or two.

50. Crustaceans. Several species of shrimp and lobster are harvested in the coastal waters. Ten species of the commercially available penaeid shrimps occur, as well as six species or spiny lobster, plus the shovel- nosed lobster. However, coral restricts the use of trawlers in much of the shrimp and lcbster grounds.

51. Recent UNDP/FAO studies tentatively indicate that the Ungwana Bav region could possibly produce about 160 tons of shrimp annually. How- ever, these data are suggestive only. For this reason, along with the possibility that the present annual catch may be somewhat underreported, investment to develop the shrimp resource should be undertaken with great caution.

52. The inshore coastal waters offer a very favorable environment for the spiny lobster, particularly around Lamu where 60% of the present annual catch of about 145 tons is taken, mainly by diving. An unpublished survey by Japanese experts estimated the population size along the Kenya coast as being about 270 tons, almost thice the recent annual catch. Tentative evidence suggests the population may support some additional catch effort. On the other hand, in the depth range of the present fishery (shore to 8 m) there are signs of a decline in the average size of lobster caught in the most productive region (North coast). UNDP/FAO has suggested that a whole weight of 0.5 kg be declared as the legal minimum size..

53_. Judgments. Policies similar to those suggested for Lake Victoria (para 25) might help to stabilize the lot of the coastal fishermen and arrest the decline in catch per unit of effort. There appears to be scope for gradual expansion of the crustacean fisheries by modern methods, particularly in waters deeper than 10 m. Enforcement of a minimum whole weight :Limit or size limit would be desirable to improve the economy of the lobster fishery.

SPORT FISHING

54. This can be divided into three main types:

(a) Lakes (especially Rudolf and Naivasha) AMNEX 11 Page 14

(b) Trout Rivers

Sport fishing in Lake Rudolf can be viewed largely as an adjunct to commercial fishing, and, like the latter, its development prospects depend on greater knowledge about existing stocks and potentials. In Lake Naivasha, black bass is the major sport catch. There is also a commercial fishery for Tilapia and black bass. Illegal netting practices also appear to be common. It is not clear whether there is a trade-off between commercial and sport fishing at existing catch levels nor is it clear which form of development presents the best use of potential.

55. Trout rivers appear to offer some development potential. This is endangered, however, by the failure in recent years of the Fisheries Department to continue anti-poaching controls on some of the most attractive trout rivers.

56. Marine game fisheries probably present the best development opportunity in this category. There are 67 registered sport fishing vessels. In 1971, they reported landings of about 100 tons. There is no good information available of the surface resources of value to game fishing. However, indications are that marlin, sailfish, wahoo and other game species are plentiful and would attract tournament fishermen if other fishing and shore facilities are attractive.

57. In general, sport fishing would seem to offer possibilities of developrient as a more valuable adjunct to the tourist industry. Making use of these possibilities depends upon greater coordination of policy and investment projects with the Tourism Department, on more promotion and on the provision of improved facilities in some areas (most notably on the coast and anti-poaching patrols on trout rivers). The costs and benefits of any such investments cannot be determined from the available information. The Fisheries Department has had plans to commission a pre-investment study on sport fislhing to review the opportunities and to make recommendations on the required organization and financing; these plans should be implemented in pursuit of the present policy of maximizing returns from tourism by attracting the higher-spending types of tourists, such as sports fishermen. Table 1< QIJANTITY AND VALUE OF FISH LANISI'D,1965-71

1965 1966 [967 1968, 1969 1970 17 j Thousand Thousand Thousand ~ Thosand Thousand ~ Thousand Thousand Tons KI, Tons KK Tons Kk Tons Kh, Tons Kh Tons KIk Tons Kk6

Area and Main_2rouk

Fresh Water Fish 2 Lake Victoria 13,215 728.0 15,445 851.2 15,748 868.0 16.357 708.3 17,442 802.3 16,400 774.1 14,918 767.0 Lake Rudolf 1,113 7.4 1,524 10.5 1,7 27 12.6 2,044 12.0 3,753 29.3 4,854 50.6 3.612 51.0 Lake Baringo 610 26.9 610 26.9 518 15.6 554 11.4 503 9 .3 717 12.4 29 3 9.0 Lake Naivasha--Cos.ercial 661 29.1 914 40.4 995 40.5 673 25.4 -89 33.5 1,150 49.2 284 29.0 Lake Naivasha--Sport Fishing ------21?2 15.1 120 8.5 100 7.4 -- -- Other Lakes 813 44.8 965 49.3 919 42.4 870 32.4 1,000 40.0 985 35.5 200 8.0 Rivers 1.016 50.4 1,5 24 84.0 1,524 84.0 1,524 84.0 1,524 84.0 1,524 84.0 1 .622 60.0 Fish Ponds 132 14.6 203 22.4 102 12.0 123 14.4 121 14.4 121 14.4--. -

Subtotal 17.560 901.1 21,185 1,8. 21.533 1,075. 22.355 903.0 2 5 7 ,2. 25 851 1,2. 20 920 944.0

Marine Fish Lam. 3,307 183.1 3,104 156.0 1.740 68.8 1,172 42.6 1 ,270 40.7 744 33.2 1,236 110.0 MaIi.di 642 35.6 1,198 60.2 1,297 69.4 1,204 63.5 1,200 67.1 442 26.0 928 71.0 Kitlili 133 7.4 127 6.4 -- -- 104 6.0 117 7.5 118 8.0 310 23.0 MtWaPa 166 9.2 -- -- 258 18.7 91 6.9 121 9.0 117 9.0 -- -- Mombasa ) -. -- 253 17.7 353 34.6 489 52.0 4I46 54.7 79 7 77.8 1,847 614.0 Shimoni ) 1,332 73.8 1,725 86.7 242 18.0 336 25.1 27 7 19.9 322 23.6 335 25.0 Vanga )------178 9.4 189 8.3 202 10.4 23 7 13.2 435 22.0 Other Sea Coast Villages-- - -- 650 36. 7 1,017 58.7 1,008 61.9 955 60.8 1.369 89.0 Sport Fishing - -- -- 125 9.7 99 2.8 125 10.0 82 6.31 102 8.0 All other areas A.91,007--- 40.0 1.011 40.0 1.630 65.0 3,0 202.9 ___

Subt otal 5.580 308.9 6,507 327.0 5,5 315.3 5.715 305.9 6_ 342~6.2 7, 6 1 460.8 6,562 962.0

Crustaceans Lamu, -- -- 42 5.0 55 7.2 79 7.9 61 9.6 66 14.6 68 18.0 Malindi - - 1 0.4 t 0.4 10 2. 5 15 2.8 7 1.8 6 3.0 Kilifi - 5 1.1 6 1.4 6 1.5 8 2.0 16 4.1 14 4.0 Mts.apa - -.- -- -- 1 0.2 1 0.2 2 0.4 -- -- Mombasa - -- 48 12.0 It 2.6 ---- 39 9.3 12 2.8 119 35.0 Shimuni --- 5 1.3 5 .1. 0 21 3.8 12 0.6 12 3.1 5 2.0 Vanga - -- 13 2.8 12 2.1 14 2. 5 4 0.6 9 1.3 15 2.0 Other Sea Coast Villages -- - 6 4.0 32 4.9 31 5 .2 27 4.3 35 5.7 47 8.0

Ssxl6total 98 23. 3 140 26.6 1 22 19.6 162 23. 6 167 Z9.4 159 33.8 274 72.0

Other Marine Products Lamu -- - .------5 0.4 2 0.3 24 1.13 Malindi ------15 2.3 6 0.6 2 1.O Kilifi ------Mtvapa ------KMobasa ------165 7.7 126 4.0 173 4.0 Shimoni -. -. ------

Vanga - -. ------Other Sea Coast Villages ------All other areas - -. -- 124 8.5 175 8.4 ------

Subtotal 159 7.3 223 5.2 124 8.5 175 8.4 185 ln. 4 134 4.9 199, 6.0

3 _____ ~~~~~~~~~~~~~~~~23, 397 1240.6 2S,055 1,435 ,2 i4i68.5 2 I4024U0 9 JI.UU2 u'sf4. 33 o1 52 1- 2i95 k984.

I/ Provisional 2 2/Area of Lake Victoria (Kenya territory), 4,100 kui; Lake Rudolf, 7.200; Lake Nairobi. 140; Lake liaringo, 130; Other Lakes, 200; Fish Ponds, 2,000 ro 3,000: Various Dams, maximum esti.ate, 8,000.

Sorc, iuistr- of Tourism and t-'i1dlife,Fisheries Departm~ent, cited is SLatSlsiRsl Absfrac~ 1970 an,d 1971; Econom,icSurvey 1972. Table ": PR.ODUCTION OF F'ISH AIND SfHLLFISH, CO3TAL PIOVINCE, 1967-1971

1°67 1968 1969 1970 1971 Thousand Thousand Thousand Thousand Thousand Tons KSh Tons KSh Tons KSh Tons KSh Tons KSh

Freshwater Fish 904 847.8 870 646.7 800 600.0 985 710.9 1,822 1,753.0

Marine Fish Demersal Fish - - 2,)499 3,337.1 2,673 - 3,437 4,840.7 3,919 11,217.8 Pelagic Fish - - - - - 517 1,195.0 Sharks - - 815 981.0 720 - 527 348.4 790 686.6 flxed Fish - - 2,401 1,797.3 2,207 - 2,495 3,176.4 1,231 1,309.3 Subtotal 5,758 6,3D)4.9 5,715 6,11.5L 5,600 6,700.0 6,459 8,365•5 6,457 1h,408.7

Crustacea Spiny Lobsters - - 66 255.6 86 404.3 83 444.4 145 845.4

Prawns - - 86 201.6 61 215.8 69 226.7 124 527e4 Crabs - - 10 13.3 20 29.6 11 11.2 15 29.8 Subtotal 120 391.4 162 470.5 167 649.7 163 682.3 284 1,402.6

Miscellaneous Game Fish - - - - 53 78.3 92 117.2 102 228.7 Oysters 3 89.8 2 45.8 2 45.8 1 31.5 2 44 .7 Oyster Shell Grit 84 36.0 114 50.3 100 43.9 125 61.0 102 46.4 Beche-de-mer 32 30.0 52 47.3 65 91.7 23 2.6 59 18.3 Tuitles 4 16.0 7 24.8 18 27.4 2 5.5 4 5.9 Subtotal 123 171.8 175 168.2 238 287.1 2)43 217.9 269 344-0

Total 6,905 7,715.9 6,922 7,400.8 6,805 8,236.8 7,850 9,976.5 8,832 17,908.3

Source: Annual Report, Provincial Fisheries Office, Mombasa, 1971 D HFJ Page 17

Table 3: A-VERAGE FISH PRICES RECEIVED BY F'ISHERMEN, BY SPECIES AND AREA, 1971

Lake Lake Lake Lake Victoria Rudolf Baringo Naiiasha -______---KSh per Kg-

(A) Fresh Water

Ales tes 0.79 - - Bagrus 0.65 - _ Barbus 1.01 - 0.82 Black Bass - - 1.72 Citherinus - - Glarius 0.91 - 1.50 - Distichedus - - - - Engraulicypris 0.91 - - - Haplochromis G.65 - - - Labeo 0.07 - - - Mernmrus 0.78 - - - Nile Perch 0.87 - - - Protopterus 1.05 - - - Schilbe 0.85 - - - Synodantis 0.93 - _ Tilapia Esculenta 1.76 - - - Tilapia Other 1.36 0.26 0.62 1.39 Average 1.01 0.2Q 0.L9

(B) Marine ______KSh per Kg------

Demersal 1.75 - - - Pelagic 2.33 - - _ Shark 0.92 - - - - Unspecified 1.10 - - - - Crustaceans Spiny Lobster 6.02 - - Prawns 4.66 - - - _ Crabs 1.13 - - - - Oysters 25.00 - - .. _ .0.32 - - _ _ Miscellaneous Turtle 1.20 - - Oyster - - -

Source: Ministry of Tourism and Wildlife Table 4: IMPORTS AWD EXPORTS OF FISH AND FISH PRODUCTS, TONNAGE, 1967-71

Imports Exports 1967 196b l969 1970 1971 1967 -i19 1969 1970 1971

136 220 300 Fish, fresh or frozen 377 298 546 381 411 106 1L3

Fi.sh, salted, dried or 706 1,116 2,683 smoked 2,008 4,213 2,747 2,515 652 239 502

Crustacea and molluscs, fresh, frozen, salted 18 or dried 81 41 31 18 87 22 45 29 18

Fresh in airtight containers and fish preparations 337 256 253 346 448 2 3 - - -

Fishmeal 874 916 1,332 1,390 2,345 2 4

Oils from fish and marine 1 - 28 mammals 64 78 112 587 703 - - 1,354 3,029 Total 3 7L1 5,802 5,021 5,237 L46ho 371 697 872

Note: Dpta include trade with Uganda and Tanzania. Trade Reports. Source: Annual Reports, Fisheries Department, Ministry of Tourism and Wildlife, and Annual

oH ANNEX 11 Page 19

Table 5: CATCHES PER 5-INCH GILL NET IN THE NYANZA GULF FISHERY, 1905-68

Year Catch per net Number of Fiah (Tilapia)

1905 50 - 100

1925 30

1928 6

1933 7

1937 3.1

1942 2.5-

1947 2.1

1952 1.9

1954 1.6

1962 1.4

1965 0.5

1968 0.4

Source: EAFIRO, Annual Report, 1969 ANNEX 11 Page 20

Table 6: LANDINGS AND DISPOSITION OF FISH, LAKE VICTORIA, 1968-69

Quantity Value 1968 11969 1 69 - Tons - -KSh Thousand-

Landings

Alestes 346 56 320 45 1/ Bagrus 1,129 966 727 514 3.2 Barbus 494 185 635 165 1.0 CLarias 1,710 1,326 1,257 947 5.9 Engraulicypris 720 520 595 531 3.6 HaplochrOmis 3,684 6,427 2,610 4,6'2 29.0 Labeo 586 467 628 406 2.5 Monryrus 52 73 41 45 1/ Nile Perch - 17 - 14 T/ Protoperus 2,764 1,626 2,075 1,351 8T4 Schilbe 388 248 222 141 1/ 3ynodontis 177 256 144 138 1/ Tilapia Esculenta 2,107 3,951 3,304 5,868 36.6 Tilapia Other 274 694 694 712 4.4 Other 1,669 630 915 467 2.9 Total 16,100 17,442 14,167 16,046 100.0

C ptionFor)

Fresh 11,270 12,183 9,845 11,351 70.7 Cured 4,830 5,259 4,322 4,695 29.3 Total 16,100 17,442 14,167 16,046 100.0

Consumption (Market)

Producer Household 5,375 5,756 4,798 5,295 33.0 Marketed. 10,725 11,686 9,369 10,751 67.0 Total 16,100 17,442 14,167 16,046 100.0

1/ Less than 1.

Source: Annual Report, Provincial Fisheries Office, 1969. IBRD 10318

K E N YA 1/ MARCH 1973 AGRICULTURAL SECTOR SURVEY j

LAKE VICTORIA / / -

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International boundaries }0 20 40 60 80

Th, n p do.-1 KILOMETERS

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WORLD TUNA CATCH, CATCH/GMT, AND FLEET CAPACITY, 1958-1970

9.0

3.4 13.0

8.0 9 3.2 0x ° 3.0 12.0 0

7.0 2.8 x 2.6 11.0

6.0 T CAPCATCH/G.M.T. 2.4 a o 6.0 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2.2 2. 10.0

5.0 1 2.0

1.8 9.0

4.0 -. 16

1.4 8.0

FLEET CAPACITY

1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1963 1969 1970 1971 1972 1973 1974

1971-74 Projected Sq-ouce: Inter American Tropical TuL,a Corrmmissiw, World Bank - 7332

KENIYA AGRICULTURAL SECTOR SURVEY Catch Distribution of Tunas and Billfishes by Long Line Vessels in the_Indian Ocean in Summer Months (July)a-nd_\Q/intec Months (Dec.)_

20' 20'l

LI~ ~ ~ i ' o° LI--IlM E - El [ El EEl EF DE. DO O 0 El - El oI E ElE El O D o 1 WVI D l R J n nn {~- OEE OO El El ElO 00 CHM'-Dloom 1_ E00 1_10 El[' FI 13 DMO E Xooo a~ElJEE l E E lEElEl. X EElEl EclE Elz

__ flFl~ ~~~~~~~~~~~ mm -, O ---IL.Om El~~~~~E

_ 4 r~~~~~~~~~~~~~~~~~~~~~~~~~ATCD!5TP!P-'T!0N:

k Summer months, July El Winter months, December -20. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~20~ 20 /40 0 C 8108 12E0 1600 KILOMETERS

0 200 400 600 800 1000 El1El MILES 4 LO' ~~~~~~~~610' 810' I00

ANNEX 12 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

IRRIGATION

The Water Resource para. 3 - 19 Lake Victoria Drainage Area 4- 5 Rift Valley Drainage Area 6 - 8 Athi River Drainage Area 9 - 13 Tana River Drainage Area 14 - 16 Ewaso Ng'iro Drainage Area 17 - 19

Agencies and Responsibilities 20 - 29

Existing Irrigation 30 - 34

Development Proposals 35 - 41

Judgments and Recommendations 42 - 71 Proposed Changes: Planning 43 - 47 Proposed Changes: Implementation 48 - 53 Building Capability 54 - 55 Target Income 56 - 58 Proposed Outlays 59 - 68 Needed Feasibility Studies 69 - 71

Table 1 Major Existing Irrigation Schemes, Selected Data, 1971-72 Table 2 Tentative Planned Expenditure on Major Irrigation Schemes for the 1974-78 Development Plan Period Table 3 Tentative 'Minor Irrigation Development Proposals for the 1974-78 Development Plan Period

ANNEX 12 Page 1

IPRIGATI')N

1. Today irrigation plays a minor role in agriculture. The water resource is limited, and the miximum feasible development of irrigation will ease only marginally the probie.m of population pressure on the rainfed areas. For example, "instant" development of the Lower Tana basin would absorb at most the equivalent of about two years population increase. Nonetheless, the irrigation resource must be exploited to help increase agricultural output and raise ruial welfare

2. The critical task for thie few years just ahead is to build institutions and develop staff competence so that thereafter the irrigation resource can be brought quickly into full production. At the same time, a great deal more needs to be learned abont the resource potential.

THE WATER RESOURCE

3. Kenya's five drainage areas (Map 10280) provide a convenient basis for an outline description of its water resources.

Lake Victoria Drainage Area

4. Lake Victoria is both a potential source of irrigation water and the outlet for the rivers draining the area. The extent to which Kenya can use the Lake's waters is governed by the Nile Waters Agreement of some 70 years ago. This is understood to favnr downstream users, such as Sudan and the United Arab Republic. The major rivers, listed from north to south, are: Nzoia, Yala, Kibos, Nyando, Sondu, Kuja and Mara.

5. The irrigation potential of this area has been the subject of two studies 1/ which indicated possible alternate lines of development and their estimated costs and benefits. The identified potential, some 35,000 ha taking the two reports together, is second only to that of the Tana basin. Included are: the Kano Plain, about 12,000 ha; the sugar lands east and north of the plain (Muhoroni, Songhor9 Chemelil, Miwani, Kibos), about 14,000 ha; and, pursuant to reclamation, the Yala swamp, about 6,000 ha. The lake and rivers would be the water source; groundwater development for irrigation is not considered feasible.

Rift Valley Drainage Area

6. This is an area of internal drainage, main outlets being Lake Rudolf in the north and Lake Natron in the south with a number of smaller

1/ Sir Alexander Gibb and Partners, Kenya Nile Basin Water Resources Survey, 1956, and Extension of Kenya Nile Basin Water Resources Survey, 1961. ANNEX 12 Page 2

lakes between. The most important rivers are the Turkwell and Kerio draining north into Lake Rudolf; the Perkerra flowing into Lake Baringo; the Melawa draining the Kinangop plateau into Lake Naivasha and the Ewaso Ng'iro draining eastern Narok district into Lake Natron.

7. Rift Valley has the least irrigation potential of the five areas. None of the rivers is large and the characteristics of the Turkwell, Kerio and Perkerra are unsuitable for major development. They drain large semi- arid areas and their normal low level flow is punctuated by violent flash floods after rain. There is potential for small scale development. This has not been fully quantified but some development has taken place and more is planned, particularly to improve the subsistence of the pastoral inhabitants of the dry range areas. There is no identified groundwater potential other than the water table of riverine alluvia and surrounding Lake'Naivasha.

8. The Naivasha area has the largest irrigation potential in Rift Valley. This has not been fully surveyed and quantified. Despite the fact that a considerable amount of irrigation is practised, mainly on large scale farms for horticultural and fodder production, there is probablv scope for expansion, obviously by pump.

Athi River Drainage Area

9. Ibe Athi drains the southern slopes of the Aberdares and the flanks of the Rift Valley to the south. In its lower reaches it is known as the Sabakli (or Calana) and discharges into the Indian Ocean just north of 1falindi. The Tsavo is a major tributary contributing to the flow of the lower reaches. The only other river of significance in the area is the Voi which rises in the Taita Hills and discharges into the sea at Kilifi.

10. The Athi is one of Kenya's major rivers but the potential to Irr;gate from it has not been assessed. There may be a possibility to irrigate a narrow belt along the middle reaches of the river based on run of the river and low lift pumps; this needs study. A major proposal is afoot co divert the Athi and augument the Thika, hence building up the irrigation potential of the Tana. This should not be pursued prior to ascertaining the feasibility and benefits, if any, of direct irrigation fc- the Athi. Irrigation is practiced on a small scale and inefficiently at Chak:rra on the river's lower reaches. This could be improved and there is some scope for expansion.

1I. There is also small scale irrigation at Vanga, on the coast near the Tanzanian border. Wqater is drawn from the Umba river through primitive. inlet structures which require considerable reconstruction following seasonal floods. This area could also be expanded.

12. There is thought to be considerable potential (around 6,000 ha) at T:lvctn, agaln near the Tanzanian border. However, problems include alkaline .ndi s:nline soils, the rising of the water table, and the overall drainage of ANNEX 12 Page 3 the area which could only be done through Tanzania. Thorough study is required before the potential can be confirmed.

13. The area has no identified groundwater resource of sufficient size for irrigation.

Tana River Drainage Area

14. The Tana is by a significant margin Kenya's largest river, draining the eastern flank of the Aberdares and the southern slopes of Mt. Kenya and the Nyambeni Range. It discharges into the Indian Ocean midway between Ma2indi and Lamu. The Tana and its tributaries are the only rivers of significance in this area. As befits the country's major water resource, the Tana Basin has been the subject of intensive study. 1/

15. Considerable irrigation potential has been identified, about 100,000 ha in the Upper Basin and between 100,000 and 120,000 ha in the Lower Basin. In addition it is estimated that hydro-power could be developed in the middle reaches of the river to a capacity of about 650 M;. The three lines of development are not entirely compatible. Full development of the irrigation potential of the Upper Basin would reduce the hydro-power capacity of the middle reaches and would reduce the irrigation potential of the Lower Basin by perhaps 30,000 ha. Conversely the Lower Basin prospect is dependent on hydro-power development for the storage and flow regulation which this would involve. The existing studies do not provide sufficient evidence on which to plan the optimal development of the Tana's water resource (see below).

16. There are many possibilities for small-scale irrigation, but they are over-shadowed by the large-scale potential. And the best small-scale development will depend to a large eutent on the final pattern of large- scale development. However, one area merits special mention, the Yatta Furrow. The Furrow was constructed between 1952 and 1958, largely by people detained under the emergency regulations. It draws water from the Thika River, is 60 Im long and has a capacity of 80 cusecs. However, the permit covering abstraction is for 40 cusecs of normal flow. It is estimated that the Furrow commands about 800 ha of irrigable land. To date only about 75 ha is developed; on this both subsistence and horticultural crops are grown. The topography of the area is somewhat broken, and the predominant soils are not of high fertility. However, the basic infrastructure is already there. And the Furrow is located in an area of periodic drought. For these reasons, a study of the feasibility of developing the F'urrow potential is needed. (The area's groundwater resources are not adequate for irrigation.)

1/ Major studies are: Balfour - Beatty and Company Ltd., The National Power Development Plan 1966-68, 1967; FAO, Survey of the Irrigation Potential of the Lower Tana River Basin, 1968; International Land Development Consultants, N.V. (ILACO), Upper Tana Catchment Survey, 1971. ANNEX 12 Page 4

Ewaso Ng'iro Drainage Area

17. This has the largest land area and the least water resource. No permanent rivers flow through the area. The Ewaso Ng'iro drains the northern slopes of Mlouint Kenya and the Aberdares, in normal years discharging into the Lorian Swamp. In exceptionally wet years the flow continues on into Somalia. There is some potential, not yet fully quantified, for small-scale development along the rivers, planning for which is underway.

18. The north east border of the area, and the country, is formed by the Daua Parma, a permanent river arising in the Ethiopian highlands. There is considerable potential both for simple flood irrigation and by pump lift from the river. There is no agreemert on Daua water rights; this holds up development planning.

19. The groundwater of the area is limited in quantity and is frequently saline, hence there is no groundwater irrigation potential.

AGENCIES AND RESPONSIBILITIES

20. Several institutions are involved in the development and control of the water resource. The Water Resources Authority was established by the Water Ordinance of 1952. It has no executive powers but is charged with advising the responsible Minister (presently Agriculture) with regard to resource use, planning and conservation. The Director of the Water Develop- ment Department (WDD) (see below) is its Technical Advisor. In practice there is totally inadequate coordination of water planning, and the planning effort has been unbalanced. Short-term planning of domestic supplies has had most attention. A comprehensive resource plan geared to assessed long- term need and resource availability is lacking. This deficiency is recognized and proposals are in hand to undertake the preparation of such a plan, as discussed below.

21. The Water Apportionment Board was also created under the 1952 Or- dinance. It controls water use through the issue of permits, without which no development may take place. Five Regional Water Boards, one for each of the drainage areas discussed above, advise the Board on their respective areas.

22. The Water Department (WD) of the Ministry of Agriculture is the most important body dealing with the water resource. It is divided into four branches: Development, Operation, Water Resources and Administrative Services. The Department is chiefly concerned with the planning, construction and operation of domestic supplies. It is responsible for the development of the livestock watering facilities financed through the ongoing, Banl-assisted, livestock project. The Department's other major field is data collection. A comprehensive network of river gauging stations and water ANNEX 12 Page 5

level recorders is maintained and there is considerable knowledge of groundwater resources. While data storage and retrieval systems can be improved, lack of data is not likely to constrain water resource planning. The WDD is peripherally involved with small-scale irrigation schemes through the provision of assistance on engineering aspects to the Land and Farm Manage- ment Division of the Ministry of Agriculture, which has the main responsibility in this field.

23. The Land and Farm Management Division (LFMD) of the Ministry of Ac,riculture has important responsibilities in water resources, including the all important field of conservation, and minor irrigation development. 1/

24. Until very recently the development of minor irrigation was entirely ad hoc. Some development was spontaneous, and some was sponsored by charitable institutions. Government involvement was minimal. Perhaps of greater significance, operating schemes received negligible technical advice, either operational or agronomic. Not surprisingly, therefore, many schemes fa:led and performance in general was poor. Many of these schemes were in the semi-arid range areas. As a result of prolonged drought in 1970 and 1971, and Shifta activity, 2/ many pastoralists lost many or all of their stock and the Government had to mount massive relief efforts. Quantitative evidence is scarce, but a few figures serve to show the size of the problem. In Turkana, 4,000 people are dependent on famine relief, and in Eastern Province the figure is 17,000 rising to 37,000 occasionally. This problem increased Government's awareness of the potential of minor irrigation development as a means of improving the livelihood of the poorer pastoral-- ists, while simultaneously reducing the burden of Government relief.

25. To realize this potential, plans have been made to increase official involvement. It is tentatively intended to develop over 4,000 ha during the 1974-78 Development Plan period. Planning and construction would be the responsibility of the LFMD and subsequent management would be provided by the Crop Production Division of the Ministry of Agricujlture. Development would be undertaken by three Minor Irrigation Units to be stationed in Rift Valley, Eastern and North Eastern/Coast Provinces. An application has been made to FAO/FFHC for funds and technical assistance for one unit and other donors will be sought for the other two.

26. The National Irrigation Board (NIB) is a semi-autonomous body created by Act of Parliament in 1966 to be responsible for planning, construction, settling and managing national irrigation schemes. It is

1/ Conservation is discussed in the general report.

2/ Throughout the 1960's guerilla warfare, related to the Kenya/Somali border dispute, disrupted life in North Eastern Kenya. The guerilla fighters were locally called Shifta. ANNEX 12 Page 6 answerable to the Minister of Agriculture. The schemes operated by the Board and its development proposals are described below.

27. The Board operates efficiently; problems on schemes usually arise from technical difficulties rather than any deficiency in management. Scheme management involves the provision of a number of supplies and services: mechanical culrivation, inputs, marketing and sometimes processing. The schemes are farmed by tenants who are subjected to strict discipline under threat of loss of licenses. In practice on the most successful scheme, Mwea Tebere, tenant income is a sufficient incentive and tenancies are seldom terminated.

28. The Board's operation is at present small, just over 6,500 ha during the 1971-72 season, as is its development capacity, now about 800 ha per annum. During the forthcoming 1974-78 plan period, it is proposed to develop about a further 7,000 ha, increasing annual development capacity to about 2,000 ha. The major constraint on development is lack of trained manpower. Major efforts will be made to train additional staff during the plan period. In the meantime considerable reliance is being placed on expatriate personnel.and consultants are engaged to do needed studies.

29. Hydro-power development mu:,t be mentioned in any discussion of irrigation because of possible conflict of interest over allocation of water rights. The Ministry of Power and Communications regulates power development which is in the hands of three Government-controlled firms, East African Power and Lighting Company, Kenya Power Company, Ltd. and the Tana River Development Company, Ltd. Kenya's major hydro-power potential is on the middle reaches of the Tana River. As mentioned above, its development is bound up with that of irrigation. At present, planning for the Tana resource lacks coordination. Proposals for remedying this have been made and are discussed below.

EXISTING IRRIGATION

30. Mwea Tebere is the largest and most successful scheme (Table 1) (Ma- 10283). There are currently no major technical problems, vields have increased steadily and tenant performance is good. It is the only scheme rinancially self-supporting. This is mainly due to its being large enough to support overhead costs. The Tana scheme is also very successful. Cotton yields have increased dramatically over the past few years, leading to significant increases in tenant income. The scheme is not yet financially viable, however, being too small to cover overhead costs; this will be remedied with further development in the Lower Tana Basin. Judging from the available data, Bunyala would appear to be satisfactory. However, it is in tihe same ecological zone as Ahero and there are already indications that it will suffer the same from blast and yellow mottle virus on rice, the main crop. ANNEX 12 Page 7

31. Ahero was developed as a pilot scheme to provide guidelines for the development of the considerable irrigation potential on the Kano plains. To date the guidelines are not available. The major crop, rice, suffers from severe disease attacks and yields are very low. As a consequence, tenant performance is poor and the scheme requires considerable financial support. The Ahero research station is investigating rice varieties and other crops. Sugarcane has shown some promise and plans are in hand to try the crop on the scheme on a field scale. Ahero is a relatively new scheme and there is hope that the technical problems may be overcome.

32. The Perkerra scheme is a disaster, and is now a mill stone around the neck of the NIB. Consistently poor performance has demoralized tenants, partly because of the wide fluctuations in onion prices. Tenants on the scheme have consistently resisted efforts to diversify their cropping. They prefer to gamble on high onion prices, and have refused all attempts by NIB to stabilize prices. In addition, onion yields fluctuate widely with weather conditions; humid conditions favor fungal attack and weed growth, while hot dry conditions recently resulted in poor bulb formation. Inade- quate irrigation may account for the latter since the scheme suffers from periodic water shortages (lack of conservation measures in the catchment have markedly affected the flow of the Perkerra river, the scheme's water source, the silt load is damaging the fishery of Lake Baringo).

33. A feature common to all these schemes, resulting from Government policy, is the size of holding. This is about 1.6 ha, about 4 acres. Plot size is determined by the desired target income. Early schemes were planned to achieve a KE 100 tenant income; the later schemes, Ahero and Bunyala, were planned to KI 150 target income (presumably experience at Mwea suggested that with the passage of time a higher target income could be selected, with the plot size being kept constant). As Table 1 shows, successful schemes readily achieve the target income.

34. Data on minor schemes are scant. As mentioned above, the development of minor schemes has been ad hoc, they have been given little or no supporting services, and many have in consequence performed poorly or failed entirely.

DEVELOPMENT PROPOSALS

35. The 1974-78 development plan proposals have yet to be finalized. The preliminary documents available in late 1972 suggested public expenditure of K, 7.3 million for the period (Table 2). Expansion of existing schemnes is contemplated only in the case of Mwea and Bunyala, 405 ha and 300 ha respectively. The former would require diversion of flow from the Nyamindi to the Thiba River, the canal costing an estimated Kb 65,000. The latter would be subject to an engineering study to ascertain that a gravity supply could be taken from Lake Kanyaboli. ANNEX 12 Page 8

36. The estimates provide for starts on five new schemes. Of these .-asinpa and Bura, in the Upper and Lower Tana respectively, would be by far the largest. ILACO are currently completing feasibility studies for these schemes. An interim report has been prepared which, while subject to change, indicates the probable findings. lIasinga looks decidedly un- favorable with an estimated internal rate of return (IRR) of only 4%. Bura, with an estimated IRR of 14%, looks more attractive. However, these findings appear to require qualification, as is discussed below.

37. Of the other new schemes, planning has begun for Kano II, and action on Yala and Taveta is contingent on further study, to be financed under the Plan.

38. The Yala Swamp extends to about 16,000 ha; of this some 2,000 ha were reclaimed under an FAO/UNDP project. This has not provided sufficient data to plan for the full development of the swamp area and further study is to be undertaken. It is understood that the Netherlands is interested in providing assistance for this study. In anticipation of favorable findings, the tentative development plans include provision for a small research station to investigate the reclaimed area, and thereafter funds for development of a pilot scheme. Somewhat similarly, funds are provided for a drainage study at Taveta with a notional sum for subsequent development.

39. The bulk of the funds provided for studies would go to the Tana Basin. Ot:her funds are provided for research and manpower training. All are clear needs, as discussed below.

40. For minor schemes, the preliminary development plans call for the development of about 4,200 ha spread over 13 schemes and four provinces (North Eastern, Coast, Rift Valley and Eastern). The schemes, their area and construction period are shown in Table 3. As mentioned above, development would be undertaken by three Minor Irrigation Units; external assistance would be sought to help create and manage these.

41. The preliminary cost estimates suggest that this planned minor scheme development would cost about Kb 700,000, the equivalent of Kb 170 per i-ra plus an undetermined amount for manual labor. This omits the cost of expatriate staff which apparently would be as follows: 5 men per unit (surveyor, irrigation engineer, mechanic, administrator, agriculturalist), *hrh 3 units for 5 years; hence a total of at least Kb 750,000, or Kb 180 per ha. Equipment for each scheme is estimated to cost Kb 16,000, or Kb 40 per ha. Running costs, exclusive of amortization of development costs, are estiplated at FE 20 per ha for gravity schemes and Kb 35 per ha for pump fed schemes. These costs appear very high, particularly since all the schemes would be too small to carry the overheads which have been necessary on NIB scheomies to achieve production and recovery of charges from tenants. In other words, the schemes are too elaborate, and will produce a low return. ANNEX 12 Page 9

JUDGMENTS AND RECONMENDATIONS

42.. These proposed expenditures, and the ultimate contribution of irrigation development to agricultural production and rural welfare, are significant. The next few years are critical in this field, as the institutions dealing with irrigation and the information base must be sharply improved if the water resource is to be effectively exploited over the longer term.

Proposed Changes: Planning

43. Two recent studies have proposed institutional changes for water development. The first, Comprehensive Water Resources Planning in Kenya, 1971, a UNDP financed study, outlined proposals for the preparation of a National Water Plan and the creation of a supra-ministerial agency to execute this. The second, produced by the UNDP-sponsored Tana River Basin Survey Nission, calls for the creation of a Tana River planning agency.

44. In the first case, it was proposed that the agencv would have much wider responsibilities than resource planning, namely: "(1) overall administrative and executive control of water resources policy in the development, management, and research conducted by governmental and private organizations; (2) achieving coordination of all ministerial efforts in water resources development, management, and research; and (3) assuring adequate and proper support to existing and contemplated operating agencies so that accepted projects can be satisfactorily undertaken and completed".

45. It is understood that Government has accepted the proposal for the preparation of a National Water Plan; this is a clear need and is endorsed. However, the proposal for a supra-ministerial agency as described above is not accepted. An alternative suggestion is offered for consideration, it is put with considerable diffidence since the mission did not have the opportunity to examine this issue in depth.

46. It is proposed elsewhere that the WD be transferred to the Mfinistry of Natural Resources (MNR). If this were done and MNR, through WD, made executing agency for preparing the National Water Plan, then its presently inadequate planning capacity would have to be developed to a level sufficient to cover the water sector. Through this project, long term aims would emerge. Improvements in data collection, their storage and retrieval, would permit optimization of resource allocation. W4D with increased planning capacity and the data at its disposal would be well placed to advise on sectoral development. Conflict of interest might arise but, with adequate data to draw upon, this could be adequately resolved by an interministerial committee similar to the proposed Land Use Committee (Annex 1). ANNEX 12 Page 10

47. As mentioned above, separate proposals have been made for the Tana Basin. It is understood that Government has accepted the need for a Tana Basin planning agency, and that a Tana River Development Authority has been created and a chairman appointed. The agency would:

(a) monitor the design and execution of planned projects;

(b) evaluate performance leading the way to improvements;

It was proposed originally that this be done in close collaboration with the proposed National Water Authority. If the above suggestions are accepted then the Tana agency would collaborate with the Ministry of Natural Resources (MNR) in the formulation of the National Water Plan and, also,

(d) carry out a variety of studies to complement those in existence to enable optimal resource development in the Basin.

Proposed Changes: Implementation

48. Three institutions are involved to some degree with irrigation: the National Irrigation Board, the Land and Farm Management Divisiorn (LFMD) and the Water Department. For reasons outlined below it is suggested that the National Irrigation Board have sole responsibility for irrigation.

49. The WJater Department is only marginally involved in irrigation at present. If it is to achieve Government's objective of bringing improved domestic water supplies to all the population by the year 2000, and if it is to develop a capacity to plan for the sector resource, then this marginal involvement in irrigation must be seen as an unnecessary impediment which should be removed.

50. Proposals for a meaningful Government involvement in the development of small scale irrigation have only recently emerged. It has been proposed that this be primarily the responsibility of the LFMD. The increased effort is fully supported but before it gets underway, the allocation of responsibility should be reconsidered. The NIB is the only body with irrigation expertise at present. The LFMD would have to recruit such expertise. Initially this would mainly be expatriate but there would soon be a move to Kenyanize, thus drawing on the already scarce engineering graduate material. There would also be competition for irrigation agro- nomists. The disposal of very scarce trained manpower between two institutions would be wasteful. It would be better employed solely in the NIB.

51. The question of the likely impact on small scale irrigation development should also be considered. The LFMD, starting from scratch with no experience and probably relying on expatriates with no local knowledge, would almost certainly make mistakes which NIB would avoid. ANNEX 12 Page 11

Efficiencv would be lower and costs higher, to Government's detriment; and, as always, with the farmer and his family being the ultimate sufferer from sul-optimal public performance.

52. The future work load of the Ministry of Agriculture and the L`MD outside of irrigation is also an important factor. If Government's development objectives are to be attained, the Ministry of Agriculture will be obliged to increase its effort throughout the rainfed areas. The proposals in this report alone will considerably increase the Ministry's work load. Attention has been called elsewhere to the urgent need for improved soi:L -onservation; this is an LFMD responsibility. Firstly, the Division is in its infancy and has barely scratched the surface of the farm management problem. Even to provide essential services to the "problem" large farms will stretch its resources.

53. For these reasons, development of minor irrigation should be handled by the body best equipped to tackle it, namely the NIB. It will be argued that the NIB will have its hands full developing major schemes. This should not be accepted as an argument for rejecting responsibility for minor irrigation. If this is to be developed, as it should be, some institution must handle it and the NIB is best placed to do so. However, it must be stressed that different planning and operational criteria are needed for large-scale and small-scale schemes. Minor schemes have a large welfare component, since in many cases they are substitutes for famine relief; this calls for different funding and accounting procedures. Thus minor schemes must, from the outset, be clearly separated both con-- ceptuallv and operationally from major schemes; if they are not, both types of schemes will fail.

Building Capability

54. Organizational reform needs to be followed by specific steps to cievelop the capabilities of the revised institutions. As a start, it can be expected that the project to prepare a National lWater Plan will help improve planning capacity. For large-scale projects, the greater part of the potential is in the Tana Basin, already studied a great deal. With good management, the authority can rapidly acquire an acceptable level of capa- hilitv. This leaves minor irrigation. Proposals for minor irrigation are being prepared in a planning vacuum. This must be remedied to obviate conflict of interest and misallocation of resources. To illustrate: minor development is based on small rivers. These provide vital water supplies to the range areas. These essential range requirements, present and future, must be quantified before thle amounts of water available for irrigation can be determined.

55. Considerable time will be required to build up a capacity to develop irrigation on a meaningful scale. An early start must be made if the capacity is to be available when required. In terms of magnitude, the effort proposed for the 1974-78 Plan seems appropriate. This will ANNEX 12 Page 12 enable real impact to be made during the succeeding plan, as well as further gains in capacity. The above recommendation to bring all irrigation within the purview of the NIB must be reiterated. As indicated earlier, shortage of trained manpower will be a major constraint on irriga~:ion development. It is important that the available expertise be brought together for efficient utilization and that an adequate level of manpower training and development at all levels be undertaken at an early date. Experienced professional staff can be hired from overseas in the early stages, but they should work with Kenyan professionals and technical support staff at all times, so that the latter groups can get experience. This calls for advanced provision of funds and personnel zo allow training to proceed in appropriate institutions and on the job. The NIB is best placed to assess these needs. It must be given the resources to meet them.

Target Income

56. There is no evidence as yet to suggest that irrigation development per se is a particularly attractive proposition in the traditionally narrow and direct economic terms. However, the appraisal calculus must be broadened to take account of the return to irrigation through its contribution to easing population pressure and low incomes in the rainfed areas. In this context the present way of choosing income targets, hence holding size, must be questioned. The target income considerably exceeds average rural incomes; it is 50% bigger than the highest target of the Million Acre Settlement Scheme and is two and a half times that of the current Shirika Settlement program.

57. Large sums are thus being spent, or their expenditure is planned, to create a privileged minority. Canal and land development of the Mwea extension will cost about Xi 600 per ha; capital costs of the new scheme at Masinga are tentatively put at about K1 650 per ha in the interim report of the ongoing feasibility study; the comparable figure for Bura is Ki 420 per ha with no allowance to improve access to this remote area. Thus a capital outlay for irrigation development of about Xi 1,000 per familv is called for in present planning.

58. This is too much. For irrigation to play its appropriate development role, these high costs should be spread over the maximum possible number of beneficiaries. The target income, hence plot size, should be reduced. In situations where the reduction of plot size might be imprac- ticable, such as on existing successful schemes, consideration should be given to increasing charges for services in order to channel the benefits of irrigation for the development of other areas. The Tana cotton irrigation project is too small to carry its full overhead costs and presently receives an annual subsidy of Ki 30,000. At least part of this could be eliminated by raising water charges nearer to economic levels. Tenants presently enjoy incomes of about Kb 200 per year, and could thus afford to pay more for the services of the project. The appropriate income level for the future needs study, but a figure between KX 75 and Kb 100 is suggested. ANNEX 12 Page 13

The argument that the present income target is necessary to provide an incentive to tenants to submit to discipline and thus perform satisfactorily is not accepted. The land shortage and unemployment problem is already more than severe enough to assure that there will be no shortage of candidates for tenancies which will give them an income somewhat better than the rural average.

Proposed Outlays

59. Present Government proposals call for the expansion of the Mwea scheme. Two aspects of the proposal merit attention. First the expansion area would be served by the Thika River; but this is already fully tLtilized. Its flow would therefore have to be augmented by diversion from the Nyamindi River. The canal is estimated to cost KE 65,000 or KI6 160 per ha (405 ha expansion). At this cost level, the economics of the proposed expansion should be carefully appraised before final plans are made. Second, with the expansion, Mwea would cover about 6,000 ha irrigated. Care must: be taken to ensure that the expansion is not counter productive; this could easily happen as a result of costs of management or reducing management efficiency.

