RESTRICTEDA r-Am- AF8FIL E CUt'! ~Report No. AF-58a

VUIUIFILECUP voi'ume 5 --

I This raeport wirs nrepnared for usea within the Bank nn t ffiHnfotel organiztlns'.n

IThey do not accept responsibility for its accuracy or completeness. The report maynot be pub!ished nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROSPECTS FOR ECONOMIC DEVELOPMENT IN EAST AFRICA

(in four volumes)

VOLUME II - KENYA

(in seven parts)

PART TWO: ANNEX A- ACRICULTURE. FORESTRY AND FISHERIES

AuustI 3.1, 167

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EQUIVALENTS

Currency

1 Kenya Shilling U. S. $0. 14U.S. $1 = K. Sh 7. 14T1- = U. S. $2.80I 1 = K. Sh 20.00

Weight

Throughout this report, unless otherwise stated,tons refers to long tons of 2240 lbs.

COMPOSITION OF THE MISSION

This renort is based on the findings of a Mission to F.ast Africawhich did its field work in October, November and December 1966 and consistedof the following:

.Tnhn n. dH WTilde, (Chipf of Mission (TRPDT)

Colin M. F. Bruce, Deputy Chief of Missionand Chieaf' Economist+ - Kenyar (TBRD))

Kudlapur G. V. Krishna, Economist - Kenya (IBRD)C. G. Akhurst, Agricultural Adviser - Kenya (FAO)Maurice Fenn, Agricultural Economist - Kenya (FAO)

Per Tlvei4te, Deputy Chief ofP Ml11ssion

and Chief Economist - Tanzania (Consultant)BDruno EJ2. Scheltema, Economist - TLanzanLa \(LDIBD)

Archie Forbes, Agricultural Adviser - Tanzania (FAO)Jacqdues K'athIane, Agricul"Ctural Economisti - TLizan[iad (IBD.RJ)

Otto Maiss, Deputy Chief of Missionand Chief Economist - Uganda (IBRD)

Nicholas Carter, Economist - Uganda (IBRD)David IV. jvj. Haynes, Agricultural Adviser - uganda (IIB RD)Montague Yudelman, Agricultural Economist - Uganda (Consultant)

H. David Davis, Adviser on Tourism (IBRD)Bernard H. Decaux, Adviser on Industry (Consultant)Jack Derrick, Adviser on Industry (Consuitant)Edward V. K. Jaycox, Adviser on Transport (IBRD)Aristides J. Macris, Adviser on Agricultural Training

and Education (IBRD)David McLellan, Adviser on General Education (Consultant)Lyell H. Ritchie, Adviser on Industrial Finance (IFC)Gavin Wyatt, Adviser on Power (IBRD)

The Mission's findings relate for the most part to the situation asof the end of 1966, although in some respects note has been taken of develoomentsup to the middle of 1967.

A rITTUTTT mr TnV FEl1'OrTTO'J A1T T'TrFTJ,SnTEI IN rTIMATrAItUALU LJIU112~, ruIxI.J.L1xj. llflL I? iOfl~11fLx) l\J IThMI

TABLE OF CONTENTS

Page No.

SULVIMARY AND CU SJIONUS1b .......................................

I. The Present Situation. The Production Pattern.1Contribution to the Economy .Production Since 1961.3

II. The 1966-1970 Development Plan ......................... 6The Direction of Effort ............................ 6Output Targets ..................................... 6Export Targets ..................................... 7Proposed Expenditures .............................. 7Forestry and Fisheries ............................. 10The Plan in Relation to Available Resources ........ 10

III. Some Controlling Factors in Agricultural Development 12A. Productive Capacity of the Land .12

Scope for Improvement .12Irrigation ............... 15Mechanization ............ 16

B. Markets .17Prospects in General ............................ 17The Market Outlook for Tea ..... ................. 19Commodities for Which Overseas

Market Conditions are Favorable .... ........... 19Possibilities of Exporting Maize .... ............ 21Exports to Uganda and Tanzania .... .............. 21Import Substitution ............................. 21The Overall Prospect for Exports

in 1970 and Beyond ............................ 22C. Land Transfer ...................................... 22

The Settlement Schemes .......................... 22Transfer of Large-Scale Farms Intact ............ 26

D. Taxation of Agricultural Produce .... ............... 28The Case for an Increase ........................ 28The County Council Cesses on Produce ............ 28Proposals for a Land Rate ....................... 29A Tax on Produce Handled by the

Marketing Organizations ....................... 30

IV. Government Participation in Agricultural Development ... 31The Field Extension Services ....................... 31Developrment of the Pastoral Areas .... .............. 34

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Page No.

The Research Services .............................. 38Agricul tural Credit = == .a ahal....a.a.a. 41Agricultural Development Corporation .... ........... 43Marketing Arrangements- t - . 43Agricultural Education and Training .49A £rv.icliiitiiria1l Development Plannir~ing 5.

V. Production Prospects and Probles. 57A. Crops.57

}eat~~~--I be .......... ............................ 59A.c Crops................................................ 57

MA ',nMa co . .. . . . . . .. . . ... . . .. . ... . . .. . . ... . ... . . ... . ... . . ... . ... . . ... . . .. . . .. . . V1

WDheat . ........................................... 59

Coffee .......................................... 63

Sugar Cane.. nd.. ugar.......................................... -'-Sisal . ........................................... 62

Sugar Cane and Sugar . ........................... 64

Toac ................................................... 70)Horticulture ..................................... 6

Cashoewus ................................................... 70

Potatoes.69Tobacco .......... ............................... 70

B.~~ Lietc .................................................... 7Cashew Nuts . .................................... 70

Dioconuse ....ol................................................ 72'B. Livestock ...................... 71

General. .. .................... 71Disease Control..................72Artificial insemination Scheme............7Beef ......... ................................... 74Hair Sheep and Goats .................... , 76Dairy Products .77Pig Meat. 79Wool and Mutton .80Poultry and Egg Production .80

VI. Forestry ., 81

VII. Fisheries .............................................. 84

VIII. General Production and Export Prospects .... ............ 87

APPENDICES

1. Statutory Boards and Other Official Organizations Responsible forAgricultural Production, Marketing and Development in Kenya.

2. The Marketing of Maize and the Disposal of Surpluses.

3. Existing Agricultural and Livestock Research Centers and ExperimentStations.

4. Additional Tables; Mission Proiections.

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markets for these two crops, rather than inability to achieve physical outputtargets, that will reduce the overall rate of growth of agriculture in theimmediate future. For coffee, we believe that it will be possible to sell onlyabout 55,000 tons in 1970, of which 53,000 would be exported compared with thePlan target of 70,000 tons; and this alone will reduce total export earningsby over 16 million.

6. We believe that most of the other croo production targets in theDevelopment Plan will be achieved. The main exceptions are cotton and sugarfor which output is likely to fall short of the targets by at least 30 percentand 25 percent, respectively. Tea production is scheduled to increase byalmost 90 nereent in the Plnn nerind mainlv throuLh the KTTA'm 1arqp programof smallholder plantings; progress towards this target is very satisfactory.For the livestork sector, it is now evirdent i-hat the nDevelopmenit Plan targets

for meat and milk production for 1970 are overambitious, but we believe thatqtriking increases in output are possible overarather longer period

7 Mn-rkt +r fnlorT Tnn i;r+1.r m-i rih:ncnaoc in thp rnn++trn ,of' -nlr'1e._

tion. The most urgent need is to avoid chronic overproduction of coffee. Tothis end we believe thatthe Government shold aim to take out of productionsome 30,000 acres accounting for an output of about 10,000 tons of coffee.This objective will havre to be realized through a com..bination of measures thatwould discourage marginal producers by, for instance, higher export taxes oncoffee and t

h at would offer- coffee grrowers positive i-ent-, to schift theiJr

land to alternative uses. The development of alternative cash crops forexport is noit eacsy, al +en-+ a production ^ould pribably be fth or increased

and considerable maize exports could also eventually be developed, providedproduction costs can be f-her r-edu. Special effot s must a-lso be made tno

build up markets for the fruit, vegetables and potatoes that Kenya is excep-ti-1onall welsie -to produce 4ut the wides oppotur.tie forexaninI±U IId..L_LJ W .LL- 4 r U V s j)J.tU.LLt,Z: * )LU Ut. 5ID WIC.L _U~ ~I tjppIJJ. ItUUIS.IV-.3 I OI a 115C1±

production appear to be in livestock products, and the development of com-mercial li±ves'.,tock raising is now rightly bt'ueLing gJ. veII aI high11 pioiU.Lty.

8. The economic potential of most of the pastoral lands, even thsue -withhigh quality grazing, has until recently been hardly tapped at all and thepopulation of about one million people has been able to produce little morethan their own subsistence. The Government has recently prepared a program f'orthe development of the pastoral areas which entails expenditure of LI9 .4 mii1onover five years. Although we consider the program overoptimistic, the success-ful introduction of commercial livestock husbandry to progressively wider areasis undoubtedly of prime economic and social importance.

9. The rising trend of marketed output from the peasant farming areas isto be sustained by further large injections of development capital during thePlan period. This sector is likely to increase its share of the country's totalmarketed crop production from 26 percent in 1964 to nearly 45 percent in 1970.The settlement schemes, which have added 1 million acres to the small-farmsector, are expected to account for more than one-sixth of all crop productionmarketed by smallholders in 1970. Sustained growth in the small-farm sectormust be based on the more effective use of land for cash cropping, dairying andmore economical food crop production. The continuing programs of land reform,general supervision and advice from the extension services, special measures to

AGRICULTURE, FORESTRY AND FISHERIES IN KENYA

SUMMARY AND CONCLUSIOITS

1. Until 1960, the agricultural economy of Kenya was divided into twodistinct parts. One was the "scheduled" area which was in effect the com-mercial European sector and consisted of large farms and ranches developed byindividuals or companies. Some two-thirds of this land was used for cattleranching and the remainder for mixed arable farming and for estate productionof permanent crops, mainly coffee, sisal and tea. While comprising only one-fifth of the high potential land, this sector accounted for about four--fifthsof the country's marketed production in the late 1950's. The second was the"nonscheduled" African small farm sector area which supported 80 percent ofthe rural population, and varied widely in ecological conditions and stages ofdevelopment from the vast semi-arid areas of purely subsistence livestockkeeping to the intensive mixed cash-crop farming in parts of Central Province.Even before 1960 farming on the higher potential lands of this area had shownmarked though uneven progress.

2. Since 1960, small-farm agriculture has continued to develop rapidlyin some areas. Between 1954 and 1964, the overall annual rate of growth ofmarketed output was 8.8 percent. This progress has been associated withactive Government assistance involving heavy development expenditure andextension services for farmers. In particular, the policy of encouraging landconsolidation, enclosure and registration has helped to stimulate progress-The most notable features of small farm development have been the rapidincreases in the nroduction of high value eash erons, esneciallv coffee, teaand pyrethrum and the rapid development of milk production from grade cows.

3. In the large-farm sector, developments have been less favorable torapi: g 7rnwtfh minc- lQrf -petween 19Q6 and 1 O( the aren o f R1Eropean

farms was reduced by 1% million acres through land transfers for settlementscbem.s a,nd a furvthe.r 600,000CC ac.resz have ben taken-, up 1y lan-rge,-seale African'~

farmers. In the two years before independence in 1963, there was a seriousloss of confidence among the established farmers in the former scheduled areasand investment and productivity suffered. But the land transfers in thefollowing years followed an orderlyn rram and confidence return ed. +utpufrom the land that was transferred continues to lag, however, and althoughsettlement pnroductior. is no increasing', -m --P +', new, A fricn.n large fars

are still in difficulties.

4. In the ten years prior to 1964, the rate of growth of marketed outputof agri4cultural and liv_,est1ock production -veragdapoitey53err,a

year. For the period 1964-70 we expect the rate of increase to be much lowerharL thlat.d in tnhe preceuding perio d oUr th ill at pro-Jectedt iLn the Plan . We estILLmdate

that the gross value of market output at constant prices will rise at anannua±l rate of about 3.5 percent as compared wi-th 5.9' percen-it-I proJecuted by the

Plan. Further declines in prices will probably reduce the growth rate toapproximately 1.9 percent. A fall in p-rices is also likel-y to confine theincrease in export earning to around 2.1 percent a year as compared with therate of almost 4 percent projected by the Plan.

5. Coffee and sisal were two leading contributors to the growth ofoutput in monetary terms from 1955 to 1964, and it is the restriction of the

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develop particular crops and an expansion of agricultural credit, togetheraccount for more than half of the develonment and recurrent exnenditure envis-aged for agriculture in the Plan.

10. Up to 1970, the Government proposes to take no more than another60,000 tn Rn O0nO acres from the large-farm sector for settlement schemes,although the Development Plan states that a further 320,000 acres may be ptur-c'hased frnm uropensn fortransnfr to the + Agricultural TDeeloprmnt rpTonati+on

(ADC) or directly to African farmers. In the interests of productivity, thefuture rate of land transfer should not exceed the rate at which it is requdredfor suitable African buyers or for sound economic use by the ADC. Accordirgly,we believe that a much reduced rate of transfer in the years immediately ahleadwill be necessary. The large-farm sector will continue until 1970 to producemore th1]M half" th'-e couintr-y's markleted production and rmore th,n h-- 4-f the .lCUl-1

tural exports, so that the productivity of this sector must continue to be aprimary concern.

11T L1e most serl.ous b4otl53 1enec1k. i1n tUhe development- ofi oup iLs4L th.e

shortage of qualified personnel in the public and semi-public organizationsresponsible for the formulation of polic-y-, the detailed planning nld imple-mentation of projects, and the organization and supervision of agricultura:Lser-vices to the farmiler and livestock owner. While Lrainlng prugrtnib willsoon produce increasing numbers of personnel at the junior and intermediatelevels, the shortage of senior professional staff with extensive educationand experience will persist.

