A Strategy fcr the Development of Four Districts in Western Kenya Prepared under contract for the United States Agency for International Development (IQC Contract No. PDC/1406-I-00-1097-00)• Gary D. Kilmer Robert Bates Elliott R. Morss Abdi Zahedani Tony Babb Albert H. Barclay, Jr. May 1982 DevelopmentDAT Alternatives, Inc. 624 Ninth Street, N.W. Washington, D.C. 20001 i PREFACE This report cuntains the findings of a study intended to identify opportunities and approaches for enhancing the economic development of western Kenya. The study focused on two districts in Nyanza Province, Kisii and South Nyanza, and two in Western Province, Kakamega and Busia. All four districts are characterized by high population densities and medium to high potential for agricultural production. This part of the country, adjoining Lake Victoria, has been designated by the Government of Kenya (GOK) and by the United States Agency for International Development (USAID) as a priority area for new development initiatives during the 1980s. At the request of the GOK and USAID, Development Alternatives, Inc. (DAI) fielded a five-person team in late 1981 to review the development prospects and potential of four districts in western Kenya. The team consisted of Gary Kilmer (team leader and rural enterprise specialist), Tony B-abb (agriculturalist), Elliott Morss, (regional planner), Robert Bates (institutional development specialist), and Abdi Zahedani (economist). Field work was carried out in November and early December. Because of delays in receiving comments from USAID and the GOK, and conflicting travel schedules of the DAI team members, revision of the draft report submitted in mid-December has taken longer than originally anticipated. This report presents an overall strategy for accelerating the pace of development in western Kenya, with special attention to the agricultural and rural industrial sectors. It does not contain detailed feasibility analyses of specific project proposals, nor should it be read as a comprehensive project identification document. It is meant to provide guidance to the GOK and to USAID, as an interested donor, on the major elements of a long-term program to improve agricultural productivity and create additional employment opportunities in western Kenya. ii The team is grateful for the excellent cooperation it received from the many individuals who assisted in organizing the research effort and willingly submitted themselves to a seemingly endless series of interviews. Particular thanks are due to Mr. Barak Odhiambo of the Ministry of Agriculture and Mr. John Nyamiobo of the Ministry of Economic Planning and Development, who participated actively with the team throughout the study process and contributed importantly to any credibility our suggestions may have. Thanks are also due to Mr. Francis Masakhalia, Permanent Secretary, Ministry of Economic Planning and Development, and Mr. Tom Worrick of the USAID Agricultural Office, who organized and coordinated the overall effort. The officers of the Provincial Administration in Kisumu and Kakamega, as well as the staff of the Lake Basin Development Authority, were of great assistance in providing information and logistic support to our team. Others are too numerous to mention, but their cooperation and openness made the work enjoyable for the team and contributed greatly to the final conclusions and recommendations. The team members and DAI, of course, accept responsibility for analyzing the data provided and arriving at the conclusions that are presented this report. Gary Kilmer Team Leader May 1982 iii TABLE OF CONTENTS PREFACE. CHAPTER ONE INTRODUCTION . BACKGROUND . ........ Purpose. ......................... 2 Methods of Investigation .............. 2 Schedule ............. ...................... 3 GENERAL CONCLUSIONS. 4 CHAPTER TWO REGIONAL SETTING AND CHARACTERISTICS . .. 7 BACKGROUND .................... ......... 7 ECOLOGICAL FACTORS ................... 9 DEMOGRAPHIC FACTORS .................. 11 Land Scarcity .......... .................... Migration 12 Pa-terns ........................ 14 Trends in Fertility ...... ............. ... 16 EXISTING INFRASTRUCTURE ...... ................ 16 The Transport Net ork ................ 17 Power, Water, and Related Services ......... 20 FOOTNOTES...................... 21 CHAPTER THREE THE MACROECONOMIC SITUATION....... 23 RECENT POLICY TRENDS .................. 25 THE IMPACT OF DEVELOPMENT ASSISTANCE .......... 29 DECENTRALIZATION INITIATIVES . .. ......... 32 District Authorities ...................... 33 Lake Basin Development Authority . .......... 35 FOOTNOTES..... ........................ CHAPTER FOUR AGRICULTURAL SECTOR ASSESSMENT .......... 39 INTRODUCTION ......... ...................... 