60. Ahero has not yet fulfilled its pilot function. It is beset by technical problems and as a consequence tenant performance is poor. The major achievement to date has been to displace 50% of the pre-development population (a sad commentary on present target income policy) and to place the other 50% in an insecure position. Despite this, plans are in hand to' create a new scheme, Kano II, and to expand Bunyala, both in the same ecological zone. These plans are premature. A great deal of intensive research remains to be done in search of a sound technical base for irrigated farming in the area. Only when a proven farming system is available should irrigation be expanded in the Lake Victoria Basin. Even then a rider must be added. Much of the area receives about 1,250 mm of rainfall per annum. The research effort into improving rainfed agriculture has been totally inadequate; it should be sharply expanded, improved, and vigorously pursued, given the high cost of irrigation. This research must include an investigation of economic ways of overcoming the soil drainage problem, and increasing yields. In overall, it remains to be seen, and should be urgently determined, whether improved rainfed or irrigated agriculture would yield most in economic and social terms. Present levels of rainfed production are very low and could obviously be improved. The degree of improvement, and its technical and economic feasibility relative to irrigation farming, should be established as soon as possible to arrive at a development strategy for the area. The importance of this work cannot be overemphasized, given the present and projected population density, and the scarcity of alternative sites for resettlement.

61. The second of the consultant studies of the Kano plains area concluded that irrigation of much of the present sugarcane growing area would be economically feasible. As noted in Annex 4, the sugar issue is complex, ANNEX 12 PagE 14

and all options should be examined, including irrigated cane in the Lower Tana. In any event, before the introduction of irrigation to the Kano cane area, husbandry standards would have to be greatly improved; with present standards, irrigation would be a waste of resources.

62. The Government does not plan to expand Perkerra. This scheme exemplifies a point made in the Tana River Basin Survey Report which merits emphasis ... "it is usually politically unfeasible to phase out an irrigation project once people have been settled on project land and have enjoyed the benefits of irrigation water--no matter how badly the project's costs may turn out to exceed its benefits". The country cannot afford more "Perkerras"; schemes should only be launched when the research base is adequate and thorough feasibility studies have indicated a high probability that the returns will be satisfactory.

63. The Masinga and Bura schemes in the Tana Basin are the most significant of the Government's proposed developments. It is unfortunate that the overall information base is so weak. Despite the amount of study devoted to the Tana Basin, it is still not possible to produce a development plan which would optimize resource use. The series of studies have had different objectives and have been done by different groups, and they cannot be synthesized to produce the required plan. The two irrigation studies mentioned above give the impression of attempting to justify irrigation rather than to assess its feasibility. Both appear to leave out essential cost elements in their evaluations. The Upper Tana Study (the more critical one, since development there would constrain power and irrigation development lower down) seems to underestimate irrigation water requirements, the opportunity cost of water relative to hydro-power development, the benefits foregone, and grossly to underestimate project costs. This view is borne out by the present (second) feasibility study. Its use of both the opportunity cost of water as determined in the previous-study, and the casual treatment of the critical question of benefits foregone, leave much to be desired. Like much of the Upper Tana Basin, the Masinga area has moderate rainfed potential. As pointed out in Annex 1, people are flowing into such areas, and will inevitably continue to do so; it is with the results of these flows, and the alternative possible ways of raising their productivity--that irrigation development in the Upper Tana should be compared, and not against a stagnant, unchanging position.

64. It seems extremely unlikely that high-cost intensive irrigation of the type now being proposed will be economically viable in the Upper Tana. It is therefore important that studies be undertaken to cover a much wider range of activity, as suggested in the Tana River Basin Survey Mission Report.

65. The Bura development would be attractive if the final feasibility studv bears out the preliminary findings. However, the Government should ensure that all development costs are included in the evaluation; the interim report indicates that certain costs (e.g., some road construction and tenant housing) may be omitted. ANNEX 12 Page 15

66. If it turns out that acceptable returns can be obtained at Bura, the NIB might well concentrate its activities there. Both the Upper Tana and the Lake Victoria area should be further studied to determine whether irrigation development is justified. The target for development at Bura might well be doubled at 8,000 ha. This would allow NIB to build up its capacity; it would lead to economies of scale and hence improved returns; and would help assess the true costs and benefits of large scale development in the Lower Tana. The project would not prejudice future proposals which will emerge from integrated basin planning by the Tana River Development Authority.

67. Pending completion of the proposed studies, little can be siaid of the tentative proposals for developments at Taveta and Yala. The latter, however, is in the Lake Victoria area, and development should only be considered when research has produced a technically sound cropping system.

68. The Government intention to expand minor irrigation is endorsed. Ilowever, the proposed rate of development is optimistic. It implies that minor irrigation, consisting of small schemes widely scattered, can be developed at the rate only now achieved by the NIB after several years of operation on major schemes. And the need to plan comprehensively the water resources of the rivers involved, and to undertake adequate soil survey work, is understressed. Furthermore, the present tentative cost estimates are too sketchy to support a major development program. As discussed above, NIB should be given responsibility for the schemes. With its conside:rable experience, and drawing on the additional manpower proposed for the preparation of minor schemes, an effective program could be developed quickly.

Needed Feasibility Studies

69. These, then, are the Government's development plans for irrigation. Three proposals should be added. First, it is recommended that the full irrigation potential of the Naivasha area be ascertained with a view to including the irrigable area in the land transfer program. If the area could be developed to intensive, smallholder irrigated agriculture it could probably support many more people than at present. Horticultural crops could be grown for processing and for export; in fact, the rehabilitation and possible expansion of the dehydration plant (now losing money) should be studied at the same time as the irrigation possibility.

70. Second, a feasibility study should be mounted to prepare proposals for the full development of the irrigable land commanded by the Yatta furrow. While consideration should be given to horticultural crops, the probability of drought makes it necessary to also grow subsistence crops.

71. Third, it may be possible to irrigate a narrow belt along the middle reaches of the Athi River. A feasibility study is needed to ANNEX 12 Page 16 investigate this potential and, if desirable, prepare proposals for development. This could benefit people living under extremely arduous conditions at present. The area is equidistant from Nairobi and Mombasa, and has excellent communications. Horticultural crops could be considered as an important enterprise. ANNEX 12 Page 17

Table 1: MAJOR EXISTING IRRIGATION SCHEMES, SELECTED DATA, 1971-72

Area Main Main Crop Average Tenant Scheme Irrigated Crop Yield Tenants llet .nlcome Ha Kg per Ha Number

Mlwea 4,659 Paddy 6,000 2,578 3,163 Ahero 840 Paddy 2,539 i 515 760 Tana 570 Cotton 3,170 359 4,434 Perkerra 408 Onion 5,100 455 752 i/

Bunyala 212 Paddy 7,940 131 3,898

I/ 1148% cropping intensity

21/ 200% cropping intensity

3/ Includes income from chillies, an important secondary crop.

Source: Various ALEX 12 Page 18

Table 2: TENTATIVE PLANNED EXPEN.DITURE ON MAJOR IRRIGATION SCHHES FOR THE 1974-78 DEVELOPMENT PLAN PERIOD 1/

1973-74 1974-75 1975-76 1976-77 1977-78 Total -Th------ThousandKL------

Scheme Expansion Niwea 155 90 245 Bunyala 220 220

Operating Subsidy Existing Scheme Ahero 56 45 35 30 25 191 Perkerra 15 15 15 15 15 75 ';Iana 30 30 30 30 30 150

New Scheme DevelopmEit Kano II 279 260 150 689 Yala 100 100 M4asinga (Upper Tana) 340 703 324 324 1,691 Bura (Lower Tana) 150 817 480 480 480 2,407 Taveta 10 10 40 10 10 80

New Scheme Operating .9hbsidy Kano II 50 45 40 135 Masinga 18 45 63 Bura 14 49 84 147

Research Ahero 27 29 30 31 33 150 Yala 40 10 10 10 70 Tana 17 19 20 21 23 100

Feasibility Studies Yala Swamp 30 30 Various 15 90 15 120

Processing Tana (rinnery 150 150 Nyanza Rice Mill 200 200 rraining 35 53 52 46 50 230

WinI s H 7 8 10 10 10 45

Tota.l 826 1,976 1,839 1,359 1,294 '7,294

1/ In the preliminary discussion stage as of end 1972.

Source: NIB ANNEX 12 Page 19

Table 3: TENTATIVE MINOR IRRIGIATION DEVELOPMENT PROPOSALS FOR THE 1974-78 DEVELOPMENT PLAN PERIOD 1/

Area to be Scheme Drainage River developed Construction Area 1974-1978 Period ha

North Eastern Province Mandera Ewaso Ng'iro Daua Parma 400 1973-74 Rhamu " 400 1974-75 Garissa Tana Tana 400 1975-76

Coast Province Lower Tana Tana Tana 400 1976-77 Galama/Chakama Athi Sabaki 170 1977-78 Vanga Athi Umba 220 1977-78

Rift Valley Province Turkwell Rift Valley Turkwell 500 1973-76 Wei Wei ." Wei Wei 220 1976-77 Lomut Siga 100 1976-78 Kangalai Suam 400 1976-78

Eastern Province Merti Ewaso Ng'iro Ewaso Ng'iro 100 1973-75 Bulissa 400 1974-76 Isiolo Isiolo 500 1976-77

Total 4.210

/. In preliminary discussion stage as of end 1972.

Source: Various

ANNEX 13 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

AGRICULTURE: GENERAL SUMMARY AND RECOMMENDATIONS OF RECENT UNDP/ILO STUDY

ANNEX 13 Page 1

AGRICULTURE: GENERAL SUMMARY AND RECOMMENDATIONS OF RECENT UNDP/ILO STUDY 1/

"Three major thrusts are proposed for an employment and incomes strategy for the agricultural sector, namely--

(a) the intensification of land use for both crop and livestock production, with a concentration of effort directed to the poorer families in an attempt to raise their standard of living by comparison with that of the community as a whole;

(b) a redistribution of land towards more labour-intensive farm units; and

"Tlee Programme of intensification of land use requires increased research (see Chapter 9), improvements in the extension service, easier access to agricultural inputs, and a continuous review of agricultural pricing and marketing policies (Chapter 10).

"The strategy requires farns and entire districts to be moved along the continuum from subsistence production to full commercialisation. We recommend that most attention should be paid to the subsistence end of this continuum, with highest priority being given to the rapid introduction of hybrid and synthetic maize in both the high-potential and the medium-potential areas.

"Opportunities for cash crop or livestock production should be widespread. For an employment and incomes strategy, crops which have a high labour requirement per hectare, with a seasonal labour requirement whicli does not clash with that of other crops and yet promises a continuing and higlh financial return to the farmer, are to be preferred. We propose a cash crop programme for the high-potential areas based on pyrethrum, tea, horticultural crops and to a lesser extent coffee. We also propose the upgrading of native cattle through the extension of the artificial insemination xservice, the intensification of grassland use, and the development of intensive rearing of pigs and poultry and the stall feeding of cattle. For the medium-potential areas, more research is needed to identify desirable cash crops in addition to cotton. We recommend the rapid development of the beef industry as a source of income for the semi-arid areas.

1/ Quoted verbatim from UNDP/ILO, "Employment, Incomes and Equality-- A Strategy for Increasing Productive Employment in Kenya", ILO, Geneva, 1972, p. 16. ANNEX 13 Page 2

"Secondly, the strategy for land redistribution towards more labour-intensive units is based on the premise that much land on larger farms is being underutilised, and that output, incomes and employment would all be raised by the subdivision of farms in cases in which output per hectare is lower than might be expected from small holdings in a similar locality.

"Specific recommendations for achieving this redistribution are as follows:

(a) if the joint owners of a farm prefer to run it as a number of individual plots they should be actively encouraged to do so;

(b) the Government should act as a willing buyer for any large farm offered for sale in the high-potential areas for subdivision into settlement plots;

(c) the Government should repossess any farm seriously in arrears with repayments to the Agricultural Finance Corporation or the Agricultural Development Corporation;

(d) the larger holdings on existing settlement schemes should be subdivided;

(e) in the longer term, a progressive land tax related to the size and productive potential of the holding should be introduced (Technical Paper 15); and

(f) in the longer term, a ceiling on individual land holdings should be considered.

" We also recommend that in all future land transactions the Government should offer land on a leasehold or rental basis for a relatively short period of time, e.g. a maximum of 10 to 15 years.

"Thirdly, to settle underutilised land it is necessary to overcome the imperfections of the land market and the constraints on the free movement of people between different parts of Kenya. We recommend that the Government should institute a programme of settlement on underutilized state land, by one or. more of the following methods:

(a) a laissez-faire approach of letting people infiltrate the underutilized areas;

(b) a phased programme setting limits on the rate at which immigrants could enter and be settled in underutilized areas, with local inhabitants being given priority; ANNEX 13 Page 3

(c) government purchase or long lease of trust land with a view to the settlement of landless people from the heavily populated areas; and

(d) the adjudication of trust land and the institution of individual ownership to encourage the development of commercial agriculture, in the hope that (with the assistance of a land tax) some form of subdivision or landlord-tenant system would develop.

"Finally, we recommend the initiation of two medium-scale irrigation schemes in the next development plan period, so that planning and implementation capacity for major irrigation schemes in the late 1980s and 1990s may be developed. The subdivision of existing four-acre irrigation plots into two-acre plots should be instituted where practicable (Technical Paper 12)!'.

ANNEX 14 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

PIGS AND POULTRY

Pigs3 para. 2 - 25 Market Outlets 4 - 8 Produiction 9 - 14 Services to the Industry 15 - 16 Issues 17 - 20 Proposals 21 - 25

Poultry 26 - 48 Production Systems 28 - 32 Market Outlets 33 - 35 Constraints on Development 36 - 40 Outlook and Issues 41 - 43 Proposals 44 - 48

Table 1 Pig Purchases by the Uplands Bacon Factory, 1961-70 Table 2 Technical Performance Data for 27 Large Scale Pig Farms, 1968 Table 3 Estimated Gross Margin for Baconers, 1972 TFable 4 Estimated Gross Margin for the Smallholder Pig Enterprise, 1972 'Fable 5 Retail Prices of Meat in Nairobi, 1971 'Fable 6 Estimated Investment Requirements for a Smallholder Broiler Enterprise, and Loan Repayment Possibilities, 1972

ANNEX 14 Page 1

PIGS ANID POULTRY

1. Rapid change is underway in the pig and poultry industries. Pig numbers have been declining, but the poultry industry is in a phase of rapid expansion. Poultry, meat and eggs are now important in the diet of subsistence farmers and low income urban people.

PIGS

2. The pig industry is centered ,n Uplands Bacon Factory (UBF), which was established during the colonial period to promote exports and to supply local consumers. It now takes some 80% of pig marketings, all under contract arrangements. Before Independence, UBF was supplied by large Eu'ropean farms in Rift Valley Province. Since that time, two trends have taken place: the gradual replacement of European farmers by African producers from Rift Valley and Nyeri and Kiambu Districts as suppliers of UBF (in 1971-72, 50% of pig intake came from African producers); and the development of a smallholder pig industry to supply local markets.

3. The pig industry is strongly cyclical in nature, as shown by the UBF slaughterings (Table 1). The highest recorded pig population was 71,475 head, in 1970; this dropped to 50,524 within a year. A recent survey shows that this downward trend is continuing. However, this overall picture masks differences between the various types of producers. The large European farms supplying UBF show a steady decline in production after being taken over by African producers, with many going out of production or seeking alternative markets. The pig population in the areas supplying UBF dropped 40%" between 1970 and 1971 in re:;ponse to poor producer prices and increasing costs of production. But elsewhere, in the areas supplying local markets, pig numbers increased 43% to 13,000 over the same period.

Market Outlets

4. There are four types of market outlets for slaughter pigs: (a) UBF, (b) four smaller slaughter houses, (c) the low-income market in and around Nairobi, and (d) local consumption in rural areas.

5. UBF can slaughter 100,000 pigs per annum, but is currently operating at only about 40% capacity. The majority are bacon type. Roughlv two- thirds of the UBF output is consumed in Kenya, the rest being exported to neighboring countries, particularly Zambia and Uganda. UBF has high over- lhead costs, resulting from the underutilization of capacity, and the maintenance of high standards of hygiene for the export market. Partly because of this, retail prices for pork are higher than for beef; yet, UBF passes onlv about half the proceeds on to the producer. This partially explains the decline in production, wh:Lch has not yet been rectified by a 1972 price increase of 7% for baconers and a changc in the grading system. Discounts *of 10% to 15%" on local prices are required to enable exports. Large-scale ANNEX 14 Page 2 farmers can send their pigs directlv to the factorv, Whereas smallholders havc to channel pigs through their cooperative, which usually charges a fee of 5%;.

6. Three medium-sized slaughter houses in Nairobi--East African ".eat Products, Ltd., Supermarket Ltd., and National Air Services Ltd.--and the Turi butchery up-country have acquired a growing share of the pig market, slaughtering 12,000 pigs per annum. Although they have to pay excess of KSh 0.45 per kg of carcass weight to the Pig Industry Board, as compared to about KSh 0.02 11 payable by Uplands, they offer producer prices on the farm which are equivalent to UBF's prices for the top grade at the tactory gate.

7. Smallholders in the outskirts of Nairobi slaughter pigs locally and sell the meat in Nairobi. Probably not all the product from these areas is inspected. The customers in Nairobi are low-income workers, who get the pork from their colleagues commuting from the rural areas. The retail prices in this market are around KSh 5 per kg of meat; thi3 is lower than the poorer grades of beef.

8. Similar outlets for fat slaughter pigs are developing in the ruiral areas. A farmer with stock ready for slaughter (at a liveweight of over 110 kg) takes orders from his neighbors until all the meat is booked. Producer prices work out to KSh 4 per kg meat; the main return is from fat, which is sold at about KSh 7.20 per kg.

Production

9. A survey carried out in 1968 on 27 large-scale farms shows that productivity is extremely lotir compared to developed countries 2/ (Table 2). Recent data from the Agricultural Development Corporation confirm this evidence. The majority of large-scale farms have relatively low reproductive rates for sows, high losses of niglets and poor feed conversion ratios. About 3.8 kg of feed are normally required for 1 kg of liveweight oain in fattening units. However 70% to 80% of the baconers delivered to the Factory receive top grades.

10. Pigs are usually kept in stone houses with concrete floors. Rations may contain un to 50% maize; reject wheat, barley and pollard are also fed. Protein sources are meat and bone meal, blood meal and cotton seed cake. lineral and vitamin stupplements are either bought with the protein concentrate, or purchased separately from the importers. Compared to other species, diseases are a lesser constraint in pig production. W4orm infestation is common because of unsatisfactory sanitation practices. African Swine Fever is effectivelv controlled by compulsory double fencing round the piggeries to prevent contact with wlld pigs. IHowever, pneumonia is a common disease. Trvpanosomiasis can be a threat in piggeries at the Coast.

1/ The equivalent of 0.5% of payout to farmers. 2/ xi. R. Spaeth, The Economics of Pig Production in Kenya, 1968. A%NNEX 14 Page 3

11. In efficiently run piggeries, the gross margin per baconer may be quite satisfactory (Table 3). However, productivity is typically low, as noted above. This, together with the present high prices for milk (making feeding of dairy cattle more profitable) accounts for the current decline in the pig industry. If the annual number of marketed pigs per sow could be raised by, say, 40% to around 16%, the hog enterprise could compete.

12. To counteract declining throughput, UBF has set up a 300-sow unit, with fattening facilities. The takeover of a further 100-sow unit is being negotiated.

13. Smallholders in the flyeri and Kiambu Districts of Central Province expanded their pig production for UBF substantially in the late 1960's. The lack of feed after the drought in 1971 and the low net return thereafter have led to a sharp decline of pig farming in these areas. The size of the pig units normally ranges from one to five sows. Much of the feed is purchased in compounded form. Low standards of pig housing and husbandry result in worm infestations, high loss rates and low daily gains. Smallholders also have difficulties meeting the quality standards set by the Factory, and they get a lower price than is paid to large-scale producers. The number of pigs sold per sow per year ranges from 8 to 10. A survey of 19 smallholdings in 1970 showed that 16 lost on pig operations; the remaining three showed a small profit. The costs for water, feed, and marketing are higher than on large-scale farms.

14. A new type of smallholder pig production is emerging in the rural areas, using farm waste and the purchased low grade feeds (Lehmann System). Despite an even lower efficiency than in smallholdings supplying UBF, the system appears sound (Table 4). This is the type of enterprise prevailing in the vicinity of Nairobi, mentioned above.

Services to the Industry

15. The Pig Industry Board is a Government agency responsible to the Mlinistry of Agriculture. It has three functions: (a) to develop the pig industry; (b) to give policy advice to the Minister of Agriculture; (c) to license pig purchasing and processing. Until recently the Board was closely linked to UBF and concerned mainly with production for the high-quality market. This partially explains why pig development on small farms has lagged.

16. A pig husbandry extension project supported by the Danish Govern- ment has been underway since 1970. The foreign staff includes four extension officers, one research officer and a project manager, who also advises the Mfinistry of Agriculture on pig policy.

Issues

17. The lack of permanent water supplies, access roads and input delivery systems handicap the growth of smallholder pig production. Pigs require a higher level of management than grazing livestock, and the lack ANNEX 14 Page 4 of basic know-how is a major constraint. The extension activities of the Ministry of Agriculture are commendable, but they are comparatively recent and require time to become effective. Another problem is that the supply of feed, such as maize, barley, wheat and high-quality proteins, is often limited. If more than 50% of the bacon pig ration is maize, the product quality goes down. (Producers of heavy hogs for local consumption do not have this concern.)

18. The distribution of feed to smallholdings is either insufficiently organized, or the costs often make pig production unprofitable. Bulk purchases through Uplands Bacon Factory, and production credit reach only a iew smallholders. The Second Smallholder Agricultural Credit Project IDA-105-- signed in 1972--makes no provision for pigs.

19. It is unlikely that the UBF can effectively promote the industry because (a) its overhead costs are high; (b) Kenya has no advantage in the export market,, as feed prices are higher than export parity; (c) milk prices now make dairy cattle a more profitable outlet for feed; (d) consumer prices make beef more attractive than pig meat; (e) husbandry practices and farm productivity are low. Nucleus estates cannot provide a steady and growing pig supply unless production can be made profitable. If this is done, however, it would also be profitable to fatten pigs on private farms.

20. The attractiveness of the smallholder fat pig enterprise is reduced by the lack of slaughter and storage facilities in local towns and on the outskirts of big cities. Pig meat has to be consumed within the day of slaughter if no cooling facilities are available. The high representation of Muslims in the meat trade is a further constraint.

_roposals

21. Hog policy should be redesigned to stress production for the domestic market. Costs can be reduced. If this course were accompanied by an increase of beef prices as recommended in this report, pork prices can become attractive to the domestic consumer.

229. The processing industry should be further decentralized to lower cDsts and increase responsiveness to consumer requirements. All privileges, ?cgal or practiced through an accumulation of historical developments, should be-withdrawn from UBF, and the market opened to interested parties. Competi- tiori among small-scale butchers can improve marketing efficiency and perhaps strengthen producer prices. Pig slaughter and cooling facilities are required in all larger communities. Municipal and County Councils should provide credit to assist the trade in construction of these facilities. More cooperative feed mixing facilities are required in smallholder areas to mix locallv grovm feeds and purchased supplements, both to serve the nog industry and other livestock enterprises. ANNEX 14 Page 5'

23. Labor intensive pig production on smallholdings should be favored over large-scale commercial piggeries. Rather than trying to meet the quality standards of the UBF, the aim should be to produce a lower quality product (meat and fat) for lower income groups in urban and rural areas. The spontaneous developments already underway indicate that smallholders are discovering ways to make this type of production profitable. These developments should be fostered by helping smallholders increase productivity on the farm and providing better access to inputs and marketing services.

24. To accomplish this, the Pig Industry Board (which has proved unequal to the task) should relinquish development functions to the proposed Animal Production Division (APD) in MOA. The latter would organize and run a package program for smallholder pig development, jointly with poultry, through a Pig and Poultry Unit (PPU). The pig development task should be placed under a highly competent manager, and ncot trusted as an activity of little importance. The pig extension service is already reasonably adequate, and has had the assistance of the Danish Team since 1970. The task is to integrate the administration of an input supply and credit scheme and support for slaughtering and storage facilities.

25. The first phase of the proposed smallholder pig development program should be launched as soon as cattle prices are raised (see above). Abattoirs with cold storage facilities are required at Nairobi, Mombasa, Nakuru mnd Kisumu. Over the longer term, smaller abattoirs with cooling facilities might be needed at Thika, Kiambu, Fort Hall, Nyeri, Thomson's Falls, Embu, Meru, Kakamega, Bungoma, Kisii, Eldoret and Kitale. A smallholder package program should ultimately cover the following areas: Central Province, Western Province, Embu, Meru, Kisii and possibly parts of South and Central Nyanza, and Siaya. The initial target might be some 1,000 farms, each with a credit of KSh 3,000, and a total output of 30,000 pigs annually at full development. Local cooperatives should also be assisted in storing feed supplies and organizing the sale of pigs to the market. The project, probably suitable for bilateral assistance, might require an investment of some US$1.1 million. including US$300,000 for abattoirs, US$400,000 for smallholder credit and US$ 100,000 for cooperative development. Prcject preparation would require technical competence and careful study, and implementation should be carefully phased. It is essential that the project have an adequate technical st:aff; this means that it cannot be a small project.

POULTRY

26. The Central Bureau of Statistics estimated the chicken populaition at 13.3 million head in 1970. These were unevenly distributed, with the high densities being in Nyanza and Western Provinces, and in Machakos and Ki.tui Districts in Eastern Province. Although new, commercial poultry production is developing rapidly around the large towns. The Ministry of Agriculture estimates that, in addition to the native farmyard chickens, there were over ANNEX 14 Page 6 a million improved birds in the country in 1971: 600,000 egg type, 841,000 meat type and 52,000 mixed. Both the duck and turkey enterprises are minor: 83,000 ducks and 20,000 turkeys.

27. The egg industry is cyclical, but in recent years output has been growing at an average rate of around 7% per year. The young broiler industry is growing more steadily and probably at a faster rate. A feed shortage in 1971 temporarily reduced poultry output.

Production Systems

28. Poultry producers can be classified as follows:

(a) "Farmyard" poultry farmers;

(b) Breeding farms;

(d) Commercial broiler producers.

29. Poultry has traditionally been an integral part of subsistence farming. Peberdy 1/ estimates the annual output of this sub-sector at 11.3 million kg of poultry meat and 424 million eggs. About 140,000 birds are slaughtered weekly. The costs of production are low, as the birds salvage in the farmyard, or are fed waste products which have little value in other uses.

30. Nine poultry breeding firms are registered with the Association of Kenya Poultry Breeders. They supply the bulk of the day-old chicks, although there are also a few smaller hatcheries. In 1971, 88%' of the 1.47 million day-old chicks marketed in Kenya were hatched in the country. Roughly 30, are purebred or crossbred chicks, the rest being hybrids. About 43% were egg type and 57% meat type chicks. Poultry breeders are usually linked to one of the big poultry concerns in the U.K., U.S.A., or Israel, whence they obtain their parent stock. Production costs are said to range from KSh 1 to KSh 1.50 per chick. The retail prices for day-old chicks are almost double the lower cost figure. Day-old chicks are produced for export to neighboring countries, but the volume is small.

31, Commercial egg enterprises near the big towns are generally owned by part-time farmers, who start off with about 100 birds, increasing their flocks when market prospects are good. At present feed prices, it costs KSh 0.22 to KSh 0.24 to produce an egg; prices fluctuate around KSh 0.25. There is little opportunity to reduce costs, because brought in feeds and drugs are the major component. Farm mixed feeds appear to offer little

1/ J. P. Peberdy, Animal Production 1970-1980 and Beyond, 1970. ANNEX 14 E'age 7

advantage over compounded rations, although some argue this point. Egg price fluctuations are a major problem for commercial producers, but nonetheless such producers help greatly to stabilize egg supply in the face of the strong seasonality in output from farmyard poultry. Marketing costs and the trend to concentration in the wholesale market are making it difficult for small producers with less than 100 birds to carry on.

32. Less than 20 medium- to large-sized poultry farmers supply over 90% of the 25,000 broilers which are produced on commercial farms per week. The remainder comes from a large number of small producers. The returns to broiler production appear sufficient to stimulate expansion; one estimate shows a gross margin of KSh 0.60 to the producer on each bird sold for KSh 4.50.

Market Outlets

33. The egg market is poorly organized. In most areas, the consumer or the retailer gets his supplies directly from the producer. The exception is Nlairobi, where the City Chicken and Egg Dealers Cooperative Society at the Kariokor market collects the eggs of the many small producers and distributes in the city. It is estimated that of the 13 million commercially- produced eggs per year, 7 million are consumed in Nairobi, 2 million in Ilombasa, 0.4 million in Nakuru and 0.4 million in the Kitale area. The remainder are sold locally.

34. The market for poultry meat, estimated to be 35,000 birds a week, is poorly equipped with marketing facilities. In the wholesale business, only two private companies in Nairobi have cold storage facilities. Only about 20% of the butchers have cold storage facilities. The City Chicken and Egg Dealers Cooperative in Nairobi is the only agency collecting slaughter birds from rural suppliers.

35. As noted above, about 25,000 chickens a week are currently supplied to the market by commercial producers. The remaining 10,000 birds go to low-income consumers at retail prices of about KSh 7 per kg meat, and are thus competitive with other forms of meat. The retail prices for commercially- produced birds in the higher income market ranged from KSh 11 to 13 per kg in 1971; this is about the price of the most expensive cuts of beef (Table 5). As of late 1972, prices had not changed much since these data were collected.

Constraints on Development

36. The commercial poultry industry is the largest consumer of compounded feeds. The compounder millers usually deliver the feed to the farm. Feed prices have not changed since 1970, due to price controls, and producers claim that they cannot make substantial savings by mixing feed themselves. The opening of a compounder firm at Mombasa has reduced the feed costs for poultry farmers at the Coast. A persistent shortage of protein ingredients is to be expected. This will lead to slower growth in the industry or, if offset by imports, may raise feed prices substantially. ANNEX 14 Page 8

37. Preventive measures against the many poultry diseases are essential for commercial poultry production. Inoculations against Fowl Pox, Newcastle Disease, Epidemic Tremor, Fowl Typhoid and Mareks Disease have to be done as routine operations. Smallholders are frequently not aware of this and also underestimate the losses that may occur from parasite infestations. While research on poultry diseases is carried out in the Department of Veterinary Services, no Government extension service is available in the field to advise small-scale producers on disease control measures. The gap is inadequately filled by agents of chemical firms.

38. The lack of extension personnel for the whole field of poultry production is a special handicap for small-scale producers. Currently there is only one poultry officer working in IMOA. The Government has recognized this gap and is negotiating a poultry development project with the Govern- mient of Israel. This will emphasize extension, but will also include veterinary and production research. An agricultural economist will also be nrovided.

39. The lack of poultry slaughtering and cold storage facilities is another severe constraint. There is also a complete lack of market information for poultry farmers. The smallholder producer is unable to assess his best chances in the market and the cheapest sources of input supplies. With the exception of the City Chicken and Egg Dealers Cooperative Society in Nlairobi, there are no facilities to assemble the produce of smallholders. Unless these are developed, the chances of smallholder broiler production will be very poor. In the egg market, these constraints have probably had a lesser effect in the past, but are likely to grow as the retail market develops.

40. The development of smallholder poultry farms is likely to be assisted by 700 sub-loans to smallholder egg producers from IDA Credit 105. These loans are scheduled to amount to KSh 3,000 each. Aside from this, there is no credit available for smallholders in poultrv.

Outlook and Issues

41. The consumption of eggs and poultry meat is expected to grow rapidly over the coming years, with poultrv meat perhaps growying by 20% a year. The main expansion of the market will occur in the urban areas, which will be supplied mainly from commercial poultrv producers. Relatively high current profit margins and the hoped-for introduction of improved technology suggest that it may be possible to reduce poultry prices to the consumer.

42. B.A.T. Co., Ltd. has expressed interest in the broiler industry, and proposes co take over two local poultry breeding firms (Poultex Kenya Ltd. and Kenya Poultry Development Co.), to develop 11 new broiler farms, and to establish a slaughter factory with cold storage facilities. In addition, it proposes to establish a demonstration unit to encourage s;aLl-scale poultry production. Projections show that output from B.A.T. and other growers will rise from 25,000 birds per week in 1972 to 85,000 in 1978. (B.A.T. will supply 80%O of the required eggs from its hatcheries, ANNEX 14 Page 9 leaving only a minor share to other firms.) The hulk of the projected expansion in marketed production will come from the farm of B.A.T. Poultry Development Ltd. The projected ex-factory production costs will permit a retail price of KSh 8 or less per kg broiler meat. This would be competitive with other forms of meat.

43. Commercial poultry production, particularly for the Nairobi market, seems assured of a profitable future. However, the smallholder will face many problems. The basic question is how to raise profitability of poultry on smallholdings, both to increase and stabilize income for the producers and to provide animal protein for the rural consumer. More research is required on the economics and the husbandry sides of smallholder poultry, an enterprise which has potential for a segment of the rural population. Hlowever, it should be recognized that in the nature of the business, the number of beneficiaries will be few and the program is not of the highest priority. Proposals

44. The proposed Animal Production Division should be given responsibility for poultry, as noted above, along with hogs, in a Pigs-Poultry Unit (PPU). The unit should mount a project to include extension, and credit for poultry farmers and input stockists, particularly for the "farmyard" poultry farmers. The PPU should also equip itself to provide daily market information to producers.

45. Credit should be made available to assist smallholder broiler producers, perhaps from bilateral sources. As a pilot project an investment of KSh 12,300 would be required for each of 50 broiler farms producing 4,700 birds per year (Table 6). Total investment would be US$90,000.

46. Grouping a number of smallholder broiler producers situated close to each other might produce economies of scale. Contract arrangements with a slaughter factory could secure the latter's throughput.

47. Regular egg collection systems have to be developed to give smallholders a chance in the market.

48. The Ministry of Agriculture, jointly with the PPU, should undertake a practical program of research on the economics of poultrv farming, how to use locally produced feeds, the design of cheap housing, and poultry diseases. ANNEX i4L. Page 10

Table 1: PIG PURCHASES BY THE UPLANDS BACON: PACTORI, 1961-70

Year Number % Change over Previous Year

1961-62-/ 50,212 -24.1

1962-63 52,733 + 5.0

1963-64 L6,003 -12.8

1964-65 47,931 + 4.2 1965-66 51,048 + 6.5 1966-67 41.,535 -18.6

1967-68 39,184 - 5.7 1968-69 46,553 +18.8 1969-70 56,591 +21.5 1970-71 60,245 + 6.4

1/ Year ending June: 30.

Source: Ministr.y of Agriculture Page 11

Table 2s TECGMCAL PEF03MAUNCE DATA FOR 27 LARGE SCALE PIG FARMS, 1968

Total number of sows 821

Number~ of sows per unit 30

Number of litters recorded 1,291

Number of litters per sow and year 1.7

Number of piglets born pep litter 9.8

Number of piglets weaned per litter 7.3

Losses of piglets 30. 9 Average weaning weights (kg) 15.0

Number of pigs sold per sow 11.3

Source: H.r. Spaeth, The Economics of Pig Production in Kenya, 1965 ANNE 14 Page 12

Table 3: ESTIMATED GROSS MARGIN FOR BACONERS, 197?i/

Perforaance Lovel M 1. 2 3. 4 - -- KS perrig ------

Gross Output Value-/ 265 269 273 278

Variable Costs

Weaner 66 66 76 76 Feed 145 133 116 105 Transport of feed 2 2 1 1 Minerals 3 3 3 3 Vet. expenses 3 3 4 4 Wages -6 6 6 6 General livestock repair 4 4 6 6

Total above 229 217 212 201 Interest 5 5 5 5

Total 234 222 217 206

Gross Margin 31 47 56 72

1/ Performance Level 1 aswume8 a feed conversion ratio of 3.6 kg up to 60 kg liveweight, and 4.4 kg from 60 to 100 kg; Level 2, 3.3 kg and 4.0 kg; Level 3, 2.9 kg and 3.7 kg; Level 4, 2.6 kg and 3.4 kg.

Performance Level 1 asatues that 65% of hogs Grade 1A or 1B, and 35% Grade 1C; Level 2, 70% and 30%; Level 3, t5% and 25%; and Level 4, 80% and 20%.

2/ At KSh 4.2 per kg for Grades 1A and 1B, and KSh 3.0 for Grade 1C.

Source: District Guidelines Trans N2oia, Ministry of Agriculture, 1972. ANNE 14I Page 13

Table 4: ESTIMATED GRDSS MARGIN FOR THE IALLHOLDER PIG ENTEMLPRISE, 1972.

Costs KSh

Weaner 60

Pollard for 15 months @ KSh 24 per bag (2 kg per day) 314

Slaughter Fees 20

Transport of Meat to Nairobi 50

Total 44

Sales

1 Pig, 90 kg meat @ KSh 5 450

14 bottles of fat @ KSh 3e6 5°

Total 500

Margin 56

Source: Ministry of Agriculture AML l14 Page 14

Table 5: RETAIL PRICES OF MEAT IN NAIROBI, 1971

High Income Low Income Classes Classes

K----Sh per day

Beef

Fillet Steak l 12 RUmD Steak 12 10 Rolled Sirloin 11 2.0 Topside 10 8

Pork

Leg 11 10 Loin 11 10

Veal 18 114

Lamb

Leg or Shoulder 12 11 Loin 12 10

Mutton 10 10

Goat Meat 8 7

Poultry

Capon 13 Roaster 8 Broiler 11 Boiling Fowl 7 7

Source: Corcoran and Tyrell, A Study Of The Broiler Industry And A SuLrvey Of The Kenya Market For Broilers, 1971 ANN 1h Pagre 15

Table 6: ESTIMATED INVESTINT REQUIRMENTS FOR A a4ALLHOLDER- BROILER MERPRISE, AND LOAN REPAYMENT POSSIBILITIES, 1972 i/

Housing KSh

Ministry of Agriculture Poultry House Plan Series 2A (100 m 2 for 1,000 birds) 2,850 Cement floor 5,9250 Extra insulation 600

Sub-total 8,700

Equipment

Gas brooder & hard board 2,375 Feed troughs chick size (21) 00 grower size (25) 625 Waterers chick size 33 intemnediate size 210

Sub-total 3,6h3

Growing Cost per Bird

Chick (one day old) 1010 Housing (depreciation 5%/year) 0.11 Equipment (depreciation 10%/year) 0.09 Food (4.5 kg) 2.80 Litter 0.10 Veterinary services 0.30 Electricity, water etc. 0010 Miscellaneous 0.10 Sub-total (4-70) Allowance for mortality (5%) 00224

Total cost per 1.8 kg bird 4.94

Income per Broiler Unit

Price paid per bird by processing plant 5.60 Cost per bird a494 Net income per bird 0o66 Net income per broiler unit per year 3:12 2J

Allowances for ReDayment of Loan Capital requirements (total) 12,433 Financed by loan (mainly the building) 8s700 Annual payments (7½ interest and five years) 2,15:

rT.ss=ues ,000 bird throughput in 11 weeks; growth rate of 1.b kg in 9 weeks ( weeXs down time for cleanJ=g); feea conversion rate of 2.5 kg feed pe- 1 k.g livewe-.gCbt gain; outptt per year of L,727 broilers. 2/ E.oughly a 25% annual return to capital.

Source: AFC

ANNEX 15 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

WILDLIFE AND TOURISM IN RURAL DEVELOPMENT

The Distribution of Benefits para. 2 -- 5

Policy Design and Coordination 6 -12 Wildlife Policy in the Pastoral Areas 8 --12

Administrative Questions 13 --14

Project Possibilities 15 --18

Appendix 1 Wildlife Viewing Areas

ANNEX 15 Page 1

WILDLIFE AND TOURISM IN RURAL DEVELOPMENT

1. Both through direct utilization and as the basis for the tourism industry, the wildlife resource can contribute significantly to rural development. Wildlife usually competes with other land uses, however. The inter- relationships are complex, and careful planning is necessary to assure that wildlife and rural development measures are fully integrated. If this is not done, the rate of rural income improvement will be slower than necessary, and wildlife and the entire tourism industry will be in jeopardy.

THE DISTRIBUTION OF BENEFITS

2. At K- 24 million, the 1971 tourist receipts exceeded returns from coffee for the first time. Of this, over one quarter goes to Government in the form of direct taxes on tourists, import, excise and consumption taxes on goods purchased by tourists, and taxes on the incomes earned by persons and firms employed in supplying tourists' demands. While there are substantial costs associated with these earnings, studies indicate that the net social returns are substantial, probably in excess of 30%. 1/ Most of the net gains from tourism accrue as additional tax receipts to Government. Hence, the immediate distribution of gains is largely determined by the pattern of public expenditures.

3. It is reasonable to attribute KL 8 to KL 12 million of 1971 tourist receipts to wildlife. Some KI 2 million of this went to the sport hunting industry, with the remainder being accounted for by wildlife vLewing. Most of these receipts go to firms outside the wildlife areas serving persons who would not have come to Kenya if wildlife viewing opportunities were not available (Map 10281). 2/

4. In addition, there are returns from consumptive wildlife utilization. The value of output of legal activities (sales of skins, horn, meat, and live animal exports) came to around KL 0.5 million in 1971. Estimates of the returns from illegal wildlife utilization (poaching) are not available, but they are significant in some areas. On the cost side, wildlife causes substantial damage to crops, and reduces the returns from ranching enterprises

1/ Frank Mitchell, The Costs and Benefits of Tourism in Kenya, Institute for Development Studies, Nairobi, November 1968; and the Economic Value of Tourism in Kenya, Ph.D. Dissertation, University of California, 1971. 2/ An up-to-date list of wildlife areas, actual and proposed is at Appendix 1. This amplifies and corrects information provided on Map 10281. ANNEX 15 Page 2 thirough competition for forage and water, disease transmission, and predation. Moreover, these costs are rising as stocking rates increase and as cultivation is extended into increasingly marginal areas. On balance, the net gains from consumptive wildlife utilizationi (excluding hunting) are currently small.

5. The exact proportion of tourist receipts which reaches rural people is not known. However, there is no doubt that the indirect returns are significant. For example:

(a) The ex-farm value of agricultural and ranching products consumed by tourists staying in hotels in 1971 amounted to some K1 0.75 million. Almost as much again was consumed by tourists staying outside hotels (55% of tourist nights in 1971 were spent outside hotels);

(b) Surpluses from operation of game reserves under their control were the main sources of revenues for the Narok and Kajiado County Councils in 1971. Councils provide a variety of welfare services to rural people;

(c) A substantial fraction of the KIL 3 million spent by tourists on gifts and souvenirs in 1971 was on wood carvings and other curios either produced in the rural areas or using rural materials;

(d) Most of the 12,000 jobs generated by tourist expenditures in commercial firms dealing directly with tourists (hotels, tour operators, retail tradesmen) are located in the urban areas or at the Coast. However, some of the earnings of the employees of these firms are transferred to their families in the rural areas;

(e) Jobs in National Parks and Game Reserves, and in hotels located within or near these attractions, probably amount to no more than 2,500 at present. However, this type of work is the main employment opportunity in the modern sector in several rural districts.

(f) Controlled Area Fees paid to County Councils in 1971 for hunting privileges and animals shot by sports hunters on Trust Land amounted to K- 76,000, and there is substantial scope for raising these revenues in the future if hunting is efficiently managed.