12. Development is seriously handicapped by the lack of detailed practicalprojects and programs. In considerable part this is due to the fact that thePlanning Division which was established in the Ministry of Agriculture in 1965has really not been allowed to concentrate on its basic function. For themost part it has been used to carry out various types of ad hoc assignments,including some of an administrative character, to the detriment of real planning.The Division should be strengthened and its work reoriented so that it willtake the responsibility for ensuring that projects and pertinent policies areworked out in the requisite detail. It must also be given the tasks of (1)initiating the collection, particularly at the farm level of the data which areso essential to effective planning and which in the past have often beendeficient, (2) assessing short-term and long-term personnel requirements, and(3) evaluating projects and programs which are under way and which may need tobe altered in the light of experience.

13. If the Planning Division is to function successfully, there must bealso an expansion of the statistical and survey services now located in theMinistry of Economic Planning and Development. In particular the staff of theFarm Economics Survey Unit which is now pitifully small must be considerablyincreased so that much more information can be obtained on development problemsat the farm level and the possible ways and means of coping with them.

14. Proper staffing and management of development projects are alsodifficult to achieve. This problem could be overcome to some extent in theshort run by a properly coordinated program of foreign assistance, and in thelonger run by expansion of training and educational facilities. However, it is

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inevitable that the shortage of staff and managerial resources will, forinstance, enforce curtailments of plans for the expansion of livestock produc-tion and the extension of credit to smallholders.

15. The expansion of staff and agricultural services is handicapped bya shortage of funds for recurrent expenditures. Since recurring outlays inthe field of agriculture often have a more important effect on output thaninvestment expenditures, it is essential to provide, whether from domestic orforeign resources, more adequate financing for this purpose.

16. Personnel shortages dictate for the time being a concentration onthe most promising areas of development. Gradually, however, plans must beworked out to distribute the fruits of agricultural progress somewhat moreevenly than in the past. There are still large areas with considerablepopulations which have experienced comparatively little progress, and even inareas which have been the focal point of development a substantial portion ofAfrican farmers, particularly those with the smaller holdings, have benefitedlittle from the rise in production.

17. Durina its visit toward the end of 1966 the Mission received only asmall number of new projects which seemed prima facie to merit considerationin whole or in part for foreign financing. Among these were:

(1) A major program for the develonment of the nastoral areas andthe increase of livestock production by investments totalingf4Q_4 millinn in the neriod 1967-1972.

(2) The third stage of the Kenya Tea Development Authority program,to begin 1968, entailing the development of a further 36,000acres of 5mallholder tea and the construction of' 20O-25 factories,

at an estimated total investment cost of approximately 15 million.

(3) A program for planting 12,000 acres of exotic softwoods annuallyup to 1980 at an estimat.ed annul ect. of f611,000 .

(h l- The constructin rf r 1n0 mile of fores+ roasc and +ti mainten&nc

and improvement of a further 300 miles annually for the next fouryears, atv wn estimated cost of s-v67 s000

(5)~ Th.-e develop=.1-ent. ofP Take Rudolf fisheries at acptlcost ofPWI ~ ~ ~~~~~~~~~~~1 I - p','

160,000 at the Lake and Tf337,000 for an access road needed forthe efclent4-4 evacuati4on of 4the catch.

.I Li tCLC_ U IJUU=_iL, '3 .. LJlILU U1IJon UI U Wui l d. U1d urI1LJ~ I.L LUt6) mhe etablisl;lent of vaccine pprouductio va d lgnsi

pathology block at Kabete, as well as three or more diagnosticlaboratories in hiie ±livestockU pro.duction areas;th total capi tIIC U L 1 UPL U

cost is estimated at about I200,000.

(7) The expansion of the existing training center for agriculturalinstructors at Embu, the construction of a new training centerfor such instructors and additional facilities for education ofdiplomates at Egerton College, all of which were reported to

require a total capital investment of t229,000; and the three

additional Farmers' Training Centres in Busia, Baringo and Taita

districts with a total investment cost of 190,000.

We understand that in the meantime additional projects have been prepared.

AGRICULTURE, FORESTRY AND FISHERIES IN KENYA

I. THE PRESENT SITUATION

The Production Pattern

1. There is an extensive range of ecological conditions in Kenya and,consequently, a wide variety of forms of land use and land ownership.

2. Of the total land surface of 225,000 square miles, only 38,000square miles or less than 17 percent has an annual rainfall of over 25 inches,though reliable arable crop production requires 35 inches. and higher. Thelow, and often irregular rainfall elsewhere, precludes almost any efficientarable crop production, except in the few small areas where irrigation can bepracticed.

3. Approximately one-eighth of the population obtains a livelihoodfrom these low rainfall areas, principally by extensive livestock farming onthe better pastures. Nearly 60,000 square miles in the northern and easternparts of the country have an annual rainfall of less than 10 inches and thesparse population exists precariously, often in near famine conditions.

4. The high potential farmlands with adequate rainfall and good soils,are situated principally in the highlands and in a narrow belt near the coast.In the highlands at altitudes mainly between 4,000 and 10,000 feet, conditionsare suitable for a wide range of crops, including maize, pineapples, vegetables,fruit trees, Arabica coffee, pyrethrum, wheat and tea. Dairying is important,and wool sheep thrive at the higher altitudes. At lower levels towards LakeVictoria, sugar, cotton, maize and other food crops are grown. Along thecoast conditions favor tropical crops, especially coconuts, cashew nuts, sugar,cotton, mangos, citrus, cassava and yams.

5. Around the periphery of the higher-potential lands, mainly in the 25to 35 inches rainfall belt, conditions are often suitable for sisal growing,but large acreages of maize, beans and other subsistence foodstuffs are grownunder marginally suitable conditions in conjunction with livestock farming.Wheat production is becoming increasingly important in some areas of thisrainfall belt.

6. During the colonial period, agricultural land in Kenya was classifiedinto "sohedulled" and "nonsnhedulled" areas. The seheduiled areas consisted oflarge farms and estates occupied exclusively by Europeans, and accounted 1'or7 73 milli on acres in 1Q60. Of this total- 0=3 million acres were in thecoastal strip and Voi District and the remainder in the highlands. This large-f'rm sector ineluded annroximatelv one-fifth of the high-potential land in thecountry and produced more than four-fifths of the marketed agricultural olutput.ome two-thinrds of the area ws- in nastures,- unsquitable for nultivation - hut

the remainder was largely well-developed mixed farming land or estates underr,c>rm,,npnt. r'ronq

7. In, thethreeTyears +a-cr lrAndenn ee the sizie of the I arge-farms

sector was reduced by approximately one and one-quarter million acres whirhwere purch.oasdfo Euroear owr.ers andprilrle lr.tosmalholerset:!e

ments. Consequently, the number of large-scale farms and estates has fallenfrom just over 3.600 in 1960 to less than 2,800 in 1966 and their area is nowless than six and one-half million acres. In the same period, about 750 farmstotalling 600,000 acres have been purchased intact by African farmers fromEuropeans.

8. What were formerly known as the "nonscheduled areas" of Kenya,aecount for four-fifths of the high notential land and support anproximatelv80 percent of the country's rural population. These are the areas of Africanqmallholdinga where nroduction is still largelv on a subsistence basis,

although the process of change from "traditional agriculture' is now wellu1ndePr wayv T'he pnst tmwsl vPyears have seepn the- int-roIiinti nr qnt3 spnread of new

methods, new cash products such as coffee, tea, pyrethrum and milk and therae s1 ating gro.wth of mixred favrmin rith empnhaslc on pTroduc,,rtion fo-r marke-inga

Progress has largely been associated with the consolidation of individualho1n.gsldings, uhic ,.;h h ais c re ated t he oppo rtrsnrvl rt 4+ tes to i gror,w h i g In 4nh value c nash crop-c

or keep grade cattle. However, subsistence cultivation still predominates inla g areas whexre t1ese adva. -tages are not present .

9.. A urd system of ±land tenure is often the key to agriculuraldevelopment and the progress of consolidation, enclosure and registrationconinues lo lbe a vital part of' the Governm.enI' agiMtrlplc.I

some regions, notably the Central Province, enclosure and registration area-lmaostu compelet , but elsewlere 9 in termU s of area, Ile greater part of 1 tIle

work will not be completed for many years.

10. The historical division of land into tribal territories still preventsthe fLee migration oL excess popuilation, arld there are wide variatlonls inpopulation pressure between different parts of the agricultural and pastoralareas. Conseq-uer,tly, there are cases of serious local cor.gestion of population,for example, among the Kikuyu in parts of Central Province and among the Luosin parts of Nyanza, Wilie in the thinly populated Masai terrlUories someexcellent land is scarcely used.

11. Problems of excess population also exist in some of the semi-aridareas where the density of cattle required for the subsistence of the pastoral-ists has become greater than the land can carry and the pastures have becomefurther impoverished through overstocking. In parts of Turkana, for exampie,the inhabitants can no longer support themselves by traditional stock keepingand are increasingly dependent on famine relief.

Contribution to the Economy

12. Agriculture and animal husbandry continue to be the most importantsector in the Kenyan economy and they provide a livelihood for 1.2 million ofthe country's 1.6 million families. The contribution of agriculture, livestock,forestry, fishing and hunting to the Gross Domestic Product has fallen somewhatduring the decade from 1956 to 1966: from 43 percent in 1956 to 40 percent in1966.1/ In comparison with these figures, the average annual contribution of

theIae re- se' ny 3onal irnt.the share is only 37 percent.

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manufacturing industry to the Gross Domestic Product has risen from 9.4 percentln 1996 tn 10.9Q nperent in IQ66.

1 . Agrinuiltiirp alsn makes n larap inl9ir n+t conntrihbti nn tn (J)P rs thpsource of economic activities in service industries, particularly transport,storage and wholesale and retail trade, and with animal husbandry providesmaterials for a large part of the country's industry.

14. Agricultural and livestock products have continued to be the mostip a.t -_-earners of foeign xn exchiar.ge, andA in 19Or6 nmnllnt+ i n raw or

processed form, to 73.8 percent of the total value of overseas merchandiseexports. The ability to purchase the increasing vol-.e of overseas goods anrdservices needed for economic development depends not only on the availabilityof foreign capital and aidA but -also iin _- c4nonnsider4ablae. mCeasu,rv.e uPo-n a_- contin+ing

expansion of export earnings from agriculture and livestock production.

15. Kenya has problems of unemployment and under-employment, in bothrr uan anrea. i.T4-l the pop,-' iation and total labor force gro-wing atrura.± d.I ur'a n i areas. LN4 J±±C +tCU.. JU CSl fJLiL W SSI4 5..O.-

an estimated annual rate of 3 percent, nonagricultural employment will absorbonLy dLJJaboLUt 25 percenlt of.U! lulhe add l4 4t1ions lo tIe lab'or lorce 'by 19070 , so 4t

agriculture will have to furnish employment for most of the increase. Sul-sistence farmers an1 d small farms producing casL crops (cotton, sugar cane,paddy, tea) will increasingly use family labor, but most of the requiredincrease must come from the production of crops giving, higrh cash returns L rnd

having intensive labor requirements.

Production Since 1961

16. From 1960, as Kenya prepared for independence, the agriculturalsector entered a difficult phase of transition and reconstruction, particularlyaffecting the "scheduled areas". While agricultural output as a whole cor.-tinued to increase, there were two major factors in the large farm sector thatparticularly affected progress over the next five years.

17. The first was a loss of confidence in the future among the Europeancommunity. This led to a serious reduction in investment on the large farmsin the "scheduled areas"; many farms were neglected and a few were completelyabandoned. Production capacity for the future was especially impaired by therunning down of herds of grade cattle and the sale of breeding stock forslaughter. The dairy industry is still suffering from the shortage of gradecows that arose in this period. It was not until 1964, when the new KenyaGovernment was securely established, that European farmers recovered theirconfidence; in the past two years, the increasing investment in capital equip-ment and fertilizers and an active interest in new technical developments areevidence of renewed vigor in the large farm sector.

18. The second major factor was the massive program of land transfer.One and one quarter million acres - almost one-third of the mixed farming landin the former scheduled areas - was purchased by the Government for settlementand a further half a million acres for the establishment of large-scale Africanfarmers was purchased with Government assistance. (The land transfer programis discussed in more detail in paragraphs 94-125, below). Because of the speedand scale of the transfer operations, a drastic fall in output from the land

involved was inevitable. In the case of the settlement schemes, productivityis now recovering, but we see no clear prospect of a full recovery in outputon the new African-owned large farms.

19. While the growth of production in the former "scheduled areas" hasbeen restrained by transitional problems since 1960, the African srrallholderareas have benefited from more positive developments. The continued consoli-dation and enclosure of holdings in the Central and Eastern Provinces and otherhigh-potential areas has facilitated comirrercial production; and, althoughagricultural credit has remained very inadeauate, there have, nevertheless,been notable increases in productive investment and output. Coffee and teaacreages have increased dramatically SmalIholder roff'ee exnanded from 41,90oacres in 1961 to 131,000 acres in 1964 when further planting was prohibitedbhcauis of Kenya's obligations to the International Coffee Agreerrent. / Ten

growing by small farmers was confined to only 1,600 acres in 1959 but by mid-1966 had passed 16,010 acres uinder the development prograrnm of the KTDA . Therehas also been a remarkable development of dairy farming in recent years; in19 thC e1, p.c,, re-c-o r1 Ir nl,r only abou 000 g-rad rda i cows, -. Qo n srmc, 1 -fa.s ,,+ in- -O 1966

the nunber totalled 100,000.

20. Increased opportuniti-es and incentives to grow cash crops have givenro--ressile smallholders a more - c--. - --- al outlook Jn t-eia -farring -ar -made

them more receptive to the efforts of the agricultural extension services. Invaryinng degrees, the attitudes of farmers nard thei-r f'arming p-rcti- are

changing in such a way that the extension service officers can be more effective;L -V LaZ ccJ.r t±wc csc1cctcuc 0 CJi w ±1W lJ-±D) L D II-LJO c- ±la.UX U 0--p - OuJ . v

is accelerated. In recent years the work-ing of this process has been veryapparent n those areas whiere highi- value cashi crops car. be produced. At the-.paren + 4-.->- 4-,.c- i--, .. kA,-ni A+ -,-

same time, there remain extensive less fortunate areas where producers are stillwho1lcly occupied Uawl nIith traitina s istenc crops.