39 LAND USE AND PRODUCTION PRACTICES ... ............ 41 Current Land Use Patterns ..... ............. 41 Potential for Expanding the Land Base for Agriculture.... ............. 44 Protection of Natural Resource Base. ......... 47 ANALYSIS OF CONSTRAINTS TO AGRICULTURAL PRODUCTION . 50 Introduction ........ .................... 50 iv Research, Extension, and Training. .. 52 Soils Management . 54 Livestock Disease. ................ 55 Input Supply ........................... Production Credit 58 for Small-Scale Farms. .. 61 Marketing of Agriculture Outputs ........... .64 PROPOSED INITIATIVES ... .................. 67 Introduction ... ........ ........... 67 A General Strategy for Agriculture ... .......... 68 Policy and Program Changes . ..... 69 Proposed Initiatives in Technology Development .... 69 Farming Systems xesearch and Extension . ..... 70 Soils Management, Research, Extension and Training Projects.... ............... .71 Livestock Forage and Fodder Crop Promotion ..... 72 Animal Traction and Farming..... .............. 73 Soil Conservation and Tree Production. ...... 73 Proposed Initiatives in Cash Crops . .. 73 Proposed Initiatives in Agricultural Services . 76 FOOTNOTES ....... ............... ........ 77 CHAPTER FIVE RURAL ENTERPRISE: SECTOR ASSESSMENT . 79 INTRODUCTION ...................... ....... 79 CURRENT STATUS ................ ASSISTANCE . ......... 79 ASITACPRGPROGRAMS. ..~..................... .. .8 84 Industrial Credit. ..... 84 Technical Assistance Programs ........... .... 95 MAJOR CONSTRAINTS .............. ........ 97 Manpower ..... ..................... ..... 97 Entrepreneurial Capital...... ............... 99 Rural Infrastructure ..................... 100 Summary of Major Constraints .... ............. PROPOSED 100 INITIATIVES ...... .................. 101 General Strategy . ................. 101 Agro-Industrial Opportunities ............ ... 102 Project Possibilities..... ................ 105 FOOTNOTES. ........... ........ 115 CHAPTER SIX ALTERNATIVE MODELS FOR PROMOTING ECONOMIC DEVELOPMENT IN WESTERN KENYA. 117 Line Ministry Projects .... ............... 119 Regional Projects .... .......... ........ 121 Provincial Projects ...... ............. ... 122 District Projects................ ....... 123 Nongovernmental Projects .............. 127 v ANNEX A. A-I ANNEX B . B-1 AN EX C *. C-1 ANNEX D . D-1 vii LIST OF TABLES Table Title Page 1 District Populations, Growth Rates and Densities . ........................ 12 2 Net Migration Flows, 1969-79, by District . .. 14 3 Producer Prices for Principal Crops ........ 29 4 Kenya: Medium- and Long-Term Public Loan Commitments and Disbursements . 31 5 Rural Enterprise Acti-ity Kisii District. 80 6 Rural Enterprise Activity Kakamega District . 82 7 Rural Enterprises Activity Busia District . 83 1 CHAPTER ONE INTRODUCTION BACKGROUND The commissioning of this study by the Ministry of Economic Planning and Development reflects the interest of the Government of Kenya (GOK) in better coordinating and enhancing economic development efforts in western Kenya. This region, underdeveloped commercially, contains about 32 percent of the population of the country and a large share of its most productive resource, fertile land. The region has never really caught up with other productive parts of the country since colonial times, when it was seen as a source of agricultural labor for European-owned farms in the Rift Valley, and when the production of most cash crops by Africans was not only discouraged but actually prohibited. The GOK now sees that the future prosperity of Kenya as a whole depends, to a large extent, on increasing the agricultural and industrial productivity of this region and integrating it more effectively into the national economy. Western Kenya (Nyanza and Western provinces) is also one of the two areas identified as priority target areas by the United States Agency for International Development (USAID) in its Country Development Strategy Statement (CDSS) for FY 1984. The first of the three development objectives listed for USAID/Kenya in this document is "increased rural production, employment and income." The subject of this study is thus consistent with USAID's medium­ term program needs and should also contribute to the further definition of longer-term program efforts. 2 Purpose The aim of this study, as presented in the team's terms of reference, was to "suggest economic development approaches which will result in expanded production and contribute to economic growth" in four districts of western Kenya--Kisii, Kakamega, Busia, and South Nyanza. The terms of reference specified that particular attention should be given to actions that would: " Reduce population pressure on the land; " Increase employment opportunities; " Increase agricultural production;