(g) Infrastructures (particularly roads) constructed to serve tourists also facilitate marketing of agricultural products-from remote areas. ANNEX 15 Page 3

POLICY DESIGN AND COORDINATION

6. The nature of the wildlife management problem and its relationship with rural development can best be seen by dividing the nation's 'Land area into three basic classes. The first includes those areas suitable for exotic forests, cultivation, or urban development. liere the objective of wildlife management is to minimize game damage by the most cost-effective mixture of deterrence, eradication, animal translocation, and construction of game proof barriers. The second class, probably covering 5-6% approximately of the country, include those areas which will yield most through exclusive wildlife use in the form of National Parks and Game Reserves. The objective of management is to secure maximum returns from tourism consistent with con- serving natural habitats and providing recreational and educational opportunities for the nation's people. Thirdly are the pastoral areas, perhaps 70% of the national area. The optimum use of these areas involves some combination of wildlife and livestock enterprises, with small blocks of occasional cultivation here and there. Because the most valuable use of wildlife is in tourist viewing rather than consumptive utilization, it is useful to break this basic class into two. First is the dispersal areas of Parks and Reserves. These are comparatively large with important interactions between them and the Parks and Reserves they serve. Thus, most Parks and Reserves cover only part of the dry season concentration areas of much larger ranges used by wildlife. Maintenance of high wildlife densities within most Parks and Reserves requires either that the wildlife have unhindered access to their traditional wet season range--or that the technology be developed and the investments in habitat management be made to permit Parks and Reserves to harbor high year-round densities of wild animals. This technology is not known. The second subclass is the pastoral zones outside dispersal areas of existing or potential Parks and Reserves.

7. In each of these five situations, there is an obvious need for coordination among agencies dealing with the many different aspects of resource management. Agreement must be reached on the best uses (or combinations of uses) to be followed for specific areas, and also on the means of implementation. Thus, the success of agricultural activities i" some areas will depend upon the efficiency with which measures for game control are implemented. There must be careful planning for Parks and Reserves, bearing in minid current and future tourist and recreational demands, as well as the returns foregone from excluding agricultural/pastoral activities. In the remainder of the pastoral areas, planned stocking rates, and location of physical facilities (watering points, fences, dips) must take account of the requirements for wildlife as well as domestic stock management, if joint returns are to be maximized.

Wildlife Policy in the Pastoral Areas

8. The main objective of past wildlife policy in the pastoral areas was to preserve as many wild animals as possible, with very limited quotas for sports hunting and animal capture. The main instruments of policy were detailed laws and regulations for all activities connected with wildlife, and departments organized on quasi-military lines to police and enforce those regulations. This protectionist policy was correct--for its time. It was ANNEX 15 Page 4 correctly felt that wildlife might yield substantial returns in the future; but the means for securing those returns were not yet at hand.

9. More important, the other main user of the range--domestic stock-- was managed in ways which were completely inimical to sustained high levels of wildlife offtake. Under traditional pastoralism, the individual family had the right to manage its herd alone, but not to exclude others' herds from particular areas of land. While wildlife was a (serious) nu:isance to the pastoralist, no individual could hope to capture the gains from reducing wildlife (an extremely expensive process). Similarly, the individual could not improve his lot by reducing his herd size and increasing offtake, since others would occupy the carrying capacity thus freed. Stocking rates were regulated not by conscious management, but by the Malthusian mechanisms of drought and disease. In these circumstances, the policy of preserving as much wildlife as possible was the only rational policy (assuming that the wildlife was expected eventually to yield positive returns), just as maximizing his herd size was the only rational policy for the individual pastoralist.

1in HuimTn andarn"mal disease controls, and the wider distribution of water have destroyed the ability of the traditional Malthusian mechanisms to restrict stocking rates to levels which maintain range carrying capacity. lience the Government is implementing an institutional "revolution" which is intended to induce pastoralists to manage stocking rates and raise output. Specifically, the range land is being adjudicated to individuals and groups, who are receiving up to 20,000 ha on freehold tenure. The necessary complementary inputs are also being provided. For example, the recently appraised World Bank Livestock Project, Phase II (KE 129, IDA) will help provide financial and technical assistance to these new "ranchers" (as contrasted with nomadic pastoralists) to assist them to adopt appropriate productive techniques. IWith carrying capacity thus being brought under explicit conscious management, it is clear that the survival of large herds of wildlife will depend upon them yielding returns to ranchers at least equal to the returns from the livestock which they replace. (This does not deny the fact that ranchers may wish to retain small populations of wild browsers to control bush. But the main wild species in terms of biomass such as zebra, wildebeests, topi, and kongoni do compete with cattle).

Il. The Government recognizes this fact, and it has announced that no rancher in the adjudicated areas should be required to sustain wildlife on his land if this means lower returns. With the help of the UNDP/FAO Wildlife Management Project, ways of getting to ranchers some of the returns from wildlife are being explored. In the case of the dispersal areas of Parks and Reserves, the Government has accepted the principle that wildlife grazing fees should be paid to ranchers if the direct returns from wildlife are in- suifficient to replace the losses from livestock enterprise due to wildlife. It is planned to negotiate agreements with landowners under which they will adiopt a resource management scheme permitting maintenance of migratory wildlife herds. In turn, the Government will provide specified amounts of assistance so that ranchers get an appropriate return from wildlife. In other areas, it is hoped that extension services, regulation of markets in game products, and financial and technical assistance to ranchers engaged in wildlife utilization will enable landowners to capture some of the wildlife return. ANNEX 15 Page 5 12. The Government is also increasing the funds for assessing existing range use patterns (by both wild and domestic stock); for identifying the potentials of wildlife in combination with livestock; for identifying those areas suitable for park or reserve status; for developing areas for tourism, and for staff to provide extension services to ranchers, meanwhile continuing to enforce regulations.

ADMINISTRATIVE QUESTIONS

13. To help improve the coordination of wildlife programs inside and outside Parks and Reserves, the Government is merging the Trustees of the Kenya National Parks (a statutory body) with the Game Department into a single Wildlife Management Service, under the Ministry of Tourism and Wild- life. Some argue that this Department should be under the Ministry of Agriculture or the Ministry of Natural Resources. There are two reasons why this should not be done. First the largest returns from wildlife will continue to come from tourism, and it is desirable that these complementa- rities be fully recognized when programs and projects are being planned. This can best be done by leaving responsibility for wildlife and tourism under a single Ministry.

14. Secondly, the trade-offs between wildlife and other farm enterprises are not well understood, even at the technical level. This means that there is little to be gained by combining the regulation of tourism and wildlife activities with the management of agricultural activities. In fact, there are substantial advantages from a separation of administrative responsibilities in these areas. Separation is likely to result in a clearer definition of problems, and a greater effort to solve them. Conflicts in resource use proposals can then be brought to the interministerial level for debate, rather than being resolved at the interdepartmental level. 1/

PROJECT POSSIBILITIES

15. This review of emerging policies and coordination procedures in the complex wildlife-tourism-agricultural field suggest that far-reaching changes of the right sort are in the offing. In many respects they are a response to the revolution in pastoral tenures now getting underway. It will take time to design ways and means of fully exploiting the new potential of the wildlife resource, and integrating its development with other rural programs. However, several project proposals are under study. As noted above, the Livestock Project KE-129, now being studied by the World Bank, has a wildlife component which would help to finance: (a) a Census and Monitoring unit to produce data on wildlife and domestic stock population levels and

1/ Artivation of the interministeriaI Land Tlse Committee to resolve conflicts related to natural resource use is un(lerstood to he under consideration. ANNEX 15 Page 6

trends; (b) water supplies near Amboseli National Park and Mara Game Reserve for pastoralists who now get water within these areas (unless alternative sources are provided, it will be difficult to fully exploit the tourist potential of these areas); (c) tourist viewing facilities in combination with livestock ranching in the Kitengela part of the Nairobi National Park dispersal area. 16. A parks and tourism project is being prepared in connection with the 1974-78 national development plan. This will implement some of the poilicies discussed above. The tentative outline of the project is as follows: (K1, Million Parks and Reserves Development (new and existing parks; staff housing and training; fences; tourist viewing points) 3.5

Tourist Roads (inside and outside parks and reserves; upgrading of existing roads and new roads) 5.0

Wildlife Training Institute (retraining of existing staff in new skills to implement the new policies and to provide more systematic training of new entrants to the Wildlife Management Service 0.25

Wildlife Viewing Facilities in Park/Reserve Dispersal Areas (wildlife viewing tracks, staff housing, lookout points, infrastructure for lodges/campsites) 0.5

Parks/Reserves Planning Unit (to improve planning of the total parks/reserves system; prepare development plans for individual parks/reserves) 0.35

Construction of Game Proof Fences 0.25

Research and Planning (Wildlife and domestic stock interactions; formulation of ranch models incorporating wildlife; experiments on biology of particular species) 0.5

Total 10.35 ANNEX 15 Page 7

The last item is of particular interest for the long run integration of wildlife-tourism-agriculture policy.

17. Two other proposals of considerable relevance to the rural impact of tourist development are in the preliminary discussion phase. One would create new game parks, reserves, and folkloristic and cultural attractions in the heavily populated western regions to provide new outlets for local resources and spread the returns from tourism more widely. The second would establish service centers near parks and reserves to accommodate staff and local inhabitants and provide organized market outlets for locally produced foodstuffs.

18. Project development is difficult, as it involves the design of optimum wildlife-livestock interactions for which little technical information is available and no precedents exist. It is being undertaken in the context of revolutionary changes in land tenure and land management practices now taking place. There is a shortage of information on most areas which have potential for development, and there is not enough qualified staff to design and appraise alternative plans and programs. Under these circumstances, there should be no reluctance to borrow abroad to speed up the rate of staff development, to expand inter-disciplinary research and to assist with the formulation of programs. Without this, it is doubtful if the target tourist receipts of Kb 66 million in 1978 and K% 140 in 1986 called for in the perspective national plan can be met.

ANNEX 15 Appendix .1

WILDLIFE VIEWING AREAS

National Parks and Reserves

Tsavo Lake Nakuru Nairobi Mt. Elgon Aberdare Amboseli* Mt. Kenya Marsabit Nat. Reserve 01 Doinyo Sabuk Shimba Hills Nat. Reserve Meru Illeret* Malindi Marine NP Mar'ne Nat. Reserve Watamu Marine NP

County Council Game Reserves

Masai Mara Isiolo Buffalo Springs Olambwe Valley Samburu

Proposed Parks/Reserves

Saiwa Swamp Hirola Broderick Falls Rahole Mumias Kora Nzoia Delta Bisinadi West Mau Kindaruma East Mau Isiolo Extensions Ngurumani Samburu Extensions Ngong Hills Ndotos/Matthews Range Chyulu Hills South Lake Rudolf Shimoni Marine Lake Rudolf Reserve Tana Mangabey Reserve Malka Mari Tana R. Colobus Reserve Wajir Lamu (Possibly more Kilifi Creek Bird Sanctuary than one) Kerio Valley Reserve Mboni

Proposed Private Land Wildlife Viewing Areas, Including Dispersal Areas

Mara Dispersal Area Kitengela Dispersal Area Lorsuate Hills & Plateau Amboseli Dispersal Area Ewaso Nyiro Plain Maralal Viewing Area Mount Suswa McCall's Farm Sanctuary Hell's Gate

Note: Gedi, Fort Jesus, Olorgasailie are National Monuments under adminstration of the National Museum, not Kenya National Parks.

* Not yet declared.

Source: Ministry of Tourism and Wildlife.

ANNEX 16 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

RURAL COOPERATIVES

The Position Today para. 3 - 27 Primary Societies 6- 9 Cooperative Unions 10 Kenya National Federation of Cooperatives 11 Department of Cooperative Development 12 - 16 Cooperative Bank of Kenya, Ltd. 17 - 18 Cooperative Production Credit Scheme 19 - 23 Cooperative College of Kenya 24 - 25 Nordic Assistance Program 26 - 27

Key Problems 28 - 45 Government Participation 29 - 33 Operating Environment 34 - 38 Management Difficulties 39 - 45

Issues and Recommendations 46 - 55 Focus and Orientation 47 - 49 Management, Training, and Plarning 50 - 54 Awareness and Education 55

Table 1 Smallholder Cooperative Activity, 1970-71 Table 2 Cooperative Societies, Number and Gross Income, By Type Figure 1 Organization of Cooperative Movement

ANNEX 16 Page 1

RURAL COOPERATIVES

1. Cooperative societies are important organizers of smallholder production and marketing activities, particularly the latter. There are about 1,000 active societies, with an estimated membership of 500,000 (including multiple memberships), and a gross turnover of the order of Kh 50 million per year (including the "country-wide" cooperatives). They are particularly important in coffee, reflecting the use of this form of organization to develop coffee production among African farmers in the middle 1950's. Pyrethrum and dairy produce are other important cooperaltive specializations (Table 1). Increasingly, primary societies are broadening their activities, including the supply of seed, fertilizers and sprays, the provision of short-term credit, cattle dipping facilities and tractor- hire services.

2. The Government is active in developing and regulating rural cooperation. The current Development Plan states that, "Cooperatives have an extremely important role to play, especially in small-scale farming areas, and the Government intends to intensify its efforts to encourage the healthy development of the cooperative movement." A more detailed statement of policy is contained in a Government "White Paper". 1/ This indicates inter alia the intention to pursue the development of "multi-commodity, multi-purpose" primary societies at the village level.. However, since the mid 1960's the Government's main concern has been to correct difficulties deriving from the poor management and associated mal- practices in many societies. The White Paper also states that "the overriding concern of the Government during the next three years is that cooperatives should be disciplined and made to operate more efficiently in accordance with sound business principles." Cooperatives are accordingly in a phase of consolidation involving the sorting out of society affairs and the training and upgrading of management.

THE POSITION TODAY

[3. Today there are 1,464 "primary societies". Most of these are grouped into 39 "cooperative unions" on a geographical and functional basis. The societies and unions are members of the Kenya National Federation of Coopera- tives (KNFC) which is the national or apex organization (as shown in Figure 1 at the end of this Annex), as is the Cooperative Bank of Kenya. The Cooperative College of Kenya provides training services.

I/ Republic of Kenya, Cooperative Development Policy for Kenya, Sessional Paper No. 8, Nairobi, T970. ANNEX 16 Page 2

4. This basic organization is complemented by four of the former European farmer organizations which are "country-wide cooperatives". These are the Kenya Planters Cooperative Union, Ltd. (KPCU), Kenya Cooperative Creameries, Ltd. (KCC), Kenya Farmers' Association, Ltd. (KFA), and the Horticultural Cooperative Union (HCU). Their main concern is the processing and marketing of coffee, dairy products, cereals and tropical fruits respectively, though the KFA is also the largest farm supply merchant. They retain remnants of their original character and outlook, but are increasingly ad- justing to meet the marketing needs of smallholder members of primary societies. Larger farmers can become members of these organizations directly, on the same basis as the constituent primary societies. These organizations are in each case paralleled by a parastatal board which coordinates the sale of produce. For crops other than those handled by these "country-wide" organizations, primary societies deal directly with the boards. The KFA is exceptional; because of its input merchandizing functions it deals with many different societies and unions.

5. Another element in the system is the Department of Cooperative Development of the Ministry of Cooperatives and Social Services as noted above. Through its broad powers this institution performs many functions which would otherwise devolve on the KNFC, and by virtue of its regulatory and development functions intervenes at all levels and in all activities of the movement. The Department is helped by the Nordic Assistance Program, which has technical assistance counterpart personnel at all levels of the cooperative structure.

Primary Societies

6. Primary societies are of three types. The most numerous are the marketing and processing societies, which were started to provide a means of organizing the collection and processing of farm produce. Most were developed with official help, some by spontaneous efforts of the initial members and others by political leaders. Those started officially, including those on Settlement Schemes, were aimed at capturing management and scale advantages. The spontaneous local movements were frequently aimed at displacing middlemen. The politically-based societies were formed to enhance the standing of as- piring local leaders, and have frequently proved to be commercially ineffective and short-lived. In most cases, the marketing cooperatives initially handled only a single crop. Although this pattern is slowly changing, the predominance of single-crop societies is clearly shown in Table 2.

7. The second most common type is the production cooperative. This category includes societies formed to purchase and operate large farms previously owned by Europeans, and some ranches--many of European origin and some formed by tribal groups. In addition, there are a few societies concerned with livestock production, fishing, charcoal production and native crafts (Table 2). ANNEX 16 Page 3

8. Cooperative farming may be of two types: (a) with land owmed individually but farmed as one unit, and (b) with land owned and farmed collec- tively, as on certain Settlement Schemes. The ostensible advantage oi: cooperative farming is that large-scale production methods can be maintained and, by hiring trained staff, a high level of management can be maintained. In practice, most members have their own subsistence plots adjacent to the large- scale fields. Since cooperative farming is a difficult form of cooperation, and since it is frequently attempted only when smallholder production is ecologically problematical, it is not surprising that these societies frequently run into trouble.

9. A third category of primary society is the supply cooperative, usually formed to obtain economies of bulk buying and to eliminate or replace the local merchants or middlemen who provide the services of holding stocks, distributing inputs and providing short-term credit. This type is rare, and the few which do exist are urban. ?Tiscellaneous types of societies, such as thrift and credit groups, are also frequently urban.

Cooperative Unions

10. Cooperative tnions coordinate the activities of primary societies in a gi::en area. In most cases, the unions deal directly with the country- wide cooperatives and marketing boards on behalf of the societies, though the larger societies are wholly self-sufficient. For the smaller societies the unions provide storage, purchasing and marketing services and management support. Pfrmary societies frequently do not have hired staff, so union facilities and staff provide vital support.

Kenya National Federation of Cooperatives

11. The national organization came into existence in 1964. Besides acting as the mouthpiece of the cooperative movement, the stated objectives of the federation are: (a) to unite all registered cooperative bodies into one cooperative organization for their common good without impairing their autonomy; (b) to represent the cooperative movement and in particular to advise the Minister responsible; (c) to encourage the establishment of satisfactory audit and standard accounting arrangements in its member bodies; (d) to publicize the cooperative movement; (e) to collect, assort and disseminate information and statistics relating to cooperation and cooperative bodies; (f) to advise upon educational projects and arrangements; (g) to encourage the growth of the cooperative movement and the formation of cooperative bodies; and (h) to foster liaison between the cooperative organization in Kenya and other countries. In practice, however, these functions have been largely circumscribed by the activities of the Department of Cooperative Development. ANNEX 16 Page 4

Department of Cooperative Development

12. The Cooperative Societies Act of 1966 established a commissioner for Cooperative Development, who is the Registrar of Cooperative Societies, and Assistant Commissioners, who are responsible for the control and supervision of cooperative societies. Under the Act all cooperative societies must be registered before they can carry on business and claim the privileges attendant upon that status. The Commissioner is empowered to refuse or cancel registration at his discretion. The commissioner may provisionally register a society for one year if he expects that it will ultimately meet the requirements. A society may appeal to the Minister against a refusal to register, or a cancellation of registration.

13. With the approval of the Commissioner, societies may form a cooperative union or amalgamate with one or more other societies or divide into two or more societies, provided that certain conditions for the protection of members and creditors are fulfilled. The Commissioner may alsoyrequire two or more societies to amalgamate, to join to;ether and form a cooperative union or compel a primary society to join a union. These last two powers are exercised when the Commissioner considers it desirable for the efficient funictioning cf a cooperative union. The by-laws of a society, including changes, must be approved by the Commissioner before they can take effect.

14. According to the law, societies must keep proper books and accounts and must produce them for inspection by the Commissioner on demand. A Depart- ment official must counter-sign all checks, and societies' accounts must be audited at least annually by an auditor appointed or approved by the Commis- sioner. The Commissioner may hold an inquiry into the workings of a society; and he may also direct an inquiry into the accounts of a society on the application of creditors. If after an inquiry he is satisfied that the committee of a society is not properly performing its duties, he may remove the committee and order the society to be run by a committee of two people, whom he may appoint, for at least one year. As an alternative, the Commissioner may dis- solve a society. The Commissioner investigates and approves all proposals for major financial transactions by societies.

15. Society members each have one vote, can attend general meetings and thus disapprove of the managing committee's plans and ultimately of the committee by not re-electing the members to office. But, in realiLy, as many societies were created from above, the members take little active part in affairs, and committees are regularly re-elected by a handful of electors. From the members' perspective the society may be an organization having power over them. First, the by-laws are binding on all members, who may be fined by the society for breaking them. Second, the society is given wide powers over members' goods and chattels when credit is extended. Third, and perhaps most important from the point of view of the cooperatives' ability to carry out Government policy, are the compulsory marketing provisions of the Act. A society is empowered to contract with its members that they dispose of their produce to or t:hrough the society, that they produce a specified amount of produce or pay ANNEX 16 Page S

a specified sum by way of damages for failure to do so. The Act also provides for a further extension of these compulsory marketing powers to cover non- members of societies. The Minister may require all the producers of a particular crop in a specified area or throughout the country to dispose of it to or through a cooperative where that cooperative can show that its members produced 60% of that crop for the two preceding years in the specified area or throughout the country.

16. The Act provides that societies may make loans to their members, and the Commissioner may authorize loans to non-members and may regulate the amount which may be lent on the securitv of a charge on immovable property. Societies may charge the whole of their property as security for a loan, and the charge must be registered with the Commissioner within 30 days. The Register of Charges is available for inspection to any member, creditor or potential creditor of a society. Where the lending agency is the Agricultural Finance Corporation, the main agricultural credit agency in Kenya, it may only lend funds to a cooperative society which applies in writing., and of which the officers and committee have been authorized to make the application by a two-thirds majority of the members present and voting at a general meeting. The members of the society are jointly and severally liable to repay the loan and interest thereon, and the Corporation has a right of full access to the book.s of the society.

Cooperative Bark of Kenya, Ltd.

17. The Cooperative Bank was established to mobilize the financial resources of, and provide a source of finance for, the cooperative movement. Shareholders of the Bank are the registered cooperative organizations. The Board of Management consists of 9 members, 5 representing the cooperative movement and 4 representing the Government (Ministry of Finance and Ministry of Cooperatives and Social Services). The Bank was registered in 1965 as a Cooperative Society and is also registered under the Banking Act as a commercial bank. When it started business in 1968 the Bank became the central banking institution for the cooperative movement and the backbone of the cooperative banking system. This system includes individual members' accounts, the primary societies' accounts with unions, and unions' accounts with the Cooperative Bank. (The Bank operates no account for individuals.) The Cooperative Production Credit Scheme (CPCS) is the program which has been used to tie the cooperative banking system together, from primary society member through the Bank level, and to coordinate its operation.

18. The Bank offers standard banking and credit facilities to its member cooperatives. Overdrafts and loans are provided for: (a) coffee and other crop advances, (b) produce buying, (c) dairy cattle, (d) coffee factories and cotton ginneries, and (e) farm machinery. The lending is restricted to short and medium-term finance (up to 5 years) at an 8% interest rate. Funds are provided by the Government and are augmented by society and union deposits and members' savings. Financial and banking transactions between the societies and their members are facilitated by tne CPCS. ANNEX 16 Page 6

Cooperative Production Credit Scheme

19. The CPCS was initiated in 1970 to encourage better management at primary society and union levels; stimulate rural savings, retaining such funds in the sector for the benefit of cooperators; provide the cooperative society with greater liquidity; encourage membership loyalty; and increase the productivity of cooperators by enabling them to obtain purchased inputs on credit. This coordinated program is expected to replace the ad hoc credit schemes of individual societies and involve all levels of the cooperative structure. Overall responsibility for its implementation and control is shared by the Cooperative Bank and the Department of Cooperative Develop- ment. Since the principal activity of most of the viable societies is the marketing of agricultural produce, the CPCS is geared to this activity. 1/

20. The scheme was introduced at a time when the credit transactions between societies and members were chaotic. Outstanding debt was estimated to be in the order of KI3 1.3 million. In many instances, there were no records of debts, recovery mechanisms were inadequate, and there was no uniform procedure for extending credit to members. These difficulties reflected poor management and permitted petty corruption, leading to a lack of confidence and creating an obstacle to building strong societies. Accord- ingly, the CPCS was designed to overcome these difficulties, and places heavy emphasis on (a) common, formal but simple procedures governing transactions, (b) stringent eligibility requirements for unions, societies and members, and. (c) regular policing of the regulations by the Department of Cooperative Develcpment.

21. The Department's District Cooperative Officers and the Nordic advisors at union and district level play key roles in program implementation and evaluation. To qualify for participation, cooperative unions must: (a) formalize all outstanding debt, (b) appoint a qualified Credit Secretary, (c) establish a Banking Section within the union, and operate central banking facilities for affiliated societies, (d) appoint a Banking Committee, (e) be prepared to allocate funds for lending, and (f) pass the necessary enabling resolutions in a General Meeting. Each of these requirements is specified in considerable detail. Primary societies and individual members have similarly stringent eligibility standards to meet. To the extent that the cooperative structure operates from the bottom up, the cooperators' desire for CPCS funds should animate the entire system and result in the adoption of standardized and regulated procedures.

22. Consistent with cooperative principles, the CPCS has a second phase savings element called the Cooperative Thrift Scheme (CTS). Societies participating in CPCS which are eligible for the scheme are selected by the Depart- ment and must meet certain formal requirements and pass enabling resolutions

1/ For details of this scheme see: Von Pischke, J.D., A Description of the Cooperative Production Credit Scheme, Working Paper No. 80, December 1972, Institute of Development Studies, Nairobi. A shorter statement is presented in Annex 7. ANNEX 16 Page 7

in order to participate. Cooperators' savings are kept in the accounts their society maintains for payouts, and the savings balance is accumulated by each member not withdrawing the entire amount of each payout for his deliveries. By the end of 1972 savings of about Kb 13 million (as opposed to CPCS loans outstanding of Kb 8 million) had been built up in this manner.

23. Apart from the detailed regulations and procedures, the requirements that staff be trained to specified standards provides an additional measure of control. The training requirements are specifically stated in terms of the courses provided by the Cooperative College of Kenya. All entrants to the staff ranks must have passed the ABM I course and Credit Secretaries are required to have passed the ABM II examination. 1/

Cooperative College of Kenya

24. The Cooperative College was established in 1967, with the collaboration of the Nordic countries, to train society staff and members and officers of the Department of Cooperative Development. The College has a physical capacity of 180 students, and the number of students passing through approxi- mates 1,000 per year, reflecting the short term, in-service nature of the College's offerings.

25. The program includes the ABM I and II courses previously mentioned. Both of these are of 10 weeks duration. A good pass in ABM II permits entrance to an advanced Certificate Course in Qooperative Administration. Each level of proficiency is tied to a seniority level within the movement or Department of Cooperative Development. Special courses are also run, including Coffee Factory Management, Credit and Savings, and a Committee Member Seminar. The College also runs correspondence courses and supports the local activities of the field education staff. The College is currently heavily supported by Nordic Assistance, both financially and by resident advisors in a total staff of 21.

Nordic Assistance Program

26. The Nordic program was introduced in 1967, and staff has approximated some 50 advisors concerned with management and development cooperatives including KCC and HCU. In financial terms the Nordic contribution is expected to be KSh 41.5 million for the six years 1972-77. Staffing in 1973, and projections are:

1/ ABM is Administration, Bookkeeping and Management. ANNEX 16 Page 8

1973 1975 1977

Cooperative College 8 5 4 Field Education 7 5 2 Accounting 10 10 3 Credit and Saving 9 7 3 Field Service 6 3 2 Development Planning 4 3 1 KNFC 4 4 1 Coordination 2 2 2 50 39 18

27. The projected reduction in support for the Cooperative College reflects the good condition of that body. The drop in accounting, however, may underweigh the anticipated expansion of cooperatives and the continued need for upgrading of accounting performance. The, stronger emphasis to be given to the KNFC implies a move toward reinstating this body as an effective apex organization, making cooperatives somewhat less of a government instru- mentality. The development planning support is expected to decline as the present phase of "consolidation" is completed.

KEY PROBLEMS

2&,. Three types of problems require urgent attention.

Government Participation

29. Though a Regis$trar of Cooperative Societies was. established in 1931, its powers did not extend to smallholder cooperatives till 1945. The Regis- trar's Office became the Department of Cooperative Development (DCD) in 1960 and was located in the Ministry of Agriculture. In 1963 it was transferred to the Ministry of Commerce and Industry, and in 1964 became a separate Ministry of Cooperatives and Marketing. In 1965 it was moved back to Commerce and Industry, and in 1966 became part of the Ministry of Cooperatives and SQzi31. Services where it has remained.

30. This extensive reshuffling reflects some Government in,decisiveness, as to the role of cooperatives and the Department. Cooperation has been developed as the major channel for extending commercial services to the smallholder--though this intention does not seem to have been specifically promul- gated or recognized. In many respects it is a cooperative movement without a cooperative ideology. Once this truth is accepted, the problems of the cooperatives can be considered from a more productive point of view. ANNEX 16 Page 9

31. The 1966 Cooperatives Societies Act substantially increased the powers of the DCD. This change was necessary because of the post-Independence growth in number of societies and in management problems. In summary, the powers of the DCD include: (a) direct financial and budgetary control through District Cooperative Officers; (b) amalgamation of inefficient units; (c) removal of committee members in case of serious mismanagement; and (d) appoint- ment of graded staff of societies and unions, (including secretary-managers, accountants, factory managers and clerks). This represents virtually total "top down" control, and highly centralized control as well if the organization of the DCD and its related organizations (including the marketing boards) is taken into account.

32. In addition to its supervisory function the DCD is also responsible for developing a national policy for cooperatives, and for its implementation. Although a large part of its energies over the last eight years have been taken up with auditing, supervision and control, a concerted program of development planning has been initiated. Functionally the Department is divided into five divisions, (Development Planning, Credit and Finance, Audit and Accounts, Education, and Legal and Registration), each headed by an Assistant Commissioner. There is also a separate unit concerned with settlement scheme cooperatives, located with the Department of Settlement. Each Division is assisted by one or more of the members of the Nordic team. Under the current Commissioner the high turnover of senior staff has been reduced and the development activities of the DCD have been intensified.

33. The developments reflected in current programs, such as the CPCS and CTS, the emphasis of the training program, and the comments in the draft Development Plan for 1974-78, are clearly in keeping with the unstated goal of promoting Government-regulated commercialization of farm output and a reliable "delivery mechanism" to help smallholders take up improved farming methods. Relatively little emphasis has been given so far to promoting the cooperative philosophy. 1/

Operating Environment

34. The "traditional" cooperatives were based more on social obligations than economic interest and centered on production, with marketing usually being a family matter. In modern day cooperatives the arrangement is almost the reverse. This leads to management problems because a committee member, once elected, is traditionally inclined to fight for his own group interests rather than common institutional objectives. Too, people who are elected to cooperative committees are frequently the larger farmers, because this can improve society management. On the other hand, it may at times lead to activities and policies which are not in the general interest. In this way it is conceivable that the cooperative can become a vehicle for building up political support for an individual, rather than a creative activity promoting self-help through group action.

1/ See Apthorpe, R.J., "Agriculture and Cooperatives in Kenya", Apthorpe, R.J. (Ed.) Rural Institutions and Planned Change, Vol. IV, Report No. 10.15, UN Research Institute for Social Development, Geneva, 1970. ANNEX 16 Page 10

35. Another problem faced by cooperatives is competition from other institutions, both private and governmental. This is constructive if the battle is from positions of equal strength. However, the younger cooperatives often find this to be a severe problem until they have been able to assemble finances ancl set up operating procedures which can sustain member loyalties in the face of temporarily higher prices offered by other outlets, and which also can overcome the attempts of businessmen to conquer the society from within.

36. There are also certain statutory obstacles to cooperative development. For instance, in many situations the cooperative remains single crop oriented because it is not allowed to handle other crops which its members can produce. There is a tendency for each marketing authority such as KTDA or the Pyrethrum Marketing Board (or production authority, as in the case of the Settlement Schemes) to want their own exclusive infrastructure, rather than build on or integrate with an existing one, be it cooperative or not. This may retard the development of a strong farm-level cooperative structure.

37. A further constraint on the growth of cooperatives is the insistence of government agencies on maintaining tight control of the services they provide. Though quality control in coffee is the responsibility of the cooperative societies, the Ministry of Agriculture manages all extension activities related to coffee. There are similar conflict situations in tractor services, credit and crop insurance schemes. While the case for centrally organized services is strong in many instances, the fact that the cooperatives are effectively excluded from performing many services limits the extent to which they can make themselves attractive to farmers. On the other hand, there are many services which they can provide (and are increasingly doing so) which are as yet not frequently made available by Government. The programs of the CPCS and CTS for credit and savings, chattel and crop insurance and the retail and storage capacity for seeds, fertilizers and other inputs, as well as consumer items, are obvious examples. Another case is the response of Government to the effort by cotton cooperatives to take over the ownership and running of the ginneries.

38. Finally, cooperative societies and unions must deal with other institutions which may be ill-organized to carry out their function or serve smallholders. Kenyan agriculture has a range of institutions--some dating from the days before Independence, others oriented to smallholder agriculture, and -,e designed to facilitate the transfer from one to the other. The mar- kceting authorities with which the cooperatives have to deal, including the countrywide cooperatives, are in many respects better able to meet the needs of large farms than small farms. For example, the KFA has so far been unable to adapt itself to serve the small-scale sector, although to do so does not have to result in reducing services to large farmers. The KPCU and the Coffee Board, who in combination handle and market the coffee crop, use procedures in receiving and paying for producer deliveries of coffee beans which have resulted in some societies receiving no payments whatever for periods as ANNEX 16 Page 11

long as one year, despite regular production and deliveries. 1/ Accordingly, they have not been able to make "pay-outs" to growers. Apart from severe short-run economic pressures on members, these shortcomings undermine the confidence of society members and auger against the development of a strong cooperative system.

Management Difficulties

39. As implied above, many of the cooperatives' management problems reflect factors beyond its control. Others relate to the structure of the cooperative aystem and the procedures through which it functions, such as bookkeeping and accounting, budgeting ind control, staff training and career development, member education, committee selection and related issues.

40. First, reflecting the top-down structure that has developed, the staff and comnittees of the societies are overcommitted to the task of handling the matters passed down to them from the union and DCD headquarters. Frequently, Anforwation and irnstructions are not acted on at all, simply because they are ob,-cured by the morass of details that have to be attended. In short, cooperatives have tended to become bogged down in bureaucratic procedures.

41. Second, reflecting the nature of the cooperative movement with its many members, the accounting system is complicated and duplicative, with a rassive number of small entries. Bookkeeping machines are running 22 hours a day in some cases. Happily, the problem is being tackled, and once the CPCS accounting scheme is widely implemented the situation should improve.

42. Third, the procedures employed are too complicated to be understood by the average (often illiterate) member. The system of invoices and receipts is such that the members are individually unable to check on their receipts or deductions. Accordingly, there is much scope for their being cheated-- unwittingly or intentionally--by the society or union staff Further, the process is expensive, and less than 80% of gross revenue is returned to the grower. Again, the simple procedures of the CPCS scheme will lead to some improvement, but continued development work is needed to further simplify the procedures. Fuller understanding by individual members of all transactions affecting them is perhaps the best means of counteracting petty corruption.

43. Fourth, another managerial constraint is that in many cases there are no separate plans, budgets or accounts for each society or for coffee factories. Thus, the society and the union have little control over their factories and societies respectively. For example, although a fairly elaborate quality distinction is made by the KPCY on all deliveries, no corresponding differential payment system exists at the society level. This provides little incentive for growers to improve the quality of their coffee.

44. Fifth, there is a shortage of qualified and experienced staff, and the turnover is high. One-third of all graduates from the Cooperative College do not stay with cooperatives. This is partly explained by the disadvantages

1/ Waters, A.R., African Economic Inertia: The Control and Structure of the Coffee Industry, Paper to the Rocky Mountain Social Science Association, Colorado College (mimeo) 1970. ANNEX 16 Page 12 associated with working for an elected committee. Because of the decision making processes of committees the skills of the Secretary-Manager are frequently underutilized. In addition, however, there is a lack of a career structure within the cooperative system. Vacancies at society and union level are filled from outside, even though suitably qualified staff may exist elsewhere within a union. Again, the DCD is aware of this problem and grade promotions related to the stages of the Cooperative College training program are being implemented; but this program still has some way to go. The extent of nepotism is much reduced since the DCD has begun to approve the appointments of graded staff.

45. These represent some of the more obvious management problems in the cooperatives. However, these problems should not be taken as an indication that the structure is in jeopardy, or that further development is impossible. In the progress and consolidation of the last six years there is ample evidence that most of these problems can be solved.

ISSUES AND RECOMMENDATIONS

46. The immediate task ahead is to do a better job of work already underway, rather than seeking new approaches and procedures.

Focus and Orientation

47. In the activities and proposals of the Department of Cooperative Development, the emphasis is on building a viable structure which will provide a smallholder service system to help raise productivity and living levels. The orientation is clearly commercial, with the major concern being the effectiveness of the production and marketing activities. Today the approach is "top down" implementation of a program to develop a workable nationwide institution which will permit more smallholders to participate in development. This is being pursued by upgrading the existing elements of the system.

48. While this focus belies the rhetoric of "African socialism", it seems pragmatic and sensible. The consolidation begun after the failures of the early 1960's is making good progress, and this activity is sufficiently complex and difficult to justify keeping to this somewhat narrow focus for some time to come. Other dimensions, like development, might better follow the establishment of a good commercial service system rather than try to be its precursor. Accordingly, this commercial focus should be made more explicit in the policies of the DCD and in its planning and education programs.

49. However, it is important that the member participation dimension should not be overlooked. Specific attention should be given to creating a counterbalance between the committees and the appointed staff. This would involve some change in the powers and responsibilities of both groups. ANNEX 16 Page 13

Concurrently, improved procedures should be developed and implemented wherever possible, to provide the individual member with as full a knowledge as possible. In addition, attention could be given to the electiorn of committees, taking account of the conflicts and interest groups likely to exist at the society level. This means that the DCD will continue for a long time to come. If so, it is important that the KNFC be built up to provide a countervailing force vis-a-vis the activities of the Commissioner and his staff.

Management, Training, and Planining

50. A primary requirement is an expanding cadre of managers and an increasingly aware membership. The foun(ation for moving in this direc:Lion would seem well laid in the Cooperative College. But a more specific arrangement for the funding and expansion of the Ccllege is desirable. Since the training provided is to the net benefit of Kenya as a whole, consideration might be given to financing this institution on the same basis as a university, i.e. as a separate entity from the DCD, though still closely allied to it. The need for upgrading and training staff and members will continue to grow for many years to come.

51. The need for high quality staff suggests the need for an esitablished reward system based on a career structure. Cooperative staff salaries should not be tied to civil service scales in the long run, or allowed to lag behindQ Staff conditions and salary structure should be standardized nationally.

52. There is a need for continuing central control and auditing procedures. This might usefully include a mobile "shock troop" of auditors wfho would make surprise visits to locations. Procedures should stress problrau solving and simplification.

53. The DCD should develop planning capacity, partly to replace thie Nordic team when it is phased out. This means that provisions for specialized training must be made, perhaps overseas and at university level. In addition to this capacity, an outside group concerned with cooperative management might provide useful cross-fertilization and a source of staff. The Depart- ment of Commerce at the University of Nairobi would appear to be the logical place to develop an outside core-group concerned with cooperative management, training and research. Accordingly, consideration should be given to building up the Department of Commerce, perhaps initially with the help of bilateral aid.

54. The Planning and Development unit must work hand-in-hand with the counterpart branch in the Ministry of Agriculture. Apart from integrating new product programs into the movement, development should follow three lines: (a) It must extend laterally such programs as the CPCS and CTS, to ensure coverage of all societies; (b) It must expand the range of services to members. Such expansion is already extending to the provision of inputs for subsistence crops, and this should be continued. It might also include the ANNEX 16 Page 14 provision of farm pick-up and delivery services and further expansion in the field of commercial services, for example, insurance for chattels, crops, and life. The KNFC should not be excluded from participation in the planning or implementation of such developments; (c) It must extend regional coverage. At present the coverage is rather lopsided and is far from complete even in areas where the movement is well established. In redressing the balance the DCD should ensure that the Settlement Scheme cooperatives are fully integrated with the rest of the structure, and not given special attention.

Awareness and Education

55. As the cooperative system moves from consolidation to expansion, a concerted program of public education should be pursued. To promote a greater awareness there should be courses in cooperative development and cooperative management available to students in the social sciences, natural sciences and the professions. It would also be worthwhile to present to the public a more balanced picture of the state of cooperatives than is now being offered. ANNEX 16 Page 15

Table 1: SMALIHOLDER COOPERATIVE ACTIVITY, 1970-71

Societies' Turnover Product Volume % of National Total Million KSh

Coffee 26,302 tons 48 178.9 Pyrethrum 8,772 tons 90 42.9 Milk 165.9 million 28 29.0 litres Cotton 19,415 bales 65 12.4 Sugar 138,948 tons 25 866

Other Coop. Produce - 65.0

Settlement Produce 60.0

Union Activities 133.0

Source: Department of Cooperative Development ANN-Ex 16 Page 16

Table 2: COOPERATIVE SOCIETIES, NUMBER AND GROSS INCOME, BY TYPE

Percentage Number Total of total Operating Type Number Income Income at Lo6s. '000 KSh %

Primary Coffee 124 170,438 57.7 23 Multi-product 86 27,464 9.3 26 Dairy 49 1l3,836 6.4 26 Sugar 26 17 ,648 6.0 5 Pyrethrun 42 14,805 5.0 19 Farm purchase 107 13,780 4.7 64 Cereals and grain 36 4,361 1.5 16 Eggs and poultry 3 4,289 1.5 1 ianching 21 3,61T 1.2 10 Other crops 10 2,439 0.8 1 Fishery 7 2,150 0.7 1 Pigs 6 1,661 0.5 0 Cotton 11 1,405 0.5 3 Fruit and vegatables 3 878 0.3 0 Craftsmen 6 849 0.3 3 Timber and charcoal 1 372 0.1 0 Other livestock 1 265 0.1 0 Non-rural 106 9,889 3.4 29 Total 645 295,143 100.0 227

Cooperative unions 20 13,530 - 7

Countrywide organizations 3 1595249 _ 1 (KPCU, KCC., HCU)

Source: The data summarize. alsaiMpie ovf 670 sociAtios audited in e5ther'r 1969, 1970 or 1971, and repPesenting most of those that are fully viable and roughly half of the number of existing societies judged to be potentially viable. The summation does not refl&ct the same point in time for each society, but rather the entire group audited in 1969 through March 1972. Department of Cooperative Development, Audit Statistics, September 1972. ANNEX 16 Page 17

:7igure 1. (}rganiza;ion of Cooperative Movement

r 17c Department of Flational --- Cooperative ,'ederation) . Devel pment Cooperative Bank of Kenya

Cooperativ e ______lUnions

_ marketing Boards

Societies i

Countrywicde _ _ _ _ _ Cooperatives <;

Individual < Members

| | ~cooperative < tCollege

Counterpart |Aid Program

Source: Department of Cooperative Development.

ANNEX 17 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

RIURAL ROADS, WATER SUPPLIES AND ELECTRIFICATION

Rural Roads para. 2 - 23 Background Data 3 - 12 Specific Prohlens 13 Possible Remedial Steps 14 - 22 Staffing Needs 23

Rural WJater Supplies 24 - 62 Background Considerations 26 - 35 Water Department Program 36 - 40 Water Quality and Health 41 Issues and Recommendations 42 - 62 Responsibility and Coordination 43 - 48 Organization and Administration of WD 49 - 51 Benefits and Levels of Service 52 - 55 Water Charges and Connection Fees '56 - 62

Rural Electrification 63 - 71 The Program 65 - 70 Judgments 71

Table 1 Distribution of Classified Roads by Province and Category, 1970 Table 2 Central Government Expenditure on Development and Maintenance of Highways, 1963-1974 Table 3 Feeder Roads: Estimated Vachicle Operating Costs, 1964 Table 4 Distribution of Direct Road Development Expenditure by Road Class Table 5 Government Development Expenditure on Rural Water Supplies 1971-72 Table 6 Estimated Capital Costs of Treated Rural Water Supplies Per Capita Table 7 Classification of Water Related Diseases Table S Advantages and D.isadvantages of Alternative Rural Water Supply Systems Table 9 Annual Expenditures by Water Department to Slake Water Available to the Entire Rural Population by the Year 2000 (Basis: Communal Water Points) Table 10 Annual Expenditures by Water Department to Make Water Available to the Entire Rural Population by the Year 2000 (Basis: Individual Connections)

ANNEX 17 Page 1

RURAL ROADS, WATER SUPPLIES AND ELECTRIFICATION

1. Taken together, roads (outside the municipalities), rural water supplies and rural electrification comprise about one-third of public sector development expenditures. This is a truly substantial level of investment in the infrastructure for rural development. It is defended by proponents on many grounds-such as increasing agricultural and other production, and decreasing inequalities in social services between urban and rural areas and between regions and hence a possible reduction in rural-urban migration. Hlowever, investments of this magnitude pose serious issues. For example, there are urgent alternative uses for the resources. The investments require a stream of recurrent outlays for operation and maintenance. It is hard to identify and quantify the linkages between investment in rural infrastructure, increased production, and social equity. Moreover, the expenditure level has been attained only by an accumulation of responsibilities in ministerial headquarters in Nairobi, at the expense of local government, ministerial staff in the field, and the participation of the local citizenry.