21.-11-IL During the~ ten-year period, 1954-L1964,te annual ra-e of growth o'

marketed output from the small farm sector was 8.8 percent, while that fromsmiallholder agric-ulture as a whole, including subsistence prod-uctoi, appearsto have been roughly 4.5 percent a year. This progress has been very uneven.In areas which are most favored by soil, rainfall and miarket opportun1ities,spectacular rates of development have been achieved. In Nyeri district forexample, it appears that marketed production between 1954 and 1964 rose by anannual average of approximately 17 percent. In Central Nyanza, on the otherhand, the only discernible progress was increased subsistence output for thegrowing population.

22. Most of the semi-arid areas have also failed to share in the recenteconomic development and some impoverished districts have become increasinglydependent on public assistance. For any improvement in living conditions, thepopulation of the drier pastoral areas must await major livestock development

1/ Fro.m *the end of +thcr T . aAm4ni++atonn in 19O63 V e r +Key cea-se to be amember of the International Coffee Organization until she rejoined as

an independent state in 1966. In the interval she continued to honor

the spirit of the Agreement.

-5-

proJect ss or, ln 4xrm cae,asse ,rton Ito more favo red1A slsri cts.

23 The C1.LJa'IJ± UIic 1dbLJ ±11so''e Ul Va±LA= L P1 UULAJ .LUiI LII ilo 19L6, was due _part.

to the adverse factors which have been mentioned and partly to an extensivedrought 4in- 1Q 1946. The effect on the coJAfeecrpwsaliuryseost, JUIL~.± _L Lf ). ±Iic: i Ic'.1 L iiiLi U c LI iJJ.p Wcub JJd:I UULL;LL_ ±L_Y ~1±JJ~with the output from large farms falling from 28,000 tons in 1962/64 to 22,0004t ons .in I'K 19 I64/6. This4 was 41ollowed by a I e.-o- 4y- -to 25,20 4on. - in 1965/66.

0), Ml f l - ~1 r_~

. Thliere was also a large fall in the ialr±feued outpu, o± flz. UUULI bt in

1964 and in 1965, due partly to reduced plantings on large farms but mainlyto the drought. This led to a national snortage for urDan consumption in1965 and in early 1966 and to the necessity for heavy imports from the U.S.A.Although official statistics are not yet available, it is thought that themarketed output of 1966 planited maize will reach 2.5 million bags. Thisrecovery was due partly to the increasing use of new varieties of higheryielding seed, which represents a most important development in food cropproduction, and partly to better weather conditions,

25. The other major crop which yielded a much reduced revenue in 1965was sisal and in this case there has been no subsequent recovery. With greatercompetition from other sources of supply, including synthetics, world marketprices have progressively fallen to levels which are now deterring all but themost efficient producers. Producers' total revenue from sisal in 1964 was17.16 million and in 1966 it was only-about 40 percent of this figure.

26. Finally, the past five years have seen the continued decline in theimportance of wattle production, due both to the felling of trees and to thedevelopment of synthetic substitutes for wattle bark extract. As recently as1955, wattle bark extract still accounted for 9 percent by value of all Kenya'sexports but by 1965 the corresponding figure was only 1.9 percent and may -ellfall further by 1970.

27. The impact of all these foregoing factors on the cash revenue offarmers is shown in Table 1.

Table 1: CASH REVENUE TO AGRICULTURAL AND LIVESTOCKPRODUCERS, 1960-66 a/

(in if thousand)

.,ear Small" Farmus T arge Farms Tota:!

1960 9,500 37,700 47,2001961 10,380 .35,699 46,0or91962 10,518 37,125 47,61431963 11,304 40,612 52,0o341964 14,011 41,164 55,1751965 14,540 36,960 51,5(0196 6(prov.) 19,700 37,500 57,200

a- The basis for calculating these figures has recently been changed for i963and subsequent years, but the data in this table are given on the oldbasis to show the trend for a longer period.

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II. THE 1966-1970 DEVELOPMENT PLAIT

The Direction of Effort

28. The 1966-1970 Development Plan strongly emphasizes the significanceof agricultural development in Kenya. It recognizes that the industrial andcommercial sectors cannot absorb the prospective increase in the nationallabor force and, therefore, that most of the working population must continueto seek their livelihood from primary production. Accordingly, agriculturemust be organized and improved to provide productive employment and assure arising standard of living for the rural population. Development policy mustbe balanced to promote the welfare of both urban and rural populations and togive each sector a fair share of the increases in national income.

29. Development expenditure to increase productivity is to be channeledespecially to the needs of the small farm sector, which directly supports four-fifths of the rural population. Past experience has shown that well-directedinvestments in this field can bring substantial returns and it is now plannedto increase the gross value of the marketed output from small farms fromnl4.33 million in 1964 to 133.68 million (at 1964 prices) in 1970. Thecorresponding increase in the large farm sector is to be from 139.77 millionto 142.73 million. After allowing for the transfer of 11¼ million acres fromthe large farm to the small farm sector, these figures still imply a remarkableincrease in the importance of the small farm sector, to the monetary economyof the countrv. It is assumed that the subsistence part of small farm outputwill increase at 3 percent per annum from approximately '69 million in 1964 toTR83 million in 1970.

Oiut.nut TarLret.s-

30. The overall targets for marketed output of the main commodities in1970 are shown in Table 2.

Table 2: DEVELOPMENT PLAN OUTPUiT TARGETS

Base 1970 %B:1as e Year E s timat+ed ( Increase

Commodity Year Unit Output Output Increase Over Base YearCo ffffe e I I964/c6 Tmons 38,800 700 n 3,o -I0 80

Cotton lint 1964/65 Bales 22,880 95,000 72,120 31004neapple

(canning) 1965 Tons 20,100 42,000 21,900 109Ca.s'Iew Inus L 17U*f UJ MonsII Vn.)UU 'I 'U 3 UUU

Pyrethrum 1964/65 Tons 4,440 12,500 8,o60 180R±i c e (pady ) y 164'/65 ags 255),00 49,0 2uu,009

Sisal 1964 Tons 67,000 65,000 -2,000 -3Sugar (cane) 1964 Tons 411,000 1,500,000 1,089,000 265Tea (made) 1964/65 m.lbs. 45.95 68.29 22.34 49Wheat 1964/65 m.bags 1.59 2.05 0.46 29Milk (incl.

butterfat) 1963/64 m.gals. 61.1 81.5 20.4 33Beef 1963/64 Head 182,000 288,ooo 106,000 58

-7-

Export Targets

31. With regard to exports of agricultural products, the Plan takesaccount of the fact that -les to Uganda snd Tanzania are njnlikelv to increaseas readily as in the past, although it appears that Kenya will find a readymarket in 1Uand9a for virtunallv the whole of hir wheat. qnd milk output siurpL us

to domestic market needs.

32. In overseas markets there are special difficulties with regard toco-ffee and, Ks Yeny r-cn-tly ,rein 4JA +I,a Th,+-rro+4 n.l Cfpfee- On----4 -.,+J,her sales to the main markets are limited by quota. The Plan assumes thatexports ofP 70l,000 4tons wll -be possib-le in 19(70 but zs explained --A aagah

65-67, below, we consider this an unrealistic forecast. For sisal, a largefall in value to ,3.7 mUI lIon in 197I is uuutc_pa__ d b-1u--me r-een deve]op-

ments indicated that even this figure is too optimistic. It is estimated thatthe proporLion of ail exports represented by agric-ultural nd li-vestockproducts in 1970 will be 63 percent, or almost unchanged from 1964. In moneytermas, the plarined increase is from 146.6 million to s58.3 million, a growthrate of just under 4 percent a year.

Proposed Expenditures

33. In the five financial years, 1965/66 - 1969/70, 1f16.89 million isearmarked for items of land transfer and development (see Table 3). This.continues, on a greatly reduced scale, the program for the purchase of farmsfrom Europeans on a "willing buyer - willing seller" basis and their trarnsferin one form or another to African ownership. Because the land is beingpurchased largely from British nationals, the United Kingdom Government has aspecial interest in this program and is financing, by grants and loans, -thecosts of land purchase and some of the development costs. For operationsduring 1966-70, this contribution is to be about ]C14.39 million. Since thisoverseas finance is provided for a special purpose and is to be used mainlyto make transfer payments and not capital investments, it is shown separatelyfrom the Central Government Development Budget.

34. The consolidation, enclosure and registration of individual landunits has proceeded rapidly in the past decade and is recognized as a pre-requisite for the development of commercial agriculture in the former Africantribal areas. Up to the end of 1965, the process had been completed on274,582 plots covering 1,630,597 acres of mostly high potential land. In termsof area, this represents a minor part of the lands to which land reform couldusefully be applied with the cooperation of the landholders. In 1966, theLawrence Mission Report recommended a program to continue consolidation andregistration, with proposals for hastening and cheapening the process. Thelimiting factor is the availability of qualified staff for the surveying, legaland administrative work involved, but it is hoped that in the four years to1969/70 a further 2,696,000 acres of agricultural land will be registered. Thecost of the program, which is financed by the U.K. Government, was originallyestimated at !4.36 million in the Plan period.

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Table 3: CAPITAL COSTS OF LAND TRANSFER ANDDEVELOPMENT. 1965/66 - 1969/70

(in i million)

TDe Crip r.i on Amou mt

Development costs on 'Million Acre"Settlement scheme etc., for which landpurchase is already completed. 7.00

Purchase of a further 80,000 acres anddevelopment under settlement schemes. 1.65

Transfer of large farms intact to Africanowners at an assumed rate of 50,000 acresper year. 3.10

Purchase of 120,000 acres to be operatedby the Agricultural Development Corporationas national farms, or as "transitional"farms until private buyers are available. 2.94

Purchase of "Compassionate Case" farmsfrom owners who are no longer able to managethem or to find a private buyer. 1.00

Rehabilitation of abandoned farms or mis-managed farms taken over after service of"Management Orders." 1.20

TOTAL 16.89

35. Anart from the fore2oina schemes of land transfer and land reformthe Development Plan for agriculture consists essentially of schemes and proj-ects which are intended tn have a direct impart on nroduictivitv in the smallfarming areas and the semi-arid areas of the country. To help support these9evelornpment.s there isz also 2 - rnarnm o)f research and agarircultural Pducation nand training. To a large extent these schemes are to be carried out by newlycreated or enlarged institutions, particu larly the AgricuJltural FinanceCorporation (AFC), the Agricultural Development Corporation (ADC), the RangeManagement Division and the Animal husbandry Division of the Ministry ofAgriculture, and the Kenya Tea Development Authority (KTDA). Table 4 indicates

th- mai. -; i tems i v+ PhJc n yvnaTn an rl + I-n -,- J c++ii+, Jnnc v -,cT~cnQfihl f cv' r 1i hTn ncshowmain itemsinthisprogram..and the institttions Peslane for - asshown in the Plan.

Table 4: DEVELOPMENT SCHEMES PROPOSED IN THE PLAN,BY TYPE OF INSTITUTION

(in B million)

Institution and Purpose Amount

An-rit riit aii-rnI rnanc ncvraton

Agricrl-1tur-aA Credit -- d- Ac-ministratvion 5;.30~

A grcult ' - e Th,Ivelomt - rc rp orat J on

Chemelil S"ugar Facto-,y anA !- Sgr Ce rdutin1.4

Wheat Production in Masai Lands 0.15Oth .1er ProUJects and Ai.WI ni.Lstrat ion o.69

Range Managemenut Division and Agric-l'tural FinaUce Corporatio:

Development of Pastoral Areas and Beef Production 3.52

Kenya Tea Development Authority:

Smallholder Tea Development 1.60

National Irrigation Board:

Irrigation (Feasibility Studies, Pilot Schemes,Extensions of Existing Projects) 1.80

Ministry of Agriculture Services:

Tsetse Control Scheme in Nyanza o.4oSettlements in African Areas 0.35Rural Development Schemes 0.12Soil Conservation 0.24Pineapple Production Development o.o8Livestock Production Development 0.75

Research: 0.18

Education and Training: 0.60

TOTAL 17.18

36. The grand total of planned central Government development expenditureson agriculture during the Plan period, 1965/66 - 1969/70 would thus amount toB38.4 million (see Table 5).

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Table 5: SUMMARY OF PLAN PROJECTION DEVELOPMENT EXPENDITURES,1965/66 - 1969/70

(in S thousand)

Program Amount

T-1n TrPrnsfers, 'Set-tlements and A A-4n-istrato in -

the Former Scheduled Areas 16,890

Land Consolidation and Registration 4,360

Program of Crop and Livestock Production Development 16,4o4

Research (other than included above) 175

Education and Training (other than included above) 600

38,429

Forestry and Fisheries

37. For forestry, the planned total of development expenditure is15,941,000. The major projects are a continuation of softwood plantationdevelopment, costing 12,305,000 and a pulpwood afforestation scheme in theTurbo area, costing 1l,225,000. For fisheries, the program of development upto 1970 is relatively modest and the total cost of projects proposed is putat only 1523,800.

The Plan in Relation to Available Resources

38. Of the total proposed expenditure of i138.4 million in the Five-YearAgricultural Development Plan, land transfer items account for 116.9 millionand of this a minimum of n14.4 million is to be provided from overseas underarrangements already made. Apart from land transfer programs, the total ofcapital investments is to be 121l.5 million of which the Government of Kenyahas planned to finance approximately one-third from its own resources. Inpractice, some outstanding projects will have to be reduced or deferredbecause of difficulties in obtaining the necessary overseas aid or in carryingout the projects on the scale and in the time projected. At this stage itappears that development expenditure within the period 1966-1970 may fall shortof the program figure of 121.5 million by approximnately 20 percent. Thisshortfall will probably arise mainly through a scaling down of the major proj-ects for development of the pastoral areas and for agricultural credit.

39. The Development Plan does not deal explicitly with the problems ofstaff and recurrent finance that will arise from the increased activities ofthe Ministry of Agriculture. The increases in staff required over the Planperiod are not simply for new projects. The Ministry's establishment has notbeen substantially increased for several years and in many fields is nowclearly inadequate in relation to existing commitments. This is especially sosince many posts are held by inexperienced or underqualified staff.

- 11 -

4o. The Ministry itself is at present preparing proposals for a newestablishment to cope with current and future responsibilities. In the caseof the field extension services and research services, this is likely toindicavte an increase of' annroximatelv 50 nercent in the number of agriculturaland assistant agricultural officers, and an increase of more than 35 percentin the nTmber of technicnl assistants Proposals for an ernivq1ent increasein the staff of the veterinary service are also likely to be justified.

41. For the recruitment of the "certificate" and "diploma" level staff,the agricu-l+tural education nA training progrm- will approximat+ely meet require-

ments by 1970, but for staff with professional qualifications the needs will bemor di; fPif; C- I+ +A -P- f1-; I - T-wn_;\ swN<A reerl an oveteri+_ ry

officers will be required from outside the country and the problems of recruit-ment shloultd not- be underrat[ed.

4 2. Increass ln st ual.f on tese i UdLt bsUgges L.teU, jinRLdcate ani inCre a se of

rather more than one million pounds in the vote for personal emoluments inII r../ (U 7 _ ____2_1 LI im 1-- L _n_ _ r _h ` nn ..

yUY/ Iu* -LI le s anie 'LI[ilu, we : IuIdueU L LILI1t.I lb tt b Li.Ull , d;Ub l1U aLLUWnlgt,

the extension, research and livestock services to spend more money for suchltems as transport and travel, specialist advisory services, demlonstrations Ld

farmer training centers, all of which have been severely restricted in the past.Investigations might also establish a case for achieving further net increasesin the value of agricultural output by expanded subsidy programs for fertilizersand other items.

43. Funds on the scale required for these purposes are unlikely to beobtainable from the Treasury unless new sources of revenues are developed. Forthis reason we have suggested later that the case for a tax on the turnover ofthe produce marketing boards should be considered.

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III. SOME CONTROLLING FACTORS IIN AGRICULTURAL DEVELOPNENT

A. Product-~±.ive( epnncit+ (of' tfhe Tlnf9

Scope For Improvement

44. The division of the land areas in Kenya into grades of productivitypotentialU bDased on rainfall w.1L iithUS adjustmn.ents fUor altitudes, was adopted in-L 1the Swynnerton Plan and has remained the general basis of land classification.

i L.-,l apS .1S aI auv ,Sv lC; g1C, "-u:Wi I-L;II 1So o's;lre Ull roc-I jnlollair,--- 4. IL 0 1 0. ,SJSU 0.StLL SAIUOAi ~WLU WII~UZI 10 0U}PJLLt=m L , LIC U -L (ILI -L JL0L IZ LI. (J L (IdI.UULI

on soils and past crop performance for more detailed land planning.

45. More effective use could be made of new land for specific cropprod-uction, if detailed surve-ys of land productivit-y potential had been carriedout. Agricultural-ecological soil surveys are invaluable for planning newdeveloplments; and, althoughn a map ol Ken7ya's ecological zones has been -prepared,there is still an urgent need to improve the underlying data and to undertakestudies of crop patterns and productivity related to soil-ecological data.

46 It is estimated that the potentially prod-uclve land of Keny-a repre-sents just over four acres per person and by African standards this is arelatively low figure. However, despite severe population pressure in somearable zones, there are other significant areas which have not been exploited.The most notable case is part of the Masai tribal land in Narok, where it isbelieved that up to a quarter of a million acres of unbroken land is suitablefor wheat growing and wool sheep. Recently, however, the Masai eiders havebeen persuaded to make a small part of this land available for cultivation andit is clearly important to find acceptable arrangements f-or bringing more intoeffective use as soon as possible. There is also an opportunity to makeproductive use of a hundred thousand acres of pasture and arable land in CentralNyanza if the current project for the eradication of tsetse fly is completedand followed effectively by settlement.

47. A great deal of smallholders' land is being inefficiently used forthe production of food crops in traditional style. No precise statistics areavailable but it is estimated that approximately 3 million acres are sown tomaize and that the overall average yield is about five bags per acre. Muchmaize is grown as a subsistence crop in areas where soil and rainfall conditionsare unsuitable and where the probability is against a yield of even five bagsper acre. There is now reason to believe that the recent development of newhigh-yielding varieties of composite and hybrid maize will radically alter thissituation. Farmers who use the new variety can secure significantly higheryields per acre and correspondingly reduce the area needed for subsistence.Maize prices have already been reduced and can be expected to fall further, asoverall yields increase and unit costs of production fall. This will encouragemarginal subsistence producers to switch to cash crop production where theyhave the opportunity and to buy rather than grow their maize requirements.Overall, there is the opportunity of freeing for other productive use, asignificant fraction of the estimated three million acres now used for maizegrowing.

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48. In the production of other basic food crops, such as beans and peas,there is also much scope for increases in productivity. It is, of course, normalfor efficiency in the production of subsistence crops to lag behind standardsfor cash crop production. It is particularly difficult to persuade producersto spend cash on improved inputs such as seed and fertilizer for crops whichdo not bring a direct cash return. Hitherto, for example, efforts by theMinistry of Agriculture to organize the bulking and general distribution ofimproved varieties of legumes and pulses in Eastern Province have had litt:Lesuccess because of lack of interest among producers. However, we believe t-hatthe prospects for acceptance are now improving and that efforts to improve theefficiency of food crop production should be given a higher priority. Experi-ence with the new maize varieties may make farmers more receptive to thegeneral idea of buying approved seed and fertilizers, instead of regularlyreplanting f'rom their own crops.

49. In recent years, thousands of producers have been introduced to thegrowing of coffee, pyrethrum and tea and the opportunities for growing thesecrops are increasingly being exploited. The need for a large increase in thenational dairy herd offers profitable opportunities to many more farmers, butthey are handicapped by the continuing shortage of grade cows.

50. In most Droducing areas, it is difficult to identifv new or alterna-tive cash crops which would give a substantial yield per acre. The possibili-ties are comprehensivelv dealt with in "A National Cash Crons Policy forKenya" published by the Government in May 1963. In most cases, they dependupnon prolongned reearch work ana eYtension serviees to est.aisq h suitablevarieties of the chosen crops on a commercial basis. Unfortunately, it has notbhen poTssibl to u1ndertake this research and extension work on the necessaryscale in recent years and, until resources are available to do this, theestablishment of potentially important cash crops will be delayed. This seemsparticularly unfortunate in the case of a number of horticultural products for

'hirhl ~ ni ~I nt ,IiYn 1 r, c.1im ~i l to-r rl f'n-%-rvnh I o nn e rrV'ko+ rnn+o-n1 in c V1 ov Qs*.hih oi and cllr.ate aeconsidered fvrbeand a market potential ex:istbut which cannot be grown on a significant scale until the problems of va:-ietyselection and cul-tivation techniqu-ves are resolved.

51. As discussed later, we bheliev that, with feeding stuiffs- qvSilRThlp at

lower prices, there are new opportunities for profitable pig and poultry *produc-tion. There are nuim-.erous holdings where a small-scale pig production unitcould be established at relatively little cost and effort, if the farmers'interest couA1ld be oaroused. HTo,Wever since in most parts ther-e + ono tr-Ad +;onof pig-keeping, it will only be developed with the close support of the

acvnso ervi,cesc. Simllar cly,, given help r&ndl ad,r rce many-, small1holders,' r.-vl ld

profitably produce eggs and poultry meat on a small scale both for domestic useand for loc1arl ma-Lrets. At preser,t, the exte nson se - -ce 1 +lack the specilize

staff needed for these purposes although some attempts are being made to remedythi-s sit-uation.

52. ThetotalquarIit Uitles ofLj .L fertilizer LI ±L, and hence the use c,f

fertilizers, have increased in Kenya appreciably over the last ten years, andtheir structure has altered markedly-. In 1955, phosphatic fertilizer5 c.mprisedabout 70 percent of the total imports (30,000 tons) but since 1963 nitrogenousfertilizer imports have expanded dramatically and formed nearly 70 percent oI

- 14 -

the total imports of 69,000 tons in 1965.1/ It is assumed that most of thenitrogen went on coffee, tea, sugar, cotton, maize and wheat on the largerfarms but assuming that an average rate of application would be 2 cwts per acreof sulphate of ammonia, less than 500,000 acres would have been treated, whichis a small fraction of the total cropped area on small and large farms, esti-mated to be 8.5 million acres. Locally produced cattle manure is rarelyavailable and too small in amount to be of any consequence. Fertilizers,therefore, have made a limited contribution to Kenya's agricultural development,although a wide range of crop fertilizer trials for which helpful, if notconclusive, results have come, has been carried out by the Department of Agri-culture and other authorities.

53. The Development Plan makes no direct reference to the part whichfertilizers could be expected to play in reaching the crop production targetswhich are planned, although the local manufacture of nitrogenous fertilizersis seen as one of the opportunities for industrial development. No estimateis given of the inputs of fertilizers and insecticides that will be needed overthe Development Plan period.

54. The reasons for low fertilizer usage would appear to be that thebenefits have not been put over to the farmer and credit has not been availablefor buying fertilizers. Only in the last year or two has there been anyfertilizer subsidy, but the availability and distribution of fertilizers, out-side the former scheduled areas, has been too casually organized.

55. Future consumption estimates for nitrogenous fertilizers (based onstudies made in relation to the possibility of manufacturing within the Mombasaarea) suggest that by 1970 the equivalent of 115,000 tons a year of sulphate ofammonia could be used. If the use of phosphatic fertilizers (mainly importedf-r.^m Jganda) increased nronortionatel]v (notassic fertilizer usage is negli-gible), the total annual consumption would be around 200,000 tons which would benear1y three timnpes the rc-rrent. uisagCe Althonugh t.hp total nunntitv represents a

not unreasonable rate of application (approximately, on 20 percent of the farmedland) a more realistic amount is onsnidepred to be 8n n,0 to 90 ,00 tnns su1lphate

of ammonia, or rather under double the present consumption. The reasons for thelow.rTer estimate a-.re :

(1) Ihe miin increase in fe-tillze ue.Tould normal ly be ex-pected to

come partly from the small farming sector, which has previously notLJCAeAn a +at user ofr. A. _4. <1 4z;, anA pr vnC4 pa1- _; o Am 1cf Cce, ta A

and maize growers.

(2) Coffee is expected to have a period of depression in the next fewyears, duUring whi-ch' expenditure on f1ertlizeL.Lrs1__; is~ W-lkely to rise,

much.

(3) There has been no dramatic breakthrough and convincing demonstrationof assured ecuonumic returns for the small farmer from fertilizer use,

1/ Figures for imports of superphosphate fertilizers (see Customs and

Excise Trade Report, EACSO, 1965) appear to include the superphosphateimports from Uganda under a miscellaneous item.

- 15 --

especially for maize and other foods.

(4) The fertilizer price subsidy has been restricted to superphospates.

(5) Even the Mission's reduced estirnates of fertilizer consunption ia1970 will require a massive effort by extension workers and cooperativesocieties, more agricultural credits and more extensive distribution.Consumption could be increased by extending the subsidy to nitrog-enous fertilizers, thus raising the total annual subsicdy in 1969/70 tothe order of 1700,000 to 1800,000. compared with 1350,000 at present.

Irrigation

56 Despite a nonnqidtirahpl numbpr of investiatinons and studies ofirrigation possibilities which have been made in different riverine areas inKenya, progress has bhen slnw in aeveloning organized irrigation in the zones

where agricultural production is severely limited by insufficient rainfall. Ofthe total area of 400,000 acres to 500,000 acres estimated to be suitable forplanned irrigation schemes, about 10,000 acres to 11,000 acres are being irri-gated and a similar size of area is probahly receiving water from simple localmethods. The slow rate of progress is principally due to the high cost of schemes(\250 per acre), the relative isolation and inaccessibility of most of the land,the paucity of information and results on agronomical and marketing aspects andthe lack of trained an-d experienced personnel, pa~ rtnicla+rly in 4 cnna1 ervp.rnpY

Experience indicates that caution in developing irrigation is justified owingWU') t± t.._ S4. I. | J I1 A W LUI WL1 WJ t a j, Di 1 u U tX.tf5 ±o11 a1 ±iiD 4. J aU.W L \ U J.LUs £4W-IC

intensive and disciplined methods of cultivation involved and in finding goodmanagemert.

5-7. MThe contro-l ofP 4rrigation projects has benplcd nerte el1) I -L1ilt: ULI IL .L JL ~.4.I.4. 4 LU±LuJ± l ±l ~. ~ 1 II L J,:~U±£ jy..Lctaa 4.~U.U UZ UU_ -

formed National Irrigation Board, an autonomous body which has full responsi-b±ilitUy 1or thre planing, opr ation andliU. -----.--a,geI 4f the larger schmes T

step should increase the efficiency of existing projects by improving theplalnning and manageimen-t and by incorporating into the ne-w or expanded schemesthe experiences gained in successful existing schemes.

58. Of the currently functioning three irrigation settlements, only thatat Ivwea-Tebere for paddy production has becom-ie a success, bouth on the basis ofcrop and financial returns. Here the important factors were (a) capable andfirm management, backed with the power to evict tenants who thereby would losea high annual income, estimated to be -1136 net per family; (b) suitable soils;(c) good water supply; (d) an adequate supply of paid labor to supplementfamily labor and (e) close supervision. In Perkerra, the only other mode:ratelylarge irrigation system, this combination of favorable factors has not existedin the same measure. This scheme has also suffered from poor planning, asomewhat unreliable water supply and difficulties in finding remunerative crops.However, farmers are now earning a good income from onions. The third sclheme -the Galole project in the Lower Tana, has stagnated. Despite some good yieldsof cotton, it is still only in the pilot stage, because of inadequate staffing,scattered plots and the isolation of the area.