RURAL ROADS

2. With 90% of the population living outside the major urban centers, it is hard to define a rural road. In some sense, every road outside the municipal areas is really rural. The Government has made rapid strides in improving and expanding the major road network, through a combination of aggressive project preparation by the Ministry of Works (MOW), a strong commitment to the value of roads, and very substantial investments by numerous multilateral and bilateral donors. Just before and during the Second Five-Year Plan, considerable progress has been made on a variety of special purpose minor roads (for tea, sugar, fish, rice, settlement, general feeder, tourist and defense).

Background Data

3. There are approximately 43,000 km of classified roads in Kenya, nearly 15,000 km of which are all-weather roads, the rest being earth roads subject to failure in the rainy seasons. The data as of July 1972 are: ANNEX 17 Page 2

Contribution to Total National Class Length All-Weather System --Km------%------Z--

A. international Trunk 2,900 20.6 B. National Trunk 2,500 14.8 C. Primary 7,800 32.7 D. Secondary 9,800 22.6 E. Minor 20,000 9.3

Total 43,000 100.0

In addition to these classified roads, the MOW estimates that there are 125,000 km of unclassified roads and tracks.

4. In 1970, there were 137,271 vehicles with current licenses (excluding military vehicles). Of these, 43% were cars, 42% trucks, pick-ups and trailers, and buses comprised 2%. This number has been growing at about 10% a year in recent years. Foreign exchange considerations have temporarily imposed the need to control the importation of passenger cars. The increases in traffic volume on roads have been more rapid than the increase in vehicle numbers because of greater utilization of vehiclea, and because of the striking increases in the capacity of heavy vehicles. Indeed, on trunk roads, the annual increase in traffic volume was estimated to be 23% from 1967 to 1970. The increase in capacity of trucks, overloading and speeding have all contributed to the growth in the need for road maintenance.

5. The trucking industry operates under relatively free competition, especially on major roads, where freight rates are KSh 0.50 to KSh 0.80 per ton per km on larger vehicles. Off these major roads, competition is less, vehicle size smaller, and operating costs higher, so that freight rates are substantially higher. In most areas of the country, the majority of roads are vulnerable to rain, and there is evidence of th-is;; being a constraint to the development of cash crops.

6. In 1971, 3,103 kn of the road network was bituminized and this, is, expanding at 200 to 300 km a year. A large proportion of the other trunk, prima,,, and secondary roads are of high standard, with many of them being gravellcd, at least in the more difficult stretches. This high standard also applies to a few of the special purpose roads, including some tea roads that have been recently upgraded and some feeder roads in Central and Rift Valley Provinces. However, the great majority of minor and unclassified roads and tracks are in poor and deteriorating condition, because of low construction standards and lack of maintenance. Many of these roads are reported to be virtually useless for motorized vehicles.

7. Responsibility for construction and maintenance of roads was largely concentrated in Nairobi at the beginning of 1970. Prior to that ANNEX 17 Page 3

date, the County Councils had received grants to construct and maintain roads of the types which correspond roughly to current classifications D and E and unclassified roads within their areas. The MOW was responsible for the three higher classes, A, B, C. Because the road grants were sometimes diverted to other purposes, and because the County Council operations were often inefficient, responsibility for their roads was centralized in the Roads Department of the MOW in 1970. The functions of the County Councils no longer include any responsibility for roads. Meanwhile, certain categories of roads remain the responsibility of other agencies; these include municipal and other urban roads under the municipalities and the Ministry of Local Government, settlement roads under the Ministry of Lands and Settlements, and forest roads under the Ministry of Natural Resources.

8. The Roads Department of the MOW is well organized and efficient in comparison to other ministries, especially after its reorganization on January 1, 1970. Its strength lies in its engineering staff; the economic staff of the planning section currently consists of only one economist from CIDA (Canadian International Development Agency) who shares his time between the Ministries of Works and Finance and Economic Planning. This means that work on the economic justifications of road projects is frequently rudimentary. The Roads Department also suffers from problems of recruiting experienced staff, especially Kenyans. In September 1971, the Department had 95 established positions at the level of engineer or above; 26 of these were unfilled, while 46 were filled by foreign technical experts (from the U.K.'s OSAS and Norway's NORAD). The situation has not changed markedly in the last year. It is overcome in large part by the use of both international and local consultants. The staffing situation is unlikely to improve dramatically, since only about 45 civil engineers graduate each year in the three countries of the East African Community, and there is heavy competition for Kenyans among these graduates both from other government agencies and from the private sector which can offer considerably higher starting salaries. According to the Kenyanization Plan for the MOW, all permanent posts in the establishment should be filled by nationals by 1977; shortage of supply and competing demands may make this target optimistic. The World Bank's Highway Maintenance Project, with a substantial training component, is assisting in the training of middle-level staff such as foremen and machine operators.

9. Despite these staffing problems, the Roads Department has been very successful in preparing and executing projects, in attracting foreign assistance and in winning a very large share of Kenyan development expenditures. The fact that the Department has a large shelf of prepared projects appears to be largely responsible for this situation (few other Ministries have many projects ready and waiting for finance). The success of the Department can be seen by comparing the Kb 43.0 million allocated in the Second Plan for development expenditure on raods with the KE 77.3 million appearing in the annual budgets for the Roads Department over the Plan period. In FY72, roads accounted for more than 31% of total Government development expenditure. ANNEX 17 Page 4

10. The recent trend in the relationship between development and maintenance expenditure was 0.7:1; in FY73 the same ratio is 2.8:1. This situation has created enormous strains on the maintenance system, aggravated by the decision that most upgrading of roads through gravelling should be included in the maintenance budget (KE 650,000 in FY73). Many secondary and the majority of the minor roads are not properly maintained, and unclassified roads (with the exception of special purpose roads) receive no maintenance at all. The World Bank's Highway Maintenance project covers less than half the classified roads and concentrates on trunk, primary and some secondary roads, where it is beginning to have a considerable impact. SIDA and OSAS are expected to supply additional equipment for minor roads (Class E).

11. Settlement roads are the responsibility of the Department of Settlement in the Ministry of Lands and Settlement. Of the four major types of settlement schemes, only the conventional schemes had roads constructed for them (Annex 3). When the schemes were established, the Town Planner acted as executive coordinator for physical planning, and he liaised with the MOW to decide the width of roads necessary and where they should run. Access roads to each plot and feeder roads were constructed to relatively high earth standards by the Soil Conservation Unit of the Ministry of Agriculture. However, no maintenance funds have been provided until this year for either these roads or the roads that existed prior to the establishment of the other three types of settlement schemes.

12. In FY73, the Department of Settlement was allocated K6 52,000 for maintenance, to be used by field officers who negotiate contracts for the work either with the District Engineer or private contractors. This amount is very small in comparison to the 8,000 km of settlement roads. In addition, the World Bank has made a loan for the upgrading and rehabilitation of approximately 1,000 km of settlement roads. Despite these initiatives, the problems of settlement roads remain severe. Indeed, there is evidence to suggest that the lack of access to transport and roads is a major constraint on the development of non-subsistence smallholder agriculture on settlement schemes. The Department of Settlement has submitted a request for KI 10.4 million for the Third Five-Year Plan for road construction, upgrading, rehabilitation and maintenance on more than one-third of settlement roads. It remains to be seen how the Ministry of Finance and Economic Planning will adjust this request.

Specific Problems

13. The essentials of the major road network are, with some exceptions, in place today. The design and construction capacity in the country is not overstretched, and the MOW provides a generally efficient implementing agency. Nevertheless, there remain many problems. Among these are:

(a) Responsibility for minor road systems. Prior to 1970, this was vested in the County Councils. After that date, the MOW took over respoiisibility, but was given little additional ANNEX 17 Page 5

financial or manpower resources to handle the task. At that time, too, new programs for special purpose rural roads were being financed by external donors, and these took up a great deal of time and resources in the Roads Department. The net result is that maintenance and construction of the rural minor road network (outside the special purpose roads) have been neglected;

(b) Coordination among Ministries. This has often been rather poor. The MOW tends to act independently of other operating ministries when planning and implementing the road needs of projects being undertaken by other agencies. The flow of information between ministries is inadequate. For example, when the Narok wheat scheme was initiated, the MOW was not consulted and sade no plans for roads for the scheme. Transport problems have hampered the scheme, since it relied on inadequate roads constructed during an army exercise. Similarly, the fish road to Lake Rudolf was started well before the economic potential of the Lake had been finally assessed. There is now evidence that most of the expected traffic in fish may not materialize;

(c) The economic justification for rural roads, and the establishment of priorities. Until recently, project requests generally originated with the District Development Committees, passed to the Provincial Development Committees for an initial selection, and then to the MOW for priority selection, which was done on the basis of a vague formula of some resources for each Province, top priority then being assigned to roads with the highest traffic density. In the preparation of the World Bank Highways Loans IV and V, savings on vehicle operating costs were estimated as the principal economic benefits. Because of low numbers of vehicles per day, this exercise in the latter loan application gave internal rates of return of less than 12% for half the feeder roads under consideration. As a result of this experience, a more systematic system of assessment of benefits (including some estimates of induced traffic) is being set up in the Planning Section of the Roads Department;

(d) The use of labor-intensive methods of construction and maintenance for rural roads. Kenya has very little experience on this technique. A few MOW contracts are let on the basis of assisting the relief of unemployment. Basically, these contracts stipulate that the contractor must employ a certain number of workers, and that he will be paid their wages over and above his normal expenses. And in three Special Rural Development Program areas (Mbere, Migori and Kapenguria), projects involving labor-intensive feeder ANNEX 17 Page 6

road construction and rehabilitation have been started; these have not yet been evaluated fully. The general attitude among senior officials in the Roads Department remains negative on labor-intensive methods;

(e) Maintenance of rural roads, already discussed;

(f) What agency should maintain and construct roads in the settlement schemes. These roads fall outside the responsibility of the MOW. They affect a large number of people, generally in high potential areas. They are currently being neglected; and

(g) The financing of the construction and maintenance of rural roads. In the last few years, some development expenditure of the Roads Department has been transferred from trunk and primary roads to a variety of smaller rural roads. Table 4 presents the estimates for development expenditure on various road classifications for FY73 and FY74. It seems that foreign assistance plus Government commitments over the next few years are likely to ensure a growth in financing for minor rural road construction, especially of special purpose roads. Planned development expenditures in the coming Third Five-Year Plan for all roads are likely to be about KE 110 million compared to the Kb 77.3 million estimated as probable expenditures in the current plan period. Despite this, the need for funds for rural roads remains enormous, and sufficient resources are not being made available. For example, the cost of gravelling feeder roads is estimated to be Kb 700 to KE 800 per km. The Roads Department thinks it could effectively use KE 2 million a year for this purpose, and that this should be part of the development rather than the recurrent budget. Maintenance requirements raise the question whether local taxation or other sources of financing could be used for these needs on minor rural roads rather than placing the whole burden on the stretched budget of the central government.

Possible Remedial Steps

14. It is important at the outset to recognize that the MOW is the most suitable agency for planning, construction, and maintenance on all roads (with the exception of forest roads, which constitute a special case and can be handled adequately under the Ministry of Natural Resources). No other government agency has the staff, the equipment or the experience to undertake road operations. It follows that the responsibility of the MOW as the central executing agency for roads should be clarified and strengthened. This latter point applies with particular force to unclassified and settlement roads. ANNEX 17 Page 7

15. Clarification of responsibility, however, does not solve two major issues of coordination. The first is the relationship between the MOW and other operating ministries initiating development projects that include a road component. The second is the relationship between the central government and local areas to assure that the design and location of the rural minor road network fit local needs and priorities. The Government should implement as soon as possible its plans to place the Roads Department in the same relationship to its client ministries as the Building Department of the MOW currently has. This would shift the responsibility for seeking funds and justifying road programs to the functional ministry which has the greatest interest in using the roads. Thus, these functions would be located in the Ministry of Lands and Settlement for settlement roads; in the Ministry of Agriculture for tea, sugar, rice and general feeder roads; in the Ministry of Wildlife and Tourism for tourist and fish roads, and so on. The ministries concerned would establish the criteria for road needs, whereas the MOW would be the designing and executing agency for all these roads. Responsibility for general purpose roads would, of course, remain with MOW. This would lead to closer integration of roads into new development projects, and reduce the direct development budget of the Roads Department. Roads would become an integral component of new development projects, and would be justified as such. In the cases of roads for existing development projects and other areas, justification would still have to be done on the basis of the benefits accruing to the individual road.

16. The Ministry of Finance and Economic Planning should help to:

(a) determine criteria for the total road development and recurrent budgets vis-a-vis other needs;

(b) determine, with other ministries, the distribution of the road budgets between the various classes of roads;

(c) provide, with the MOW, guidelines for client ministries on reasonable road costs for various categories of projects, and on criteria for the justification of individual roads and for roads which are a major component of integrated projects; and

(d) establish, with the MOW, criteria for the size and distribution of the maintenance budget. (Upgrading through gravelling should be transferred to the development budget, with no corresponding cut in the maintenance budget.)

17. These organizational changes may result in a reallocation of the total expenditures for roads from trunk and primary roads to greater emphasis on smaller rural roads. Pressure from client ministries will ANNEX 17 Page 8

assist this reallocation. Such a reallocation, carefully phased, is desirable. 1/

18. The second problem of coordination concerns local roads. The District and Provincial Development Committees have not as yet proved to be effective in determining local road priorities.. Yet, as more emphasis is placed on minor, special purpose and unclassified rural roads, the importance of local knowledge of the functions and best locations for the proposed roads grows. Committees should be strengthened and, jointly with District Development Officers (discussed in Annex 8) try to assure that local knowledge and needs are given weight in determining road priorities. To do this job, the Committees need more information on project proposals in their areas and on criteria for deciding the amounts to be spent on various types of roads and in each area, as well as on the criteria for deciding priorities. This could be provided by the Ministry of Finance and Economic Planning, and the MOW. Within this framework, the committees can assess local needs and draw up a list of the top priority roads for each area on an annual basis, but within a longer- term perspective.

19. Concerning road maintenance, a critical problem, the World Bank's Highway Maintenance Project is intended to improve maintenance of most trunk and primary roads and some secondary roads; it appears to be progressing satisfactorily. The appraisal report for this project foresees the possibility of using existing maintenance equipment and staff on the rest of the classified network, once adequate experience has been gained on the current project. It is to be hoped that it will soon be practicable to expand coverage, even though this will increase the recurrent expenditures of the Roads Department.

20. Unclassified roads, including most of the existing and proposed special purpose roads, provide the primary access for most rural people to the classified network. If the construction of these roads is to be the full responsibility of the MOW, it is logical that it should have all maintenance responsibilities, thereby preventing duplication of activities, staff and machinery. But how should the MOW organize itself to supply this service, which now barely exists? The Government has before it a proposal to establish Rural Access Road Units for this purpose. These

1/ It would be made easier through more efficient maintenance of the major road network, and through more effective enforcement of speed and capacity regulations on the major roads. Both of these items are currently receiving attention, but their importance in freeing resources for rural development should be more fully recognized. A separate Traffic Police Department has been established, and new weighing stations are being financed by the World Bank to assist in controlling weight restrictions on heavy trucks. Again, the Ministry of Finance and Econo- mic Planning can play a useful role in promoting enforcement. ANNEX 17 Page 9 would be at the district level and would be created progressively as funds and staff allowed. Each unit would consist of a superintendent, a few labor supervisors, a small plant with operating staff, a small permanent labor force and administrative staff. The superintendents would be responsible to a Senior Executive Officer for Rural Access Roads in the MOW. Each unit would receive a vote to cover the costs of its core staff and equipment and a block sum for the hire of seasonal labor. Programming would be carried out by the District Development Committees through the District Development Officers. The committees would determine the appropriate mixture of self-help labor, plant and hire of seasonal labor (together with wage rates), under general policy guidelines laid down by the MOW after consultation with the Ministry of Finance and Economic Planning. This proposal has a great deal of merit, and should be initiated in two or three districts as soon as practicable. If the experience is successful, coverage should be expanded. When firmly established, these units might also maintain minor roads, if regular MOW services are still not available for this class of roads.

21. A principal problem with rural access road units is the lack of experience in Kenya with labor-intensive methods of earth road constrilction and maintenance. Not much is known about the financial costs or of the administrative and training requirements of adding labor-intensive road work. With concern over the employment/poverty situation mounting, this is an area which requires urgent attention. Spotty and inconclusive evidence from Ethiopia, India and Rwanda 1/ suggests that labor-intensive methods on certain major aspects of rural road construction may be cheaper than capital-intensive methods. The available Kenyan data, including the SRDP experience, should be analyzed, and the Government may wish to consider using a consulting firm experienced in these fields to establish and monitor prototype projects.

22. On the side of finance, rural road development and maintenance costs are likely to grow quite rapidly over the rest of the decade as new projects are started, as more maintenance is done, as minor and unclassified roads are upgraded, and as resources are shifted from major to minor roads. These costs can be kept in bounds through improved administration and operating efficiency, and perhaps through judicious use of labor-intensive methods. In any case, the Government may wish to mobilize local sources of finance to meet a part of the additional expenditures needed for rural

1/ See for example:

(a) IBRD Agricultural Sector Survey Report on Ethiopia, Annex 22. (b) Inception Report - Substitution of Labor for Equipment in Road Construction: Scott Wilson Kirkpatrick and Partners, February 1972. (c) Developpement de la Culture du Pyrethre - Rapport Routier: ILACO, Arnhem, Netherlands, February 1968. ANNEX 17 Page 10 roads. A road development tax could be levied as a proportionate attachment to a suitable existing tax. Money raised in this fashior. could then be earmarked directly as a contribution to the costs of the Rural Access Road Units. This would constitute a way of taxing additional rural incomes to pay some of the infrastructure costs responsible for a portion of the incremental income.

Staffing Needs

23. Some of the staffing problems of the Roads Department have been outlined earlier. If the Roads Department is to accept additional responsibilities, building up staff capacities at both senior and middle-level positions will become paramount. At middle-level positions, the assisted KHTC is beginning to make an impact, and this should increase markedly. There is need for a continual assessment of staffing needs for these positions so that the programs and capacities of the KHTC can be tailored closely to them. Decisions about the implementation and phasing of the Rural Access Road Units will, of course, be important in determining needs. At the senior level, the situation is even more serious because of the small number of engineering graduates, and the heavy competition from the private sector. While the situation is likely to improve over time, the Roads Department for several years to come will have to depend in part on expatriate technical expertise. Therefore, planning for recruitment of expatriate staff is important. Particular attention needs to be paid to the economic capabilities of the Planning Section of the Roads Department, and also to the need for continuity among expatriate advisors. (The World Bank's project Highways V provides for two economists under technical assistance.)

RURAL WATER SUPPLIES

24. Rural people rank water supplies high on the list of "felt" needs. Many ministries have tried to meet this need, and most of the resulting schemes are badly operated and maintained. The Government intends to provide the entire population with piped water by the year 2000.

25. Aside from the political return, water systems create benefits by saving time and energy, and improving health. These all augment the potential productivity of the labor force. This potential productivity can raise incomes if incentives and complementary inputs exist. Unfortu- nately, all this is difficult to quantify, and there is no good way to allocate resources to and within this sub-sector.

Background Considerations

26. In early 1972, some 932,000 persons (8% of the rural population) had an adequate water supply. By the year 2000, the nation may have 28 million people, and a rural population (those in market centers and smaller ANNEX 17 Page 11

communities) of about 17 million. This suggests that the task ahead on water supplies is a big one. The Second Plan (1970-74) emphasizes community water supplies, particularly rural. The Water Department (WD) of the MOA has underway a major rural water program financed by SIDA. Numerous other government agencies are involved in rural water supplies. Though estimates are very hard to make (in part because of definitional and accounting problems; in part because of the variety of agencies involved), it appears that about Kb 900,000 of the national development budget was spent on rural water supplies in FY72 (Table 5).

27. The work on water is highly fragmented, despite the good legal framework in the Water Ordinance of 1952. A Water Resources Authority was established at that time, responsible to the MOA, to research water resources and make development proposals. Though not de-gazetted, this body has been dormant since 1968. The Water Apportionment Board is subordinate to the Authority, and is responsible for enforcing parts of the Water Ordinance, particularly on water pollution. The enforcement arm of the Board is the Water Law Section of WD, which at the end of 1971 only had 14 Water Bailiffs to cover the country. Water permits are required only by large users, and the staff is too small to enforce even this. In 1969, the Cabinet established the Inter-Ministerial Committee for Rural Water Supply, charged with making recommendations and reporting to the Minister of Agriculture on financial policy, water charges, and collections. The Committee has not been very active, but is now showing new signs of life. The WD also gives policy advice, as it is responsible overall for the conservation, supply and development of water. All these bodies report to the Minister of Agriculture but seldom coordinate with other government agencies in rural water (see below).

28. WD is the principal executing agency for rural water supplies. It now has four functional branches--Development (including Planning, Design and Construction Sections), Operation and Maintenance, Water Resources and Administrative Services. These branches cover not only rural water supplies but also minor irrigation and urban water supplies for non-municipal towns; it operates 107 gazetted and about 100 ungazetted schemes in all. In January 1970 SIDA lent Kb 1.6 million to cover 82 small rural water projects, and a second loan for a similar amount for 30 larger projects has since been made. The Government has asked for a third loan of KSh 100 million to cover much of the water development proposed in the forthcoming Third Plan.

29. WD has suffered from the changing Government structure and from a general lack of policy guidance and support. Its recent reorganization, a new Director, and the renewed interest in rural water is improving WD operations. Nevertheless, WD does not have the authority or power to bring order and efficiency to rural water development. WD does not have direct control over its own field staff (the Provincial Water Engineer is responsible to the Provincial Director of Agriculture). It has serious staff shortages and relies heavily on expatriate senior staff. It has a negligible recurrent budget (over the last three years, development ANNEX 17 Page 12 expenditures increased 400%, while recurrent by only 25%). Its administrative procedures are not suitable for development work. Despite the recent introduction of a data bank, its informaticn on water resources and use is inadequate. In spite of these problems, WD plans to bring water to 610,000 rural people by June 1974, under the two SIDA loans.

30. WD also has a small development budget (KE 8,000 in FY72) to subsidize the construction of dams and boreholes by private individuals and groups. There are some 4,000 boreholes in Kenya, most of which supply some water for domestic consumption in the rural areas.

31. The Ministry of Health has had a demonstration water supply program since 1960, in conjunction with WHO and UNICEF. At end FY72, 561 small schemes had been started, though a WHO survey suggests that at least half of those completed may not be working, or not reaching all those for whom they were designed. The schemes in this program are selected, designed and built by the Ministry of Health. Design is done by Public Health Inspectors who have attended an eight-day training course; not unexpectedly, therefore, many schemes have design problems. The Health Inspectors recommend schemes; the SRDP areas receive priority, but the selection method is not clear. Construction involves self-help (labor and funds), UNICEF equipment, and some funds from the Ministry of Cooperatives and Social Services. On completion, most schemes are handed over to the County Councils for operation and maintenance, a difficult task for the small and often isolated schemes. Repair and running costs are often high, and skilled mechanics in many areas are scarce.

32. The County Councils also operate some 300 rural water schemes, which were constructed either by the Councils themselves or entirely by self-help and then taken over by the County Council. The Local Government Loans Authority has made some loans to the County Councils for water development. Priorities seems to be set on an ad hoc basis, without information about schemes constructed or planned by other agencies. The County Councils also are short of professional staff and recurrent funds, so that all their schemes suffer from the same problems as those of the WHO/UNICEF program. All County Council schemes are supposed to recover their operation and maintenance costs, but rates and collections vary widely. Many schemes collect nothing at all, while, even in the three schemes with individual connections throughout, revenue has never exceeded 50% of levy, because of a reluctance to cut off supplies of defaulters. In many instances, there is a vicious circle when operation and maintenance prove difficult because of lack of funds, spares or mechanics; therefore, people seek water elsewhere, making the collection of water charges even more difficult and so agravating the problems of keeping the schemes running.

33. The Department of Settlement is responsible for water development on settlement schemes (Annex 3). The policy is to supply piped water to every farm (piped 20 feet inside the boundary, not to the homestead), since this type of connection is said to provide better protection against bilharzia and cattle ticks than do .:mmunal points. Thirty projects have ANNEX 17 Page 13

been completed, with assistance from IBRD, the U.K. and UNICEF. The earliest settlement schemes receive priority. Until recently, the Department of Settlement has handled design and construction, using Peace Corps Volunteers, with the designs being sent to IRD for approval. This arrangement has not proved satisfactory, and WD has now seconded a hydraulic engineer, water superintendent, technical water officer and a water bailiff to the Department of Settlement. The Department lends money to the cooperative societies to build the reticulation system--at 6-1/2% interest per year for 20 years. The cooperative societies are supposed to run the schemes, with water operators trained by the Department. Water charges to the farmers are expected to cover both operation and maintenance and the repayment of the capital construction costs. Thus, each scheme has its own set of charges, varying from KSh 8 per month for some gravity flow schemes, through KSh 16 to 28 for pumped schemes, up to KSh 35 per month for some boreholes. Water charges for each farmer are deducted from crop payments made by the cooperative society, which then sends the loan repayment to the Department of Settlement. In January 1972, the repayment rate on loans to the cooperative societies stood at 60%. None of the schemes supply treated water, since no provisions were made even for sand filters. There have also been numerous problems with faulty design, construction and maintenance. At present, 25 of the 30 schemes require some further capital expenditure to rectify faults.

34. There has been an enormous surge of self-help activity in water development since Independence. Although figures on money collected anxd spent, on the labor input, and on projects completed are unreliable, the Ministry of Cooperatives and Social Services estimates that in FY72, KL 140,000 was spent on self-help rural water schemes (including a contribution of K6 26,000 from the Ministry). A proposed scheme is first registered with the District Commissioner who gives permission for funds to be collected. Technical assistance may be obtained from WD, the Ministry of Health, or occasionally, from the County Councils. WD has two technical officers assigned full-time to self-help schemes. If financial assistance is required, the proposal is forwarded through the hierarchy of Community Development Committees to the Inter-Ministerial Committee on Self-Help. Most self-help rural water schemes are very small, though in recent years. a few very large projects have come forward--Kandara, the largest, has an estimated construction cost of K6 500,000, and there are several others proposed in the order of KIh 200,000. Despitje the assignment of two technical officers, WD can only provide very limited assistance in design and construction; a large number of schemes are at the money collection stage, and the officers are busy. As a result, many design and operational deficiencies are apparent in self-help schemes, many of which are now operated by County Councils. The rest are operated by self-help committees, which face severe problems in operation and maintenance.

35. A small portion of the water used by the Mombasa Pipeline Board is also allocated to rural areas. The Board has constructed bulk delivery pipelines to supply water as far as Kilifi (30 miles north of Mombasa) and Kiani (25 miles south of Mombasa). WD buys this water on a bulk basis and then acts as agent to distribute to local rural communities. ANNEX 17 Page 14

Water Department Program

36. WD has currently completed about 35 projects under the first SIDA loan. It collects scheme proposals from the District Developnent Committees and checks each scheme for technical and economic feasibility. In general, within districts, the priorities of the local committees are followed unless there are overriding reasons not to do so. In allocating- funds for rural water supplies, the initial guide is that funds should be3 equitably distributed among the seven Provinces. After that, selection is done on the basis of number of people in a district who are not served:. by adequate water supplies, cost per capita of the proposed schemes, and political considerations.

37. WD is understaffed, having only about 40 professionals. At the end of 1971, there were-only five Kenyan engineers. Turnover among expatriates and local staff is high. In 1972, 44% of established professional posts were vacant. One recent report estimates WD will require an additional 65 engineers by 1980. 1/ In the field, there are Provincial Water Engineers, who are senior and well-qualified. A number of districts have District Water Officers, sub-professionals trained in the Department- and responsible for construction, operation and maintenance. Below this level comes a cadre.of foremen supported by operators who are in charge of operation and maintenance of individual schemes. WD is now organizing several mobile District Water Teams, though lack of recurrent budget is delaying implementation. Provincial offices have their own workshops and small supply stores. Much of the construction and design work has been contracted out because of staff shortages.

38. Policy on water charges and connection fees has been in flux. Until -Lecently, all schemes, except those in very poor areas, were expected to contribute to operation and maintenance cots; those in high potential areas were also supposed to pay part of the capital costs. In the high northern districts, only point supplies have been provided. In the high-potential areas, complete reticulation systems have been used, with the assumption that 40% of customers will receive individual connections, rising to 70% after 10 years. Connection fees have been KSh 150 plus- any actual costs over KSh 400 for the individual connection. In addition, a deposit of KSh 60 was required in 1972. These charges have effectively ;-itioned the demand for individual connections far below the assumed 40% rate. Water is unmetered, except for institutional users such as schools- and health centers, which are charged KSh 100 for a meter device, Customers on eaclh scheme have been charged at a flat rate, which varies between schemes, and is based largely on ability to pay. The rates for individual. connection vary from KSh 7.50 to KSh 15 per month. For communal points in high- and medium-potential areas, all families around the point have

1/ L. Rundgren, "Report on Training of Technical Staff", Nairobi, May 1971. ANNEX 17 Page 15

been noted by the revenue clerk (working under the Provincial Administration). These families are charged twice a year at the rate of KSh 1.50 to KSh 4.50 per month. The scheme rate being based on ability to pay. In practice, collection rates have been very poor-at the end of 1971, from 19 schemes in service, the total revenue collected was Kb 700 out of an expected KY 12,000. This was in part because of the severe problems of collecting around communal points, and in part because so few individual connections have been taken up.

39. As a result of this experience, water charge policy is likely to be changed for the next plan period. At that time, basic rural water supplies will be provided free of cherge to consumers. This level of service is defined as a communal water point serving a population within a radius of 2 km in high potential areas, 5 km in medium-potential areas, and a radius to be defined in relation to needs in the low-potential areas. At the same time, individual connection will be encouraged by the use of a nominal connection fee and water charge levels that will offset a significant portion of the costs of operating and maintaining rural water supplies. Thus the subsidy element for rural water supplies will theoretically increase, though in practice, given the low collection rate and the costs of collection, it may decline. Since the new charges are not decided on, the actual subsidy is unknown.

40. Table 6 presents rough estimates, based on the first SIDA loan and relevant Tanzanian and tUgandan experiences, for development expenditures per head on various types of rural water supply. From this table it can be seen that the cost per head of individual connections is approximately double that of communal points. Development expenditures on treatment plants only add about KSh 5 per head to the cost of developing untreated water. It has been estimated that annual costs for operation and maintenance of WD rural water schemes with communal points averaged KSh 17 per head in 1971, which is higher than is technically feasible because old and over- extended schemes have higher recurrent costs. For a family of, say, seven people, the annual subsidy of operating and maintenance costs would be about KSh 100 if no water charges are made. If capital charges are added to this, the total subsidy per family per year would be about KSh 150 to KSh 170.

Water Quality and Health

41. The health hazard created by traditional water supplies is not known. Table 7 shows a classification of the main diseases related to water in East Africa. How these diseases impair health and productivity is not clear. While protected water supplies are a necessary precondition for improved public health, they are not a sufficient condition. Many diseases are not related to water, and even water-related diseases may not be prevented if the rural population also has access to untreated supplies (e.g. when visiting friends, or children bathing in streams). Furthermore, in overcoming many water-related diseases, a greater quantity of water seems to be at least as important as better quality. Individual connections are associated with much greater use of water than are communal points, where ANNEX 17 Page 16

per capita consumption is little different from traditional sources. Water- related diseases and problems also vary between regions: harmful levels of fluorine are prevalent in boreholes in the Rift Valley; cholera has appeared spasmodically in the North East over the last two years; bilharzia is widespread but particularly affects Western Kenya, where studies suggest that public water supplies can be instrumental in increasing risk of infection unless they are well designed and properly maintained. The first SIDA loan contains KL6 25,000 for investigation of these issues.

Issues and Recommendations

42. These comments make it clear that the rural water supply program has many problems. These should be solved now, to help assure that the program expansion plans can be successfully implemented.

43. Responsibility and Coordination. Dispersion of responsibility and authority is one such problem. This can lead to actual or potential conflict. In the East Kinangop settlement scheme, for example, farmers are prevented from taking water from the Nairobi storage area under the Aberdares; yet, no agency is able to decide whether this small offtake of water for domestic and livestock consumption might producer higher benefits than in its present use. This brings up two questions: first, should a separate organization with policy responsibility for water development be established?; and second, should WD continue to be in the Ministry of Agriculture? _A-National Water Authority responsible for policy formulation and coordination has been proposed in conjunction with the Master Water Plan, likely to be funded by UNDP and WHO. The Kenyan government is reluctant to have yet another agency created which would cut across the concept of ministerial responsibility, and so it does not appear to view the Authority concept favorably. These arguments seem to be valied, yet the needs for policy formulation and program coordination remain strong.

44. One possibility is to set up a small secretariat in one of the existing Ministries to study water development policy. This could be located in the Ministrv of Finance and Economic Planning, which ultimately has to decide on competing claims for funds. Or it might be located under the Permanent Secretary in the ministry responsible for WD. This brings us to the second question. WD is physically divorced from the Ministry of Agriculture, and does not seem to rank highly in the priorities of that ministry. It might more properly be located in the Ministry of Natural Resources, where the use of water, a scarce and vital resource, is a matter of primary concern. Such a shift might also ease the process of administrative reorganization that-WD is undertaking. It would also give the Ministry of Natural Resources a major function and program which would strengthen that ministry, while simultaneously permitting the MOA to concentrate on agricultural production.

45. The second issue of responsibility and coordination concerns the dispersion of activities in rural water supplies among five major ministries--Agriculture, Health, Local Government, Lands and Settlements, ANNEX 17 Page 17

and Cooperatives and Social Services. In view of the diverse standards and operating procedures of these ministries, the scarcity of resources, and the failures in design, construction and operation of schemes, it is perfectly obvious that responsibility should be consolidated. The Ministry of Health has already largely met its goal of demonstrating the benefits of piped water. Because of the many problems with design and construction of their schemes, this ministry should not limit itself to small simple schemes (generally gravity or hand-pump schemes) in remote areas, which may not yet have learned the benefits of piped water. Such an arrangemenr would avoid overtaxing the capacity of District Health Inspectors.

46. The County Councils, under the Ministry of Local Government, want to extend their control over rural water schemes, despite difficulties in maintaining service on many of the schemes under their aegis. This could help them recover from their loss of power in early 1970, and perhaps provide a new source of revenue. However, it would be wiser to transfer (gradually) County Council schemes to WD, starting with those schemes that are in the most serious financial difficulties. This is because -many of the Council schemes are suffering from poor maintenance. Neither their Ministry headquarters nor the Councils have adequate staff for operation. And Councils are unlikely to produce a useful national uniformity in water charges.

47. Rural water supplies on settlement schemes, under the Ministry of Lands and Settlements, present similar problems. As with roads, the Department of Settlement does not have capacity to construct, operate and maintain rural water supplies. More than 80% of the water supply projects on settlement schemes are facing design and operational problems. The Department has been unable to overcome staffing problems (e.g., it could not find counterparts for the Peace Corps Volunteers). These schemes should be transferred gradually to WD. Water charges on settlement schemes should be brought into line with those elsewhere in the country. If the current subsidy element in charges is maintained, some mechanism should be created to reimburse the Local Government Loans Authority for the outstanding capital construction costs on the schemes.

48. Most of the many self-help water schemes are in trouble. In the future, technically bad schemes should be stopped at the outset. The water permit and the collection permit should be requested and issued at the same time, and not until a competent WD officer approves the scheme design. To hold operations within resource limits, an inventory of schemes by size together with the expected inputs from WD, should be done without delay and kept current. Operation and maintenance arrangements for self- help schemes also need improvement. One individual must be responsible; recurrent funds are needed, and in many cases access to a workshop. Schemes taken over by the County Council should be handed to the WD, as noted above. Operators for the larger self-help schiemes can be trained in existing WD facilities. Self-help project committees need to be told at the outset how much money will be needed to meet the recurrent costs of their schemes (many self-help groups believe that their contribution to ANNEX 17 Page 18

capital investment is the total cost that they should be expected to bear). The aim for the medium-term should be to get self-help schemes into the >JD network, and a set of priorities for these transfers should be established. Because they are many and small, however, they will probably be the last projects to be fully incorporated into WD.

49. Organization and Administration of WD. WD is already short of staff, office facilities, transport, and recurrent funds. The strong suggestion (made above) that it should have additional functions means that operational procedures must be changed and additional resources provided. Mobile District Water Teams, already initiated by WD, need priority attention. The importance of such teams will grow as WD takes over more and more schemes. These teams should concentrate on operation and maintenance, developing, as their capacities grow, into construction activities and eventually into the full range of water services. Organizationally, they should be similar to the Rural Access Roads Units, being responsible directly to a senior officer in WD and operating on a block vote for operation and maintenance, with rapid recourse to contingency funds when justified. As the teams develop construction capacities, the use of unskilled local labor needs to be explored.

50. The WD is now acting on many of the recommendations on staffing and training made in a recent study. 1/ Training needs and capacities will require frequent analysis and updating. The shortage of Kenyan civil engineers will be a critical bottleneck for several years to come. Manpower planners should take up this problem urgently.

51. Other WD problems, including transport, material supplies and office procedures have been studied by the WHO Sectorial Survey, and many of the proposed solutions are being considered or have been implemented.

52. Benefits and Levels of Service. The annual expenditure for rural water supplies is less than 2% of total public development expenditure today. As the program is expanded, the need for criteria for levels of service and quantification of benefits will become important. Two principal questions stand out: first, whether water should be supplied to individual connections or communal water points, and second, whether water should be treated (filtration, chlorination or both).

53. The first question is in large measure one of location and timing. In most low-potential areas, the distribution and other characteristics of the population (including nomads in some areas, and inability to pay for services) suggest that individual connections merit little priority. In high-potential areas, most of which are densely populated and relatively wealthy, most people can afford and will probably want individual connections;

1/ L. Rundgren, Training of Technical Staff for Water Development Division, SIDA, May 1971. ANNEX 17 Page 19 though there will be some areas where this does not hold. Also, most high-potential areas are well-.watered, so the time savings from supplying piped water may be quite limited; 1/ this should be kept in mind in determining priorities.

54. It is perhaps in medium-potential areas that the benefits in time saved through piped water are greatest (cases in medium-potential areas where women walk 6 to 8 miles to the nearest water supply are not uncommon). The trade-offs between individual connections and communal water points are nonetheless obscure in these areas, because the population is generally more dispersed and less wealthy than in high-potential areas. Table 8 presents a qualitative listing of the differential benefits from individual connections, communal points and traditional supplies. Individual connections require greater investment for a given number of consumers, so that fewer schemes can be constructed in a given period. Yet, the ability to recover most or all operation and maintenance costs from individual connections should reduce the subsidy element, or the strain on recurrent expenditure, in future years. These issues require careful consideration and delicate policy decisions. Additional knowledge on the incremental benefits to health, nutrition and livestock husbandry of individual connections would be valuable in making these decisions. As a general rule, the Government should pursue its goals of supplying basic services in low-potential areas and encourage individual connections in the other two areas (aiming to meet the 40% goal for individual connections on all new schemes in these areas).

55. The costs of treatment are relatively low--averaging an additional KSh 5 per head in development expenditure and KSh 70 per head per year in recurrent costs. Given the expected (though unquantified) benefits from treatment, the WD should aim to add treatment facilities to all new schemes, and, where feasible, to those existing schemes which lack such facilities.

56. Water Charges and Connection Fees. Appropriate water charges and connection fees present extremely difficult economic and political problems. The existing rates vary widely. Existing schemes have a wide range of capital and operation and maintenance costs per capita, depending on the source of supply, size, coverage, age and other factors. The basic alternatives for water charges are:

(a) Self-financing, by charging at the average cost of supply, including amortization of capital. This would minimize the drain on central government finance;

1/ I.D. Carruthers, Appraising Proposals for Water Supply Investments, Working Paper #31, Institute of Development Studies, University of Nairobi, March 1972. ANNEX 17 Page 20

(b) Setting charges equal to marginal costs (generally much lower than average costs);

(d) Averaging charges among schemes, or using differential charges by scheme, area, income group or type of connection.

57. Because of the difficulties of rate collection around communal points and the low marginal costs of such services, the basic service might well be made free throughout the country. These services will be taken up by the rural poor, thereby receiving an income supplement. The required subsidy will be substantial, of course. Even if only the basic service were to be provided in all rural areas, the subsidy from the central government would rise from KL 0.71 million in 1972 to KL 11.45 million in 2000, when all the rural population is to be served (Table 9), according to present plans.

58. With expected growth in gross national product and government revenue, this subsidy could be supported by the Government. Meanwhile, the burden on the recurrent budget should be eased by increasing the number of revenue-producing individual connections. To accomplish this, the fee for individual connections should be lowered so as to ensure that at least 40% of customers in new schemes take them. The WHO Sectorial Study proposed a flat fee of KSh 100 (including deposit) for an individual connection, implying a subsidy of KSh 150 to KSh 200. The fee can be a4justed in the light of experience. The demand for individual connections could also be strengthened by an educational campaign by health, nutrition and community development staff.

59. The appropriate recurrent charges for individual connections needs study. Newer rural schemes have high initial outlays for intakes, pumping and so on, with very low marginal costs for additional connections up to the capacity of the initial water supply. Thus, average costs tend to decline, and marginal costs are often relatively low. A hypothetical WIH0 calculation shows that, in a scheme where 40% of the population has nMJividual connections, the average annual cost of the whole scheme per individual connection (including operation and maintenance, and using an interest rate of 10%) would be nearly KSh 670. Most rural families would be unlikely to accept individual connections at this cost.

60. The alternative approach recommended by the WHO Sectorial Study is that charges for individual connections should be based on ability to pay. The Study suggests that this rate might be set at KSh 15 per month in most high- and medium-potential schemes. Even this rate may be high, since it amounts to 10% of average rural family income; however, the richer half of the rural population in the high- and medium-potential areas have considerably higher incomes than the average. ANNEX 17 Page 21

61. To promote a more equal income distribution, there is merit in charging higher water rates in most high-potential areas than in most mediim-poter.tial areas. However, the differential must not be such as to cause over-population in water-scarce areas. Assuming that the "felt needs" for rural water supplies are reflected in effective demand, it seems at least reasonable that those receiving individual connections should cover t'ae operation and maintenance costs of their own connections (i.e., an average of approximately KSh 100 per family per annum). The extent to which they shlould also contribute to those costs for communal points in their areas is a political decision which depends on the Government's view on who should subsidize the rural poor. The final point is that this entire diecuesion depe.nds on an effective syutem of rate collection aad £sanctions agaiast those who do not pay. Problems have been reported in this area in the case of several County Councils and even a few Provincial Adminis- trations. The whole program of rural water supply development would be cndwrgered without firm, enforcement by the Office of the President, which io likely to assume much greater responsibility over time for revenue c:sllection. As a spur to revenue collection, the District Water Teams might order their priorities for maintenance activities on the basis of percentage of charges collected by each scheme.

62. Tables 9 and 10 present estimated development expenditures for rural water supply up to the year 2000, as prepared by the WHO Sectorial Study, to assure that the rural population is reasonably well served as of that year. The targets are ambitious, but feasible if the economy and public revenues continue to grow at reasonable rates. SIDA loans already signed will take care of most development expenditures in the Second Plan period. Mhe additional loan now under discussion would also cover much of the Third Plan expenditure (1974-78). Thereafter, however, development expenditures will rise rapidly, and there will be a need for additional external financing. Public performance in the interim will determine whether this can be readily obtained, and from what sources.