59. Only two new irrigation activities will be carried out during the

Development Plan period, apart from the expansion of the Mwea-Tebere scheme.One is the pilot scheme for draining the Yala Swamp and the other is the KanoPlains Ahero pilot project. By 1970, both should have results frcm the pre-liminary series of agronomic trials (cotton, sugar and rice). At Yala,topographical and soil surveys must be undertaken, and technical problemsinvolved in draining the area and disposing of the papyrus reed wThich coversthe area will have to be resolved. At both sites, there are difficult humanproblems. At Yala, the health problem looms large (malaria, trypanosc.miasis);and at Ahero much of the investigation will have to focus on the problem ofgetting the Luo farmers to accept the sweeping changes in land tenure andagricultural and livestock practices involved in irrigation.

6o. J*§ajor irrigation progress will continue to be slow, but if the con-straints envisaged can be overcome, there is a potential 35,000 acres to40,000 acres at Yala and 30,000 acres on Kano Plain for irrigated agriculture.The realization of these goals is, of course, also contingent on adequatedemonstration, through investigation, that the crops which can be grown will alsobe marketable and profitable.

61. Apart from major irrigation schemes, the Plan envisages that moreattention will be given to low-cost, small-scale measures by which villagergroups and other small cormunities can be organized to make better use of shortrains and to control the heavier rain floods. One such example was seen of aspecial water-spreading project in Turkana (Lorengippe) by whlich supplies ofdrought--resistant fodder grasses are being increased. Such measures, althoughindividually small in effect, could in the aggregate assume some significantmeaning and merit a special allocation of staff. In the dry famine-prone areas,successful minor irrigation works which relieve the need for regular or periodicfood relief might be warranted even if the cost of crop production appears tobe relatively high.

I4echanization

62. In Kenya, as in most other African countries, the use and properselection of machinery and equipment for cultivation and other agriculturaloperations pose problems which in many respects are still far from resolved.For most African farmers, the hoe and machete are still the only implementsused for land clearing and cultivation. In some areas oxen are widely used,primarily for plowing. It is the tractor, however, that today has a strong andgrowing appeal to the African cultivator. In part this is due to the fact thatthe large farms in Kenya have long used tractors. In 1964, there were about6,hQo tractcrs in K{snvq- and of these 5,9l00 wpre emn1pvl d on large farms Tn

recent years, more and more tractors are being used by Africans, particularlyon settlement schemes but also on the larger holdings in the traditional Africanfarming areas. At the same time, African farmers are making much greater useof other equipm-ent such as spray pmmps for crop protection and for combatingcattle ticks.

63. African agriculture in Kenya will undoubtedly require much moreequipment in the future. The central problems, however, are to select the typesof machinery and equipment that are most suitable for the variety of conditionsin Lhelt UWn ey dLIU t J to-ldAt -ae su t theiL proper usueL ant mIaintenac ofi et:quLipJIIetL1

gets much more attention in the future. Tractors can under certain circumstances

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make a notable contribution in taking the drudgery out of farming, in overcomingseasonal labor bottlenecks and in improving the timeliness and to some extentthe quality of land preparation and other agricultural operations. However,mechanization often encourages the farmer to put in less labor than he shouldif he is to raise his total output sufficiently to meet the cost of mechani-zation and still leave him a larger net income. Usually costs cannot be metunless yields are raised significantly through greater effort and a variety ofother inputs. In many areas, too, holdings are too small or the topography istoo difficult for the use of tractors. There is a danger, above all, that inthe enthusiasm for mechanization the possibilities of more economic alternativeswill be neglected. One of these alternatives - at least for parts of Kenya -is the more extensive use and improvement of ox-drawn implements. The emp:Loy-ment of draft animals in the past has often been severely handicapped by thefailure to devise or select suitable implements and by the inadequate attentiongiven by the extension service to the training of farmers in the use of suchanimals and to the dissemination of appropriate equipment.

64. Much more thought and effort should also be devoted to reducing zoststhrough improved operation and maintenance. Too often tractors break down orequipment such as sprayers is completely discarded for want of knowledge of,and facilities for, elementary maintenance and repair. There is an urgentneed to take advantage of Farmers' Training Centers and other institutions forthe purpose of training farmers, rural craftsmen and extension workers in theprinciples and practices of maintenance and repair.

B. Markets

Prospects in General

65. The wide range of soils and climates in Kenya has allowed developmentof an exceptional variety of temperate and tropical crops and livestock products.Consequently, domestic production can meet almost all of the country's main foodrequirements and provide a fairly well diversified range of commodities fcrexport. Excessive dependence on the world market for only one or two crors hasbeen largely avoided and the country's agricultural exports are well diversified(see Table 6).

Table 6: PERCENTAGE DISTRIBUTION OF AGRICULTURALAND LIVESTOCK EXPORTS, 1965

Product PercentageCoffee 34.1Tea 15.5Sisal and sisal bags 10.7Meat and meat products 6.8Pyrethrum flowers and extract 5.4Hides; skins and leather 5 2Milk and milk products 4.3Wheat snd f1mir 4Wattle bark and extract 2.0

Pineapples i -ns1 9Other 9.8

100.0

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66. Despite this diversity, difficulties in particular markets willseriously retard the growth of Kenya's agriculture in the immediate future andthe most serious restriction will be the market for coffee. Because of exten-sive new plantings in recent years, especially between 1962 and 19614, theDevelopment Plan estimates that production will increase from 43,500 tons in1963/64 to 70,000 tons in 1969/70. This assumes that Kenya, as a member of theInternational Coffee Organization, will be given an export quota which willallow her to dispose of this tonnage. For 1966/67 the Kenya quota, plus specialsupplements, amounts to just under 44,000 tons and while we are reluctant tomake a judgment on what quota Kenya will be able to negotiate for 1969/70, thereappears to be no reason to expect a large increase from the present figure. Ina world market situation, where surpluses already exist and where consumptionis rising only slowly, the International Coffee Organization is unlikely toaward substantial increases in members' quotas. Kenya has already receivedspecial supplements to her basic quota and may present a further case forspecial treatment, but we have no evidence to suggest that this would beadmitted.

67. Consequently, it seems likely that the quota in 1970 will onlyprovide for export sales of approximately 47,000 tons and that sales of afurther 6,000 tons may be made in nonquota markets. Assuming a weightedaverage price of 1312 per ton for these sales, it appears that export earningsfrom coffee in 1970 are likely to be no more than B16.5 million, which is16.2 million below the Development Plan target.

68. This prospect calls for a maJor change in production policy. Thereare now approximately 216,ooo acres of coffee in the country, a great part ofwhich is immature. This indicates potential production of at least 70,000tons from 1970 onwards. Assuming local consumptionl of 2,000 tons, the totaltonnage saleable in 1970 is likely to be only 55,000 tons with a subsequentincrease of approximately 2½ percent a year. As discussed later in this annex,we therefore believe that the replacement of large acreages of coffee trees byalternative crops has now become one of the most pressing problems in agricul-tuira9l nol i cv

69. Sisal is the other maior crnn fnr which market nroRneets are dis-

tinctly unfavorable. In 1963, which was the peak year for production andprices sisl ornt,n±e fo-r 17.2 pnerfent. hy- va11lue of All expr-rt. -_ Since that.

time world prices have been badly affected by the expansion of sisal outputelsewhere and the development of synthetic substitutes a.d there is no prospectof a revival in demand for the natural fiber. Prices and production are stilld eclining and' we anticip-ate that 4-n 1970 the value of sisal -rts w4i11 'be

only f2.5 million, compared with 16.o million in 1964.

70. Kenya is the world's largest producer of pyrethrum. Tn 1961/62 itprovided more than 60 percent of world sup-plies. In 1961 and 1962 there wasconsiderable overproduction, but in the following years output sharply declinedo)wi1ng tUo 'the ImosiUti Uon 01 f UeduCeU 111ud1 rkit u11 quuu bC unI Pu1cUI lbtU Uof large

farms for settlement. By 1966, however, production had recovered to 9.3 milliontons of dried flo-wers, and the Plan en1vlbsges that by 1970, it will be possibleto export the equivalent of 12,000 tons at unchanged prices, so that exportearnings wlil be 14.0 millio-L compared with 2 12.5 millilon n 1964. However, the

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market for pyrethrum is severely limited and Kenya is unlikely to increase hershare of world supplies after 1970, especially in view of plans for increasingproduction in Tanzania. Moreover, there is a real risk that cheaper synthe!ticinsecticides may undercut the market, although the special qualities ofpyrethrum as a safe and "natural" insecticide have allowed it to meet competi-tion successfully up to nowr. On the most optimistic assumptions, Kenya'sexports cannot be expected to rise rapidly beyond 12,000 tons a year, althoughat current prices the production of much greater tonnages would be feasible.

The Market Outlook for Tea

71. Tea has now firmlv renl½eed .si.a as the eron seeond to coffee bothas a source of revenue for producers and as an export earner. Largely throughthe successful development, of smaialholder produ.-tion- onutnut and exnorts will

rise by 50 percent between 1964/65 and 1969/70 and there are ambitious plansfor further expansion

72. Pressure of supplies i s expected tn reduce the wnorl mnrket valiue oftea in general between the present and 1970, but for Kenya this decline is1 lkelyT +o, be mvitigate +hyrough, an ovra~ll imp rcrnvem.e i n qual i ty whlc rh is

already being achieved.

73. For smallholders in particular, the opportunity costs of growing teaare low in Kenya ana th,IeCre is scope for a la-g -expanso even at c i ably

reduced prices. At the same time the country's expanding output will for manyyears represent such a small part of world spp lles thtu it cannou si.gn,ifiaLintl

affect prices. Assuming the average price of Kenya tea as Sh3.50 f.o.b. in1970, export earnings are expuected to be 110.0 m illion in that year comi,pare-dwith 16.5 million in 1964.

Commodities For Which Overseas Market Conditions Are Favorable

74. On a world basis, meat is in short supply and producers in generalcan look forward to favorable markets and a rise in prices in the years ahe-ad.For the immediate future, Kenya will be able to take only limited advant.age ofthis situattion because domestic consumiption ls largely absorbing the modestincreases in output that are being achieved. However, the development of live-stock production is now receiving -particular attention and large investLmentsin ranching are expected greatly to increase the quantities of meat for exoortwithin the next decade.

75. For fresh meat, Kenya, like almost all other Africa-n suppliers, isexcluded from the European market by the importing countries' sanitary anddisease control regulations; it is unlikely that this situation will changesignificantly during the Plan period even though Kenya is now seeking to createdisease-clean areas for production of meat which will ultimately be acceptablein European markets. In other parts of the world, especially the Mediterraneanand Indian Ocean areas, the good quality of Kenyan beef allows the Kenya MeatCommission to sell to a wide range of countries and further markets could oereadily developed. There are possibilities of greatly increasing the effi:ziencyand scope of export sales through association with international companies andtheir marketing organizations.

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76. For tinned meats, Kenya already has the advantage of such an arrange-ment with Mlessrs. Liebic so that under the "Fray Bentos" label the Kenya MeatCommission provides a large proportion of Liebig's supplies which go mainly tothe United Kingdom Market.l/ In the long run, it may- be possible to promotethe export of pork products under a similar type of arrangement.

77. The overseas marketing of fresh fruit, flowers and vegetables callsfor special expertisep and nrniz7ntirn ann fror carefulI (developm,rnt. At prepsnt

exports outside Cast Africa consist mainly of consignments of green beans,strawberries, mangoes and other high quality produce by ai-r to Furope. Theannual value of these exports, landed in Europe, has reached approximately',n( T ni 1ni rin qnrl qlf.iri7ialh thJi nirni l ::ki1l;+ir oft ;rf'ocE crnnno ; e nnTA a

restricting factor, there are hopes of doubling the value of this trade by1970. Exports by sea are not important at present, but it appears thatfurther efforts to promote shipments would be justified.

78. The main development in canning fruit for export is at the ThikaIf'actrya of Kenya Caners^ LTd WheTr>17e ,;lAo mr+ z+I, +h 7 ol; rF1 4 ± CL'_ VVU X '-. lLalJJ aX114 U(tla0 V.UJUA.b . vNIU a tX i 1U1 W 9A11V tlV.l

Packing Corporation, pineapples are being canned and exported under theer4cA .. ca Company's Y!nc-l J onte" T4l It is likely -that, the value ol exporls

under these arranFemnents may exceed 1l.25 million by 1970.

79. Kenya's eminent suitability for producing fruit, flowers and vege-tables almost throughout. tUhe y ar, aClong w4.th thc urgent need of Uany pucers

to develop new cash crops, suggests a strong case for the expansion of horti-c L'U ltur aL prd uction Lfo Li _LiA)Li U U both iU n f11 reL h 5I 1a2n1d pi rocesseC fU.rms11CC ." 1 UWi sus-

tained efforts and experience there appears to be no reason why the necessaryma-rkets should not be built up, both overseas and wi1hin Africa. In the longrun, the improvement of inland communications could open entirely new andii-mportant marrkets, especially for tempperate fruits.

eO. Exports of potatoes have lapsed in recent years because of productiondifficulties, but following successful research work on disease control, arecovery is now expected and there are favorable opportunities for sales ofseed and trade potatoes in Indian Ocean markets as soon as production exceedsdomestic needs.

81. Cashew nut production is expected to expand to 12,000 tons by 1970and there is the prospect of a firm demand so that the export value will bealmost f0.75 million. At present the bulk of production is exported to Indiain the form of nuts and only some 1,500 tons are con-verted to kernels byhandcracking at Kilifi. The net profit from exporting nuts is actually greaterthan from exporting kernels) the processing is carried out by a cooperative,which loses money, but the case for producing kernels is that it provides muchneeded employment in Kilifi and increases foreign exchange earnings. Theeconomics of exporting nuts or kernels and of processing by hand or by factorymethods, need to be properly investigated.

1/ Kenya MIeat Commission Preinvestment Survey.

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Possibilities of Exporting Maize

82. Increasing efficiency in maize production points to the future possi-hi 1 itv nf exports at lunsubsidized prices (see paragraphs 227-234 snd Appndnix 1)=

The current world market value of maize represents approximately Sh362/- perton or Sh32/50 per bag f-.o .b. Mombasa, and the present mnarket outlook does notsuggest any major charge from that price up to 1970 at least. In the past,nnnccasinl exorts n-of mai7 hae- bn m-Ad ,+ bult r -iny k with the hl o- substaIn -

tial subsidies. With higher yields it may be possible to produce maize withoutny-4 su-si a+ a -o-rm- -atel -3 perkO - bag- J may then be

possible to export at world market prices provided the collection and movementof ma4ze Irom large 'ari-us tLo point of shipmlent is effiinlognzdLUcL I.' 11(il L ~ 5 Z I.dI oU U±l U I11ll l L -LS el- UiLt=1 L,LY kUL ,ali±LZt-U.

8. On present ev-vidutnce, it appears quit posble uI t uhua at 17 a

producer price of Sh23/- per bag may be adequate for the production of enoughmaiLze Lto meet, ' 1the domestic foodstuff and livestock feed requirements plus asubstantial surplus for export. The importance of foreign exchange earnings,especlally in view of the outlook for coffee exports, may justify specialefforts to promote an export trade in maize even though the trading margin isnil.

Exports to Uganda and Tanzania

84. The Development Plan recognizes that the promotion of agriculturalexports to Uganda and Tanzania is likely to be more difficult in future asthose countries strive to produce more of their foodstuffs locally and todevelop their agricultural processing industries. In the case of wheat, how-ever, Kenya should have no difficulty in disposing of her increased output,The value of wheat surplus to Kenya's increasing domestic requirements islikely to be approximately Xl.5 million in 1970 which is less than Uganda'simport requirements. Fresh milk sales to Uganda are expected to increase toapproximately fl million by 1970 and sales of other dairy products and mea-tproducts to both Uganda and Tanzania are likely to be well maintained. Keniyaalso has special advantages as a source of livestock for breeding purposes andonce her own needs are more fully met, there will be opportunities for increasinglivestock sales to both Tanzania and Uganda.

Import Substitution

85. Because of the wide range of food crops already grown, the scope forthe development of import substitutes is limited. Nevertheless, the Planindicates some additional opportunities which will be explored. In 1964, importsof foodstuffs cost 15.9 million and in 1965 they cost 19.6 million, due largelyto the drought of that year and the resulting importation of T2.3 million worthof maize. In a normal year, the largest item on this list of goods imports fromoverseas is sugar (11.7 million in 1964) and it is expected that increases indomestic production by 1970 plus purchases from Uganda will largely eliminatethis item. Major import savings will also be achieved through increases incotton production. The local textile industry has not hitherto used significantamounts of home grown cotton and in 1964 the crop, worth 10.65 million, waEexported. For 1970 we estimate that, out of increased production, exports willstill earn approximately 10.65 million, but that 45,000 bales worth 11.5 millionwill be supplied for local textile manufacture.

The Overall Prospect For Exports In 1970 and Beyond

86. The difficulties which we expect for coffee are likely to overshadowal 1 othcr marrkect pr;b1- rJ h,c rth v+ Pcvwr yrocsr onA + reducesn byr more he 1 t l

{. t V v l. X a AL _, CA11X4. V t ± a ,.atJV J_ J a i a >VL - -J - - _

percent the total agricultural export earnings envisaged in the Developmentlanl. Over a widr field+, the export prices of coffee, sisal and cotUtUon must

all be expected to fall in varying degrees and we expect that, overall, theunit value of exports in 1970 will be_ o r5 percent of the 196- 4 figure. Tomaintain the growth of export earnings, market prospects clearly indicate thatgreater em,phasis shoi,u' d yabe placed on Jlivestocka develop..ent 4in f uatu4re

87. The Plan forecasts an annual rate of growth of agricult al exportsof just under 4 percent from 1964 to 1970. We find the production targets on-which this forecast is based generally reasonable and appropriatel-y pased.On the other hand, since the assumptions on market conditions for coffee andcertain other crops appear unduly optimistic in the light of present evicdence,we believe that an annual growth rate during the period of only 2 percent ismore likely.

C. Land Transfer

The Settlement Schemes

88. Since 1961, approximately 1.2 million acres, or about one-third ofthe mixed farming land in the former scheduled areas, have been purchased fromEuropean owners and divided into settlements for some 30,000 families. Thelargest element of this program has provided for the purchase of 987,000 acresand its division into plots for landless and unemployed persons, includingformer employees on the European farms which were purchased. This is the "highdensity" scheme and in most cases, plots are designed to yield an annual cashincome of between 125 and Tf4o plus subsistence. The second main element is theIBRD/CDC ;'low density" scheme which covers 180,000 acres, allocated with theaim of providing each settler with ifl00 annual cash income plus subsistence.These two major schemes together have become popularly known as the 'MillionAcres" scheme and there are in addition a few minor projects designed to meetspecial local problems.

89. The estimate of total expenditure on the program is 125.75 million,of which 124.40 million is for the "high" and "low debnsity" schemes, and thefunds have been provided as follows:

IC million

United Kingdom Grants 10.64United Kingdom Loans 10.42IBRD/CDC Loans (2:1) 2.63West German Loans 1.22Government of Kenya 1.22

Total 25.75

The purchase of land and establishment of plot holders has now been almostcompleted.

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90. A relatively small extension of the settlement program in the forrmerscheduled areas is being undertaken in the four years from 1967 through 1970.Under the Development Plan 80,000 acres were to have been purchased and settledin this period under "low density" schemes basically similar to the IBRD/CDCtype, but it now appears that the figure will be reduced to approximately60,000 acres.

91. The sheer size and speed of the "Million Acre" program have inevitablycontributed to the drastic fall in output from the settlement areas in thetransitional period. Marketed output has been low in relation to the targetfigures set in the settlement scheme budgets, but many schemes are still in anearly stage of development and crops are not yet properly established. Thereis no satisfactory means of measuring total settlement output because a part isused for subsistence and of the marketed output a part does not pass throughthe official cooperative organization. However, on the evidence of the cooper-ative records, output is ncw increasing steadily on practically every scherre.Much of the settlement area was formerly used for dairying and on a number ofschemes, especially of the "low density" type, output per acre has alreadypassed the presettlement figure. But the significant target for the individ-ual settler is the output level at which the settler car meet his livingexpenses and make his loan repayments on time. In general, progress towardsthis is reasonable.

92. At present, however, the official statistics suggest that the loanrepayment position is very unsatisfactory. On a wide sample of schemes atJune 30, 1966, T86i,000, representing 58 percent of the value of all billspresented, was shown as unpaid. In mitigation it can be said that the droughtof 1965 caused additional difficulties and that the early stages of establ:ish-ment are particularly onerous as settlers are billed for their first loanrepayment only six to twelve 12 months after they are installed. Nevertheless,for every scheme in the sample, the amount of arrears was greater in mid-1C66than it was a year earlier. The situation can only be tackled, first, by doingeverything possible to increase settlers' outputs and incomes and, second, bystronger demands for repayment and the eviction from their plots of the less-deserving defaulters.

93. The unsatisfactory rate of loan repayments is obviously associatedwith the criteria used in selecting settlers. On the "low density" schemes,candidates were required to have some agricultural knowledge and to deposil;quite a large sum of money, often 1f100. Most of the settlers in this categoryhad more experience and a greater financial stake in their enterprise and,therefore, have done better than those on "high density" schemes where setllerswere selected primarily on the basis of need and were often saddled with adisproportionately large debt because they were required to put up little orno capital themselves. A primary object of the "high density" schemes, was toassist poor and unqualified people and give them opportunities to improvethemselves and their contribution to the economy. Every one of these sett:Lersautomatically qualified for loans which normally totaled not less than 1200for land purchase and development expenses. A poor rate of repayments in theserirrumstances is not surprising and is an inevitable price of the social objec-tives that were fundamental to the scheme.

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94. It has been a basic principle that settlers should ultimately acquiretitle to their plots, but that in the meantime they may be disciplined and, inthe last resort, evicted, for breaches of their tenure or loan agreements. Upto the end of June 1966, only eight plotholders had been depossessed forbreaches of tenure and only two for breaches of loan agreements. It seemsobvious that under existing conditions the settlement authorities should makemore use than this of their ultimate sanction against defaulters.

95. All plotholders on settlement schemes are established by a largeoutlay of public money and effort and in return should be required to make afair contribution to national output. To help ensure standards of performanceand to make it easier to replace unsatisfactory settlers, there would be advan-tages in establishing tenants rather than owners. On the Mwea irrigationscheme, a system of tenancies works well and is justified by the need fordiscipline within a centrally planned enterprise. To some extent the argumentalso applies to a settlement scheme. On the other hand, settlement schemeshave come to be closely associated with the concept of private land ownershipand it is likely that without the prospect of acquiring a title to his plotthe new settler would lack sufficient incentive. We consider that there is aneed. at least for an initial period; in which the Dlotholder is strictly onprobation and that, subsequently, and until his debts to Government are cleared,he should still be liable to eviction for continued failure to meet his obli-gations on loan repayment or for neglect of his plot.

96. Because of their heavy commitment for loan repayments, settlers areuander special pressure to maximize their cash returns from production. It is-therefore, essential that they should have the best possible marketing facil-ities. With few exceDtions; each settlement scheme has its own cooperativewhich is responsible for handling all produce marketed from the scheme. Fordairy products and nvrethrum; it is the cooperative which receives the supnlvquotas. Thus, the cooperatives have a role which is vital to the settlers'T 1 -being and whic-h is alsao verv exactingr The Trohblems which nlague thecooperative movement in general are found in full measure on the settlementschemes. In most cases they have failed to give gornd services to their meTnhers.Because of widespread inefficiency and peculation, marketing costs have in,most ncases been undully high n-n9 settlers have oft-n r-o-rt-A to cl-andsti-n

sales outside the system. In view of the crucial importance of the settlementcooper-atives, iit- is to be hoped that+ they will, be give prortyinth

country-wide program of measures to overhaul the cooperative movement.

97. The settlers also have a special need for marketing services thatw.ill h-elp ther,l to produce the --- orit crop __d to4 prpr them fo sale--4-,_ ~_ -'-L--L i _ LI11 LU u 1 UUU CL -d).J UPJ1 L dL. C: u1 UPZ), dIiu. LU P)~V.L :-.L t ~L 11c:1I U . L =

in the right way. The original settlement budgets were based on croppingpuatterns WhichL± b11 lULitfU U;btfb LUllt LU L,At UUUqUateUt=C UU'CUIL 01 i111tLArL11g

constraints and which in any event will become increasingly obsolete as marketrequiremRents andu pices change through the years. lo enable the Pruuucer5 totake maximum advantage of market opportunities and to integrate settlementproduction plans properly into the nation, sturategyl there is a need for moreadequate advice on production. There is also a need for guidance and adviceon the presentation of produce and quality control to meet market requirementsespecially for horticultural produce where growers have to be taught the vitalimportance of regularity of supply, careful handling and constant quality.

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98. Any assessment of the achievements of settlement must refer to thepolitical context in which the program was conceived. On the eve of Independ-ence, it was clear that the national Government would have to take immediatesteps to transfer large areas of the former "White HIighlands" from the existingowners in order to reduce the concentration of property in alien hands and tomeet the popular African demand for land. In this situation a large number ofEuropean farmers were anxious to leave Kenya provided they could realize afair price for their investments. Some indeed were prepared to abandon theirfarms and many others were attempting to live off their assets, so thatproductivity in the scheduLed areas was already beginning to fall seriously.

99. Consequently, both the Kenya Government and the United KingdomGovernment had an interest in promoting an orderly transfer of land on condi-tions generally acceptable. Politically and socially, the settlement scheme(and the remainder of the land transfer scheme) has been a definite success.The policy has undoubtedly helped stabilize the political situation andrelations between the remaining Europeans and their African neighbors are nowfar more harmonious. It is also important to note that the settlement schemesare making a real social contribution by increasing the number of peopledirectly supported by the land in the former scheduled areas and so reducingpopulation pressures elsewhere. In 1965, it was considered likely that Africanemployment on settled land already exceeded presettlement employment by around50 percent. By 1970 it is expected that the total population on settlementscheme lands will be a quarter of a million people.

100. The total cost of the operations - 124-4 million pounds for the Mil-lion Acre Scheme - is formidable, but at this stage it is extremely difficultto assess the nresent snn nros-npe-tive performanne of the settlers in terms of

output or to make any overall judgment of the schemes in economic terms. Tn.TJlv 1Q66 t.he Government nnpnintd t.he Vqn Arkadie Mission on T,.n9 Settlefmentto consider all aspects of land settlement in Kenya, including its economic

_r _ IIt. We hpar d tinr-he henefit. onfi thaf t Miss--ion's vreponrt r.rhi rh wns issued in

December 1966.

101. The report argues that in examining the economic costs and benefitsnf -tt.lement it. is illogicrl tn treat n- c Phsrge npainst settlement thewhole cost of transferring land and other assets from their former owners.This rco-st, whic-h toorlnt- for anproximat-elv T1l2.8 millinn out of' total ePT)endi-

tures of .124.4 million on the "Million Acre" scheme, was strictly not a devel-o--ent -ost but a tr---s-fer , m.rment with.in the v conomlyr (alt±houig,ch firinavnceodr byr

external debt - and leading to a capital outflow). The land transfer wasnecessitated -- ci Ioiia -nclutrce n its cos w as -11-re fo national_

purposes of social and economic stability. The trainsfer having been made, there' evant figuare for assessing th1e economics of th1e settlement progrm is ;he

cost of developing settlements on the land in relation to the cost of developingth-I-e same 'lan'" in othiler possible uses.

102 * Ue bttler,IetU development costs are approxlmately 1.6 milllon,

but of this, 15.5 million is covered by special grants from the United Kingdom.It is arguable that this element sho-uld also be excluded, since the grantwould probably not have been made available for alternative uses and was thusnot a cost to the Government of Kenya. On this reasoning the economic develop-ment cost of the settlement operations would be reduced to 16.1 million.