RURAL ELECTRIFICATION

63. A small program of rural electrification has been underway for a number of years. This serves mainly government administrative headquarters, schools, health rooms, shops, small industries and wealthier householders in and around these pockets; a small quantity of electricity is also used for irrigation. The program is designed to help develop growth centers and rural industry, and stem migration to the cities. Since fairly heavy subsidies are involved, one effect is to redistribute income from electrical consumers in the large towns to those in smaller towns, mainly the wealthier members of the population living in market centers. 1/

1/ Some farmers produce their own power, but no firm data are available. ANNEX 17 Page 22

64. All rural consumers of the rural electrification program pay tariffs at the national rates. Commercial establishments and institutions also pay a small, subsidized connection charge.

Tne Program

65. The Ministry of Power and Communications has the main responsibility for electrification policy. Power is generated by a number of agencies, owned principally by the Government, and bulk supplies are also purchased from Uganda. Consumption is growing at 9% to 10% a year; current and planned generating capacity is likely to be able to service this growth. With one minor exception, the sole distributor is the East African Power and Light Company (EAPL), an efficient organization principally owned by the Government.

66. EAPL is profitable, with pre-tax profits in recent years averaging about 20% of revenue. Roughly half of this accrues to the Government in direct taxes. Tariff rates are set by Government, and are said to be relatively high. The tariff adjustment of 1965 requires that EAPL set aside 1% of its total revenue to offset losses on programs considered sub-economic. This was the genesis of the rural electrification program. The offset losses include both the initial construction and installation costs, and the portion of operating costs not covered by revenue. EAPL has, in the last few years, been contributing slightly more than 1% of total revenues (which amounted to KSh 160 million in 1971). With this contribution, some ten rural electrification schemes have been inaugurated since 1965.

67. Funds for rural electrification will also soon come from a SIDA credit for a power station on the Tana River. The loan is being made to the Government at a low interest rate, and will be on-lent to the Tana River Development Corporation at an interest rate of 7-1/4%. SIDA estimates the interest differential will amount to between KSh 2.0 million and KSh 4.6 million yearly during the years 1976-1991. The total sum will be approximately KSh 55 million, all to go to EAPL for rural electrification. SIDA will supply, on a grant basis, one planning engineer, one construction engineer and two foremen to supplement EAPL staff (which otherwise would be unable to expand the program).

68. SIDA consultants have done two studies on rural electrification. 1/ Most of the recommendations have been accepted by the Government and SIDA. However, two issues persist. One concerns how to organize to decide on scheme ties; the other concerns how to assess losses in sub-economic schemes. The Lalander Report proposed a Rural Electrification Fund to coordinate policies and set priorities. EAPL thinks that this job can be

1/ Kenya, Rural Electrification, Bergman and Company, Stockholm, August 1970; S. Lalander, Requirements for an Expanded Rural Electrification Program in Kenya, Stockholm, March 1972. ANNEX 17 Page 23

done well by the existing Electricity Development Council, consisting of representatives from the Ministry of Finance and Economic Planning, the Ministry of Power and Communications and EAPL; this view seems reasonable, as the volume of work is small, and the nation already has a great pro- liferation of councils and committees. On the second point (loss assessment) EAPL accounting techniques make it difficult to assess actual operating costs on the sub-economic schemes, and to predict the time it will take for revenues to equal operating costs (the Ministry of Finance and Economic Planning thinks 15 years is a realistic average; EAPL feels this is too short). These differences of opinion are currently being ironed out in negotiations between thle two organizations.

69. The criteria for allocation of funds under the expanded rural electrification program are now being worked out by the Ministry of Finance and Economic Planning. Currently priority is given to the bigger population centers, and to those with some immediate industrial potential. Attention is also paid to schemes having the lowest likely losses, so that funds may be stretched as far as possible. These criteria seem defensible, except for the more diffuse divisional schemes (see below). However, the provision of power alone, without other development activities, is of limited use, and the largest payoffs might be expected through a joint program to encourage medium- and small-scale industry. The Rural Industrial Development Centers are now getting underway, but they are not yet well coordinated with the rural electrification program. This needs to be done.

70. There are now two types of rural electrification schemes, and a third is planned for 1973. The first is the isolated scheme, basically for District headquarters in areas well removed from the main transmission lines. These schemes have their own generators. The second type is the interconnected scheme, for rural towns. These run a branch from the main line. The third (proposed) type is the divisional scheme, in which lowr voltage transmission lines will be run to market and local centers. These divisional schemes will first be established in high-potential, relatively rich areas. North Tetu Division will be the first phase of this program. The estimated average capital investments and initial yearly operating losses per scheme are:

Annual Operating Loss Capital Investment of Capital Invested ---Thousand KE ------_ ---%-

(a) Isolated 40 20

(b) Interconnected 60 11

From these figures it seems likely that the expanded rural electrification program will be able to construct about one of each type of scheme per year.

Judgments

71. The planned rate of expansion of rural electrification is reasonable for the period just ahead--in terms of expenditures, returns and the EAPL capability. ANI'EX _1 Page 25

Table 1: DISTRIBUTION OF CLASSIFIED ROADS BY PROVINCE AND CATEGORY, 1970

Intemational National Province Trunk Trunk Primary Secondary Minor Total

Central 354 98 713 1,328 1,843 4,336

Coast 547 456 568 889 2,580 5,040

Eastern 701 510 1,365 1,928 5,273 9,777

Northeastern 162 245 769 632 1,951 3,759

Nyanza 217 377 824 901 1,191 3,510

Rift Valley 816 767 2,934 2,961 5,489 12,967

Western 170 49 518 640 700 2,077

Total 2,967 2,502 7,691 9,279 19,027 41,466

Source: Ministry of Works ANNEX 17 Page 26

Table 2: CENTRAL GOVERNMENT EXPENDITURE ON DEVELOPMENT AND NiINTENANCE OF HIGHWAYS, 1963-1974

Year Maintenance Development Total ------KSh Million------

1963/64 22.6 16.0 38.6

1964/65 21.2 14. 35.6

1965/66 31.0 49.O 80.0

1966/67 32.8 73.4 106.2

1967/68 36.0 110.2 146.2

1968/69 43.8 126.0 169.8

1969/70 55.0 173.0 228.0

1970/71 60.0 263.2 323.2

1971/72 95.0 323.0 418.0

1972/73 (estimate) 130.0 366.8 469.8

Source: Ministry of Works. Table 3 : FEEDER ROADS: ESTIMATED VEHICLE OPERATING COSTS, 1964g

Unpaved Roads Bitumen

Low standard High Standard

Grade Equivalent [ GO | G1- G G2 - ---- G1G-

Vehicle Operating Costs (Shillings per mile)

Light Vehicles 1.16 1.10 1.0o .o99 0.94 0.88 0.83 0.77 0.72 066 0.61 O.53

Heavy Vehicles 2.44 2.33 2.22 2.11 1.99 1.88 1.77 1.66 1.54 1.43 1.33 1.18

Source: Estimates derived from results of investigations by the Road Research Laboratory, Sir Alexander Gibb and Partners (Africa) and the Economic Intelligence Unit (East Africa Transport Study).

N.B. These are 1964 estimates that require updating. ANNEX 17 Page 28

Table 4: DISTRIBUTION OF DIRECT ROAD DEVELOPMENT EXPENDITURE BY ROAI) CIASS

Description E ForeqW.t FY.7

Trunk Roads 38 34

Primary Roads 314 38

Secondary Roads 7 11

Yiinor Roads 'L0 10

Unclassified Roads 11 7

Total IOO 100

Source: Ministry of Works AJNNEX 17( Page 29

Table 5: GOVERNNENT DEVELOPMENT EXPENDITURE ON RURAL WATER 5JPPLIES, 1971-J72

ExDenditure-

Water Department (Ministry of Agriculture)

Rural Water Supplies (SIDA Loan) 654,000 Dam and Borehole subsidies 8,000 Ministry of Health 92,400

Ministry of Lands and Settlements 90,000 Ministry of Cooperatives and Social Services (assistance to-self-help schemes) 26,000 County Councils 32,000 Total 902,400

Source: Ministries concerned. ANNEX 17{ Page 30

Table 6: ESTIMATED CAPITAL COSTS OF TREATED RURAL WATER SUPPLIES PER CAPITA

Area Type High Potential xftum LOw -______KL ------Individual connections 5.5 7.5

Communal water points (mains designed for individual connections) 4 5.3 5.5

Commuial water points 3 3.6 4 1/

1/ Estimate is for growth centers only.

Sourcet WHO Sectorial Study .ANNEX 17 Page 31

Table 7: CLASSIFICATION OF WATER RELATED DISEASES

Type of Water-borne Water-washed Water-based Water-related Disease insect vector

Main Low dose: Intestinal: Per cutaneous: Onchoceriasis diseases Typhoid Gastroenteritis Urinary schistosomiasis Cholera As8ariasis Lactal Gambian Leptospirosos Cutaneous: schistosomiasis sleeping sickness Otitis externa High dose: Inesteds

Bacillary Louis borne Guinea worm dysentery typhus

Amoebic Skin sepsis dysentery Chronic skin Tularaemia ulcer

Paratyphoid Trachoma

Infective Conjunctivitis hepatitis Scabies Enteroviruses Yaws

Tinea

Leprosy

Louis borne relapsing fever

Main Improved Increased water Increased water Protected method of water. quantity quality water improve- quality source ment

Mineral quality of waters Contamination by pesticides, etc. Excess sulphate salt., Excess fluorides.

Source: Bradley, D.J., Infective Disease and Domestic Water Supplies, Water Supply Research Paper No. 20, University of Dar-es-Salaam, 1971 ANmx 17 Fage 32

Table 8: ADVANTAGES AND DISADVANTAGES OF ALTEItNATIM RURAL WATER SUPPLY SYSTEKS

|L-lilvidu.ai Conniun1c;L { ralitic-iaa Variable - Co otions s.otcr Points Sourc

7i>.:ser o- axti.iwi uXsers Ecitin1tetod 2/3 u.ser.-. per sche-to3 uCC!rs 03nly ' cr ..do1. - ;-tin:W&a`d 50 Esti:aated 5 Estiraatcd litre s/pICeson litres/person 5-15 litre s/perscn

T:L.e navcC;, Tni'.:lUi Soeo llone . c r

021 £nri: use "rood opportur- F.evf opportw-- Few oDOrtur- (ii

CoaIt ninUt Ii C1 VecY low I:ow I ig

?eli.il.ity oxf ligl High j Vraries

poteritial 1c ' Iligh Very low, ii ! revenule col; - Mny ce t ion : hiv c -- ^, cntZ i7ci.ltc~d c.v-erage .icightcCi avergc i estimated at estimated at L 63 0 L 3.2 of total .Per i'cr-. 4,8 Go ver3.&nt IJCX;1,fighi! H subsidy

-_ _.

Souroe: WHO Sectorial Study ANNXC 17 Tael: 2'ANNTAL EXPENDITURES BY WATER DEPARTMENT TO MAKE WATER Page 33 AVAIIABIE TO THE ENTIRE RURAL POPULATION BY THE YEAR 2000 (Basis: Comnmunal Water Points)

1£2(.)Lrci >;-otiLC4J C re 2.'.'c*1cnE nt, m>lt Yetar 0 &:M. p.lnrli i: w ot1 j.t_

KL Millio ------_ ------lc: 7 2t . 61° re7 1lrt 73 .67 .16 .83 .80 1-.6

74 D75 .1 88.Sl i I 81

75 .87 .22 1.09 1'I 08 2. 17 76 o.99 .23 1,22 1.13 2.35 77 1.13 .30 1.43 1.50 2.93 78 1.29 .35 1.0G 1.75 3,39 70 1.49 .41 1.90 2.07 3.97 8,0 1.69 .61 2.30 3.06) 5,36 S1 1.95 .65 2.60, 3.25 5,8r 2.28 .62 2.90 3.10 6.00 83; 2ll.61 .59 3.20 2.97 6.17 84 2.93 .64 3.57 3220 6; 77 85 3.26 .66 3.92 3.31 7.2 3 36 3.60 72 4r 52 3.62 7.9,1 87 3.94 .82 4.76 4. 03C, 8Z,4 88 4.3.1 .94 5 25 4. 68 9,93 89 4. 75 1.02 5.77 5*12 10.89 90 5.22 1.26 6.48 G.32 12. 92. 5.75 1.49 7.24 7.44 14.68 92 6.29 1.57 7,86 7.83 15,6 93 7006 1.55 8.64 7.92 .6.56 4 87.85 1.39 9.24 6.97 16.21 95 8.67 1.26 9.93 6.32 16.25 96 9.29 1.21 10. 50 6.06 16.56 97 93.3 1. 18 11.C01 5.88 16e89 98 10.57 . 1.17 11.54 5.86 17.40 99 10.090 1.23 12.13 6.17 18.30 2000 11.45 11.45

&i'1rX'8 WS,$ectorial St,u4r .I 17

Tabl o l?0 AMNAL E7YhNDITUERS BY WAkTER 3DEPARTENT T,) MM,2AI-LXAfl A'VAE-A-5A3 TO TQF1ENTIM RUfLq.L -00PUIATION.' HI.EYEA:R 2C,00; vBasis.-ilEdidi tlQoa-ectimpr?,8)

lzccurrent Exrenldi tv.re lDevelocmiinn t T ot~L< YePt ; Ivnd,`.X o 1V\-32'.>

73) f79 20j,CC t0!. j

74l -1 2r, 1g2 2.X.3-! 3

76 ::,.ller31^l7r0

78 -. w5 4 e.4zz O 22o5 3 79? 1.rJ7 r;8 'r2 297.g,

s>.-t~~~~~~~3 4. 6 7&,` 2 ¢.:);

832 2 S72 r 82 _r!;0 O .,

8. 3~: .92_3* 3-er

EZ.7 As

FL 7 6 , 7. D1 P"£,£, j;

r *9 >gr .4 *1,eCs eO (>65 / . 7

9 jib i *_e <~ ~ ~ ~~59_(l 90 L*Xx7. -; r~

9 6 .O 2 -f_e1/ v.4

97 llTI 678 1.) 3!36rj l ;-

So3r C. 'WECvi rzf 33L> (1}3, <.'vi,*.: ANNEX 18 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

AGRICULTURAL TAXES AND SUBSIDIES

Taxes para. 2 - 1'1 Income Taxes 3- 6 Commodity Taxes 7- 9 Taxes on Inputs 10 - 12 The Total Tax Burden 13

Sutbsidies 14 - 17 Fertilizers 15 Artificial Insemination 16 Others 17

Development Promotion 18 - 35 Income Tax 23 - 24 Export Taxes 25 - 26 Land Taxes 27 - 31 Subsidies 32 - 35

Table 1 Taxes Assessed on Agricultural Income, 1963-69 Table 2 Fertilizer Subsidies: Rates and Total Cost, 1964-73

ANNEX 18 Page 1 AGRICULTURAL TAXES AND SU3SIDIES -/

1. The agricultural sector provides less than 10% of tax revenues. This may seem too small, bearing in mind that agriculture generates one-third of GDP. However, agriculture contains most of the poorest people andl few of the rich, so that it can be expected to make a less-than-proportional contribution to revenues under a progressive taxation system. More than half of the value of agricultural production comes from the non-monetary sector, which is difficult to tax. Too, the agricultural community is heavily "taxed" througlh the protection given domestic consumer goods industries, and through an overvalued exchange rate and correspondingly.low prices for exports. Thus it is hardly possible to assess whether the agricultural sector is making an appropriate contribution to tax revenues.

,AXES 2. Income and commodity taxes make up the bulk of the taxes paid by farmers.

Income Taxes

3. Agricultural income is taxed in four ways: (a) individual farmers who earn above the minimum taxable income are assessed on their individual incomes, according to the current income tax schedule; 2/ (b) farms and estates registered as companies or cooperatives are assessed a company tax (at the standard rate of 40% on profits); (c) agricultural employees (primarily managerial grades) who earn above the minimum level are liable to pay income taxes on their wages and salaries; and (d) all persons earning less than the minimum taxable income, but KSh 80 or more per month (including many small farmers and farm workers), are assessed for graduated personal tax (GPT) on a progressive basis. 3/

1/ This is a preliminary overview of the tax-subsidy question in relation to agricultural development. The IBRD basic economic report, scheduled for release in late 1973, will examine fiscal policy in detail in the context of the Third (1974-78) Development Plan, and the effects of protection on the economy and the farmer.

2/ Present (1972-73) tax rates start at 12-1/2% on the first Kb 600 of taxable income, and increase on a progressive basis to a maximum rate of 75% on all income over Kb 9,000. The rate of progression is relatively rapid, but the scale of personal allowances is set at a level which exempts most of the African labor force, even within the urban wage-earning category. For example, the basic personal allowances are Kb 216 a year for single individuals, Kf1 480 for married couples and K; 960.for families with four or more children, while average African wages are about KE 175 a year.., 3/ The minimum GPT payment is KSh 4 per month on incomes of KSh 80 a month or more. N-1opersonal allowances are given, and the tax increases progressively to a minimum flat rate of KSh 50 per month on monthly_incomes of KSh 1,000 or more. Individuals liable for income tax have also to pay GPT, but since January 1, 1973, GPT payments have been deductible from taxable income assessed for income tax purposes (although not set off against income tax). ANNEX 18 Page 2

4. Income tax from agriculture has declined in absolute terms in recent years, and now represents a minor proportion of total tax revenues. Table 1 shows the amount of tax assessed on individuals and companies whose *nain source of income was agriculture, over the years 1963-69, in comparisoa with total tax revenue actually received o-er the same period. Even assuming that all the assessed taxes were actually paid, agriculture would have contributed only about 3% of total income tax revenue in 1969. This proportion has probably fallen further since 1969, the latest year for which data are available.

5. The agricultural sector also pays income tax through the graduated personal tax. As no records are maintained of the source of GPT payments, it is not possible to accurately ascribe a share to agriculture. Some indication can be derived from the distribution of GPT revenues between collection agencies over the last few years:

1967 1968 1969 1970 1971 ------KL Mlillion…-

County Councils 2.7 2,5 1.2 - - M!unicipal Councils 2.7 1.9 2.0 2.0 2.6 Central Government 0.4 0.9 2.0 2.6 3.2

Total 5.8 5.3 5.2 4.6 5.8

Until 1970 the county councils collected GPT within their own council areas, and the larger part of this revenue was from agricultural sources. As a part of Central Government CPT revenue also comes from agricultural sources, it might be roughly estimated that CPT revenue from agricultural income has been tround Kb 2 million a vear.

O). Some local authorities also derive revenue from land taxes. This source of revenue is important to a few individual councils, but it is relatively insi-nificant in the overall financing of local government.

Commodity Taxes

7. Both central and local governments levy direct taxes on agricultural &ornoolit2es. rne best known is the export tax on coffee, wnich is a specific ca:, of Kb 10 per ton. The rate has not varied in recent years, despite substantial fluctuations ir export prices. Thus its burden varies from year to year. The tax yields about Kb 400,000 a year, or about 1% of direct tax revenue.

°. There is also a de facto tax on locally-produced sugar, imposed through the price 'equalization fund. Ihen world prices are high, payments are made out of the fund to subsidize the cost of imports down to the level of domestic prices; the current levy of KShI 80 per metric ton on local production is, in effect, a direct tax on producers. (Convcrsely, when import prices are lower than domestic prices, the fund is used to support domestic ANNEX 18 Page 3 prices, and the producer is subsidized.) At present prices, the levy of !LSh 80 represents about 7-1/2% of the ex-mill price of sugar, and as much as 15' of the producers' sugar-equivalent price for cane. At present production levels, the size of the transfer is on the order of K16 500,000 a year.

9. Of the other direct taxes on agricultural commodities, the most important are the agricultural cesses levied by rural county councils. In 1970, their revenue from agricultural cesses amounted to some KF 540,000, or well over a quarter of the councils' total revenue. By far the most important item was coffee (KI 312,000), but cesses were also levied on hides and skins (K6 22,000), cashew and coconuts (KI 21,000), rice (KI 18,000) and other commodities including ghee, cattle, pyrethrum, sisal and potatoes. In contrast to the coffee export tax and the de facto tax on sugar, whose burden falls on both large- and small-scale producers, the county council cesses mainly fall on small-scale producers. In addition, many small- scale coffee farmers are subjected to double taxation, since they pay the export tax as well as local authority cesses on their sales of coffee..

Taxes on Inputs

10. The agricultural industry, like other producing sectors, pays comparatively little in indirect taxes on inputs. The East African customs tariff allows the duty-free importation of most machinery and plant used in production and most raw materials and intermediate goods. Similarly, excise taxes are applied primarily on luxury or semi-luxury consumer goods. The major exceptions to the generally liberal taxes on agricultural inputs are the taxes on fuels, vehicles and spares.

11. The Ilavelock Report 1/ estimated that at the level of consumption and rates of tax prevailing in 1969, the agricultural sector paid some KIb 773,000 in import and excise duties on fuel, of which about two-thirds was on gas oil and most of the remainder on gasoline. Since the publication of the report, the Government has increased taxes on gasoline and reduced those on gas oil, largely to ease fuel taxes on agriculture.

12. All tractors, combines and other agricultural machinery are imported and sold free of tax. Purchases of general-purpose vehicles (such as trucks) for use within agriculture are not exempt from taxes. This represents a substantial source of tax revenue, both from the sale of the vehicles themselves, and from licensing fees and from the sale of fuel and spares; however, the total amount is unknown. In the 1972-73 budget a consumption tax was introduced on electricity; agriculture is not a major consumer, and the tax will not affect it much.

1/ Report of the Working Party on Agricultural Inputs, 1971. ANNEX 18 Page 4

the Total Tax 3urden

13. It is difficult to estimate the total burden of taxation on the --ricultural industry. The following tabulations for 1969 may suggest (conservatively) the orcler of magnitude:

Identifiable or Estimated Taxes Kb Million Direct Taxes

Inconie Taxes 2.2 GPT 2.0 Land taxes, rates and royalties 0.5 Commodity taxes (including sugar) 1.4 Subtotal 6.1

Indirect Taxes

Fuel used by agricultural machirnery 0.7 Commercial vehicles 1/, spares, fuel and licenses 0.5 Poaer and other minor inputs 0.2 Subtotal 1.4

Total 7.5

Thie estimate of Ks 7.5 million is less than 10% of total tax revenue. Total tax revenue from agriculture would then represent about 11% of value added in monetary agriculture, while total tax revenue accounts for about 16% of GDP. (As indicated above, this comparison does not necessarily indicate that agriculture is under-taxed.)

SUBSIDIES

14. Subsidies reach agriculture in three ways. First, there are direct subsidies on inputs, of which the jost important is fertilizer. Second, government services to the agricultural industry provide subsidies through their charges. Third, the industry is indirectly "subsidized" through its exemption from import duties and other taxes which would otherwise accrue to Government. Since many of these subsidies are unquantifiable-- and sometimes their very definition is open to doubt -- it is difficult to estimate the total subsidy to the sector.

1/ Arbitrarily assuming 10% of iflport duties on transport equipment is attributable to agriculture. ANNEX 18 Page 5

Fertilizers

15. The largest and perhaps most controversial subsidy to agriculture is on fertilizers. The cost of the subsidy increased rapidly over the last nine years, particularly since its extension to nitrogen in 1969, and reached almost Kb 1 million in 1971-72 (Table 2). The subsidy is criticized because of its increasing cost and because it mainly benefits the larger farmers. The Government plans to phase out the subsidy over a period of years, and as a first step the rates of subsidy were reduced in September 1972.

Artificial Insemination

16. Another subsidy which has gro-m rapidly (but has been effective) is for the artificial insemination program. At present a nominal charge of KSh 1 is made for each insemination (whether successful or not), or KSh 3 per pregnancy (assuming three treatments per cow). The full commercial cost on the present scale of operation is about KSh 25 per insemination, which means that the producer is being subsidized by something over Kb 1 per insemination. The total cost to Government 1/ is about KS 250,000 a year, and can be expected to continue increasing, even though the average subsidy per treatment will be reduced as the service expands.

Others

17. Other subsidized services include farmer training, the tractor hire scheme, livestocl marketing (which showed a loss of KI 112,000 in 1970-71), the provision of cattle dips and other veterinary and animal health services, and rural water supplies. Overall, however, direct subsidies, with the exception of those on fertilizers, are generally not very large, and probably amount to less than Ki 2 million a year in total.

DEVELOPMENT PROAOTION

18. Any system of taxation for agriculture must compromise between two conflicting objectives. On the one hand, agricultural taxation should be increased to conform with the industry's capacity to pay, especially now that financial stringency is likely to be a greater constraint to development in the Euture than it has in the past. This makes it important'to build measures into the agIricultural tax system which will provide a growing source of revenue as the industry itself grows. On the other hand, the fiscal system is also a development tool which should be used to help acceleratc! growth of the rural areas.

1/ A large part of the cost is presently met. from external aid, tot It is understood that Government will have to bear the whole cost by 1976. ANNEX 13 Page 6

19. Tihe fiscal outlook in agriculture is not very briglit. As indicated above, income tax from agriculture has been reduced to an insignificant level, and is likely to fall still further as the large farm sector declines. In principle, the graduated personal tax could be expected to become the main tax on agricultural incomes. The GPT has proved a useful means of taxing the African wage earners in the urban areas, but it is clearly an expensive and difficult tax to enforce in the informal sector - and particularly in agriculture, where the majority of persons do not earn even the minimum income prescribed for the payment of GPT. 1/

20. In terms of promoting development, a third important feature of fiscal policy is its impact on the financial position of local authorities. Since the county councils were stripped of their main functions in 1970, the policy on local government has not been clear (Annex 8). Yet it is difficult to see how rural development can move forward without some more effective means of involving local people in decision making and implementation. If Government should decide to strengthen local government to perform such a function, the local authorities, and particularly the county councils will have to be viable financially. This means some form of Central Govern- ment revenue-sharing, or providing the councils themselves with greater powers of taxation. 2/

21. Any increase in taxes by county councils would bear primarily on the agricultural community. The main source of revenue from agriculture at present is the commodity cess, which is unpopular and tnsatisfactory. The cess is a crude and unselective method of taxing agriculture and, since it is often levied on only one or two commodities in a district, can distort land use. It is a regressive tax on farmers, and unfairly penalizes farmers in favor of other sectors of the rural economy. Commodity taxes are probably best left to the Central Government (which can judge their effect from a1 national point of view), and it would be desirable if local authorities were given an alternative way to raise revenue.

_9. To promote agricuiltural and rural development, the taxation system should encourage sound land use and resource allocation, exports, import substitntion, the use of labor, and development of the small farn sector. It should be flexible enough, however, to allow for the vagaries of wreather.

1/ Total collections of GPT have not increased over the last four years, ever though incomes have increased substantially ovet this period and the transfei of the responsibility for rural collection from county councils and Central Government was supposed to result in greater efficiency. This disappointing performance is partly due to the raising of the minimum taxable income level. Serious difficulties of administration are also being encountered. For example, in 1970-71, the first full year of Central Government Collec- tion, actual receipts from OPT were only 64% of estimated receipts, and even the municipal councils, which presumably have the easiest job of collection, have not increased the yield from this tax. 2/ The financial structure of local authorities will be examined in detail. in the forthcoming basic economic report. ANNEX 18 Page 7

Income Tax

23. With the continuing decline of the large farm sector, income tax in agriculture is unlikely to be a major source of revenue. However, as long as large farms and estates account for a substantial proportion of valuable land in Kenya, it is worth considering liow income tax (and particularly tax allowances) can be made more development-:,ziented. There are two desirable development functions of an agricultural tax system. One is to promote more intensive and productive lanid 'ise by reward-ng sound land use and penalizing noor land use, possibly in conjunction with a tax on land. The second is to maximize the contribution of Lhe large farf. sector to employment creation and other national economic goals.

24 The income ta. laws oviae !nvestmc-nt allowances, mainly accelerated clepreciation -- for land clear-I.g, tlie planting of permanent zrops, farm buildings and works, anid farm machiaer, - which are more generous than those in other sectors. It may be desiraLlz to consider: (a) Increasing allowances f.or selected purposes (e.g., cr-rarm varietal testing), for selected sub- sectors (e.g., for "pioneer" c:rops), or in areas selected for accelerated uevelopment; (b) Providing incent;,es for increasing employment, either through a direct tax rebate for expanding employment (over a certified base year level), or through acceleratedl allowances for farm housing, or through an accelerated allowance for labor cost only of farm works; (c) Providing tax relief for the cost of sub-dividing large farms, either for sale or for lease, as an incentive for nore intensive land use. However, the present income tax legislation is not a powerful way to infltuence resource use in agriculture, since the investment allowances affect only the few thousand farmers who pay tax. They provide no incentive to the majority of small-scale farmers anrl cannot be made sufficiently penal to en-orce sound land use even on large f arms.

Export Taxes

25. One of the arguments for the export tax on coffee is that production controls create monopolistic profits which it is reasonable to tax, particularly as the income tax does not pick up all of these gains. For crops not controlled, the defense for the export tax is the need for revenue (export taxes now account for only a minor par. of tax income). Moreover 9 export taxes provide an efficient method of raising revenue and are a conveinient means of directly taxing the inre,mental income of farmers who benefit from export development programs. 1'

1/ In theory, export taxes on commodities facing inelastic world demand fall mainly on the consumer; however, where the price is influenced by international agreement as has been the case with coffee exports, the burden of the tax falls on the producer. ANNEX 18 PSage *3

26. As with other specific taxes, --::port taxes must be appraised in the context of the tax system as a whole, including trade policies under which agricultural exports are alreadv t-i7-ed through an overvalued exchange rate. Hcwever, even casual investigation suggests three needed improvements. First, the form of tax should be ad valorem (or at least the specific rate should vary from year to year with world prices). Second, if export taxes are to be maintained as at leas.t a partial substitute for an efficient income t.ax coverage, the practicability of building in an element of progression may merit study. This could presumably be accomplished by a diferetntial rate between the estate sector and the small farm sector. Third, it is essential to eliminate the dotble (and sometimes triple) taxatior. coffee farmers now pay through their liability for income tax, CPT, and local govern- iment cesses, as well as the export tax. In some cases, the burden is aggravated by an additional "tax'" which is levied by marketing cooperatives; some of these are inefficient, charge too much, and the farmer has no altecnative way to dispose of his product (Annex 16).

Land Taxes

27. A considerable amount of thought has been given to the possibility of introducing a national tax on agriculttural land.l/ A few county councils already levy a form of land tax. (There is also a widespread use of loral government rates on urban residential and business sites.) A tax on land could be an equitable revenue source and a means of intensifying Land use. It could be readily assessed, at least in t'he registered areas, including thle thousands of small farms in tne formner Trust lands. Its value could be e-nected to {>row steadily wih increasing land values (the increase estimaced recently at 7' a year in the former Scheduled Areas). Insofar as intensity of land use falls with increas ng farm size, even a flat rate of land tax is progressive in its incidence. Moreover, it could provide a source of i-.venue for a reconstructed local -overnment system. However, ;he experiance cf land taxes in other countries points to some of the pitfalls. In particular, the success of a land tax depends on a competent and impartial tax administration.

2l'. It lhas been sug-gested that the introduction of land taxes would permit CPT to be abolished. 2/ However, two cornsiderations should be burne in rind. First, while land tax might replace GPT as a method of taxing fa.rers (or landowners), it would not tax non-agricultural income in the rural areas (incliuding the non-farm income of farmers). Second, if a land ta; were based upon presumptive or realizable income, it woiuld require a so(ph,isticated administration, similar to that wlich exists for OPT. Given

1/ For example, see UNDP/ILO, "Employment, Incomes and Equality," Technical Paper No. 15, Geneva, 1972. The 1967 Bank Report looked at thle benefits of a land tax, but considered its introduction premature. Za kor example, the ILO/UNDF report suggests that land taxes might eventually replace GPT in rural areas, as well as the local council commodity cesses. ANNEX 13 Page 9 the intrinsir difficulties of tax coll -.'on in poor rural areas, the effi- cie-ncy of la.nld taxes would be no more tL3nn that of GPT, unless the tax were assessed according to a relativalzv simple and crude metho(d.

29. Nonetheless, a land tax has many possible advantages as a dcvelop- i-ent tax. It can reaclh .mlost, if not all, of the farming population, whereas income tax only reaches a few. It can be designed and used as an agricultural ta1x, w1hereas incom.e taxes are more generaV in purpose. It can encourage nore intensive land use and curtail the holding of land for speculative or social security purposes. It can encourage the sub-division of large farms which are not economically used, and thereby promote outlets for labor. T1cre are in practice many difficulties to be overcome in obtaining such benAefits. There are well known problems in estimating land values and in 2asuring that rates are fairly assessed and strictly enforced. A progressive tax raite may induce a large farmer to dispose of surplus land which he cannot us" efficiently. Yet this is only a first step toward the more intensified land use, expanded employment and more equitable distribution of incomes which are often cited as arguments for land taxation. In order to achieve these goals, mnuch more planning and resources would need to be given to programs of land purchase, farm planning, credit, extension and'so oni, for the new land users.

3T. Despite the difficulties of operation, the possible advantages of i land tax employed jointly with other development measures are sufficient to warrant a close examination of its feasibility. A land tax is never popular, and to be successful it would have to have strong political backing. If its introduction is accepted in principle, a number of practical issues will still remain to be resolved concerning the type of tax to be devised, its scope, and the method and timing of its introduction. Some of the more important questions to be raised are: (a) Coverage: Should the tax apply in all *listricts on all categories of land, or only to farms in areas in uhich registration is complete? Should it apply to all farms, irrespective of size, or only to farms above a certain minimum size? (b) Basis of Assessment: Shotuld it be a flat rate per ha throughout the country, or should the rate vary according- to the potential of the land? Should the rate be the same for all farm sizes, or should it be progressive by size? (c) Relationship to Other Taxes: Should the tax be supplemental to income tax and GPT, or should they be Integrated? If they are to be integrated, on what basis? On what terms are allowances to be made?

31. These and other issues can only be resolved by those familiar with the intricacies of the income tax system in Kenya. Moreover, the introduction of n land tax needs to be considered as part of a much wider review of the fiscal system as a whole, particularly the possible abolition of CPT, the future revenue base of local authorities, and the general policy towards the taxation of land and property in both rural and urban areas. The possible role of an agricultural land tax will be taken up again, in the wider context of national fiscal policy, by the forthcoming basic economic mission. ANNEX 18 Page 10

St ibsidies

_. Subsidies can lead to expensivc and ineffective programs which may be oolitically difficult to eliminate, but they can also be a useful tool for promoting development. In principle, subsidies should be designed to be self- eliminating,, support sound resource allocation, and reach the people for w'nom they are designed. Welfare and politically-miotivated subsidies should be clearly differentiated from development subsidies.

33. 'LlTe principle of self-elimirnation means avoiding subsidies (such as the present fertilizer subsidy) which grow lar,,er and larger as a result of their very success. These are the .-,st difficult suDsidies to remove, and all too often the compronise betweeni politics and f-nrance results in a reduced unit subsidy which is of little value to the recipient out expensive to th1e tax payer. Instead, subsidies should be injected into areas where the need for assistance will automatically diminish the! more successful the program. For example, subsidies apnlied to overcome critical constr:iints should disppear once the bottleneckl has been brokers.

)!; . Subsidios to ipromote sound resource allocation caan ta;kc many forms, I)articularly where social and individual costs and benefits diverge because ef price distortions. For example, subsidies may be Justified for certain activities wfhen thiey car. be shown to have a favorable effect on enplovment or foreign exchange earnings. Selccted activities in less developed regions of the cotuntry may deserve subsidization. Other subsidies may be justified to correct distorted factor pricing. For example, export subsidies m2y '-,. indiceotc! on the basis of studies which appropriatciy shiadow price orei gn exchang'e, as maiy subsidies on wage costs through the shadowq pricing of labor. Tn some instarices, this orinciple. would require the rerimoval. of a present subsidy: for example, the present subsidy on capitaL appflied throuzth -uder- priced rates of interest on agricultLural loans.

35. it is not redundant to suggest that subsildiec- s;.eul so to .the people for xworl they were designedi it of ten happencs that they ;V not- For

c:xanp.e th,l present fertilizer subsidy is mainly enjoyed -by the lag--seale operators who least -ieed it. ilowever, the prolblerm is much inore pervasive.

It takes careful planning and Thgenuity to design subsidie-s which , 1'iTeally Fo to the needy. Table 1: TAXES ASSESSED ON AGRICULTURAL INCOME, 1963-69

Assessments Total Tax Assessed Total Income Agriculture Year Companies Individuals Employees Companies Individuals Employees Total Tax Revenue 1/ *_-__--_Number---:------of Total ------KL illion------KL Million------1963 572 1,414 1,966 1.9 0.5 0.7 3.1 12.2 25 1964 624 l,22h 1,800 1.9 0.5 0.7 3.1 13.3 23 1965 626 1,060 1,020 1.4 0.4 0,4 2.2 l4.7 15 1966 618 768 1,097 1.5 0.L 0.5 2.t4 17.3 14 1967 534 855 1,113 1.1 o.4 0.7 2.2 2{.7 1- 1968 491 910 1,217 1.0 0.4 0.7 2.1 23.3 9 1969 514 684 1,041 1.3 0.3 0.6 2.2 26.4 8

1/ Average of two financial years

Source: EAC Statistical Departaent ANNEX 18 Page 12

Taole 2: FERTILIZERt SUBSIDIE3: i'?T

P2O< N Total Cost KSh pier long ton KL Thousand

1963-64 (July 1,'63) 375 - 166

1964-65 375 - 189

1965-66 (;iarch 1,'65) 410 - 325

1966-67 410 - 350

1967-68 410 - 356

1968-69 (July 1,168) 387.5 _ (January 1,' 69) 200 563

1969-70 500 200 809

1970-71 500 200 778

1971-72 500 200 973

1972-73 (September 1,'72) 300 120 750 I/

I/ l-i.ted

,ource: I-'I-stry of .igriculture ANNEX 19 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

SELECTED FARM INPUTS AND AGRO-INDUSTRIES

Compound Feeds para. 2 - 12

Fertilizers 13 - 23

Pesticides 24 - 25

Tractors and Powered Equipment 26 - 32 Tractor Hire Service 29 - 32

The Container Industry 33 - 36

Incentives for Agro-Industry 37 - 63 Cost Levels 45 - 63

Appendix 1 - Agro-Industry and Employment in Rural Areas

ANNEX 19 Page 1

SELECTED FARN INPUTS Aii;) AGRO-INDUSTRIZES

1. The processing of agricultural products is discussed in Annexes 4, 5, 10,11, and 14 in connection with other aspects of the specific commodities reviewed in each. This Annex dealo with selected industries which are of interest in a broader context, and with the incentives being offereci for agro- industrial development in general.

COMPOUND LF'ELDS

2. The compound feeds industry provides outlets for the by-products of some of the major farm enterprises, and inputs needed to increase the rate of growth of the livestock industry, particularly poultry and hogs.

Maize is the main feed ingredient, making up almost half of hog and poultry rations. The bulk of the supply for the feed mixing industry comes from the Maize and Produce Board; there is no other legal source for significant quantities. The Board sold about 21,000 tons for this purpose in 1971-72; its average annual sales in the preceding three years were about 13,000 tons. 1/

3. Reject and low grade wheat is used for feed, probably betwieen 3,500 and 5,000 tons a year. The Wheat Board has subsidized the price of feed at times in the past when the wheat crop was in excess of domestic and export requirements. This has not been necessary lately, as the area under wheat has been decreasing and deficits have appeared. Barley is another major raw material for the feed industry. The crop is promoted by the breweries, with a sizeable acreage being produced under contract. Malting capacity is 32,000 tons per year. In addition to some 1,500 tons per year of brewers' grains, some 4,000 to 5,000 tons of reject malting barley are probably available for feed in a normal year; but estimates vary widely. In any case, supplies are likely to increase, as the brewing industry is growing rapidly. Sorghums and millets have not yet reached production levels which make them important sources of feed grains, and current prices in relation to maize are not appealing to farmers. 2/ Oats is a minor crop, uncontrolled, with some entering the feed industry; KFA is the main handler. About 3,000 tons of pyrethrum marc, a roughage equivalent to maize silage, are available for feeding each year.

1/ In addition, some 2,000 tons of maize sold by the 13oard to KFA and farmers was probably fed to livestock in 1971-72. Another 9,000 tons of maize was probably fed to livestock on farms where produced, or on neighboring farms.

2/ Only 179 bags (30 kg) of sorghum and 7,789 bags of miller were delivered to the MPB in 1970-71. ANNEX 19 Page 2

4. The use of factory-mixed compound feeds has increased rapidly in th,. last few years. The estimated tonna;tv is:

1969 J971 ---- Thousand Tons--

For poultry 23.3 33.1 For pigs 3.6 6.1 For cattle 5.7 8.5 Other 1.2 2.0 Total 33.8 49.7

5. UNGA and MAIDA, the two largest milling firms (wholly-owned by the Kenya National Mills) are the largest enterprises in the feed mixing business. Three smaller firms are also active, one in Nakuru, one in Mombasa, and one in Nairobi. In addition, the Nyeri Cooperative Union has a feed plant at Karatina, and a Danish-based company is expected to begin operations at Thika soon. Raw materials are domestic, with the exception of certain protein meals. Vitamins, antibiotics and trace elements are imported by several companies linked to overseas firms, and sold to feed mixing companies and to farmers. Distribu- tion of feeds is handled through agents (the KFA distributes about 40% of the UNGCA output, and is by far the biggest distributor).

6. Two new ventures are getting underway. The first, a Government project, provides two mobile feed mills in the Rift Valley and Central Pro- vinces, mixing farm by-products with molasses, urea and minerals to provide feed for smallholders. The second is a private company recently set up to produce and distribtute a molasses-urea-mineral-phosphoric acid feed (MUM) to beef and dairy cattle farmers. Based upon work done by the UNDP/FAO beef project, the company is setting up a mixing plant at the Chemelil sugar factory. The feed will be stored there and at Nakuru, Kitale and Naro Moru and distributed by Shell Chemicals, a major stockholder, direct to farm or cooperative storage tanks. Other sources of energy, and natural sources of protein are still very competitive price-wise with this mixture. If feedlots were located near the sugar plants (for example, at Kericho) much more of the industry output of molasses could enter the feeding enterprises at prices profitable to each side. In turn, this would permit the use of more area, particularly if and when its price falls to historic levels.

7. The two oil mills in Nakuru, the Nakuru Oil Mills and the Rift Valley Products produce most of the oilcake for feeds, mainly from domestic and Ugandan cottonseed. Some cottonseed meal and copra meal are exported, and limited quantities of soybean meal, groundnut cake and fishmeal are imported. Consumption of oilcake in 1971 was estimated to be about 1,004 tons of sunflower meal; 129 tons of soybean meal; 2,233 tons of cottonseed meal; and 2,500 tons of copra meal. 1/

I/ T.J. Aldington, The Animal Feeds Industry in Kenya, A Preliminary Survey, 1970. ANNEX 19 Page 3

8. Compound feed prices depend largely on the prices of feed maize and wheat, determined by the Maize and Produce Board and the Wheat Board, and on import duties. Oats and barley have a 30% import duty, and oilseeds 50%. The Maize Board in late 1972 was selling maize for feed at KSh 28 per 90-kg bag, taking a loss of KSh 14. Reject and undergrade wheat at that time was being sold at KSh 29 or less per bag. In spite of thn subsidy on feed wheat, it is more expensive than maize on an energy basis. Feed barley piices vary with the season, and are usually arranged by contract between the breweries and the feed mixers. In late 1972 they were from KSh 312 to KSh 400 per ton, again higher than maize. The Maize Board pays YSh 13 per 50-kg bag of dried cassaea; this is higher than maize in terms of feed value; purchases have been n,egligible. Meat meals reach the feed industry at prices which arn low compared to world prices. However, skim milk prices are high, with tht. result that milk substitutes for calf rearing are not widely used.

9. Mixed feed prices have been controlled since 1970, and vary region- ally to reflect transport costs. As noted, KFA distributes most of the mixed feed, directly to large farmers and through cooperatives to smelih.-lders. Outside the Nairobi area, the smallhtoldier mulst arrange transport fr-om the KFA branch or agent, or cooperative, to the farm. This is ofter costly,. and in some cas-:s makes the use of balanced rations unprofitable. Most of the dairy cooperatives do not have storage facilities for dry feeds, nor tanks for molasses. One way to handle the feed maiza storage problem would be to en- sile as wet maize.

1(. The Fertilizers and Animal Foodstuff_ Act, passed in 1972, requires that producers label the product and guarantee analysis. As yet no agency has been designated to enforce the legislation. This will require laboratory facilities, staff and funds. In addition, local distribution, storage, and finance need attention.

11. The most severe constraint on the feed indtstry is the shortage of protein supplements, both animal and vegetable. Supplies from the meat industry are already beinig fully used. Feeding skim milk from factories is generally unprofitable (although price adjustments in the dairy industry could readily be made to induce milk separation and skim feeding on,"the farm of a considerable portion of milk output at certain seasons, particularly if total output continues to expand). Fish meal is co3tly.

12. The outlook for oilseeds production and protein meal by-products is discussed in Annex 4. The need for research on oilseed crops such as soya bean and groundnut of high value for poultry and calf rearing is stressed, and the possible opportunities for tariff adjustment are mentioned. ANNEX 19 Page 4

FERTILI ZERS

13. There is a continuing interest in producing nitrogenous fertilizers in Mombasa. The investigations should be done with great care. It is easy to confuse economic and financial criteria; for example, in the treatment of the present ferilizer subsidy to farmers, and in estimating the effects on demand of its reduction or removal. Raw material price projections are difficult to make, including the probable trend in the price differential between naptha, the raw material, and urea. Similarly, it is difficult to estimate growth rates in demand for fertilizers. Short-term trends may not be very indicative of the longer-term future. For example, farmers used less fertilizer in 1971 than in 1970. Foreign market forecasts are also difficult, including judgments on the proportions of nitrogen markets of Tanzania and Uganda which are likely to be available to a nitrogen plant in Mombasa. In overall, it seems evident that sharply higher demand levels for nitrogen than are now forseeable should be in hand before serious consideration can properly be given to production in Mombasa. 1/

14. Kenyan farmers have only recently begun to use modern inputs in quantity, and small scale farmers still use very little. Recognizing this fact, in September, 1970, the Government commissioned a working party to investigate ways and means of reducing input costs and improving policy in this area. The working party reported in April of 1971 and in late 1972 the Gov- ernment was preparing a sessional paper on the report. 2/

15. Imports of fertilizers were valued at about Kb 2 million (55,600 tons) in 1964 and at close to Kb 4.5 million (130,300 tons) in 1971. Data are not readily available on a gross and nutrient tonnage basis. In 1969, it was estimated that about 14,470 tons of nutrient N were used. Of this, some 89% was on large farms, mainly for tea, maize, coffee, wheat, and sugarcane. In the same year, farmers used an estimated 234,000 tons of P 205 , of which some 40% was on large farms mainly for wheat and maize. Nitrogen accounted for about 36% of the total nutrient tonnage used in 1969; P205 about 57%; and potash the remainder.

16. All supplies are imported. Some ten firms normally have import licences, with the Kenya Farmers Association and one other firm servicing some 5% of the market. Imports are free of customs duties and taxes. For several years prior to 1972, the Government subsidized fertilizers at a rate which reduced the wholesale price of phosphatic fertilizers by some 30% and nitrogen by 10,%; in 1972 the amount of the subsidy was reduced by 40%. The subsidy was valued at about Kb 523,000 in 1969, and close to Kb 1 million in 1971 (Annex 18).

1/ The effect of an unduly aggressive industrialization policy on Kenyan agricultural growth is discussed in detail in the IBRD basic economic report, December 1973. 2/ Report of the Working Party on Agricultural Inputs, Sir Wilfrid Havelock, Chairman, April 1971. ANNEX 19 Page 5

17. The ilavelock study of agricultural inputs found the price of fertilizers to be higher than seemed necessary. It was noted that most importers "represent companiies which are membetrs of the European-based Nitrez cartel of nitrogenous fertilizer manufacturers." In combination with the Government's policy of restricting entry to the fertilizer distribution business, this has meant that the long-standing relationship between European firms and Ke-nyan importers may result in purchases of fertilizer abroad at prices which are above those available on world markets. In addition, the m4in importers are members of the Kenya Fertilizer Association and they issue a common price list for all fertilizers for Mombasa. The Working Party said that "it appears that the common pricing policy is to apply a 15% mark-up on the c.i.f. value of superphosphate and compound fertilizers and a 25% mark-up on nitrogenous fertilizers." The report went on to ncte that "There is no such thing as the c.i.f. price for fertilizer. In normal circumstances there will be a different price for each shipment of a fertilizer which arrives, depending on market conditions, etc. For instance, in 1969 the c.i.f. price for sulphate of amnordia shipments varied between Sh 210/10 and Sh 330/77 per metric ton. We have been given to understand that the largest importer tends to dictate the level which is chosen as the c.i.f. price. This price is one which gives them a comfort- able profit margin on fertilizer sales negotiated at the list price. Other members of the Fertilizer Association are willing to accept this price as all the current members are at least as efficient as the largest importer and they reflect this efficiency in offering larger discounts from the price list. The farmers who suffer most from this common price arrangement are small farmers who have no bargaining power and have to purchase fertilizers ait the list price."

18. The extra burden on the small farmer appears to be substantial. The report explains it as follows: "A substantial part, about 50% of total fertilizer consumption, is sold by tender. In these cases the consumer, e.g. farmer syndicates, statutory boards and large estates will pay substantially less than the Fertilizer Association price. For instance, we have been given evidence that sulphate of ammonia could be purchased on the tender market at KSh 80 per ton below the list price and triple superphosphate at KSh 100 per ton below the list price. In both cases this represents a discount of around 20%o below the list price for 13-100 ton lots. A further portion of the market, i.e., those farmers buying direct from distributors, also may receive discounts but of smaller magnitude than those received on the tender market." 1J

1/ Discounting the list price by 20% is roughly equivalent to providing free rail transport from the coast to the Nairobi area, a significant conces- sion. As of early 1972, for example, the on-farm costlof sulphate ammonia in quantities less than 13 tons in the Naivasha area approximated the following per ton: KSh 342, the FOB price at Mombasa; plus KSh 65 for rail transpcr.t; plus cost of transport from rail station or warehouse depot to the farm at a rate of about KSh 0.5 per mile; plus a retailer charge of about KSh 30. ANNEX 19 Page 6

19. Further, the report noted that "It is hard to justify the concept of charging a 15% mark-up on superphosphates and compounds and 25% on nitrogenous fertilizers. Some costs which importers incur are related to the value of the fertilizer handled (wharfage, etc.), and others are on a per ton basis (handling charges, storage, etc.). Because of this it would seem more reasonable for fertilizer importers to base their wholesale mark-up on a fixed charge per tonI plus a fixed percentage of the c.i.f. value."

20. The Working Party recommended that the import system be revised to encourage competitive buying of fertilizers on world markets; that the collu- sive pricing -and uniform mark-ups by distributors be eliminated; and that the wholesale mark-up should be in terms of a fixed charge per ton plus a percentage of the c.i.f. value. It also recommended that the retail mark-up should reflect the value of the product (10% of the wholesale price), rather than in terms of shillings per ton, independent of product value.

21. It would seem possible to improve fertilizer importVind distribution arrangements to assure that supplies are being procured at least cost, that prices at the farm accurately reflect nutrient values, and that the small farmer has a chance to get fertilizer at a price not substantially higher than paid by the large farmer. Two of the six or seven fertilizer importers and distributors handle the major share of the trade. One of these two firmLs inmports fertilizers in bulk and has its own mixing plant. The other is the farmer cooperative, the KFA. Each has close ties to Western European sources of supply. This type of procurement system may help assure supply, and per- liaps some finance and managerial support. However, it can be costly in terms of price, an important consideration when demand has yet to be built up, and in the face of increased freight rates because of the Suez closing.

22. One way of improving the present system might be through an international tender svstem run or supervised by Government. This should enable procurement at the lowest possible prices, perhaps through tapping Persian Gul-f and other potential suppliers who may have cost and freight advantages. The fertilizer procured under tender could be allocated to blenders and distributors at cost. The current importers with their current sources of supply would of course have the option of submitting tenders. A state monopoly should nct be created.

23. Ocean and internal freight charges and packing costs are important in fertilizers. This would suggest that a wicler use of the high analysis fertilizers should be promoted, thereby reducing costs per nutrient unit, and also postponing the date when it will be necessary to have bulk handling facilities for fertilizers in the port of Mfombasa. ANNEX 19 Page 7

PESTICIDES

24. The Government estimates that farmers sharply increased their use of pesticides in the 1963-68 period; in value.terms, about 95% for insecticides; 14% for fungicides; and 34% for herbicides. Farmers spent about KSh 1.5 million for these items in 1968. Although the import data for recent years need careful interpretation, they suggest that the uptrend in the use of chemicals on farms continues. The import data are:

Fungicides Insecticides Herbicides Other 1968 Tons 1,234 1,951 129 1,502 KSh Thousand 578 660 8 240

1969 Tons 932 2,139 310 1,727 KSh Thousand 433 639 134 326 1970 Tons 1,366 2,085 328 2,525 KSh Thousand 763 807 193 510

1971 Tons 821 2,693 346 2,830 KSh Thousand 342 1,026 266 482

25. The main importers of pesticides are subsidaries of foreign chemical companies. These sell to distributors, quoting idential prices for comparable products to assure that one importer is not favoured over another. Htavelock points out that "the general distribution system is further supported by an agreement between four main importing firms and the main distributing firm whereby the distributors agree not to import on their own account or handle other firm's products while the importing firms agree not to bypass the distributor in making direct sales to farmers." As with fertilizer, there is a need to improve.market organization and to eliminate distortions that exist through traditional arrangements and business practices that seek to avoid the pressure of competition. ANNEX 19 Page 8

TRACTORS AND POWERED EQUIPMENT -/

26. It is difficult to interpret the available data on the imports anld tlhe current iinventory of farm machinery. 2/ The Hlavelock report said that "At the moment there are about 7,000 wheeled tractors in Kenya of which probably 5,000 to 5,500 are on large-scale farms and estates. About 500 tractors are used by local and central Government, leaving about 1,000 to 1,500 in private or commercial use on small-scale farms, building sites, commercial transport duties, etc. A census made in 1964 showed that there were about 540 tractors in small-scale farming areas at that time. It is expected that this figure is considerably greater now." The report presents the following data on combine harvesters on farms:

Self-Propelled Tractor Drawn

1964 483 444 1967 596 446 1969 563 213

27. Kenya's location, along with the limited volume of business handled by even the larger importers and distributors results in fairly high prices for farm machinery. For example, the Havelock report suggested that the cost build-up on a medium-sized tractor from Europe is as follows:

KSh

Ex-factory price 14,000 FAS Export port 15,000 CITF Mombasa 16,300 F1 R Mombasa 16,600 Cost at Nairobi 17,200 Selling price at Nairobi 24,200

28. Seven major international firms deal in farm machinery, with two handling some 70Z of total volume. These firms have exclusive franchises, or function as a direct branch of the manufacturer. Probably even a major firm does not handle more than 250 to 300 tractors per year. At this volume, a

1/ Other aspects of mechanization are discussed in the General Report.

2/ Imports of tractors for agricultural use averaged KE 800,000 per year in 1966-69 period, and Kb 1,070,000 per year in the two following years, 1970 and 1971. Imports of tillage equipment moved from Ki 200,000 in 1965 to Kb 400,000 in 1969, and averaged Kb 380,000 in 1970 and 1971. Imports of harvesting machinery were valued at KE 196,000 in 1965, and averaged Kb 275,000 in the 1968-71 period; the comparable figures for dairy equipment were Kb 60,000 and Kb 19,000. ANNEX 19 Page 9

considerable mark-up is necessary to cover the costs of a national distribution network for both the original machinery and the spare parts, and a reliable service system. The exact nature of the scale-cost relation should be investigated to provide guidance on the number of firms needed to sustain. a competitive environment for machinery distribution, and reasonable prices to farmers. Servicing also needs to be improved, perhaps by relaxing the present limit of two years on work permits for expatriate mechanics until the Kenyan supply is more adequate. Taxation is another problem. Import duties and taxes on fuel used in agriculture are significant. Together they totalled almost IC 0.8 million in 1969, according to the IHavelock stu(ly. The aim is mainly to raise revenue. Those who oppose these taxes, like the KFA, say that they raise money costs of production, as they do. Those in favor say that power farming takes jobs away from the rural poor, which it may or may not, Others point to the possibility of redesigning taxes to bear more strongly on less productive activities. The issue is complex, and adjustment in these taxes needs to be seen in the context of all factors which affect the use of mechanical power in agriculture. However, it would be un- wise to cut back significantly on the present level of powered equipment available to agriculture. Although no data are available, some believe that such a cut-back in private contract services may be underway. If true, this may be because of the alleged difficulty in getting equipment and spare parts which is caused by the complexities of the import and foreign exchange control system. This would retard entry into the farm contract service business (as does the persistent difficulty in getting machinery purchase credit) and help explaini the view that the rate of replacement of those contractors who are withdrawing due to age or other reasons may be falling. Delayed payments for work on the bigger farms, many of which are in financial difficult (Annex 3) may also be jeopardizing the supply of powered equipment available to agriculture.

Tractor Hire Service

29. The Land Development section of the Ministry of Agriculture operates a tractor hire service to complement private contractor services; it also assists private owners to organize hire facilities. The Ministry service was started in 1967 with 25 tractors to operate in areas with little commercial cultivation, and initially concentrated in Narok District on wheat growing. A further 25 tractors were added in early 1968, and the unit has operated with an establishment of 50 tractors since then. In 1969, it bacaine politically difficult to operate in Narok, and work was concentrated in Eastern Province in Meru and Embu areas. Now the service operates in Western, Nyanza and Coast Provinces, as well as Eastern Province and Narok District, and planting is done for maize, wheat, barley and beans.

30. Work is carried out in any area for which the District Agricultural Officer puts in a request for more than 300 acres ploughing within a five-mile radius. Tractors are divided into 6 units of 8 tractors each, with two thus spare. Policy is to have at least 5 tractors operating, whilst three are under service or maintenance. A Unit Supervisor liaises with extension staff in locating and arranging work and collecting payments; a contract supervisor supervises the tractors in the field and works to a monthly target. The Unit has support transDort of two lorries and ten jeeps. ANNEX 19 Page 10

31. The unit operates on an annual budget of KSh 960,000. This is for operating and maintenance costs of tractors and support transport, r.unning of workshop (which handles 80% of all repairs) and casual labor. It does not include salaries of the staff, who are all Government employees, nor capital expenditure for new tractors and support vehicles. In 1973, KSh 13,980 was voted for tractor replacement. About 60% of all work is done on credit from AFC, and 40% for cash (which has to be paid in advance). Recent financial data are:

1970-71 1971-72 ----- KSh thousand---…-

Sales 555 957 Expenditures 683 834 Revenues 492 536

32. Although there is more demand for the service than can be met, the Ministry does not intend to expand it - partly because heavy subsidies are involved. It is difficult to get the needed management competence, and to get enough productive working hours per machine per year to keep operating deficits within reasonable limits.

THE CONTAINER INDUSTRY

33. Containers are an important part of marketing costs, and a nation's outlay for containers goes up sharply with economic development. In many canning operations, the cans, labels and corrugated cases are second only to the raw materials as contributors to cost. In 1972 in Kenya a 90-kg maize bag cost 11% as much as its contents at the offizial price.

34. One firm produces metal containers for canned fruits, vegetables, and meats. There are differing views on the extent to which its monopoly position is exploited. But many buyers say that metal container prices are high as compared to other countries.

35. Two firms produce fiber bags (designed to carry 90 to 110 kg of maize, wheat, sugar, etc.). Plant capacity is being expanded, and it is expected to reach some 25 million bags in 1973; this is in considerable excess of estimated uiational requirements. 1/ Thie Government requires that plants use at least 50% sisal (locally produced) in all bags. For the rest, jute and kenaf fibers are imported free of duty. (Manufactured bags, bagging materials, and processed jute products have a 30% import tax.) Partly because of rising prices for imported fibers, bag prices were raised to KSh 3.50

1/ H.L. Valgenan and E.C. Kotuk, Preliminary Report on the Bag and Sack Industry, UNIDO, Nairobi, May, 1972. ANNEX 19 Page 11 each in late 1972. At about that time, fiber bags were scarce and a sugar company was authorized to import woven polypropylene (pp) bags; the CIF price was KSh 2.2 per bag. Estimates of production costs for local manufacture of PP bags are on the order of KSh 1.90 per bag, with a foreign exchangte component of about KSh 1. The comparable foreign exchange cost of a sisal-3ute bag is about KSh 2. In addition to creating interest in PP bags, high costs for fiber bags increase the appeal of bulk handling, and open up possibilities for the use of double or triple-walled paper bags for such products as sugar.

36. These observations suggest that a thorough study of the container industry would be useful in the hope of designing a policy to reduce prices of containers for agricultural products. The issue is complex. For example, some 2,300 people were working in the bag factories in 1970, and the total may reach almost 3,000 in 1973 (PP bag manufacture would require less than half this amount of labor). Too, the enforced use of sisal helps sustain the demand for labor on the sisal estates. On the capital side, the ongoir- outlay for expansion of fiber bag output capacity is apparently about to be completed. It now is a sunk cost. This needs to be taken into account, along with the technical substitutability of the sevVral kinds of bags.

INCENTIVES FOR AGRO-INDUSTRY

37. In 1970, about 17,800 out of the 644,500 persons employed in the formal sector worked in food processing. If workers in the agricultural in- pu?: industries of feed, seed, fertilizer, containers, and equipment are added, the agro-industries may account for some 4% to 5% of the total work force. The future rate of growth will depend partly on the investment climate for domestic and foreign capital.

38. The formal Government investment incentives are explicitly stated in "A Guide to Industrial Investment in Kenya" published by the Ministry of Commerce and Industry. Among the formal incentives for an expatriate firm are:

(a) The right to transfer abroad the earnings on capital brought into the country;

(b) The right to repatriation of capital, with no capital gains tax (the income tax rate is 40%);

(d) Duty free imports of most capital goods and eq4ipment;

(e) A potential for restricted competition through tariff protection and direct import controls; ANNEX 19 Page 12

(f) A potential for long term development loans - these may come in certain cases directly from the Treasury or through financial institutions in which the Government participates, such as the Industrial and Commercial Development Corporation (ICDC), wholly Government owned, the Development Finance Corporation, 25% owned by the Government, and in some cases the Agricultural Development Corporation, a Government subsidiary;

(g) The Government may also provide some equity capital in new industrial ventures.

3S. Some of the formal and informal disincentives to investment are:

(a) In some types of manufacturing investment, the firm is expected to provide much of the infrastructure, including housing for workers, and sometimes schools, nurseries, water and sewerage and other facilities. In some cases infrastructure costs may be 50% of capital costs of industrial facilities;

(b) There are many controls on the employment of expatriate staff;

(c) All trade in certain products is under the direction of the Kenya National Trading Corporation (KNTC), a wholLy owned subsidiary of ICDC. The KNTC licenses dealers and traders and is following a policy of Kenyanization;

(d) There are regulations on licensing, selection of boards of dIrectors, and selling of shares to non-Kenyan resi- dents. Further, local borrowing may be restricted.

40. Perhaps the most crucial disincentive to investment is the active role of the Government in directly controlling certain industries, and in providing equity finance. For example:

(a) Dairy product processing and marketing of fluid and processed milk products is dominated by the Kenyan Cooperative Creameries (KCC);

(b) Processing of beef for export is a Government monopoly, exercised through the Kenya Meat Corporation (KMC);

(d) The pricing, purchase, sales to processors, processor margins, storage, and imports and exports of most grains ANNEX 19 Page 13

are under the direct control of the Maize and Produce Board or the Wheat Board. An exception is bayley for breweries.

(e) There is much direct Government finance in many agro- industries. The Kenya Industrial Development Bank is 51% owned by the ICDC, and 49% by the Government. ICDC is sole owner of a vegetable dehydration pl4nt (Pana- foods), and of KNTC. ICDC has some equity capital in (i) Panafrica Paper 'Hills (which will have nearly a complete monopoly in manufacturing vf certain types of containers); (ii) Nakuru Chrome Tanning Company; (iii) The Metal Box Company (a monopoly in metal cans); (iv) Kenya Fishing Industries. ICDC is working with the Maize and Produce Board in a joint venture for cashew nut processing (this would then be another legal Government monopoly).

41. The Agricultural Development Corporation (ADC), a Government agency, has equity investments in: (a) The Kenya Seed Company. The dominant firm in maize and other seed production and distribution; (b) the Kenya Fruit Processors (a monopoly in manufacture of passion,fruit juice for export); (c) the Kenya Poultry Development Co. (a major commercial chick hatchery). The ADC acts as the Government agent in charge of the substantial public investment in Chemelil Sugar Company and the East African Sugar Company (Hluhoroni). The Government has a direct equity position in Kenya Canners which currently has a virtual monopoly in the export of qanned pineapple and pineapple juice from Kenya.

42. The question for study and debate is this: Is it possible that the Government, through its active interest in development and by direct participation in many agro-industries, may have built a structure likely to inhibit future investment'of domestic and foreign capital in agro-indust-ries; and, in effect, make future development of the agro-industries dependent on direct Governmental participation? For example, how would a potential in- vestor in the fruit and vegetable processing industry react to the fact that he must obtain cans from a monopoly which has Government equity; and buy cartons from another Government-supported monopoly and, more generally, compete with a Government-owned dehydration plant, with a Government-sponsored monopoly in passion fruit processing, and with a large processor of pineapple and other fruit and vegetable products whose shares are held by Gov- ernment. In poultry production the British American Tobacco Co. will have Government equity through its proposed acquisition of Kenya Poultry Develop- ment Company (partially owned by ICDC and UNGA, the largest flour, maize and feed processor).

43. In effect, only beverages, wheat flour milling (maize milling to a certain extent, although margins are governmentally controlled), the feed industry, the vegetable oils industry, and the fertilizer industry appear to be relatively free of direct Government participation and potential day-to-day intervention. ANNEX 19 Page 14

44. These remarks are sufficient to illustrate the basic question which must be =.swerec soon if the considerable expansion potential of agro-industry is to bk fully and efficiently exploited. In short, what is the appropriate kind and degree of Government participation and control for the future? Should the Government try to sell its holdings when the industry gets established? Whatever the answers may be, the objective in processing must be efficiency if for no other reason than that competitive supplies an available in foreign markets.

Cost Levels

45. Aside from raw material, the major costs in agricultural processing are buildings, machinery and equipment, labor ruel, electricity, water (and sewage and waste disposal), containers and packaging material, and transportation.

46. Bi ldings. Both land and building costs are moderate by worid standards and property taxes are relatively low. The construction costs of factory buildings in the Nairobi area is currently around KSh 50 per square foot (sq ft) and as low as KSh 30 per sq ft in rural areas. Housing for workers has beea built from timber for as little as KSh 15 per sq ft, while other housing for low income families has run as high as KSh 40 per sq ft. Indus- trial land prices vary widely. Sites with railroad sidings are generally controlled by the East African Railway Corporation and involve an initial cost (cr stand premium) and an annual rent..

47. Machinery and Equipment. Nearly all agricultural processins. equipment can. be imported duty free. Therefore, costs are at world prices l.us tran'sportation.

48. Labor. The money costs for unskilled labor are lonw - the .iaily rates run from KSh 7 per day in Nairobi for a male employee over 18 years of age to as low as YSh 3.85 in some of the more rural townships. howeve^r, skilled labor mtay command KSh 1,000 per month. A capable secretary in Nairbol wi.ll probaly earn KSh 2,000 per month. Higher qualified employees, such as engineers, ianaging directors, and chartered accountants are generally paid according to European standards and at times even more, particularly expatriates.

49. Fuel. Kenya so far has had to depend on imported fuels. A -,etro- leum refinery at Momnbasa refines imported crude oil, with the major i.nterna- tional oil companies handling product distribution, Prices vary through time, but are reasonable, Special prices are sometimes arranged for bulk supply.

50. Electricitv. The najor source of electrical power is froo hLydlro- elec.!ric- vlants, aend thermal. generation on the coast, Lsolated areas are supplied by locl diesel plants. The lEast Afrrican Power and Lighting Co. Ltd. is respovisib7o for the distribution of electricity, There are several schedules of costs, depending on demand and usage. The charges for industrial users :re <' J,linws: ANNEX 19 Page 15

Maximum demand charges - For the first 60 KVA in each quarter KSh 90 per KVA For the next 940 " " " " " 60 " " For an additional " " " " " 54 t

Killowatt hour charges - For the first 1,200 units of KVA in each quarter, there is a charge of KSh 0.106 per unit. All units in excess of the above are charged at KSh 0.6 per unit.

51. Water Supply. The 12 major cities and towns have safe public water supplies. Industries outside these areas, however, must obtain and treat their own.

52. Containers and Packaging Mlaterials. Containers and packaging materials present special problems. There is one manufacturer of metal cans, two licensed producers for bags, and only one or two producers of corrugated cartons. The cost of some types of containers appears to be strongly effected by volume and the buyer's bargaining power, and most containers and packaging materials are allegedly priced fairly high.

53. Transportation. A disadvantage in serving world export markets is the cost of transport. Internal freight costs, both by rail and by truck, are also a major segment of costs on some commodities.

54. Operated by the East African Railway Corporation, there are 2,052 km of railway in Kenya. The main line runs from Mombasa through Nairobi, Nakuru, and Eldoret into Uganda and several branch lines serve the richer agricultural areas. All routes are single line and delivery times are often long. Railroad freight rates vary by type of traffic and distance. In certain cases, freight destined for export is given a discounted rate. During the maize and wheat harvests, deliveries to the Maize and Produce Board and to the Vheat Board have to be scheduled, because of railroad capacity limits. Further, the lack of railroad rolling stock and bulk storage facilities at the port of Mombasa often delays loading and unloading of maize and wheat, causing high demurrage charges.

55. Truck transport volume is overtaking railroad freight volume. Be- tween 1966 and 1971, rail freight receipts went up only about 8% while those for truck freight jumped 129%.

56. Railroads continue to offer low rates, but trucking is becoming more and more competitive. Truck rates are subject to negotiation; express rates for fully loaded trucks in 1972 were approximately as follows:

KSh

5 - to 7-ton lorry 6 per mile 8 - to 10-ton lorry 8 per mile 10 - to 15-ton lorry 10 per mile 20 tons and over 0.80 per ton-mile ANNEX 19 Page 16

57. The rates are slightly over KSh 1 per ton-mile for small lorries are slightly less than KSh 1 per ton-mile for the larger ones. Charges for freight over unimproved roads are significantly higher. For long-term commitments, rates are substantially reduced.

58. Air freight rates and actual air freight capacities under current arrangements are extremely important to Kenyan fresh fruit and vegetable shippers as well as to flower dealers. Freight rates are set by the International Airline Tariffs Association (IATA), but most shipments' go under contract rates with the East African Airline (EAA). Rates for shipments of fresh fruits and vegetables are:

Under IATA Conference Rates

Nairobi/London KSh 3.70 per kg Nairobi/Paris KSh 4.10 per kg Nairobi/Frankfurt KSh 3.40 per kg

By Charter - East African Airlines

Nairobi/Central Europe KSh 2.70 per kg Nairobi/Britain KSh 2.90 per kg Nairobi/Scandinavia KSh 3.50 per kg

59. During the peak winter and early spring months of fresh fruit and vegetable shipments to Europe, there is not enough EAA capacity to meet space demands. EAM has not permitted charter loadings of freight by other airlines. It has been petitioned many times by shippers who have tentatively arranged contract charter rates at costs equal to or even below EAA charter rates but to date all requests have been turned down. An early and permanent solution must be found. The lack of air freight capacity should not be allowed to persist as a major deterrent to fruit and vegetable industry expansion.

60. Harbor facilities at the port of Mombasa are under the direction of the East African Harbors Corporation. The port is capable of handling vessels of substantial size and more deep water shore berths are being constructed. A new refrigerated storage facility is also being built. In 1970, 2.5 million tons of dry cargo was handled through the port, as well as 3.3 million tons of bulk liquids (principally petroleum).

61. The two main ocean freight handling conferences in Mombasa are the East African U.K. Conference Line (EA-UK) and East African-Far East Confer- ence Line. These two conferences handle approximately 80% of total freight in and out of Mombasa. The United Kingdom, Dutch, Federal Republic of Germany, and Scandinavian shipping companies are in the East African U.K. Conference, while East African, Japanese, and Australian shipping companies make up the Far Last Conference.

62. Examples of export ocean freight rates to north European ports are as follows: ANNEX 19 Page 17

US$ per ton

Beef chilled 138.50 Frozen Beef 78.40 Butter 76.00 Maize in Bags 15.30 Canned Fruits 32.50 Fruit juices 28.80 Canned Vegetables (High Value) 42.40 (Low Value) 35.40 Dehydrated Vegetables 59.10 1/

63. There.is an additional surcharge of 15% due to the Suez closing, but there may also be a loyalty clause rebate of 10%. Contract carriers are available at negotiated rates, although the conference lines handle the majority of all freight in and out of Mombasa.

I/ Charges are by the cubic meter for some low bulk products and the costs for some dehydrated items may run higher than US$59.10 per ton.

ANNEX 19 Appendix 1

AGRO-INDUSTRY AND EMPLOYMENT IN RURAL AREAS

1. If agro-industry is defined as the processing of major agricultural commodities, it is not likely to directly produce very many jobs in rural areas in the decade ahead. This is because the economies of locating near the major towns and cities are significant and it is doubtful if the list of agro-industries in rural centers (conmunities of less than 2,000 population) will extend much beyond tea and coffee processing, sawmills, and sugar. A fact of still greater importance is that the scope for agro-industry expansion in total in rural and urban areas is not sufficient to produce many jobs in a direct sense in relation to the existing number of rural people, even under highly labor-intensive plant design. Certainly the jobs to be created through agro-industrialization in the decade ahead should be counted in thousands and not, as some do, in tens of thousands. In contrast, the indirect impact of agro-industry on employment and the earning power of labor in agriculture can be significant -- through the effect of improved marketing on the demand for and productivity of labor on farms.

2. The Rural Industries Development Program being developed by the Government through the Industrial and Commercial Development Corporation includes a considerable number of industries which fall outside agro-industry as defined above. 1/ This program was not investigated by the mission.

1/ Kenya Industrial Estates, Rural Industries Development Program - Technical Economic Survey Report on Selected Centers, Nairobi, 1972; and I. Imukai, Rural Industrialization - A Country Study, Kenya, University of Nairobi, 1972.

ANNEX 20 Page i

KENYA

AGRICULTURAL SECTOR SURVEY

STATISTICAL ANNEX

Table No.

1 Gross Domestic Product by Sector, Selected Years, and Growth Rates

2 Gross Domestic Product, Percentage Distribution by Sector, 1964 and 1969-71

3 Population and Population Density, 1969, and Projected, 1980

4 Population by District, 1970, and Projected, 1978, and 1980

5 Balance of Payments, 1965, 1970-71

6 Agricultural Imports, Main Products, Value, 1966-71

7 Agricultural Imports, Main Products, Tonnage, 1966-71

8 Imports and Exports of Edible Oils and Fats, 1971

9 Imports of Fertilizers, by Type, Tonnage and Value, 1965-71

10 Imports of Agricultural Inputs, Physical Quantities, 1966-71

11 Imports of Agricultural Inputs, Value, 1966-71

12 Agricultural Exports, Major Products, Value, by Destination, 1965, 1968-71

13 Exports of Food Products to Uganda and Tanzania, Value, by Class, 1964-71

14 Exports of Dairy Products, Value, 1970-71

15 Agricultural Exports, Major Products, Tonnage, 1965, 1968-71

16 Agricultural Exports, Main Products, Prices FOB Port, 1966-71

17 Government Recurrent and Development Expenditures by Main Categories, 1967-68, 1969-72 ANNEX 20 Page ii

Table No.

18 Government Recurrent and.Development Enpenditures for Agriculture and Agriculture-Related Activity, 1963-64, 1968-69 to 1970-71

19 Government Development Expenditures for Agriculture-and Agriculturec-Related Activity, Budgeted and Actual 1963-71

20 Recurrent and Development Budget Estimates for the Ministry of Health, 1970-71

21 Hospitals, Health Centers, and Dispensaries in Service, 1969

22 Ralnfall by Months, Main Recording Stations, 1970, 1971, and Long-Term Average

23 Distribution of Agricultural Land by Class, by Province

24 Distribution of Land by Legal Status, by Province, 1970

25 Distribution of large Farms by Size Holdings,.1962-70

26 Distribution of Small-Scale Farms by Size in Specified Districts, 1969:

27 Size Dis'tribution of Large Farms' in Former Scheduled Areas, 1970

28 Size Distribution of Registered Smallholdings, 19'69

29 Estimated Marketed Output af Principal Crops, Calendar Years 1962, 1966-71, and Growth Rates

30 Acreage of Major Crops on Large Farms, by Province, 1965 and 1970

31 Value of Marketed Output, All Farms, by Commodity, At Farm, 1965, 1968-71, and Percentage Distribution

32 Amount and Value of Marketed Crops, by Large and Small Farms, 1971

33 Acreage of Major Crops on Small Farms, by Province, 1969-70

34 Large Farms, Land Use, 1962, 1966-70, and Growth Rates, 1962-70 ANNEX 20 Page iii

Table No.

35 Purchases of Slaughter Livestock by Statutory Boards, 1961-71

36 Livestock Numbers by Province, by Type of Farm, 1970

37 Fisheries Output, Tonnage and Value, 1965, 1969-71

38 Sales of Milk and Milk Products by Kenya Cooperative Creameries, 1970-72

39 Prices Paid to Farms at Receiving Stations by Mai.ze and Produce Board for Principal Farm Products, 1966-67 to 1972-73

40 Average On-Farm Prices for Crops, 1961-72

41 Cost of Living Indices, Nairobi, 1966-71

42 Average Retail Prices of Certain Consumer Goods Included in the Cost of Living Index, Nairobi, 1965-70

43 Fertilizer Prices FOB Mombasa, Crop Year 1971-72

44 Rail Rates for Fertilizer Transportation between Selected Points, 1972

45 Output of Agricultural Training Institutions, 1968-72, and Projected, 1973-76

46 Present Organization of Public Services to Agriculture

ANNEX 20 Page 1

Table 1: GROSS DOMESTIC PRODUCT BY SECTOR, SELECTED YEARS, AND GROWTH RATES

Growth Rate 1964 1968 1970 1971 1964-71 ------KL million ------______% Annual----

Outside Monetary Economy Agriculture 73.4 87.1 92.7 95.3 3.8 3.0 Forestry 2.0 2.2 2.6 2.8 4.7 8.4

Fishing 0.1 0.2 0.2 0.1 2.4 - 20.6 Building & Construction 5.8 6.6 6.9 7.2 3.1 2.9 Water 2.1 2.2 2.7 2.8 4.2 8.4 Ownership of Dwellings 5.5 6.8 7.5 7.9 5.2 5.1 Total product outside Monetary Economy 88.9 105.1 112.6 116.1 3.9 3.4

Monetary Economy 1. Enterprises & Non-Profit Institutions Agriculture 52.0 61.9 72.9 72.6 4.9 5.5 Forestry 1.9 2.5 2.9 3.2 7.9 8.6 Fishing 0.8 1.3 1.0 0.9 1..$5 _ 12.5 Mining & Quarrying 1.5 2.2 2.6 2.7 9.3 7.1 Manufacturing & Repair 34.2 44.6 52.5 59.5 8.2 10.1 Building & Construction 6.8 11.8 12.1 13.6 10.4 4.8 Electricity & Water 4.8 6.0 7.1 7.8 7.0 9.2 Transport Storage & Communications 24.5 38.1 41.2 44.0 8.7 4.9 Wholesale & Retail Trade 32.5 41.2 48.7 51.0 6.7 7.4 Banking, Insurance & Real Estate 9.9 15.1 19.4 21.4 11.7 12.3 Ownership & Dwellings 13.3 13.9 14.5 14.9 1.5 2.3 Other Services 11.9 17.1 20.3 22.4 9.4 9.4 Total Enterprises 194.1 255.7 295.2 314.0 7.1 7.1

2. Private Households (Domestic Services) 2.9 3.7 3.6 3.6 3.0 - 0.9

3. General Government Public Administration 16.9 19,3 21.9 23.9 .1 ,'efense 2.2 3-' 4.2 5 lo10. 6, Education 11.2 19.3 23.9 24.9 12.1 8.9 Health 4.7 7.8 8.9 9.8 11.1 7.9 Agricultural Services 4.4 5.5 5.8 6.2 5.0 4.1 Other Services 3.1 7.0 9.4 10.4 18.7 14.2 Total General Government 42.5 62.6 74.1 79.7 9.4 8.4 Total Product Monetary Economy- 239.5 322.0 372.9 397.3 7.5 7.2

Total Gross Product at Factor Cost (Monetary and Non- Monetary) 328.4 427.1 485.5 513.4 6.6 6.3

1/ Constant 1964 Prices 2/ Provisional

Source: Economic Survey, 1972. ANNEX 20 Pase 2

Tab1e 2: GROSS DOMESTIC PRODUCT, ?ERCENTAGE DISTRIBUTION BY SECTOR,

1964 A-ND 1969-71

Sertor 1964 1969 1970 1971 2/

------

Outside Monetary Economy Agriculture 22.3 19.8 19.1 18.5 Forestry 0.6 0.5 0.5 0.5 Fisheries 0.1 0.1 0.1 0.1 Other 4.1 3.6 3.5 3.5

Subtotal 27.1 24.0- 23.2 22.6

Monetary Economy Enterorises and Non-Profit Agriculture 15.8 15.2 15.0 14.1 Forestry 0.6 0.6 0.6 0.6 Fisheries 0.3 0.3 0.2 0.2 Other 42.4 44.1 45.0 46.3

Subtotal 59.1 60.2 60.8 61.2

Domestic Household Services 0.9 0.8 0.7 0.7 Government 12.9 15.0 15.3 15.5

Subtotal 13.8 15.8 16.0 16.2

Total 100.0 100.0 100.0 100.0

1/ Factor Cost, Constant (1964) Prices.

2/ Provisional

Source: Economic Survey, 1972 ANNEX 20 Page 3

Table 3: POPULATION AND POPUIATION DENSITY, 1969, AND PROJECTED, 1980

1969 1980 Projected Population Land Area Density 2 Population Province and District Thousands Km- Persons per Km Thousands

Nairobi 509 684 745 903 Coast Province 9h4 83,o41 11 1,372 Tana River 1/ 51 38,695 1 65 Mombasa 2/ - 247 210 1,177 432 Northeastern Province 246 126,902 2 276. Garissa 1/ 64 43,931 1 72 Mandera 7/ 95 26,470 4 105 Eastern Province 1,907 15,5440 12 2,650 Isiolo 1/ 30 25,605 1 34 Embu 2F- 179 2,714 66 277 Central Province 1,676 13,173 127 2,377 Nyandarua 1/ 177 3,528 50 248 Kiambu 2/ 1476 21448 194 676 Rift Valley Province 2,210 170,162 13 3,113 Turkana 1/ 165 60,824 3 162 Kericho 2/ 479 44,890 98 783 Nyanza Province 2,122 12,525 169 3,175 South Nyanza 1/ 663 5,714 116 1,016 Kisii 2/ 675 2,196 307 992 Western Province 1,328 8,223 162 2,011 Bungoma 1/ 345 3,074 112 558 Kakamega 2/ 783 3,520 222 1,178 Kenya 10o943 3/ 569,250 19 15,877

1T District with lowest population density. :/ District with highest population density. §/ The distribution by-race and tribe in 1969 was (in thousands): Kikuyu, 2,202; Luo, 1,522; Luhya, 1,1453; Kamba, 1,198; Kisii, 702; Meru, 554; Mijikenda, 521; Kipsigis, 471; Turkana, 203; Nandi, 262; Somali, 250; Masai, 155; Tugen, 130; Elgeyo, 111 Embu, 118; Taita, 108; Pokot, 93; all others, 680; Asian, 139; European, 41; Arab, 28; other, 2; and total, 1049k3.

Source: Statistics Division, Ministry of Finance and Planning. ANNEX 20

Table 4: POPULATICN BY DISTRICT, 1970, AND PROJZCTED, 1978, AND 1980 Page 4

Province/District 219I 1978 1980 __ ------Thousand ------

Nairobi 534 814 903

Central

Kiambu 478 633 676 Kirinyaga 225 285 305 Muranga 454 582 623 Nyandarua 189 239 248 Nyeri 373 487

Sub-Total 1,719 2,226 2,377

Coast 2 Kilifi 315 399 4 3 Kwale 212 270 287 I,amu 22 20 20 Mombasa 257 388 432 Taita 113 1ll0 147 Tana Itiver 52 62 65

Sub-Total 970 1,279 1,372

Ea,stern

Embu 185 255 277 Isiolo 30 33 34 Kitui 350 430 453 Machakos 724 921 980 Mareabit 52 56 56 Meru 612 796 850

Sub-Total 1,953 2,491 2,650

North Eastern

Garissa 65 71 72 Mandera 96 103 105 Wajir 87 96 98

Sub-Total 2147 271 276

.Nyanza

Kisii 695 923 992 Kisumu il; 571 619 Siaya 389 512 548 South Nyanza 689 940 1,016

Sub-Total 2,187 2,944 3,175

Rift Valley

Baringo 162 171 172 Eageyo Marakwet 162 195 205 Kajiado 88 113 121 Kericho 499 716 783 Laikipia 67 74 7LI Nakuru 299 399 430 Nan,ii 214 278 297 Narok 126 147 15h ,Samburu 71 89 94 Trans Nzoia 130 189 208 Turkana 164 165 162 Dasin Gishu 199 282 307 West Pokot 84 98 102

Sub-Total 2,266 2,919 3,113

Western

Bungoma 360 512 558 Busia 203 258 274 Kakamega 807 1,091 1,178

Sub-Total 1,371 1,861 2,011

Total 11,247 14,806 15,877

Note: For 1970 period, no change in age specific fertility rates is assumed. For 1976-80 period, decline in age specific fertility rates (leading to a fall in total fertility rate from 7.6 in 1969 to 6.9 in 1980) is assume d.