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103. On the credit side, the Van Arkadie Mission conclude from theirstudies that gross output from settlement land is likely to be not less than17.25 million in 1970/71. To assess the return attributable to the developmentof the land in settlements, it is necessary to compare this output of 17.25million with the output that would have been likely if the land had been put toalternative uses such as state farms or large-scale African farms. The annualgross output of the land in its presettlement use was approximately T5.75million and for the purposes of the argument it is suggested that conversionto state farms or large-scale African farms would have resulted in a fall of20 nercent in output, to roughly E4.75 million a year. Thus- in crude terms,the prospective output of 17.25 million under settlements is 12.50 milliongreater than the likely ficnre uinder alternative form rf d'eveloprnment, a nd sofor an investment cost of i16.1 million settlements may be said to have raisedoutput by somuething like 'f2.5 million a year.7n), rf7ihnn I rofiic; m1- T.T)I oh n Ie i ^r Iv ̂ n inA -nnA n1^; i r^ 1 s ;r +h

104. These conclusions w .re explained -_,, -ualifie i t heVan Arkadie Mission report, invite challenge on various points; for example,thIe c Js t o f ir.nten s i v e prv - o1 n sAett n C + wh - -ich- is± e g the seVvices

of large numbers of trained staff to the detriment of other parts of the economy,needs to bec emlphasized . N\Teverthe-less, we fi nd the -ocuin are subtan ial

I.LVCLLO iLl LIC CDIfrI±±OA LJC1. * LI- VC± UIC.DD V 111. " 1 ~ULiC S±C. I ±1410 a.C 0 DULD UCasU1Ux _L

valid anld indicate that the economic case for the settlements is better thanh as often beensuggest e' cA 1 /

I ).)+ 4 St A;Um A el U U,C1 aIta , kJ A I 17n, t-hC po.. -1 LLL., A4'l LI CUU CJI± lCV05. It is eslle that by 1970, th pop'aion on set-tlem.ent- sch.emelands will be a quarter of a million people. Commercial production is likelyto uc be1) ̂ 5.25 mLilJ.lJJiIon out Iof UtotLL sma.L.L fCLIm UIorLIiaUCIL2±.L pruc.LtuUiL-Ln 131 CoapprUox-

mately E30 million, so that settlement schemes will represent a substantialsectuor of te smiall -farmrL econor,y ard tlheller potentia.L If utue rate fI CoomlcULIUL.growth, in comparison with the potential for other small farm areas, is ofspecial interest. It seems likely that the organized and relatively well-serviced form of agriculture on settlement schemes may prove particularlyresponsi-ve uu further inuensive developmer.t efflrts. Ex-Af*thensSCi.oUn serv-ices andagricultural credit may have a bigger impact than in "older"1 farming areaswhere traditional habits and ways of life are harder to change. Also, thesettlements contain only a small acreage of coffee and are mainly mixed arableand livestock enterprises. With no prospect oI further coffee development, tnerelative opportunities of mixed farming areas will improve and the settlements'suitability for livestock production, horticulture and mixed arable cropping,provide a good base for further development.

Transfer of Large-Scale Farms Intact

106. The circumstances in which the land transfer program was evolved in1961 and 1962 have already been described and the arrangements for establishinglarge-scale African farmers in the scheduled areas was another feature of thatprogram. Finance was provided by the United Kingdom and, between 1963 and 1965,it was possible on a "willing seller-willing buyer" basis to transfer approxi-mately half a million acres of European farms intact into African ownership.

1/ For example, in the Development Plan on page 126 and in the Report ofthe Stamp Mission.

- 27 -

The Land Bank provided mortgages up to 60 percent - later reduced to 50 per-cent - for the purchase of land and fixed assets, while the AgriculturalFinance Corporation provided credit for livestock and moveable assets andcharged interest at 61½ Dercent.

107. A number of large farms were also bought directly from Europeanswithout Government assistance and are being run successfully by individualsthemselves or by nartners emnpovinn qualified mnanagement_ Altogrether, bhy riid-1965 there were approximately 750 large-scale African farmers occupying 600,000acres of land.

108. The manority of the African farmers who were insta.l 1 ed with (Tnvern-ment assistance began without the necessary experience and qualifications •forlarge-scale farming and without adequate working capital. It was of+en forndthat the incoming owner had overstated his capital resources in order to qualifyfor. supponrt and/ secure possesi o- and was then left healvrily indebted nd w-i+houtsignificant working capital to generate income and loan repayment money. Ileryoften the farms were acquired by informally associate1 partners an thle subse-

quent lack of funds aggravated management problems.

109. Consequently-, on most of the new African-owned farms output fellbL Id~jJ ~ 4 JIUL -L - --- IJ~I dA 4 L1 01f W11-4 .44 IIOXL U,--- - - -iL LA- L q1-shlarp-ly often uu aL smnall fract"lon Iof CL wha it a be peiosy maintenancewas neglected and the owners were soon in serious difficulties. In the Trans-

Nzoia ~ ~ ~ ~ ~ ~~~~~~~~V frec,pewhr 0ouofattlo40lrg-sca-le farms hadbnBzo~.lul ' UreaUiipJLe, w'ilere .L.)U O'U 01 a UUU0a. 01 '-Lo ±.arge LC 10.11110 icIICL. UL:eli

purchased by Africans, it appeared in 1965 that no more than a tenth of thenew owners woulu survive.

110. To meet the situation, special extension services have been organizedto assist and advise the African farmers. Since 1965 a team of German agricul-turists has done notable work in the Trans-Nzoia and special services have morerecently been formed in the Nakuru and Uasin-Gishu districts. Also in 1965,the Government established a new school at Thomson 7S Falls for training Af:^icansin large-scale farm management.

111. The assistance so far provided has kept in business many farmers whowould otherwise have failed, but it is impossible to restore most of the farmsto full productivity within a reasonable time unless more working capital ismade available. A program of selective "rehabilitation credit" is now beingprepared for those farmers who are capable of implementing farm plans and arewilling to accept close supervision.

112. To make a major impact in this sector it is clear that still morecredit and intensive supervision by trained staff will be needed for manyyears. However, rapid improvement in the management of large African farmsseems particularly difficult and we see no clear prospect of a full recovery inproductivity in this sector.

113. The political situation has altered since the original land transferprogram was undertaken. While it is still clearly national policy that thealien sector should be further reduced, a much more gradual rate of transferis now desirable. On the one hand, there is a new stability in the remainingEuropean sector; private investments on large farms increased from 13.29 million

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in 1962/63 to 04.07 million in 1964/65, reflecting a new confidence on the partof the owners. Many Europeans have become Kenya citizens and of the others thegreat majority appear willing to maintain the asset value of their farms and tom -ake a flE,i1 contributio,n, to the econom.y t At the came timp 9 nimp-rnii epaYt-ri stpe

especially those nearing retiring age, would be willing to sell their businesses_at the price levels hiltherto fixed in official svaluations . On thee other hhar.d,

the number of Africans qualified to take over large--scale farms will be verysma.. in the ne;t +iA:4w ya± T . tll a..L `Ue rnaU A_ f.or t II-e. Goe rm ent o r tsheC

Agricultural Development Corporation to buy farms and operate them either asnational farms or as "transitional1 farms for transfer to private ownership indue course.

114. The case for a number of strategic national farms is sound, particu-larly in order to safeguard the national stock of pedigreed cattle and pigs andto produce certified seed corn and potatoes. But the extension of the state-run farms beyond what is required for these purposes is unlikely to be aneconomic success under present conditions. Although the United Kingdom Govern-ment has undertaken to provide funds for land purchase, the Kenya Governmentwould incur a large capital cost itself in buying the other assets involved andthe Agricultural Development Corporation would need a large expansion of itstechnical managerial staff. Even so, it is unlikely that any increase inproductivity would result from the transfer of ownersnip.

115. We therefore consider that the program in the Development Plan forthe purchase of 320,000 acres of large-scale farms between 1966 and 1970 isunrealistic. There is a special case for a limited number of national farmsand we have also suggested a case for purchasing perhaps 30,000 acres of coffeeestates in order to reduce the national coffee acreage. But beyond this theaim should be to effect transfers of land from willing sellers only as fast assuitable buyers appear) so that productivity is ncot endangered. When suchbuyers are not available, the Government should seek rather to maintain outputand investment through the capital and efforts of the existing owners.

D. Taxation of Agricultural Produce

The Case for An Increase

116. In all main sectors of the economy, the development of publicactivity in the years ahead will involve heavy demands on the existing sourcesof revenue. Activities already planned in the agricultural and livestocksectors up to 1970, imply increases in recurrent expenditure of 30 percent ormore and we have suggested a case for further increases through the extensionservices and possibly through extended subsidies for fertilizers and other farminputs. Since it is the agricultural producers who will benefit especiallyfrom this expenditure, it is proper that the agricultural sector should make aspecial contribution to the cost.

The County Council Cesses on Produce

117. Apart from certain excise duties, an export duty of B20 per ton 1/ on

1/ Reduced in mid-1967 to L10.

coffee and a small export duty on sisal, the only taxation on agriculturalproduction a + prtesent i.s in the form of produce cesses levied b,y markt

boards and the County Councils. Originally Council cesses were authorized tomeet the cost of _agricultur_al servic-es which the local authorities prlovided,l