Source: Statistical Digest Table 5: BALANCE OF PAYMENTS, 1965, 1970-71

1965 1970 1971 Debits/ Credits/ Net Debits/ Creditsl Net Debits/ Credits/ Net Assets Liab. Credits Assets Liab. Credits Assets Liab. Credits CurrentAccount------K million __-_ ------_ - - Current Account ---

Merchandise 97.4 78.0 Dr. 19.4 152.2 102.0 Dr. 50.2 192.8 104.6 Dr. 88.2 Other 44.5 6i.2 19.6 71.4 105.0 33.6 72.7 107.1 34.4

Sub-total 141.9 142.2 0.2 223.6 207.0 Dr. 16.6 265.5 211.7 Dr. 53.8 Long Term Capital 10.3 18.4 8.1 Cr. 2.0 27.2 29.2 Cr. 1.4 20.9 22.3 Monetary & Short Term Capital 3.5 1.1 Dr. 2.4 17.7 1.8 Dr. 15.9 Cr. 24.3 3.8 28.1 Balancing Item Dr. 5.9 Cr. 3.3 Cr. 3.4

1/ Provisional

Source: Economic Survey, 1968 and 1972

(D >< kfl. A.. K O Pape 6

Table 6 : AGRICULTURAL IMPORT3, MAIN PRODUCTS, VALUE 1966-71

1966 1967 196b 1969 1970 1971 ------K Thousand------

Live Animals 68 122 218 96 129 97 Meat and Meat Preparations 156 F72 J751T7 113 7 Dairy Products 5 106 1-x 3 L=73 Fish and Fish Preparations 2 7 0 23 Cereals and Cereal Preparations 4.779 ___ l,i0- 6 1 2 Fruits and Nuts 332 T 2 _470 Fresh 209 2-O 23 16 329 290 Dried and Prepared 173 133 144 135 149 188 Vegetables 763 9 5 568 982 1,470 Beans and Peas 329 1,06 Other 279 220 217 262 373 424 Sugar and Sugar Preparations 3 479 1 957 2,391 1 480 20281 4.302 Coffee, Tea, Cocoa and Sices 316 ___ 732 7 Animal Feed 190 261 2- 25O 337 528 Fish Meal 33 T 7 7z 122 1-Z Other 157 206 151 162 215 342 Margarine and Shortsnings 5 910 736 617 858 802 Other Food 2 55M 7 OF Beverages 03-1 71 T a Tobacco 1012 1361 Unmanufactured 9-12F686 346 1,346 1,32-4 Manufactured 148 83 79 130 57 67 Hides and Skins 102 117 169 229 262 1 8 Oilseeds, Oilnuts and Oil:ernels 232 20Z9 321 F2 Linseed 7 -7 7 1 - 5 Copra 132 62 13 19 29 219 Other 141 215 249 189 292 303 Crude Rubber 236 140 181 231 254 347 Wood, Lumber and Cork 1I M- 2 176 9 3 Palp and Waste Paper -o -1 82 -7 90 Textile Fibers 320 13: 760 1 6 Crude Vegetable Materials 15 3-32 2T8 Animal Oils 2 3 6 1.229 Vegetable Oils 1,4 Y 1.g7 1 179- 2 911 Soybean Oil 43 1 971i 2169 Olive Oil 13 11 16 12 9 16 Linseed Oil 23 22 46 43 31 36 Palm Oil 417 192 419 823 654 1,497 Coconut Oil 384 177 119 170 152 244 Palm Kernel Oil 9 35 11 11 12 9 Castor Oil 8 8 9 8 8 13 Cotton Seed Oil 969 1,106 1,149 588 1,179 946 Fixed Vegetable Oils 14 13 14 14 26 32 Other Oils 2 14 21 13 1 - Animal and Vegetable Oils, Processed 119 185 187 214 267 468

Total 16,776 12,463 13,003 11,703 16,626 23,359

(Continued....) ANIN,i.X 20 Page 7

Agricultural Imports, etc. (cont'd)

1966 1967 1968 1969 O 1971 --- ______------ffThou3snrd------~-- of which from Uganda:

Live Animals 1 2 7 Meat and Meat Preparations 3 3 - Dairy Products 3 - Fish and Fish Preparations 7 771 Cereals and Cereal Preparations 270 277 1 71 Fruits and Nuts 20 2 119 1 Fresh 1 9 77 IF i-I117 Dried and Prepared 1 I - 1 2 - Vegetables i22 260 80 4 129 132 Beans and Peas 102 77 25 101 X Other 34 30 28 18 28 28 Sugar and Sugar Preparations 3 2 420 1 459 910 gig 169 Coffee, Tea, Cocoa and Spices _39 0 Animal Feed 102 90 103 Margarine and Shortenings - 692w 7 6 o90 Other Food 2 2 1 1 Beverages 39X 19 16 Tobacco 7 990 2199 59 9 Unmanufactured 979T 139 56; Manufactured 50 32 25 60 4 4 Hides and Skins 30 44 5h 38 32 1 Oilseeds, Oilnuts and Oilkermels _71 1 172 Crude Rubber n-d - 1 Wood, Lumber and Cork 97 171 Pulp and Waste Paper - - 2 Textile Fiber8s 7 -7 23 4 Crude Vegetables Materials - 7 - Vegetable Oils aterals2-7 17 Soybean Oil 2 - - Palm Oil - 1 - - - - Coconut Oil - - - 2 Castor Oil - 1 1 - - - Cotton seed Oil 676 807 659 479 738 702 Fixed Vegetable Oils - 1 - 1 1 1 Other 2 14 19 5 1 - Animal and Vegetables, Oils, Processed - - - 1 - -

Total (Uganda) 2,8843 5,269 4,459 2,902 4,187 3,012

(Continued....) Agricultural Imports, etc. (cont'd)

1966 1967 1968 1969 1970 1971 ------K£ Thousand------

of which from Tanzania:

Live Animals 2 8 2 2 11 Meat and Meat Preparations 117 143 66 66 51ST Dairy Products 7 n 7 7 5 iZ Fish and Fish Preparations 31 7 1-5 447 49 Cereals and Cereal Preparations -b2 151 X 1- -29 Fruits and Nuts 33 -& 5 -9 Fresh 1I I 33 X47 T Dried and Prepared 6 1 - 2 - 8 Vegetables 299 311 215 307 534 1,073 Beans and Peas v m 1-9 v5 2T 922 Other 51 33 26 43 82 151 Sugar and Sugar Preparations 61 32 65 55 33 42 Coffee,Tea, Cocoa and Spices -67 99 IT 223 233 Animal Feed 71 21 37 Margarine and Shortenings 20 15 33 1799 E Other Food 1 - - 1 Beverages 7 9 11 3 1 Tobacco _ I75 73T 17 m Unmanufactured 2 179 1X v72 Manufactured 37 7 5 27 3 3 Hides and Skins 28 36 37 81 8 9 Oilseeds, Oilnuts and Oilkernels 17g 173 1-5 37 X3 Copra 91 7 13 19 29 219 Other 87 124 93 19 10 100 Wood, Lumber and Cork 71 45 114 84 132 162 Textile Fibers 0 31 X 132 220 m Crude Vegetable Materials 36 -Ef 7 27227 Animal Oils : -16 12 -- 7 - Vegetables Oils 7 55 ; i: E2 3 Soybean Oil - - - - - Palm Oil - 3 - 1 2 1 Coconut Oil 49 18 62 68 79 113 Palm Kernel Oil - - 3 3 - - Castor Oil - - - 1 - - Cotton Seed Oil 293 299 490 109 4a1 244 Fixed Vegetables Oils 2 - 1 - 1 - Other Oils - - 2 8 - - Animal and Vegetables Oils, Processed - - - 1 - 2

Total (Tanzania) 1,928 1,802 1,892 2,267 3,764 4,174

Source: Annual Trade Reports, 1966-71 ANiNEX 20 Page 9

Table 7S AGRCULTURAL IMroRTS, MNIAPRODUCTS, TONNA%K, 196-71 1966 1967 1968 1969 1970 1971

------Tons ------

Meat and Meat Preparations 556 878 334 364 339 254 Dairy Products 918 2,2 1,696 1,886 _2,585 1,720 Fish and Fish Preparations 2,o61 2,787 4,813 3,577 32295 1,596 Cereal and Cereal Preparations 160,581 17,871 17,375 8,633 329521 65,474 Fruits and Nuts 1 2,10 45 1,770 1S759 2,300 Fresh 905 1,009 898 882 766 929 Iried and Prepared 1,308 1,131 947 888 993 1,371 Vegetables 15,904 23,97)4 12,313 10,547 20,463 33,989 B3eans and Peas 13,106 22,093 10,203 7,866 14,293 21,464 Other 2,798 1,881 2,110 2,681 6,170 12,525 Sugar and Sugar Preparations 111,116 46,945 61,339 32,841 44,343 76,508 Coffee, Tea, Cocoa and Spices 1,089 1,622 1,502 1,973 _9_34 2,139 Animal Feed 9,865 10,797 6,008 7,618 8,365 15,985 Fish meal 405 874 916 1,332 1,390 2,345 Dther 9,460 9,923 5,092 6,286 6,975 13,640 Margarine and Shortenings 3,160 4,892 323 31453 41426 3,913 Beverages 2,754 2,472 2,710 1?624 29816 2,228 Tobacco 2,454 3,052 1,805 833 2t819 2,947 Unmanufact11red 2,365 2,986 1,750 798 2,782 2,892 Ianufactured 89 66 55 40 37 55 Hides and Skins 185 328 707 _445 472 223 Oilseeds, Oilnuts and Oil Kernels 7,251 7,462 8,925 6,597 1,877 13,193 Linseed 126 126 74 25 - 85 Copra 1,967 1,013 192 306 534 3,102 Cther 5,158 6,323 8,659 6,266 10,343 10,006 Crude Rubber 1,397 925 1,29 1,271 l,599 2,52 Pulp and Waste paper 2,901 830 3,144 2,197 2,933 6,139 Textile Fibers 4,315 4,57 5,607 52458 6,709 15,110 Animal Oils 4 3,769 8,612 8,078 13,119 Vegetable Oils 16,549 14,216 16,114 21,43 17,621 23,896 Soybean Oil 282 6 537 3,578 604 624 Olive Oil 34 28 41 32 22 40 Linseed Oil 186 180 357 r1342 236 262 Palm Oil 4,1434 2,202 6,274 12,102 6,866 15,460 Coconut Oil 3,624 1,718 954 1,555 1,241 1,871 Paglm Kernel Oil 72 348 92 83 85 39 Castor Oil 49 43 51 62 51 60 Cotton Seed Oil 7,805 9,517 7,616 3,540 8,406 5,441 FLxed Vegetable Oils 54 47 55 59 98 99 Other 9 127 137 77 12 - Animal and Vegetable Oils, Processed 1,27 2,230 2,580 2,592 2,737 4,110 (Cr4tinued ' ) ANNEX 20 Page 10

Agricultural Imports, etc. (contid)

- 1966 1967 1968 1969 1970 1971 of which from Uganda: Meat and Meat Preparations 2 123 20 12 8 Dairy Products 14-31 Fish and Fish Preparations 318 620 750 434 542 Cereal and Cereal Preparations 3t485 2,971 1,770 1A621 1S401 Fruits and Nuts 4 5 7 3 2 1 Fresh 1 - - - - - Dried and Preserved 3 5 7 3 2 1 Vagetables 4,795 8,881 2,590 952 3,743 4,262 Beans and Peas 4,152 8,429 2,251 730 2,423 2,256 Other 643 452 339 222 1,320 2,006 Sugar and Sugar Preparations 6,617 31,604 35,374 22,646 21,343 2,125 Coffee, Tea, Cocoa and Spices 266 298 234 193 205 119 Animal Feed 7,92 9,760 A4A.ri1r a.nd ShCrta8inggs 2_ 9 4,757 3,673 2,25y 3,452 39321 Beverage 2/ 1,367 1,215 361 196 1,328 558 Tobacco 1,333 ?,183 1,564 294 1,221 959 Unmanufactured 1,301 2,149 1,551 282 1, 214 953 M4anufactured 32 34 13 12 7 6 Hides and Skins 92 241 402 208 139 1 Oilseeds, Oilnuts, Oilkernsls 2,115 2,081 3,951 5,779 10,000 6,544 Crude Rabber 1 - 23 - 148 28 Pulp and Waste paper 3 50 - 84 148 124 Textile Fibers 169 237 3440 167 204 332 Animal Oils 2 2 - . _ _ Vegetable Oils 5,086 6,859 4,388 2,924 5,179 3,597 Soybean Oil - - - 15 - - Palm Oil - 5 4 _ _ Coconut Oil 3 1 - 13 - -

Castor Oil 1 4 3 2 - - Cotton Seed Oil 5,073 6,716 4,J243 2,860 5,162 3,593 Fixed Vegetable Oil - 7 1 7 5 4 Other 9 126 137 27 12 - Animal and Vegetable Oils, Processed - - - 4

(Continued....) ANNEX 20 Page 11 Agricultulral Imports, etc. (cont'd)

1966 1267 1968 19 1970 of wthich from Tanzania

Meat and Heat Preparati7ns 452 451 - 2-5- 26 184 10 ]Diry Products 101 61 36 46 461 87 :?ish and Fish Preparations 144 ].63 ].,176 2,533 2 561 920 Cereals and Cereal Preparations -4,34 2,775 2 7,011 :Aruits and Nuts 64 41 23 39 41609 Fresh 16 29 23 20 16 348 Dried and. Preserved 48 12 - 19 - 61 'Jegetables 7,555 7,619 5,767 _86l49 14, 28112 Beans and Peas 6,239 6,995 4,965 6,899 10,480 18,979 Other 1,316 624 802 1,750 3,858 9,133 Sugar aid Sugar Preparations 622 338 517 510 438 636 Coffee, Tea, Cocoa and. Spices 222 317 494 545 603 471 Aniral Feed 2,387 1,735 144 762 1,554 2,248 Margarine a: Shcrtenings 127 87 168 22. 939 522 3everages 1/ 110 99 125 17 22 6 Tobacco 990 798 178 482 1,530 1s9i6 Unmanufactured 965 792 175 480 1,528 1,896 Manufactured 25 6 3 2 2 20 :Hides and Skins 51 52 208 115 75 16 Oilseeds, Oilnuts, Oilkernels 4,350 4,805 4b;71 778 877 6,526 Copra 1,354 809 192 306 534 3,102 Other 2,996 3,996 4,520 472 343 3,424 Crude Rubber 4 - 1 - - - Textile Fibers 1,073 840 1,465 915 1,452 2j,106 Animal Oils 118 181 130 85 47 Vegetable Oils 3,226 3,018 3,921 1,437 3,964 2,677 Soybean Oil - - - - 13. - Palm Oil 2 41 - 15 17 5 Coconut Oil 480 175 496 637 683 822 Palm Kernel Oil' - - 46 36 - - Castor Oil - - 2 19 1 Cotton Seed Oil 2,732 2l,801 3,373 680 3,244 Is,848 Fixed Vegetable Oil 12 4- - 6 2

Other - 1 - 50 - - .n.imal end Vegetable Oils, Processed - - - 1 - 9

1/ Thousand liters,

Source: Annual Trade Reports, 1966-71 ANNEX 20 Page 12

Tabl_ 8: EXPORTS AND IMPORTS OFV EDIBLE OILS AND FATS, 1971

Imports . ,Exports .....- Ne,t.,Trade.-Balance Quantity Value Quantity Value- Value Tons KL '000 Tons KL '000 Tons KL- '000

Edible Oils Soya bean 700 129 - - - 700 -129 Cottonseed 5,441 947 677 148 -4,764 -799 Peanut 5 2 - - - 5 - 2 Olive 40 16 - - 40 --16 Sunflower - - 12 2 + 12 + 2 Rape, Mustard or Copra! 7 - - - 7 -

Subtotal 6,193 1,094 689 150 -5,504 -944

Edible Fats Margarine and Shortening 243 46 1,079 282 + 836 +236 Vegetable ghee 3,488 717 92 18 -3,396 -699 Other prep., animal fats 193 40 1,132 283 + 939 +242 Hydrogenated oil and fat 90 19 - - - -91 - 18

Subtotal 4,014 822 2,303 583 -1,712 -239

Oils for Edible Fats Fish 703 95 28 4 - 675 - 91 Palm 15,461 1,496 - - -15,461 ---1,496 Copra 1,871 244 1,171 174 - 698 ---70 Palm kernel 38 9 - - - 39 - 9 Other fixed oils 98 32 68 7 - 30 - 25

Subtotal 18,171 1,876 1,267 185 -16,903 -1,691

Greases 1/ Animal oils, fats and greases 12,417 1,134 104 13 -12,313 -1,121 Acid oils, fatty acidc4 3,891 424 - - -3,891 - 424

Subtotal 16,308 1,558 104 13 -16,204 -1,545

Total 44,686 5,350 4,363 931 -40,323 -4,419

1/ Potentially edible oils and fats, but mainly used for non-edible purposes.

Note: Items may not add to totals because of rounding.

Source: Annual Tradie Report, 1971. ANNEX 20 Page 13

Tab]lA 9 IIPORTS OF FfTIZRRS, Or TP, TCMNAag AND VAIWN, 1965-71

lkaantitir (Thousad Tons) 6196 I2 I& 12O 1971 Imorts from Outsdde Rut Africa Sulphate of ammia 20.9 9.2 8.8 6.3 9.6 12.0 12.1 Other Nitregenous 27.0 20.9 20.9 31.6 21.6 38.1 28.9 Basic Slag 0.2 0.1 0.2 - - 0.2 - Soper-phosphates 11.5 19.3 14.7 16.0 16.4 14.8 15.3 Other phosphatios 0.1 1.6 0.6 3.4 1.4 4.5 7.4 Petassia fertilisers and mterials 0.3 0.8 0.8 2.2 2.5 4.8 3.1 Other fertilizers and materials 10.5 18.0 19.1 12.1 33.7 . 43.9 414.5 Subtotal 70.5 69.9 65.1 71.6 85.2 118.3 111.3

Uganda (smper-phosphates) 16.2 25.1 16.7 12.2 18.5 22.5 18.5 Tansania (other fertilisers) - - - 0.2 0.2 0.1 0.3 Subtotal 16.2 25.1 16.7 12.4 18.7 22.6 18.8

Total 86.7 95.0 81.8 84.0 103.9 140.9 130.1 Vixlue (Thouand M)

Impot frm Outside Bast AfricA Sulphate of A!nnniA 602.6 267.7 214.0 141.7 196.0 228.9 239.7 Other Nitrogeous 919.1 7148.2 557.0 1,177.0 539.9 1,012.5 730.7 Basic Slag 4-a8 2,2 14.6 - - 3.5 - Soper-phosphates 522M6 85008 622,3 640.2 588.7 525.9 576.7 Other phosphation 71 68.4 35.0 185.6 57.8 183.3 333.6 Potasdic fertilisers and materials 8.8 30.6 24.2 67.2 75.3 141.8 92.7 Other fertilisers and materials 565.2 996.3 894.4 514.7 1,568.2 1,962.1 2,096.8 Subtotal 2,630.14 2,964.2 2,351.5 2,726.4 3,025.9 14,058.0 14,070.2

Rr-tt fl"M st Africa -Upnda (sWep-toRM) 301.2 528.2 355.3 274.4 1415.7 477.9 394.6 Tanzania (other frtiliesars) 0.1 - - 4.2 3.7 1.5 14.5 Subtotal 301.3 528.2 355.3 278.6 419.4 479.4 399.1 Total 2,931.7 3,492.4 2,706.8 3,005.0 3,445.3 4,537.4 4,469.3

Notes Data discrepancies among alternative sources not yet reconciled.

Source: Ministry of Finance and Planning A01,1U:,X 2,0

Table 10: IMPORTS OF AGRICULTURA1 INPUTS, PHYSICA1 QUANTITIES, 1966-71

Unit 1966 1967 1968 1969 1970 1971 Chemicals Disinfectants tons n.a. n.a. 394.5 47.1 103.9 149.0 Fungicides tons n.a. n.a. 1,234.0 931.7 1,365.6 821.0 Insecticides tons n.a. n.a. 1,951.4 2,139.0 2,084.5 2,692.8 Weed-killers tons n.a. n.a. 130.3 310.3 327.5 345.7 Other tons 1,332.0 1,407.0 1,558.6 1,813.7 2,562.5 2,971.4 Subtotal 14,329.6 3,942.6 5,268.8 5,241.8 6,444.o 6,979.9 Fertilisers tons 94,213.6 80,735.3 76,875.o 93,827.0 141,215.0 130,139.0 Tractors Crawler and Truck number 50 32 36 31 51 62 Other Wheeled number 978 741 1,088 718 1,049 830 Other number __ __ 61 11 -- 4 Subtotal 1,028 773 1,185 760 1,100 896 Bags and Sacks number in thousands 6,634.1 6,796.3 2,675.0 4,136.4 332.1 122.1

Hoes and Hatchets number in thousands 598.1 333.5 592.6 568.5 400.2 564.4 of which from Tanzania: Chemicals Disinfectants tons n.a. n0 .a 3 10 1 Fungicides tons n.a. ne.a -- -- Insecticides tons n.a. n.a. 46 125 125 105 Weed-killers tons n.a. n.. ------Other tons 2 10 40 50 35 139 Subtotal 45 36 89 185 161 244 Fertilizers tons -- -- 208 980 370 297

Bags and Sacks number in thousands 17 _ 25 _ 10

Hoes and latcheta number in thousands -- of whiich from Ugandal fhemicals Disdnfectants tons n.a. n.a. -- 0.1 2.8 -- Fungicides tons n.a. n.a. __ __ Insecticides tons n.a. n.a. 15.0 12.4 6.o 4.9 'eed-killers tons n.a. n.a. 1.0 ------Other tons 24.0 17.0 17.0 36.6 2.9 2.2 Subtotal 26.0 26.o 33.0 49.1 11.7 7.1 Fertilizers tons 24,853 16,515 11,994 18,881 22,487 18,565

Bags and Sacks number in thousands 14 -- 1 1 -- --

Hoes and Matchets number-in thousands 106 59 58 15 30 86

Source: Annual Trade Reports, 1966-71. ANLNEX 20 Page 15; T£bie 11: ThPoRTS OF AGRICULTUAAL INPUTS, VALUE, 1566-71

1966 1967 1968 1969 1970 1971 ------1 thousand ------Cbhemicals YTI'ectants n.a. n.a. 72.0 20.7 29.6 49.4 .ungicides n.a. n.a. 578.2 433.2 762.6 342.1 Inwecticides n.a. n.a. 670.2 638.8 806.9 1,026.3 Weed-killers n.a. n.a. 9.0 133.7 193.5 265,6 Other 200.7 164.1 256.0 329.6 517.7 516.5 Subtotal 1,292.7 1,032.3 1,585.4 1,556.0 2,310.3 2,199,9 Fertilizers 2,406.0 1,845.0 2,067.0 2,602.0 3,405.5 3,362.5

s7Oil P117F's~iareaMon 293.7 361.3 358.5 408.4 380.1 393.5 ^izawesting 255.7 430.6 364.4 215.1 200.7 319.4 Daixy-Fa.rm Equipipent 63.0 112.5 93.4 56.2 53.2 58.2 Other 47.1 108.8 10.6 -- 2.0.7 43.7 Subtotal 659.5 1,013.2 826.9 679.7 654.7 814.8 '-.acors 7-01er and Iruck 326.7 362.7 442.1 407.1 673.9 645 .7 Other wheeled 868.2 742.5 914.6 715.3 1,090.0 1,05727 Other _ __ 90.0 27.9 - 5.9 Subtotal 1,194.9 1,105.2 1,446.7 1,150.3 1,763.9 1,709.3 taEs and Sacks 864.6 684.2 251.0 144.2 78.6 34.2

;0oes ard Matchets 90.0 57.6 85.0 75.9 224.1 86.8 55- (37;;AllSources) 6,507.7 5,737.5 6,262.0 6,508.1 8,437.1 3,207.5 of which from Tanzania: C;hemicals T-wecticides n.a. n.a. 8 20 34 5 Other 1. 1 5 2 8 3 Subtotal 14 13 13 22 4237 rtilizers -- - 3 114 6 3 Agricultural Machinerv So IWeparafion ------1 1 -- Dairy-Farm Equipment -- -- 1 -- _ -_ Other ------1 Subtotal -- -- 1 1 1 1 Ba$Lsand Sacks 3 -- -- 1

Total (Tanzania) 17 13 17 38 49 91 o.f whioh from uganda: Chemica1s Disinfectants n.a. n.a. -- -- 1 Insecticides n.a. n.a. 2 2 2 1 Weed-killers n.a. n.a. 1 -- -- Other 12 12 11 2 -- __ Subtotal 13 1*4 1)4 4 3 Fertilizers 362 244 189 316 359 297 Agricultural Machinery Harvesting -- -- 1 -- -_ _

2jy.nd Sacks 2 -- __ 5 _

Hoes and MAtchete 30 19 15 II 8 214 Totljal (Ugauida) 407 277 219 329 370 322 zgources Annual Trade Reports, 1966-71. ANNE1X 20 Page 16 Table 12 : AGRICULTURAL UOIRPS, MAJOR PROICPTS, VAIDE, Bf 12SISTIONI, 1965, 1968-n

BFiatrilbutlis 225 1968 1969 190 ^1 ______------XKL Thousand------,

Coffee. not rosated West Gercany 6,036 4,972 6,865 5,848 5,939 30.4 Sweden 1,444 1,511 1,975 3,226 2,744 14.1 U.K. 1,387 1,205 1,312 1,163 1,648 4 U.S.A. 805 1,472 1,848 3,788 1,495 7.7 Netherlands 662 763 1,388 2,369 1,306 6.7 Japan 2? 9 117 54 1,285 6.6 Other 3,735 2,888 3,353 5,825 5,113 26.1 Smbtotal 14,096 12,820 16,858 22,273 19,530 100.C

Tea U.K. 3,762 6,632 7,892 9,369 7,99? 65.7 P.S.A. 648 11 1,514 1,236 111-W 12.1 NMtherland 481 449 384 692 919 7.5 Canada 492 691 703 688 552 4.5 Other 1,093 1,437 1,212 1,195 1,239 iO.2 Subtotal 6,476 10,387 11,705 13,182 12,174 100.0

SLsal Fiber and Tow India 84 117 186 199 239 15.8 Australia 269 159 137 143 .52 10.0 Japan 35'- 185 138 165 148 9.8 Uz. 441 197 168 238 i24 9.5 France 337 240 187 151 -14 0 9.2 Other 2,3S8 941 905 982 692 45.' Subtotal 3,870 1,839 1,721 1,878 1,515 100.0 Fyrethrus Extract Australia 165 203 242 219 1429 15.5 U.K. 362 528 338 202 397 14.4 Italy 157 380 234 254 277 10.0 U.S.A. 768 691 820 537 106 3.8 Other 513 708 594 540 1,557 56.3 Subtotal 1,965 2,510 2,228 1,752 2,766 100jj

Pyrethrw Flowera Thailand 62 1lol' 87 88 92 16.1 Malaysa 2 67 118 148 77 13.5 Japan 63 111 95 26 70 12.3 Argentina 6 47 141. 65 68 11-$ Italy 12 19 224 27 55 9.6 Hi-ngS Sng 18 38 143 37 55 9.6 Other 103 150 159 123 I514 27.0 Subtotal 266 536 570 4114 571 100.0

Neat and Xeat Pewarutinms J.K. 1,282 1,7,1 1,612 1,633 2,1C5 52.9 LiYa 23 - 170 190 1432 13.° 113 160 6 257 261 6.1, Zabia 14 59 107 1142 219 5.5 Other 1,397 1,563 984 9814 963 24.2 Subtotal 2,829 3-533 2,960 3,206 3,9g0 100.0

Hides and Wdne. Undreseed U.K. 320 276 3'J1 3.35 61.s ?5. Italy 448 273 a06 -55 i142 18.1 Spain 223 190 228 212 1430 17.6 Netherlands 143 73 79 137 18b1 7.5 West Gentany i0o4 51 28 66 65 2.7 Sweden 17 147 72 86 61 2.' COther 5°5 7714 759 572 o647 26.5 Subtotal 1,760 1,684 1,873 1,6583 2,W42 100.0

'ehttlebark Extract _ndia 373 550 517 692 618 51.2 Pakistan 1i0 1714 9' 0 203 214 20.0 ?o1and - 50 - 22 8s 7.3 Crher 241 364 381 X28 260 21.5 Subtotal 715 1,138 1,148 1.1145 1,203.; 100.0

Wattleoark Ladi- 113 104 40 2Q 22 100.0 Ot1br 5 - - - Subtotal 3118 104 140 2F 22 1X Q

i 2cat.... ) Agricultural Exports, etc. (cont'd) ANNE3X 20 Page 17 Pinsapples. tinned U.K. 582 274 464 380 388 40.0 West Germany 22 30 21 84 167 17.2 Sweden 18 16 35 8 97 10.0 Spain 13 14 23 22 84 8.7 Netherlands 6 7 48 44 70 7.2 Italy 26 24 39 37 58 6.0 Other 109 85 102 104 106 10.9 Sabtotal 776 450 732 679 970 100.0

Butter and Ghee Uganda 374 146 321 299 219 51.5 Tanzania 212 294 261 246 113 26.6 Ethiopia 14 16 18 14 16 3.8 Buruadi 14 17 17 26 15 3.5 Southern Yen 55 7 11 19 10 2.4 Other 210 279. 228 175 52 12.2 Subtotal 879 759 856 779 425 100.0 Cottm Raw Ch ±inrz-and 427 179 292 450 706 59.7 Netherlands - - 32 - 212 17.9 West Germanr 164 142 78 53 83 7.0 India 21 - 10 181 51 4.3 Other 135 77 349 544 130 11.1 Subtotai 747 398 761 1,228 1,182 100.0

BeeN.. Peas and Lentils Tanzania 76 128 120 170 240 31.6 U.K. 56 186 120 65 90 11.8 Uganda 25 48 34 106 64 8.4 Malavi 7 32 6 35 45 5.9 Netherlands 5 23 31 15 44 5.8 Italy 20 12 45 44 43 5.7 Belgium 16 16 4 41 36 4.7 U.S.A. 14 42 13 20 29 3.8 Otheir 357 523 310 292 169 22.3 Subtotal 576 1,010 683 788 760 100.0 Wool Raw w..rt ra 30 55 267 14 7 131 68.6 Czechoslovakia 108 283 114 106 60 22.7 Other 422 238 170 121 23 8.7 Subtotal 560 576 551 374 264 100. O

Oilseeds, Nuts and Kernels Netherlands - 42 31 38 161 34.7 Suthern teeno 1 40 18 73 102 22.0 U.K. 184 293 104 132 63 13.6 Other 267 317 212 322 138 29.7 Subtotal 452 692 365 565 464 100.0

Cashew Nuts. Rawr India 480 622 679 1,587 746 99.9 Other - 5 1 1 1 0.1 Subtotal 480 627 680 1,588 747 100.0 Animal Feed Ugpanda 168 94 146 283 197! 24.9 Tanzania 56 66 97 .141 168 21.2 Belgium 28 189 269 200 123 15.5 U.K. 30 84 65 82 82 10.4 Japan 39 111 36 145 50 6.3 Dnwmark 47 32 29 56 43 5.4 Other 80 90 122 171 129 16.3 Subtotal 448 666 764 1,078 792 100.0 Total Major.A,ri. c3ltural Exorte 37.01,7 7 ! 4.49K 2, 9.811 All Other Exports 10,160 18,066 16,837 18,991 23,374 Total Exports 4 7 5 9 6.332 n .606 73.185

Source, Annual Trade Reports, 1965, 1968-71. ANNEX 20 Page 18

Table 13: EXPORTS OF FOOD PRODUCTS TO UGND&A AND TANZANIA, VALUE, BY CLASS, 1964-197ig

126k 12 1966 1967 1968 1969 1970 1971 j/ -______--KL Thousand------

Meat and meat preparations 139 209 194 171 188 223 205 192 Dairy Products 848 1,361 1,170 1,165 223 1,481 1,255 1,038 Cereals and cereal preparations 1,549 1,089 1,011 1,026 982 1,693 988 674 Fruit and Vegetables 201 209 279 352 332 321 359 436 Coffee and Tea 119 99 175 111 95 66 85 66 Other foods 477 494 57-0 521 611 I0o- 1,356 1,852

Sabtotal 3,333 3,461 3,399 3,346 2,431 4,484 4,248 4,258

Tanzania

Meat and meat preparations 209 152 162 135 138 143 148 127 Dairy Products 346 309 443 566 606 705 1,028 936 Cereals and cereal preparations 1,096 1,048 387 970 965 463 658 86 Fruit and Vegetables 276 310 371 411 390 365 495 610 Coffee aad Tea 332 352 318 383 287 407 458 306 Other foods 540 531 837 340 603 735 1,200 999

Subtotal 2,799 2,702 2,518 2,805 2,989 2,818 3,987 3,064

Total 6,132 6,163 5,917 6,151 5,420 7,302 8,235 7,322

'/ Provisional

Sourcet Econonic Survey, and Kenya Statistical Digest Table 14: EXPORTS 0F DAIRY PKODUCTS, VALUE, 1970-71

1970 1971 Total Overseas Uganda Tanzania Total Overseas Uganda Tanzania ------000 K£------

Evaporated or Condensed Skimmed Milk 3 - 1 .2 1 - 1 Cream 501 107 394 1 _ 1 Other Milk 8 5 3 - 551 8 168 375 In Solid Form Whiole Milk and Cream 301 53 70 178 368 6 112 250 Skimmed Milk . 221 9 113 99 145 - 51 94 Milk, Fresh 707 20 618 69 548 16 449 83 Cream, Fresh 3 - 3 _- - - Butter 599 90 265 244 380 61 197 122 Ghee (clarified butter) 180 14h 33 3 55 32 22 1 Cheese and Card 86 8 42 36 67 8 39 20 Eggs 28 27 1 - 32 31 - 1 Total 2,637 356 1,256 1,025 2,148 102 1,040 946

Source: Annual Trade Reports, Excise and Customs Department.

'O'0 ANIN'EX 20 Page 20

Table 15 AGRICULTURAL EXPORTS, MAJOR PRODUCTS, TONNAGE, 1965, 1968 - 1971

1965 1968 1969 1970 1971 ------Thousand Tons ------

Coffee 38.4 37.6 51.1 53.8 56.2

Tea 16.9(0.9)- 28.4(0.9) 33.8(1.0) 36.1(1.0) 34.3(0.8)

Sisal 58.5(0.3) 42.0(0.2) 35.9(0.1) 44.6(0.3) 34.7

Pyrethrurn Products 1.1 2.2 2.4 1.8 2.3

Meat Products 8.1(1.2) 8.1(1.0) 7.1(1-1) 7.7(1-0) 8.0(0.9)

Hides and Skins 7.4 7.0(0.1) 6.6 6.0 7.7

Maize, unnilled 0.2 281.4(3.7) 190.3(49.h) 4.7(4.6) 0.1(0.1)

Wheat 57.2(57.2) 53.5(52.9) 24.7(24.7) 44.0(44-0) 19.5(19.5)

Canned Pineapples 9.1 5-4(0-1) 8.1(0.1) 7.6(0.1) 10.9(0.1)

Butter and Ghee 2.3(1.5) 2.1(1.1) 2.3(1.5) 2.1(1.4) 1.0(0.8)

Beans and Peas 11.5(2.1) 21.8(4.1) 14.5(3.6) 114.4(4.9) 12.7(4.6)

Cotton, raw 3.3 1.7 2.8 5.1 4.6

Wool 1.4 1.8 1.8 1.7 1.3

Animal Feeds 18.4(7.4) 31.6(3.1) 34.3(4.4) 42.1(10.3) 94.9(6.9)

Cashew Nuts 6.7 8.6 9.1 23.2 10.6

Wattle Extract 0.7(0.1) 1.6(0.1) 1.4 1.1(0.1) 1.4

Wattle Bark 3.9 3.6 1.3 0.9 0.8

Oilseeds 8.6 10.7(0.7) 7.3(0.4) 14.5(0.3) 6.5

1/ Number in parenthesis indicate exports to Uganda and Tanzania.

Source: Economic Survey 1970 and 1972 and Annual Trade Reports. ANNEX 20 Page 21

Table 16: AGRICULTURAL EXPORTS, MAIN PRODUCTS, PRICES FOB PORT, 1966-71 1/ Unit 1966 1967 1968 1969 1970 1971 - ______KSi per Unit-- -.--- '-.-.------

Coffee, unroasted kg 6.90 6.17 6.81 6.61 8.29 7.03

Tea if 7.71 8.00 7.30 6.87 7.25 7.10

Maize 100 kg - 35.21 34.41 39.36

Meat products kg 6.89 6.90 8.53 8.74 8.53 9.77

Pyrethrum extract IT 149.25 148.17 136.77 121.14 132.15 149.80 Sisal 100 kg 119.82 99.62 87.46 96.05 84.20 67.76

Rides & Skins kg 6.77 5.08 4.78 5.71 5.52 5.77 Wattle extract 1.11 1.07 1.09 1.38 1.52 1.58 Beans & Peas 0.93 1.16 0.94 0.97 1.07 1.13

Cashew Nuts, raw 1.52 1.39 1.46 1.49 1.37 1.44 Wool 7.84 6.90 6.40 6.05 5.45 3.93

Animal feed 100 kg 42.13 36.55 35.64 34.88 41-07 35.54 Cotton raw kg 4.15 4.04 4.72 5.47 4.82 5.02

Pineapples, canned 1.75 1.77 1.67 1.82 1.79 1.77

Butter & Ghee 7.59 6.80 6.66 6.66 7.14 8.00 Wattle Bark 100 kg 55.91 54.91 54.79 63.06 64.79 58.68 y Pr cvisicnal Source: Economic Survey 1970 and 1972 ANNEX 20 Pa-g-e

Table 17: GOVERNI4ENT RECURRENT AND DEVELOPMENT EXPENDITURES- BY MAIN CATEGORIES, 1967-68, 1969-70 TO 1971-72

1967-68 1969-70 1970-71 1971-72

K Million------

General Services 24.31 27.59 30.43 40.45

Financial Obligations 19.01 21.07 26.43 23.39

Economic and Community Services

Agriculture and Veterinary 11.70 10.94 11.38 16.21

Forestry 1.62 1.67 1.73 2.66

Game and National Parks 1.46 1.37 1.76 2.93

Other 14.61 23.34 36.29 38.11

Sub-total 29.39 37.32 51.16 59.91

Social Services 18.54 31-59 44.26 56.80

Not Allocated 3.31 3.88 4.52 5.75

Total 94.56 121.45 156.80 186.30

I/ Provisional

Source: Economic Survey, 1972 AMNEX 20 Page 23

Table 18: GOVERNMENT RECURRENT AND DEVELOPMENT EXPENDITURES FOR AGRICULTURE

AND AGRICJLTURE-RELATED ACTIVITY, 1963-64, 1968-69 to 1970-71

1963-64 1968-69 1969-70 1970-71

-K------KL Thousand------

Agriculture - Recurrent 3,706 1,379 8,305 9,007 Development 2,195 ;,742 4,041 4,288

Subtotal 5,901 ,,121 12,346 13,295

Settlement Z/ Recurrent 176 349 350 336 Development 7,201 ',377 1,548 1,842

Subtotal 7,377 ',726 1,898 2,178

Land and Surveys 3/ Recurrent 503 695 736 760 Development 394 977 1,166 1,344

Subtotal 897 .,672 1,902 2,104

Natural Resources y Recurrent 1,089 ,187 1,283 1,320 Development 445 975 1,074 1,083

Subtotal 1,534 ',162 2,357 2,403

Tourism and Wildlife Recurrent 7 639 73 7 790 Development 68 602 626 967

Subtotal 75 1,241 1,363 1,757

Co-operatives - Recurrent 84 335 364 404 Development - - 31 31

Subtotal 84 335 395 435

Total Recurrent 5,565 12,584 11,775 12,617 Development 10,303 9,673 8,486 9,555 Total 15,868 22,257 20,261 22,172

1/ Agriculture: Recurrent Expenditures - Vote 10. Ministry of Agriculture & Animal Husbandry. Development Expenditures - Head 1 Agriculture & Animal Husbandry; Head 2 Irrigation Schemes & Land Reclamations; Head 3 Water Development. 2/ Settlement: Recurrent Expenditures - Sub-Vote 171. Settlement Department. Development Expenditures - Head 3 Lands & Settlement. 3/ Lands & Surveys: Recurrent Expenditures - Sub-Vote 172 Lands Department, Sub-Vote 173 Survey Department Development Expenditure - Head 4 Lands. 1/ Natural Resources: Recurrent Expenditures - Vote 21 Ministry of Natural Resources. Development Expenditure Head 6 Forests, Head 7 Natural Resources. 5 Tourism & Wildlife:s Recurrent Expenditures - Vote 16 Ministry of Tourism and Wildlife. Development Expenditures Head 8 Game, National Parks and Fisheries. ; 6/ Co-Operatives: Recurrent Expenditures-Sub-Vote 22.1 Department of Cooperatives. Development Expenditures Sub-head D 23 E Cooperative Development. There have been changes in the organization's structure during the period and those are reflected in the figures. The most important refers to recurrent expenditures for Water, which were in Ministry of Works, Ministry of Power and Communications in 1963-64, in Ministry of Natural Resources in the years 1961-65 - 1967-68. From 1969-70 they have been included in Ministry of Agriculture and Animal Husbandry. Note: This table differs slightly from Table 19. Source: Ministry of Finance and Planning. ANN~EX 2 0

s~~~~osom , Page 24

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C -C C 4 C 4 -C 4J 4 4 4 4 NvO C C C C C C _ ANiNEX 20 Page 25

Table 20 : RECURRENT AND DEVELOPMENT BUDGET ESTIMATES FOR THE MINISTRY OF HEALTH, 1970-71

1970-71 M^Tousandf DeveloDment

New District Hospitals 280.5 Extension and Improvement of Existing Hospitals 361.3 Kenyatta National Hospital 752.0 Kenyatta National Hospital Housing 132.8 Training Institutions 469.1 Institutional Staff Housing 180.0 Public Health Projects 136.0 Medical Research Laboratory 37.5 Grants-in-Aid to Non-government Hospitals 25.0 Rural Development 10.0

Total 2,184.2

Recurrent

General Health Services 4,8L6.8 Personal Emoluments (including Kenyatta Hospitai) 3,035.0 Purchase of Stores, Plant, and Equipment 716.0 Training 151.0 Medical Inatitutions 315.0 Grants to Mission and Private Health Services 94.7 Other Expenses 1/ 535.1 National Hospital Insurance Fund Kenyatta Hospital Purchases of Stores, Plant, and Equipment 240.0 Medical Institutions 96.0 Other Expenses 1/ 89.2 Health Centers and Dispensaries 1 312.3 Personal Emoluments 716.0 Purchase of Stores, Plant, and Equipment 382.0 Medical Institutions 25.0 Other Expenses 1/ 196.3

Total 6,640.6

1/ Mainly administrative and staff expenses.

Source: Ministry of Health AlC1,NEX 20 iDage c

Table 21: HOSPITALS, HEALTH CENTERS, AND DISPENSARIES IN SERVICE, 1969

Provinces Health Centers 1/ Dispensaries 2/ Population Population Per Numbe.r Per Center Number Dispensary

Central 3/ 31 55,000 80 21,250 Coast 10 90,000 62 14,520 Eastern 23 83,000 91 20,870 N. Eastern - - 9 22,220 Nyanza 30 70,000 56 37,510 Rift Valley 47 47,000 143 15,390 Western 24 54,000 13 100,000

Total 165 62,000 454 22,680

Beds per Hospitals 4/ Hospital Beds 1,000 Provinces Government Mission Private Total Government Mission Private Total Po#ulation ------Number------__b Central 8 23 1 32 897 979 13 1,889 1.2 Coast 13 2 8 23 1,016 194 348 1,558 1.8 Eastern 10 15 - 25 742 971 - 1,713 1.0 Nairobi 6 3 13 22 2,550 94 752 3,396 7.0 N. Eastern 3 - - 3 108 - - 108 0.4 Nyanza 5 16 3 24 534 587 47 1,168 0.5 Rift Valley 22 16 10 48 1,406 586 430 2,422 1.1 Western 3 12 - 15 362 679 - 1,041 0.9

Total 70 87 35 192 7,615 4,090 1,590 13,295 1.3

Percent 36.5 45.3 18.2 100.0 57.2 30.8 12.0 100.0

1/ In addition, there are 13 health centers run by local authorities. 2/ Including 114 mission dispensaries. 3/ Excluding the Nairobi area, with 26 MCH clinics and 21 dispensaries. 4/ These figures do not include the seven government prison hospitals with 313 beds, or health centers with 1,164 beds.

Source: Ministry of Health ANNEX 20 Page 27

Table 22 : RAINFALL BY MDNTHS, MAIN RECORDING STATIONS, 1970, 1971, AND LONG-TERM AVERAGr

Kiambu Nyeri Nanvuki Nioro Kitale Kakusega Kisumu Kisti Embu Machakos Kilifi ……-…-_-__.______-_------…---…------…-…- -…----…-…-… -

January 1970 98 130 37 136 106 148 186 138 73 87 0 1971 110 71 2 44 9 42 12 271 3 117 0 Average 1/ 47 48 21 30 24 57 63 83 22 52 18 February 1970 6 45 16 14 9 152 70 54 .0 0 54 1971 2 23 0 0. 1 6 11 15 0 0 0 Average 51 46 25 35 42 99 87 143 24 53 16 March 1970 109 138 66 131 226 258 204 430 140 205 58 1971 36 32 28 22 21 26 74 63 45 27 56 Average 114 71 62 71 88 155 162 329 98 128 37 April 1970 358 191 106 154 144 317 216 392 138 188 85 1.971 297 142 159 141 148 227 383 379 491 276 16 Average 233 185 127 134 151 241 206 287 378 208 142 May 1.970 155 165 64 155 136 259 115 216 94 66 311 1.971 316 126 143 -136 118 361 289 1,027 332 102 198 Average 167 167 85 118 157 261 171 223 261 75 270 June J.970 61 58 58 65 89. 158 68 175 16 0 51 1.971 20 30 63 147 218 238 45 140 3;1 23 169 Average 52 32 43 78 108 186 95 155 25 12 116 Jul.y 1L970 0 46 43 76 177 219 23 97 51 0 50 1,971 62 30 36 55 181 151 59 588 63 0 76 Akverage 23 36 56 106 139 167 63 109 48 4 76 August L970 11 27 45 128 205 345 61 195 57 3 30 :1971 18 51 160 174 167. 313 97 143 31 2 32 iAverage 27 38 66 117 165 237 88 90 68 4 57 September 1970 0 14 83 68 86 217 -54 114 150 0 30 :1971 9 3 63 78 75 203 48 135 12 0 46 lAverage .32 30 49. 66 97 182 79 144 47 4 71 October 1970 46 44 76 60 83 82. 73 90 56 .0 17 1971 25 42 40 14 171 108 170 458 126. 5 iO Average 67 94 85 54 102 132. 72 177 189 47 72 November 1970 110 63 54 109 32 113 69 140 203 95 17 1971 .84 72 63 55 60 104 92 182 169 134 3 Average 148 .16 95 80 73 116 116 165 272 194 74 December 1970 19 60 24 ,-25 14 52 125 487 39 121 5 1971 213 ,77 61 61 57 89 153 130. 78 181 88 Average 82 77 45 49 45 86 104 122 84 121 42

1/ Average is for the number of years during which the station has been in operation.

Source: East African Meteorological Department Table 23: DISTRIBUTION OF AGRICULTURAL LAND BY CLASS BY PROVINCE

Potential High & Medium Province High lediwn Low Other Lsnd Total as % of Total

------_------_Thousand ha ------% -----

Central 909 15 41 437 1,402 65.9

Coast 373 796 5,663 1,480 8,312 14.1

Eastern 503 2,189 11,452 1,311 15,455 17.4

Northeastern - - 12,690 - 12,690 -

Nyanza 1,218 34 - - 1,252 100.0

Rift Valley 3,025 123 12,353 1,519 17,020 18.5

Western 741 - - 82 823 90.0

Nairobi 16 - 38 14 68 23.5

Total 6,785 3,157 42,237 4,843 57,022 17.4

Source: Statistical Abstract, 1971. Table 24; DISTRIBUTION OUF LAND BY LEGAL STATUS, BY PROVINCE, 3lst DECrX9 107(7

Western Nyanza Rift Valley Central Eastern North- Coast Nairobi 2 eastern ------Km ------

Government Land Forest Reserves 549 - 4,408 2,865 1,308 - 600 23 Other Reserves 3 23 332 45 163 - 356 236 Townships 21 228 31 36 - 545 93 Alienated 257 329 19,767 2,033 2,823 - 1,251 238 Unalienated 5 404 35 9,868 - 36,169 31 National Parks - - 21 708 7,232 - 13,997 114

Open Water 137- -^3j610 -290-- 3 5 - 558 _

Subtotal 946 -3,988 25,450 5,720 1,435 _ 53,476 735

Freehold Land Smallholder Schemes- 663 332 1,Q75 1,816 602 _ _

Other 3 - 425 1,181 21 - 451 135

Subtotal 666 332 1,500 2,997 623 _ 451 135

Trust Land Not Available for Small- holders

Forest 264 9 5,965. 13 865 - 63 Government Reserves 7 5 21 165 242 - 3 Townships 11 12 1i6 16 78 254 30 Alienated Land - 1 15 102 323 - 7

Game Reserves - - 4,800 .- 3,706 _ - Open- Water- - 26 3,516 - -- 50346 - 5

Available for Smallholders Already Registered 3,850 2,392 .5,507 4,095 2,139 - 83 - Not yet Registered 2,617 9,396 .127,081 25 125,134 126,648 29,300

Subtotal 6,749 11,841 146,921 4,416 137,833 126,902 29,491 -

Total 8,361 16,161 173,871 13,133 159,891 126,902 83,418 870

Source: Statistical Abstract, 1971 0 Table 25: DISTRIBUTION OF LARGE FARMS BY SIZE OF HOLDINGS, 1962-1970

Size of Holdina 1962 1963 1965 1966 167 68 ha 1 1970 ------Number of Holdings------0 - 19.9 290 293 277 294 281 309 379 387 417 20- 49.9 281 285 276 271 252 260 302 316 324 50-- 99.9 278 269 254 247 255 284 284 295 304 100- 199.9 386 363 3142' 338 344 329 342 354 364 200- 299.9 407 368 312 286 266 261- 287 295 321 300- 399.9 342 288 239 228 219 233 233 247 253 4o0- 499.9 339 276 205 185 181 265 205 206 218 500- 999.9 688 625 532 468 466 444 444 481 498 1,000- 1,999.9 319 313 272 262 246 219 253 238 243 2,000- 3,999.9 144 148 123 114 112 4,000-1V,999.9 106 98 106 107 119 126 114 114 115 117 113 107 111 20,000 and over 13 14 12 13 13 14 13 13 15 Total 3,606 3,368 2,958 2,820 2,750 2,841 2,953 3,045 3,175

Source: Statistical Abstract, 1971

C0 AMNEX 20 Page 31.

Table 26: DISTRIBUTION OF SHALL-SCALE FARMS BY SIZE IN SPECIFIED DISTRICTS, 1969

Size Group ------_------__- a------District 0-0.49 0.50-0.99 1.0-1.9 2.0-2.9 3.0-4.9 5.0-9.9 10 and Over Total

Kiambu No. Of Farms 10,407 7,646 12,424 10,194 7,858 3,823 743 53,095 Hectares 2,352 3,991 13,525 18,307 22,182 19,222 16,812 96,391

Huranga No. of Farms 24,864 21,355 31,694 11,672 6,670 2,495 666 99,416 Hectares 9,068 16,790 46,904 29,232 26,277 17,626 8,883 154,780

Nyori No. of Farms 6,824 9,505 14,868 8,257 4,070 1,642 209 45,375 Hectares 1,943 7,390 22,341 19,666 16,203 10,951 2,821 81,315

Kirinyaga No. of Farms 525 539 6,529 9,655 6,322 2,851 525 26,946 Hectares 130 665 9,506 20,731 21,908 16,964 6,503 76,407

Kisumu No. of Farms 9,471 15,976 13,895 7,182 3,643 1,405 468 52,040 Hectares 2,484 11,060 18,593 17,872 12,823 9,857 7,453 80.142

Siaya No. of Farms 10,287 12,428 14,272 6,898 6,066 4,995 4,519 59,465 Hectares 2,953 8,859 19,616 16,241 23,201 33,958 106,094 210,922

Kisii No. of Farms 4,o51 16,279 22,469 15,591 10,241 6,114 1,681 76,426 Hectares 1,152 11,904 33,024 38,016 39,936 41,856 26,112 192,000

South Nyanza No, of Farms 7,227 6,067 14,007 10,171 14,364 15,078 22,304 89,218 Hectares 2,280 4,561 19,383 22,234 55,870 108,889 356,883 570,100

Kakameea No. of Farms 9,608 19,215 30,658 18,676 15,869 11,983 1,943 107,952 Hectaree 2,957 14,246 42,202 44,083 59,136 82,522 23,654 268,800

Bungoma No. of Farms - 1,006 3,634 5,354 7,398 li,161 3,893 32,446 Hectares - 862 6,677 15,509 34,A64 93,483 64,405 215,400

Busia No. of Farms 2,996 1,773 3,668 4,218 4,065 9,231 4,615 30,566 Hectares 650 1,301 5,366 10,244 15,122 60,650 69,267 162,600

Kericho No. of Farms 773 2,103 8,584 8,198 9,357 8,756 5,151 42,922 Hectares 222 1,552 13,308 20,849 37,484 65,875 82,510 221,800

Nandi No. of Farms 289 689 2,268 3,268 4,647 7,514 3,557 22,232 Hectares 61 622 3,689 8,349 20,250 57,274 61,555 151,800

Taita No. of Farms 3,348 5,135 3,519 2,320 590 342 3,766 19,O20 Hectares 1,922 4,811 6,306 6,846 3,057 3,440 86,026 112,408

Embu Division No. of FArms 262 947 9,009 5,905 2,963 806 262 20,154 Hectares 96 715 13,325 14,511 11,926 6,051 4,060 50,684

Source: StatisticAl Abstract - 1970.

In Kisumu and Taita farm land es'imates account for only about half the trUBt land.

Kirinyapa - repistered areas only. Note: "Farm" in this table iB for Central Province and embu Division defined as a registered pareel of land for which the owner holds a title deed.

For all other areas 'farm" is defined as all the land within a sub-location which is under the reanonsibility of a single operator. ANNEX 20 Page 32

Table 27: SIZE DISTRIBUTION OF iARGE FARMS IN

FORNER SCHEDUL3D AREAS, 1970

Size of farmsaarge farms Estimated Total Area in -lectares Number % '000 Ha 1/ %

C) - 19.9 417 13.1 4 0.2 209 _ 49.9 324 10.2 11 0.4 5'- 99.9 304 9.6 23 0.8 100 - 199.9 364 11.5 54 2.i 2i,'- 299.9 321 10.1 8,0 3.0 30Y) - 399.9 253 8.0 88 3.3 140) - 499.9 218 6.9 98 3.6 5)r - 999.9 498 15.7 373 13.9 1,0(Y) - 1,999.9 243 7.6 364 13.5 2,,'000 - 3,999.9 107 3.14 321 l. 9 4.00(0 - 19,999.9 111 3.5 O),00& over 15 0. 1,273 47.3

2otal 3.175 100.0 2,690 100.0

1, 0lDstimatedl from the number of farms in each group and the average size of holdings in that group, as given by the mid- point in eaclh size group. The residual land was attributed to farms with 14,000 ha and more.

3ourc*: 3tatistical Abstract, 1971 ANNEX 20 Page 33

.:'ible 295: SIZE DISTRIBUTION OF fiDGISTERED SZALLHOLDINGS, 1969

&iallholdinzs Area _ Thousands X1 000 Ha

0.0 - 0.49 91 11.7 28 1. 0.5 - 0.99 121 15.5 89 3-4 1.0 - 1.9 19? 24.6 274 10.3 °.0 - 2.9 128 16.4 303 ll.L 3.0 - 4.9 104 13.3 404 15.1 5.0 - 9.9 88 11.3 629 23.8 10 and over 54 7.0 923 34.9

Total I/ 777 100.0 2,646 100.0

1/ Column totals may not add due to rounding.

3ource: Stauistical Abstract. 1970 Table 29: 15NARKTED,TIkRD OUTPUT OF PRINCIPAL CROPS CALENDAR YEARS 1962, 1966-71, AND hoFiWTH RATES

O U T P U T Growth Rate (1962-71) 1962 ~ 1966 1-967 1968 X1970 1971 ------______--Tons Thousand------% Annual Clean Coffee 50.0 56.9 48.0 39.6 52.4 58.3 59.5 3.3 Tea 16.5 21.4 22.8 29.8 36.1 41.1 36.3 11.5 Sisal 59.6 64.0 51.3 50.7 50.0 44.0 44.8 - 4.9 Pyrethrum Extract 1.3 1.3 0.1 0.2 0.1 0.1 0.1 - 22.5 Wattle Bark 2/ 62.0 50.0 54.9 37.3 33.8 29.2 28.2 - 6.9 Seed Cotton 5.4 14.4 12.7 14.3 17.1 14.0 16.8 9.0 Sugar Cane 3/ 514.6 706.4 947.2 1,375.7 1,551.2 1,528.0 18.5 1/ Raw Cashew Nuts 6.6 9.9 11.8 8.5 8.1 9.9 12.0 4.3 Pulses 12.0 19.5 14.6 4.6 8.1 11.5 12.5 - 2.1 Maize 4/ 152.5 134.3 248.8 352.6 280.3 205.7 256.6 7.6 Rice Paddy 15.2 16.6 15.9 18.7 22.7 28.5 30.0 10.5 Wheat 84.2 128.4 162.2 216.3 241.6 221.5 205.7 9.9 i/ Pineapples 12.0 14.9 17.1 32.0 35.0 3h.0 6/

1/ 1963-71

2/ Purchased by Kenya Wattle Manufacturers Association. Green and stick bark.

2/Delivered to the sugar factories for the production of white sugar.

/ Delivered to Maize and Produce Board. i/ The comparable figure for 1968-72 is -6.45%. 6/ 1967-71 Source: Statistical Abstract, 1971. Table 30: ACREAGE OF MAJOR CROPS ON LARGE FARMS, BY PROVINCE, 1965 AND 1970

Nyanza Rift Valley Western Central Eastern Coast Nairobi 1965 1970 1965 1970 1965 1970 1965 ------1970 1965 1970 1965 1970 1965 1970 Thousand Ha------Maize - - 36.1 58.0 1.9 0.1 0.6 0.9 0.2 0.1 0.1 _ 0.1 0.1 Wheat - - 94,.9 101.2 0.4 - 11.5 14.9 2.1 5.1 - - _ _ Sugarcane 11.0 14.1 1.7 7.1 - - - 0.2 5.5 4.9 - .0.1 Pyrethrum - - 4.1 2.7 - - 0.6 0.6 0.1 - - - - - Sisal - - 29.2 27.2 - - 27.1 18.7 13.5 9.4 32.1 26.0 5.3 3.8 Tea 0.6 0.9 16.8 19.2 - 0.1 1.9 3.6 ------Coffee - - 7.7 .6.1 0.1 - 18.5 19.8 1.7 2.2 - _ 1.6 1.6 Wattle 1.0. - 18.3 15.9 3.1 - 1.3 1.3 -- - - - 0.1 - Fruit - - 0.4 0.4 - - 0.8 2.2 0.1 0.1 1.4 1.0 - - Fodder Crops - - 6.3 9.1 - - 0.5 1.2 0.4 1.2 - - 0.2 0.1 Employees' cultivation 0.1 0.5 19.4 ) 0.4 ) 4.8 ) 1.0 ) 0.4 ) 0.2 ) 26.2 ) 0.1 ) 17.4 Grass leys ) 3.0 ) 0.4 ) 0.7 - - 12.3 ) - ) 13.7 ) 4.9 ) - ) 0.1 ) Other _ - 15.3 25.6 - 0.1 1.7 5.5 0.9 1.3 2.9 1.8 0.1 0.1 Total 12.7 15.5 262.5 298.7 5.9 0.4 83.0 86.1 24.9 22.6 42.4 34.1 7.7 6.5

Source: Statistics Division, Ministry of Finance and Planning. ANiEX 20 Table 31: VALUE CF I Rx ED 0FWT, AML FAMS, Page 36 sy DImTYI, AT FARM, 1965, 19M6-73, AND PERCNITAGR LISrRIUTI(3

126§.~ 1 1969 V70 11 / Datrj2I1 ______------L Thousand------

Crops

Cereals Wlheat 4,316 6,635 6,583 4,994 5,206 Maize 1,848 5,405 3,861 2,828 4,276 Barley 427 248 333 392 437 Rice 311 429 577 724 725 Other Cereals 107 223 223 62 102 Subtotal 7,009 12,940 11,577 9,000 10,746 12.5

Tenporary Industrial Crops Pineapple 90 140 210 242 295 Castor and other oil seeds 281 569 503 556 400 Pyrothrum 1,553 2,623 1,317 1,477 2,423 Sgarcane 1,544 2,178 2,942 3,509 3,457 Cotton 641 700 834 695 878 Tobacco 27 15 26 35 28 Subtotal 4,136 6,225 5,832 6,514 7,481 8.7 Other Teporary Crops Pulses 322 490 428 .236 303 Potatoes 134 503 698 1,263 1,652 Other temporary crops 2/ 141 324 1,657 1,247 ,l1i2 Subtotal 597 1,317 2,783 2,746 3,497 4.1

Pezuanent Crops Coffee 13,107 12,266 16,163 21,814 18,627 (21.7) Sisal 3,917 2,193 2,250 1,715 1,519 Tea 7,331 9,335- 11,159 13,838 11,803 (13.8) Coconuts and Products 433 490 484 520 545 Wattle 570 433 464 420 423 Casbev Nuts 423 422 423 1,186 944 Fruit and Other Permanent Crops / 607 670 702 745 1,025 Subtota1 26,388 25,809 31,645 40,238 34,886 40.7

Total 38,130 46,291 571,837 58,498 56,610 (66.0)

Livestock and Products Cattle and Calves for Slaughter 9,371 11,669 12,218 13,324 13,330 Sheep, Goats and lambs for Slaughter 445 440 453 475 500 Pigs for Slaughter 554 890 614 750 593 Poultry and Eggs 230 358 320 998 1,032 Wool 428 533 560 346 220 Hides and Skins 470 657 675 604 841 Dairy Products 4,730 7,126 6,110 6,806 9,300

Total 16,228 21,673 20,940 23,303 25,816 30.1

Unrecorded Marketed Production 2,865 3,342 3,425 4,950 3,387 3.9

Total 57,223 71,306 76,202 86,751 85,813 130.o

1/ Not reconciled with Table 32. from 1969 onwards are due to improved statistical coverege. 2/ Higher figures m TM 3/ Fruit fr~da other than permanent planta is included in other teuporary crops .

Source: Kenya Statistical Digest. ANIMK 20 Page 37

Table 32: AMOUNT AND VALUE OF MARKETED CROPS, BY LARGE AND SMALL FABMS, 1971

Quantity Value Large Farms Sall Farms Large Farms 1a1 Farms ------Tons------EL Thoumand------Cereals Wheat 185,282 20,587 4,174 464 4,638 Maize 139,684 116,906 2,328 1,948 4,276 Barley 14,715 - 437 - 437 Rice Paddy - 29,983 - 761 761 Other 607 1,874 37 65 102 Subtotal 340,288 169,350 6,976 3,238 10,214 Temporary Indus- tz4al CM!se Pineapples 32,612 1,452 287 8 295 Castor and other oil seeds - 6,700 123 277 400 Pyrethrum (Equivalent) 16 127 266 2,157 2,423 Sugarcane 990,142 537,860 2,239 1,217 3,456 Cotton - 16,764 - 878 878 Tobacco _ 162 - 28 28 Subtotal 1,022,770 563,065 2,915 4,565 7,480 Other Temporary Cro2s Pulses _ 5,441 59 244 303 Potatoes - - 260 1,040 1,300 Other - - - 1,400 1,400 Subtotal - 5,441 319 2,684 3,003 Permanent Crops Coffee 31,487 27,972 9,864 8,763 18,627 Sisal 44,826 - 1,736 - 1,736 Tea 28,496 7,794 8,602 2,353 10,955 Coconut and Products - - - 545 545 Wattle bark 9,449 18,778 140 -283 423 Cashew Nuts - 19,198 - 944 944 Fruits and other perManent crops _ _ 150 600 750 Subtotal 114,258 73,742 20,492 13,488 33,980

G2.oss Farm Revenue 30,702 23,975 54,677

Source: Statistics Division, Ministry of Finance and Planning. ANNEX 20 Page 38

Table 33: ACREA4E oF MAJOR CROPS ON SMALL FARMS, BY P9OVINCE, 1969-70

Rift Nyanza Western Valley Central Conat Eastern -_--_------Thousand Ha------______-

Cereals

Improved Maize 28.2 64.7 30.0 8.9 0.1 14.9 Unimproved Maize 162.3 69.4 42.6 164.2 129.4 280.6 Bulrush Millet 0.9 - 3.6 0.2 40.0 Finger Millet 11.9 14.7 5.6 * 0.8 3.1 Other Millet 2.8 2.1 - 1.7 0.7 5.3 Sorghum 77.1 21.8 0.6 1.4 4.0 36.3 Wheat - - 1.7 2.5 - .1.3 Other Cereals 0.1 0.5 - 0.4 2.0 0.6

Pulses

Beans 40.0 24.6 9.3 113.7 8.3 125.9 Pigeon Peas - - * 0.6 0.4 121.0 Cow Peas 4.4 0.9 0.2 0.2 5.2 55.7 Field Peas 3.5 - 0.8 6.1 * 2.4 Yellow, Green and Black Gram 0.8 0.2 * 3.0 * 10.4 Other Pulses - - 1.1 - 0.9

Temporary Induatrial Crops

Cotton 17.9 14.2 - 6.1 3.2 25.1 Sugarcane 10.6 4.6 8.8 9.7 4.8 18.1 Pyrethrum 6.9 - 0.4 16.3 - 4.5 Ground Nuts 13.0 3.4 - 0.3 0.7 3.8 Oil Seeds 2.5 2.5 0.2 0.3 5.9 13.4 Other Temporary Industrial Crops * - * 0.2 5.1 . 4.6

Other Temporary Crops

Cassava 33.9 33.7 1.1 1.9 61.2 21.8 English Potatoes 0.8 * 1.7 20.6 0.7 13.9 Sweet Potatoes 10.9 6.0 0.8 12.3 1.9 13.6 Yams - - 0.1 2.1 0.9 13.2 Cabbages 0.2 2.2 0.2 6.0 3.1 0.8 Other vegetables 0.3 - - 0.8 0.1 - Other Temporary Crops 4.2 0.5 * 6.8 4.7 12.2

Permament Crops

Coffee 10.4 4.2 0.3 27.0 1.6 19.1 Tea 3.8 4.2 3.9 6.6 - 1.1 Coconuts -- 79.9 - Cashew Nuts - - - 66.3 2.4 Pawpsws * - - - 9.0 2.3 Bananas 13.6 19.3 0.4 50.6 26.5 40.0 Other Fruits 0.6 0.3 * 2.6 29.0 3.0 Other Permanent Crops 1.5 - * 2.2 0.6 5.0

Total Land Use

Aggregate Area of Crops 1/ 461.3 294.9 108.7 479.8 456.3 916.3 Total Cultivation 284.2 212.2 91.5 267.2 214.1 476.4 Paddocked Grazing 4.7 0.6 0.4 33.1 - 13.5 Other Farm Land 2/ 925.3 538.3 660.7 330.1 1,265.1 2,938.2

All Farm Land 1,214.2 751.1 752.6 630.4 1,479.2 3,428.1

1/ Crops grown in mixtures are double counted. 2/ Includes communal grating.

Note: * Indicates less 0.05 but not zero.

Source: Statistics Division, hinistry of Finance and Planning. Table 3h: IARCE FARMS, [AND USE, 1962, 1966-70, AND GROWTH RATES

Growth Rate 1262 1966 1967 1968 16 1970 196-_70 Thousand Ha - - % Annual Temporary Crops WheAt 98.6 120.9 133.1 139.8 137.3 121.1 3.h Maize 64.5 57.3 57.6 51.8 55.8 59.3 2.4 Sugarcane 18.1 17.1 21.9 26.5 26.1 26.4 6.2 Pyrethrum 17.3 5.0 4.8 4.9 3.9 3.3 -19.0 Other 83.2 78.0 80.8 70.8 70.2 91.1 - 1.5 Total Temporary Crops 281.7 278.3 298.2 293.8 293.3 301.2 1.3 Permanent Crops Sisal 106.9 108.7 103.4 83.9 85.7 85.1 - 3.5 Tea 17.3 20.7 20.7 21.4 21.8 23.8 3.8 28 Coffee 30.5 29.1 28.7 .l 27.6 29.7 - 0.9 Wlattle 30.0 23.1 18.3 17.5 16.6 17.2 - Fruits 2.8 3.0 3.2 3.2 2.8 3.7 2.4 Other 4.3 4.2 5.3 8.3 6.7 3.2 5.9 Total Permanent Crops 191.8 188.8 179.6 162.7 161.2 162.7 - 2.4

Tarporary Meadows 95.0 79.4 79.0 84h2 86.1 98.9 0.8 Temporary Fallow 41.3 44.8 54.9 61.7 94.5 95.9 10.0 Uncultivated Meadows.and Pastures 2,155.1 1,783.4 1,844.1 1,824.5 1,77413 1,780.5 _ 2.1 Forest Land 187.7 119.1 117.9 126.5 132.0 123.7 - 6.5

All Other Land 164.1 152.7 124.2 99.5 111.9 127.1 - 3.3 Total 3,116.7 2,646.5 2,697.9 2,652.9 2,653.3 2,690.0 - 1.8

Source: Statistical Abstract 1971 and Economic Survey 1972. TableU: PURCHASES OF SLAUGHTER LIVESTOCK BY STATUTORY BOARDS, 1961-71

1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 ------Thousand Head------

Cattle and Calves 177.1 183.4 164.3 157.6 184.6 187.7 216.1 184.2 185.4 196.1 210.1

Sheep and Lambs 163.1 a/ 195.0 1/ 172.8 1/ 114.6 I/ 116.7 I/ 63.1 vJ 46.8 40.7 60.7 65.8 52.8

Goats 20.4 10.3 38.4 17.2 46.6 Pigs:

Baconers 41.0 32.7 31.4 30.0 33.4 35.5 33.2 40.6 41.4 49.5 42.7

Porkers 17.6 14.3 15.1 13.7 19.7 17.9 13.9 10.0 9.8 9.1 7.0 Larders 2.3 1.8 1.8 1.3 2.2 1.8 1.4 1.3 1.3 1.9 1.4

1/ Includes goats.

Source: Kenya Meat Commission and Pig Industry Board, published in Statistical Abstract, 1971. TabLe f6: LIVESTOCK NUMBERS BY PROVINCE, BY TYPE OF FARM, 1970

Nyanza Western Rift Valley Central Coast Eastern Northeastern Nairobi Total ----- ____ ------_Thousand------Cattle Large Farms 1.9 1.6 599.4 101.5 6.8 58.7 12.0 781.9 Small Farms 1,2h1.4 725.5 1,426.3 505.2 259.6 1,550.4 - - 5,708.4 Pastoral Arers - - 1,894.0 - n.a. 440.0 597.0 - 2,932.0

Total 1,?43.3 727.1 4,279.7 606.7 414.4 2,049.1 597.0 12.0 9,929.3

Sheep and Goats Large Farms - - 272.7 83.9 1.7 71.5 - 2.7 4032.5 Small Farms 575.5 .213.7 1,003.2 610.1 435.2 1,473.3 - - 4,311.0 Pastoral Areas - - 1,798.0 - - 5422. 291.0 - 2,631.0

Tot,al 575.5 213.7 3,923.9 694.0 529.9 2,086.8 291.0 2.7 8,317.5

Pigs - 8.9 214.0 25.1 1.4 0.8 - 1.1 61.3 Chickens 4,269. 2,294. 1,160. 1,260. 1,051. 3,230. - 54. 13,318. Donkeys 9.3 - 129.7 2.2 2.7 35.1 2.7 - 181.7 Camels - - 181.0 - - 159.0 176.0 _ 516.0

Note: Within-province breakdowns are incoaplete; item totals may therefore not add to the-indicated figures

Source: Statistics Division, Mifnistry of Finance and Planning ANNEX 20 Page 172~

1/ Table 37: FISHERIES CUTPUT, TOCNA-E AND VALUE, 1965, 1969-71

1965 1969 1970 1971 1965 1:969 1970,,,, 1971 ----- thousand tons ------thousand IK ------

Fresh Water

Lake Victoria 13.2 17.4 16.4 14.9 728.0 802.3 774.1 767.0

Lake Rudolf 1.1 3.8 4.9 3.6 7.L 29.3 50.6 51.0

Other 3.3 4.1 4.6 2.4 165.7 189.7 202.'9 126.0

Subtotal 17.6 25.3 25.9 20.9 901.1 1,021.3 1,027.6 944.0

Marine Fish 5.6 6.4 7.6 6.6 308.9 346.2 460.8 962.0 Cruistaceans 0.1 0.1 0.2 0.3 23.3 29.4 33.8 72.0

Cther 0.1 0.2 0.1 0.2 7.3 10.4 4.9 6.0

Total 23.4 32.0 33.8 28.0 1,240.6 1,407.3 1,527.1 1,9844.0

1/ Value figures represent gross return to fisheries. Source: Statistical Abstract 1970 and 1971, and Economic Survey, 1972. ANNEX 20 Page 43

Table 38: SALES OF MILK AND MILK PRODUCTS BY KEIYA COOPERATIVE CREAMERIES, 1970-72

1970-71 1971-72 (Million Liters Milk Equivalent)-- Liquid Milk 95 112

Domestic 88 98 Exports 7 14 EAC 1/ (6) (13) Other (1) (1)

Whole Milk Products 33 49

Domestic 20 21 Exports 13 28 EAC (12) (26) Other (1) ( 2)

Skim Milk Products 35 5

Domestic 30 22 Exports 5 28 EAC (5) (27) Other - (1)

Total Sales 163 211

Of which:-

Domestic (138) (141) Exports (25) (70)

Wastage Allowance 6 6

Total Sales and lhstage . 69 217

1/ East African Community.

Note: Data are for fiscal years

Source: Adapted from data provided by the Ministry of Agriculture. ANNEX PO2 Page 4!i Table 39: PRICES PAID TO FARMERS AT RECEIVING STATIONS BY MAIZE AND PRODUICEBOARD FOR PRINCIPAL

FARM PRODUCTS, 1966-67 to 1972-73

unit 1966/67 1967/68 1968/69 1969/70 1970/71 1971/72 1972/73 Kg------KSh Per Unit ------

Beans: Black food beani 90 45.00 45.70 39.00 39.00 40.00 66.00 70.00 Canadian Wonder 90 57.00 57.00 50.00 52.00 76.00 85.120 65.00 Dutch Princess 90 - 65.00 47.00 - - - Li.a 90 90.00 94.70 83.00 85.00 91.00 93.00 93.00 Mexican 142 90 72.00 71.00 65.00 65.00 67.50 86.00 100.00 Mixed 90 44.00 44.70 39.00 39.00 56.00 66.00 46.00 Mwe zi Moja 90 52.00 53.20 50.00 50.00 68.00 75.00 68.00 Red Haricot 90 45.00 45.70 40.00 42.00 56.00 70.00 65.00 Rosecoco 90 64.50 65.70 60.00 60.00 76.00 90.00 65.00 Saxa 90 52.00 52.00 47.00 42.00 56.00 75.00 75.00 Soya 90 45.00 45.70 60.00 60.00 60.00 66.00 66.00 Tender Creen 90 45.00 45.70 40.00 40.00 56.00 75.00 70.00 White 90 - 60.50 52.00 52.00 56.00 70.00 65.00 White Haricot 90 60.50 60.50 56.00 56.00 60.00 75.00 70.00 Ye 1low 90 52.00 65.70 47.00 43.00 56.00 75.00 70.00 Zebra 90 57.00 57.00 50.00 50.00 56.00 90.00 70.00 Bixa ~~~~~~~~~~80280.00 270.00 70.00 64.00 42.00 52.00 58.00 Cashew Nuts: Grade 1 80 73.60 73.40 73.40 75.50 75.50 75.50 75.50 Rain Damaged 80 - 47.70 47.70 42.00 34.00 34.00 34.00 Cas...va 50 15.70 02.05 00.00 9.50 12.00 13.00 14.00 Castor Seed 65 42.70 44.00 44.00 46.00 45.50 46.00 46.00 Capsic....: Gr-de 1 20 33.20 30.90 30.90 35.00 37.00 39.00 40.00 ShisibaHills Grade 5 20 28.75 28.20 78.20 31.00 36.00 37.00 38.00 Grade 11 20 20.45 19.15 19.1.5 22.00 26.00 30.00 30.00 ShiesbaHills Grade II 20 02.00 12.00 02.00 14.00 19.50 20.00 20.50 Copra: Kiln Dried 5S 74.05 74.05 74.05 74.05 66.05 71.80 - Sun Dried 55 60.00 60.00 60.00 57.00 61.00 66.80 - Coriander Seeds: Grade 1 40 - 50.00 32.00 29.00 38.00 4,4.00 38.00 Grade 1I 40 - 50.00 - 22.50 33.00 40.00 - Grams: Black 90 60.00 60.00 60.00 60.00 73.00 73.00 60.00 Green 90 73.00 73.00 65.00 65.00 75.00 95.00 90.00 Green (Coast) 90 73.00 65.00 65.00 65.00 - - - White 90 63.00 63.00 55.00 55.00 90.00 90.00 65.00 Yellow 90 61.50 64.70 50.00 50.00 90.00 90.00 64.00 Groundnuts: Sooth Nyanza Variety 80 106.50 94.00 85.00 125.00 106.00 108.00 110.00 Uganda Bunch Variety 80 86.50 74.20 74.20 75.00 80.00 88.00 90.00 Unshelled 27 05.00 ------Millet: Bulrush 80 30.00 31.70 26.00 24.00 25.00 30.00 30.00 Foxtail 80 - - - - 40.00 45.00 45.00 Wi.bi: Black Mixed 80 38.00 37.70 30.00 30.00 48.00 48.00 40.00 Red Mixed 80 - - 35.00 35.00 60.00 60.00 50.00 Njahi: Black 90 51.50 52.70 52.70 60.00 74.00 90.00 80.00 Red 90 41.50 41.50 40.00 44.00 61.00 70.00 40.00 White 90 41.50 41.50 40.00 44.00 61.00 70.00 70.00 Paddy: Sindano 75 40.45 39.45 39.45 38.00 38.00 39.00 39.00 Sindano (Coast) 75 41.45 ------Mbuy. 75 36.15 35.15 35.15 34.00 35.00 36.00 36.00 Mixed 75 23.00 23.00 23.00 23.00 25.00 27.00 27.00 ShinRlo la Mlajani 75 36.15 35.15 35.15 34.00 35.00 36.00 36.00 Peas: Co. (Coast) 90 49.20 44.70 40.00 38.00 60.00 85.00 55.00 Cow (Others) 90 41.00 40.00 34.00 38.00 45.00 55.00 45.00 Dried Field 90 45.00 45.00 40.00 45.00 60.00 70.00 55.00 Garden 90 50.00 49.70 45.00 45.00 60.00 70.00 55.00 Pigeon 90 55.00 55.70 50.00 50.00 75.00 90.00 65.00 Si,xsix: Black 80 102.50 105.00 100.00 98.00 107.00 115.00 115.00 Brown 80 102.50 105.00 100.00 98.00 107.00 115.00 115.00 Sorghum: Red Mixed 80 25.00 23.00 16.00 16.00 17.50 20.00 20.00 White (Mtama) 80 28.00 29.70 18.00 18.00 20.00 24.00 - White (Kitui) 80 - - - - 50.00 55.00 30.00 Sunflower: White 40 35.00 36.70 27.50 27.50 24.00 25.00 27.00 Grey Striped 40 32.00 32.00 22.50 22.50 22.00 24.00 25.00 Black Mixed 40 21.00 19.70 14.50 16.00 16.00 18.00 25.00 Maize 90 37.00 32.50 28.00 25.00 25.00 30~00

1/ For calendar years 1966-67 100. Source: Maize and Froduce Board, July, 1972. Table 40:. AVERAGE ON-FARM PRICES FOR CROPS, 1961-1972

Pyrethrum Extract Year Seed Rice Sugar Coffee Tea Sisal Equivalent Cotton Paddy Wheat Cane … -*.----.------_------____------KSh per 100 Kg …------…------1961 660.22 784.14 34,270.92 113.29 -- 52.16 -- 1962 669.91 845.81 27,903.08 109.30 -- 52.16 -- 1963 571.80 776.00 28,446.oo 108.00 -- 53.25 __ 1964 700.00 721.00 31,936.00 108.00 -_ 52.27 __ 1965 667.00 741.00 37,968.00 104. o _ 51.99 __ 1966 654.60 780.00 122.40 41!578.00 95.00 44.08 54.48 1967 583.00 783.00 107.80 39,684.00 95.00 45.51 56.78 4.22 1968 640.40 585.00 92.60 34,440.00 98.00 45.75 56.26 4.52 1969 617.10 618.91 90.02 32,518.51 97.l8 54.87 54.51 4.52 1970 747.84 673.78 78.09 31,024.78 99.18 50.73 45.10 4.52 1971 626.54- 650.47 67.78 33,946.06 104.77 50.73 50.61 L.52 1972 1/ 746.oo 651.2h 119.37 35,200.00 -99.12 59.55 50.61 5.18

1/ Second-quarter.

Source: Statistical Abstract and Kenya Statistical Digest. °|. ANNEX 20 Page 46

T.'>le 41: CCST-GF-LIVIIN I\NDICES, NAIROBI, 1966-71

Middle Income Lower Income All All Date Food Groups Food Groups - - - August 1971 = 100 ------

1966 (December) 86 88 90 90

1967 (December) 89 91 92 92

1968 (December) 89 92 92 92

1969 (December) 90 93 90 94

1970 (December) 93 95 92 94

1971 (December) 101 101 101 101

1972 (September) 104 104 102 103

Note: The above data covers a period in which the base period and the group weights were clanged. See "New Lower and Middle Income Cost of living Indices, 1971: A Description of.the Method of Compilation", Ministry of Finance and Planrning.

Source: Central Bureau of Statistics Table 42: AVERAGE RETAIL PRICES OF CERTAIN CCNSUNER GOODS INCLUDED IN THE COST OF LIVING INDEX, NAIROBI, 1965-1970

Article Unit 1965 1966 167 1968 1969 1973 ----- KSh per Unit Bread, White 1/2 kg loaf 0.83 0.83 0.83 0.83 0.83 J.85 Butter 1/2 kg 4.22 4.23 4.19 4.20 4.13 4.22 Coffee, J.G. 1/2 kg 8.26 8.26 7.97 7.30 7.13 7.75 Tea, Brooke Bond, Green Label 1/2 kg 5.75 5.75 5.68 5.68 5.98 6.02 Sugar 1 kg 1.48 1.54 1.54 1.54 1.55 1.55 Milk (delivered in sealed container) 1 pt 0.70 0.70 0.70 0.70 0.70 0.75 Beef, Sirloin High Grade 1 kg 8.11 8.48 9.87 9.87 10.82 11.76 Mutton, leg "A" Grade 1 kg 8.63 8.94 9.47 9.47 9.24 9.98 Potatoes 1 kg 0.44 0.44 0.44 0.73 0.50 0.50 Cabbages 1 kg 0.66 0.70 o.66 0.70 0.70 0.85 Eggs, 1st Grade 1 doz 4.29 4.39 4.36 4.10 4.16 4.16 Beer, East African (excluding bottle) 1 bottle 2.16 2.18 2.30 2.30 2.40 2.40 Cigarettes, East African "Clipper" Pkt of 20 2.56 2.25 2.25 2.45 2.50 2.50 Maize Flour (Posho), unsifted 1 kg 0.84 0.88 0.77 0.77 0-55 0.55 Maize Grain 1 kg 0.77 0.77 o.66 0.66 0.55 0.55 Wheat Flour 1 kg 1.21 1.32 1.32 1.32 1.35 1.33 Rice, Local grade two 1 kg 2.49 2.42 2.20 1.76 1.75 1.65 Beans, mixed 1 kg 1.06 1.10 1.10 1.10 1.14 1.37 Lake Fish, Tilapia Each 1.70 1.72 1.80 1.89 1.93 2.00 Beef, Low Grade 1 kg 3.74 3.96 4.56 4.56 5.27 5.34

Source: Statistical Abstract, 1971. ANNEX 20 Page 48

Table 43: FERTILIZER PRICES FOB MOMBASA, CROP YEAR 1971-72

Item Analysis Subsidy.* Price' N P2 05 K2 0 KSh per ton (Lots of 13 to.100ltons) 1/ ------KSh per ton------

Nitrogen Sulphate of Ammonia 21 42 352 Calcium Ammonium Nitrate 26 52. 516 Ammonium Sulphate Nitrate 26 52 516 Urea 46 92 564

Phosphate Triple Superphosphate 45-47 215 545 Di-Ammonium Sulphate 18 47 271 748 Single Superphosphate 21-22 110 268

Compounds 6 30 162 605 10 30 170 649 17 17 17 114 672 2 20 130 606 15 45 255 755 11 55 287 786 25 5 5 2/ 72 579

Potash Muriate of Potash 60-62 0 560 Sulphate of Potash 50-52 0 680

1/ In 50 kg bags. After deduction of subsidy.

2/ Plus 5% Sulphur.

Source: Kenya Farmers' A3sociation. ANN\EX 20 .?age 49

Table 44: RAIL RATES FOR FERTILIZER TRANSPORTATION BETWEEN SELECTED POINTS, 1972

To ELom Kilindini From Nairobi ----- Kai per tcn i/------

Athi River 29.5 6.5 Broderick Falls 49.5 27.5 Buagoma 50.5 29.5 Eldoret 46.o 25.5 Gilgil 36.5 15.5 Hoey's Bridge 4 8 . 5 27.5 Karatina 37.5 15.5 Kisumu 46.o 25.5 Kitale 49.5 27.5 Londiani 42 .0 19.5 Lugari 48.5 27.5 Lumbwa 43.0 22.0 Molo 40.5 18.5 Nairobi 31.0 _ Naivasha 35.0 14.0 Nakuru 38.5 16.5 Nanyuki 40.5 18.5 Naro Moru 38.5 17.5 Njoro 38.5 17.5 Nyeri 38.5 16.5 01 Kaloa 38.5 16.5 Plateau 43.0 24.0 Rongai 39.5 18.5 Sagana 36.5 15.5 Thika 33.0 10.0 Thomson's Falls 39.5 18.5

I/ In 50 kg bags; for minimum shipments of 13 tons. Source: Kenya Fanmers Association. Table 45: OUTPUT OF AGRICULTURAL TRAINING INSTITUTIONS, 1968-72, AND PROJECTED, 1973-76 1/

Actual Projected 1968 1969 1970 1971 1972 1973 1974 1975 1976 ------Number of Student Graduated------_-__-_-_-_

University Level Faculty of Agriculture, Makerere 2/ 7 20 19 19 23 1 7 - - Faculty of Agriculture, Nairobi - - - - - 39 40 40 40 Faculty of Veterinary Medicine, Nairobi 5 8 7 12 8 22 24 45 45

Sub-University Level Egerton College 3/ Agriculture 15 30 38 14 15 n.a. n.a. n.a. n.a. Farm Management - 20 15 18 10 n.a. n.a. n.a. n.a. Horticulture - - - - 10 n.a. n.a. n.a. n.a. Agr. Engineering 4 5 4 5 2 n.a. n.a. n.a. n.a. Animal Husbandry 12 22 18 14 18 18 21 26 25 Dairy Technology 5 2 4 - I n.a. n.a. n.a. n.a. Home Economics - - - 20 26 n.a. n.a. n.a. n.a. Agr. Education - 7 37 42 35 n.a. n.a. n.a. n.a. Range Management 10 9 5 6 10 20 27 30 30 Total (46) (95) (121) (119) (127)

Embu Institute of Agriculture 4/ 65 7/ 67 64 82 63 72 79 80 125

AHITI 5/ 4/ Animal Health 30 30 48 53 49 64 n.a. n.a. n.a. Range Management - - 19 19. 19 20 n.a. n.a. n.a.

Western Institute of Agriculture 6/ 4/ 125

Athi River Meat Inspection School 8/ 54 54 54

1/ Kenyan personnel only. 2/ Uganda 3/ Diploma level; 3-years post-secondary course. 4/ Technical Assistant level; 2-year post-secondary course. 5/ Animal Health and Industry Training Institute, Kabete. 6/ Planned to begin operations at Bukura within a year or two. 7/ Estimated. 8/ Planned to begin operations in 1974,

Note: In 1971-72 the estimated number of Kenyans in undergraduate agricultural studies abroad was as follows:'a) at Makerere, 49; aind b) elsewhere, 36 in a'griculture, 7 in forestry, and 14 in veterinary science.

Source: Ministry of Agriculture, Acting Head, Training Division. 6 Table 4 : PRESENT ORGANIZATION OF PTJBLIC SERVICES TO AGRUICTTLTJRE.

IC)fce of the Pre3 ti

Statuto Boards B

|Mnst of FiLnancie| - and Econo,c Planninel /

.lo s.rvice t I Financel| Dev-31opmentl |Cornercial Regulatory agricultulre MaJor services to agriculture % Boards I Boards IL,oards Boails

i Cereals i Ag. Dev. i Kenya i Kenya Si'sai . _ ,it'y el & Sugar lorks j Corp. Meat, Board e Finance Co -nission Corp. ii K.T.D.A. ii Kenya of Ministryi Dairy Mionistry Kenya Board of ii Ag. Finance iii NatL. Local . Coffee and _ Lands and Corp JIrriga- Marketing . o5rernmenst Settlemzent iii Pyrethrurn tion Board Board . ~~~~~~~~~~~~~~~~~~~~Board | 'ni., ottimistry .iii Pyrethrur. iv Pig Industry of |iv Sugar i nfor,nation Marketing Board _Coops and Author- and Froadcasti. Social ServicesL Board ity v Tea Board iv Maize and of' Kenya Produce M|inistry off _ ivcxer a;id 1 Natural Resources Board vi W'heat Board Co =,Mications .v Cotton Lirnt Horicultural Ministry~~~~ ~ndSodCoop. Dcv- -I Tcruism Yarketing Authority; . . and Board it1 * T5Lif~~~~~~~e eJu i