but over the years most of these responsibilities have lapsed and are now of,ery,r lim+itA nffe. Mear.while the incor. -from the cesses has come to -Pno apart of the Councils' general revenue and expenditure and now accounts for

~~~~~'- - A m I r n po 4-dAs ou 0 n 4- -4 -I - .. os._ - 4- _ -4 _v.1 4- er mi IL I i0rit_~ 5)

pounds.

118. The arrangements for the imposition and collection of the cesses arenot well coordinated. Under the Agriculture Act, the maximu:m cess which maybe levied on each crop is fixed by the Ministry of Agriculture and within theselimits each Co-unty Co-uncil applies cesses to the most significant maurketedcrops of the area and fixes the rates. In Kisumu for example the taxed com-modities are maize kat Shni- per bag), sisai (on a sliding scaie up to SnoO/-per ton), hides (at Shl/- each) and skins (at ShO/20 each). Coffee, in areaswhere it is important, usually bears a cess of 3 percent to 4 percent. Reguia-tions for the collection of cesses stem from the Ministry of Local Government andcollecting arrangements are haphazard. For smallholder coffee, collection isthrough cooperatives and there have been difficulties in arranging other means ofcollection from large growers who are not cooperative members.

119. In general, the system of local government cesses is agreed to beundesirable, arbitrary and inefficient. In the important case of maize, whereone shilling per bag is levied on sales to the Marketing Board, it is anincentive to "black-market" trading. For cattle, where the cess is levied onsales through authorized markets, it has seriously discouraged the use ofthese markets. At the same time the system inevitably involves a great dealof administration and effort in the collection of the cess revenues and inpreventing evasions. It is not possible to produce statistical proof, butundoubtedly, the costs of collection and the degree of evasion are very highin relation to the revenue obtained.

Proposals for a Land Rate

120. It appears that the system of local cesses has survived simply forwant of an alternative means of raising revenue for local government. Wefound some support for the idea of a differential land rate as a prospectivealternative. From the point of view of agricultural production, a land ratewould be expected to produce a favorable effect by encouraging the moreproductive use of neglected land, either by its existing owners or throughsale to others.

121. On the other hand, a land rate could only be effectively appliedwhere land consolidation and registration had been effected and would there-fore discourage cooperation in the continuing progress of land reform on waichfurther development efforts so largely depend. Adding to this the consider-ation that land rates are an especially unpopular form of taxation, one mustconclude that the introduc-tion of a land tax would not be advisable at present.

A Tax on Produce Handled by the Marketing Organizations

122. In the interests of agricultural development and marketing efficiency,we believe that abolition of the County Council cesses on marketed produceshould be considered even though the alternative of a land rate is not recom-mended. It may be desirable, 'or instance, to replace these cesses with-anational tax on produce out of which local governments would be compensated forlost revenues . The most effective form of such a national tax muight be a levyat an appropriate rate per unit of produce handled by the statutory marketingbodies. The stat utory bodies would -pruviue ±Ur brie uux by standard deductionsfrom their payments to producers and would remit the total sum to the Treasury.in this form the tax would be flexible, simple, cheap to collect and relativelyinconspicuous. It is suggested that the tax should not be imposed on maize,both because of its importance as the basic food crop and because of therelative ease with which maize can often be sold through uncontrolled channels.

123. At rates moderate enough to avoid a disincentive effect on producers,a tax based on the turnover of the Marketing Boards would still make a su.bstan-tial contribution to development revenues. For purposes of illustration only,we calculate that a tax equal to an overall rate of 3 percent would yieldapproximately 1t1.75 million in 1970.

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IV. GOVERNMENT PARTICIPATION IN AGRICULTURAL DEVELOPMENT

The Field Extension Services

124. The Agricultural Development Plan envisages changes of emphasiswithin the production field and an expansion of output in both agriculture andin livestock which will demand considerable extra attention and supervision bythe extension staff. Increases will be needed in both higher and lower echelongrades of the extension services, for which the last major revision of estab-lishment numbers took place about 10 years ago. Over recent years, the person-nel requirements for such developments as land consolidation, land transfersand settlement schemes have been met largely by internal staff transfers and byfilling vacancies in the establishment, but at the expense of considerablestrain. In the future more staff will be needed if the Government is to con-tinue and expand the "Million Acre" Settlement Scheme and the smallholders'tea program, launch the Range Management project and the smallholders' creditscheme; carry out the expanded nroarams for various crons, establish the newAnimal Husbandry Division, and meet the needs of special units such as SoilConservation, the National Trrigntion Board and the Agricul1turnl DevelonmertCorporation.l/

125. There has been reluctance in the last five to ten years to meet fullythe demands for staff increases. Several asses-nentq have iust. been made o)f

the probable needs for extra staff for the Development Plan up to 1970. Ifap-rovTed hv the Treasiry and the Govrernment, these weiilld meet. rePinirementq.

126. The structure of the field staff of the Department of Agriculture isfundamentally grouped around Agricultural Officers, who are the professionally,qa1li fi ed cs-ff. TI n9r -+1h-c,-.n ar f; f r-c + l ry+' o 1 +hc. ir1hir1 infl ;Offrp ici,ilI-r

referred to as Assistant Agricultural Officers; at successively lower gradesare Technical Assist.ants, knnown as Agricultural Instructors and AssistantAgricultural Instructors respectively. The Veterinary Service field staffhave nearly the sme I 6 a i aorganiza , wi Vtternar Officern, who are quali.ied

veterinary surgeons, Livestock Officers, Animal Health Assistants, also ca:LledVeterina-r As--stats or Technical A -;4 +in-+e aon U1+n- n"ra C!nii+

I .14'. v.LAh1i. 'S J1.LO-w J. OJa_ ± vw. 1 hJ4 ± _.1 .s. |w ,.4 LA.. V XL.'v... 4.11 U .17).

1O7.~~T Te n, -", er ofP extension saf in th-e Fi el d Srie nAgs 9,

is shown in Table 7. It should be noted that the number of personnel in the.. LUW ei ~, I WLI U d.L I= ULIt .L.LIJ. L.) L'Weeli1 Ullt ±,.lie. IMIU I U '..ielt_ iiIuLJI 1c: ~ L )4.lo-wer grades wo reth 'ir betwee th amra.dtemr rofessional

advisory staff, has tended to fluctuate rather widely in the past.

/ increases in establisrn-w-lent were friade recently for Lith Depalr+UmetiU ol

Settlement, the Kenya Tea Development Authority, the National IrrigationBoard andi the Range Management Division.

- 32 -

Table 7: STAFFING OF FIELD SERVICES(August 1966)

Senior Agricultural Asst. Agric. Technical Asst. Agric.Denartment Staff Offieer Of'fi _er Assistant Tnstruretcr

Ag,rirclture 9/ Q 1 4o) ? LnR

Range Asst. Range Range Junior RangeOfficer _______ .s ant Assistan.t

Range Manrg .rntn+ 6 60

Vet. ScoutsVeIt- _4 Tvcsoc1 Ainary r i t Animal uea-t is andOfficers Officers Assistant Skins

Inspectors

Veterinary b/ 7 26 115 )23 1,162

Totals 16 62 316 1,924 3,625

a/ iIncludes s Lid .1 111 ~e~n se lieme-ts, tesa ueve±opmenu, soil conservU iun,

farmers' training centers, home economics 4K clubs, coffee cooperatives.

b/ Includes staff in Settlement, tsetse control, farmers' trainingcenters as weii as regular Department fieid services.

128. The assessments made in December 1966, of additional staff require-ments for carrying out the Development Plan were based on fixed ratios 1/ ofthe nonprofessional staff to numbers of cultivators, grade (dairy) cattle,indigenous cattle and other livestock and were adjusted to meet special projectneeds (e.g. Agricultural Credit 2/ and Rangement Development) and varyingdistrict densities of farms and livestock on the ground.

1/ For general agricultural extension work9, one trained extension worker per600 to 1,000 cultivators (in the Agricultural Credit Project the densityis two to three times higher); one animal health assistant is required forevery 1)000 head of grade (dairy) cattle and one for every 10,000 head ofindigenous cattle.

2/ The reduced size of the Agricultural Credit Project, in which most of theadditional field staff were to be used, should decrease the proposedintake of new staff.

129. The additional requirements for agricultural extension field staffa r e ab,ou,t 60O a g-r- cl t+u ro oIfficrs f 9rc f0l + -chnicr,4 al off (assista a gc 1 + a n ric ul=

tural officers) 1/ and 500 technical assistants (agricultural instructors).The vetterinar-y services exp-t to add 17 fieldA v-4tLia- cfficrs, 55 live-stock and technical officers, and 170 animal health assistants. Additionalst-af 4-e- u r,4----4s ofP41-T)--1/ the R.g Mngm nt -4iso by 19-ln70 are esti4mated at_LUd.I 1.iSiU L 2 U1ir: iH.C1z i'ia1Ci.CC1"zUiIll., .L)± Vi.LoiJI Uy -L>I U a± Lt U. ±J.Udt I Cl u

22 range officers, 21 assistant range officers, and 65 range instructors.Irrig±ation schiiemes neeu somie audditionidJ1 fieLU stafi - '4 agrLcultural offL Uiiicer1

(as scheme managers), 6 assistant agricultural officers and 25 field assistants.The latter can be trained within the irrigation schemes.

130. Prospects for achieving these staffing targets depend on approvalby the Government of the larger new establishment involved and on trainingfacilities. In the case of the agricultural extension services (excludingsubordinate jumior grades), where the largest increases (nearly 50 percent)have been proposed, the extra cost in 1969/70 would correspond to nearly a 30percent increase in the current emoluments budget.2/ In view of the contri-bution that the extension services are expected to make to the success of theDevelopment Plan, this extra financial commitment appears well justified in!relation to the benefits estimated to accrue from the agricultural developmentschemes that will be carried out. The smaller additional requirements forveterinary and livestock staff required for the livestock development programshould be given comparable consideration in financial allocations.

131. Since the supply of university-trained agriculturalists (Kenyans:,will not meet the country's full requirements,3/ first call on those who becomeavailable should go to the field services, which can make the best use of themin key district posts. The number of veterinary surgeons graduating from theFaculty of Veterinary Science at University College, Nairobi, will slowlyincrease during the Plan period but will be insufficient to replace the con-siderable number of expatriates now being employed. In the Range ManagementDivision the expansion in the numbers of range officers, from 4 to 29, whichwill not have been completed at the end of the Plan period, will be met verylargely from staff who will have returned from training.

132. The training of agricultural instructors currently done at the

1/ Agricul-tural education in farmers' training centers, the staff trainingcenter and secondary school education in agriculture will also requiresome 90 additional technical officers.

2/ Thus the budget of the Ministry of Agriculture, which provided 12.62 tail-lion for personal emoluments in 1966/67. would have to provide, by 1969/70,for an additional 10.7 million in salaries and increments, a supplementaryexpenditure of 10.1 million for housing and vehicles.

3/ Even with the planned expansion in intake of agricultural students, MakerereCollege at Kampala is unlikely to produce more than 20 Kenyan graduates ayear in agriculture against an estimated requirement of over 60 men a yearduring the Plan period.

Training Center, Embu, is to be supplemented by a second center 1/ which willentail an inverstment estim- ted .at =110,0f0f0 nd recurrent expendit+,,es of

B125,000 in the four-year period, 1967-70. The combined output of both trainingcenters - 200 ULen a year - is cons4Aider adequate to± -e -orseab-le- nee

for governmental staff and other services up to 1970. At a similar level in4th,e Veterinary Department, the estimated requirements for -4-ma health, assist-

ants are fully provided by the Animal Health and Industry Training Institute atK.abete, which accommoudates `220 studer,ts

133. Diplomate staff- in agricult-ure (assistaLt agricultural offlcers), inrange management (assistant range officers) and veterinary animal husbandry(livestock officers are traineud iu Egertun College , adIU tIhe oUtput iL neUarly

adequate for Kenya's estimated need of diplomates yearly.2/

134. Altogether the Mission expects that training and educationalinstitutions will be able to supply sufficient personnel at professionai andsub-professional levels to meet requirements by 1970, provided plans, such asthat for a second center to train agricultural instructors, are promptlycarried out. However, there will be still a severe shortage of Kenyans withthe graduate education required for research. Moreover, the field staff willstill in large part be short of experience.

Development of the Pastoral Areas

135. Although the pastoral areas of Kenya cover four-fifths of the countryand support a human population of one and a half million, they have remainedalmost unimproved by commercial investment. The exception is a relatively smallarea of about five million acres which is mainly owned by expatriates and whereranching has already been commercially developed. On these ranches the outputis estimated at 12 shillings per acre per annum compared with between 1 and 5shillings per acre on the undeveloped pastures.

136. Parts of the undeveloped lands have a rainfall of 25 inches to 35inches per year and already support a large population of cattle on goodpastures. Their potential contribution to the livestock economy is impressive.At the other end of the rainfall scale are arid and semi-arid areas in the northand north-east. In some places, the increasing pressure of population andlivestock on the land, coupled with the deterioration of pasture as the resultof uncontrolled grazing, has created near-famine conditions.

137. The Government now has ambitious plans for increasing productivity

1/ The training center at Embu has a capacity for 150 students, and theproposed second center will take 200 students. Part of these will takea two-year course, but part, who have had some training already, only aone-year course.

2/ A large expansion of staff for Fisheries projects requiring about 40senior staff and over 500 junior staff is also planned, but as most of theiunior staff intake would not require technical training before recruit-ment the Fisheries demands are not expected to compete with those ofAgri ciltiure.

- 35 -

of the range lands by promoting commercial livestock raising as far as localcircumstances permit. It has recently prepared a synthesis of these plans ina comprehensive development project wnicn involves the expenditure of L9.4

million over five years. The developments envisaged in this project will bethe responsibility of a Special Range Management Division within the Ministryof Agriculture. Over the past two years, this Division has been built up toan establishment of twenty-one officers at headquarters and in the fieldextension service. Programs of range research, land use surveys and traininghave been initiated with assistance from the UNDP/SF and the USAID.

138. Already some preliminary steps have been taken for the extension ofcommercial ranching. An important element in the plans is the development ofunoccupied coastal rangelands as well as the improvement of existing ranchesby private enterprise and it is hoped to attract foreign investment in thesefields. Elsewhere, in the traditional pastoral areas, the intention is toorganize the livestock owners into individual, cooperative or group ranchesdepending upon local circumstances, or, where the population is not ready fora more sophisticated organization, to promote simple grazing schemes.

139. From experience already gained it is clear that, although individlualparticipants in cooperative ranches may contribute some capital, they are gener-ally unable to play a major part in management and decision-making if thei:rranches are to be run successfully on commercial lines. The cooperative ranch atKoma Rock in Machakos District is owned by sixty-six members and is well-stockedand commercially successful; but since its establishment in 1963, it is clearthat its success has depended heavily upon the expatriate senior settlementofficer who closely supervises operations. The society members are stillapparently not able to give control to a competent local manager. In fact,the term "cooperative ranch" as applied to enterprises such as that at Koma Rock,is misleading since the organization is essentially in the form of a limitedliability company rather than a genuine cooperative. The members subscribeshare capital, run the business through employed (or government) management,and in most cases live and work elsewhere. The establishment of trulycooperative ranches, where members themselves provide the management, do thework and depend on the venture for their living, presents very differentproblems. There are hopes of establishing such genuine cooperatives, but thedifficulties appear to be formidable.

140. For areas, especially in Masailand, where people have a strong prideof ownership in their cattle, the concept of "group ranches" is being developed.In such cases, the members retain individual ownership of their stock, but; theranch land is registered in the name of the group and they elect a committeeto represent them in the running of the ranch. This form of enterprise isrelatively untried and appears to call for an uncommonly strong community spiritwithin the group. This type of community spirit may be found among the Masaiand other tribes who have strong traditional family ties. Even so, groupranches can only succeed if the members are willing to relate stocking rates tothe carrying capacity of the land and to take off stock regularly for commercialsale. The great danger is that the registration of group ranches might simplyconfirm the rights of the Masai kinship groups to land without significantlyimproving its use. We were given considerable evidence that the much-publicizedconservatism of the Masai can be overcome. However, the establishment of groupranches and the necessary stimulation of commercial habits of stock keeping

- 36 -

will need a great deal of effort and organization by the Range ManagementDivision and the Livestock Marketing Division.

141. In parts of the Masai district of Kajaido, the tribal elders haveallocated considerable tracts of land to individuals, and 48 individual rancheswith an average size of 12500 acres each have already been established. Althoughthey are of much less than optimum size, these ranches may succeed with thehelp of government loans and close supervision by the Range Management Division.The scope for individual ranches on pastoral tribal land is obviously limitedbut they would have demonstration value in helping to inculcate commercialhabits of stock keeping among the lMIasai.

142. Community grazing schemes are intended for backward areas whereorganized ranching is not practicable. Graziers continue to own their ownstock but do not acquire a title to land and their grazing rights over specificareas are controlled by government. Water supplies, dipping facilities andgeneral advisory services are also to be provided and the graziers are to makepayments for these facilites. It is planned in the next five years to establish96 such schemes in Turkana, Samburu, Baringo, Kitui and Machakos. These arelargely the areas in which famine relief is most often required and, in theabsence of some development effort, they are expected to degenerate further.

143. There is ample evidence in Kenya of the need for the enforcement ofgrazing controls to prevent overstocking and deterioration of pastures in themore arid areas. But regulations to control grazing will be abortive unlesseffective steps are also taken to control cattle populations in the affectedareas. This in turn involves the resettlement of the pastoralists themselvesin cases where they cannot obtain adequate subsistence from reduced herds.

_44 Communitv grazing schemes were onerated in Kenva in the late 1950's

but, although their advocates consider that they showed their value, they hadlargely failed hv lQ9l, mainly becruse tihe contemnorarv nolitic2l situationmade it hard to enforce regulations and because the drought of 1960/61 createdspecial difficulties. A siccsqfuil -resusqcit.a9ti n of grazing schemPn will

require firm regulations and a strong organization to enforce discipline,especial Tit r1eard UTj +t tF onn+rol of} cat++l nuimbe-rc! and rlthern+ penton of-

poaching on reserved pastures.

145. A part of the range development program provides for more stock routesand holding grounds on the periphery of the settled areas. This would allowcattle to be drawn more readily from the semi-arid areas when their owners wish4to sell i4n ti4mes of drough-t, and put into con"dition on the holding grounldsuu n _J_± ±u L±Iu _ J L U VULIU ~u~i U I LIUL kiJ~LU UL-L ~ J uiie 11OJ..U±L1, .LU LU

before delivery to the Kenya Meat Commission. At present it is very difficultto coordinate supplies with equj±i ei Unj. fo ±lauIhter , espec,ialy where

disease outbreaks restrict movements. The holding grounds would serve asquarantine Uarteas as we'L'L as fa-tbtening11, B,1 oLUiU.Z , antu heiJ LpU toveni UULt utie fLow Uf

supplies to the Kenya Meat Commission. The potential value of these holdinggrounds in in-UProviLg ithe wetights Uo blu:,!er catle is suggested by uthe ifua

that mature Zebu stock, introduced to good pastures and sound management fortwelve months, have graded better at slaughter and put on 200-.lb. weight perhead. It is intended to use for these purposes several properties which theAgricultural Development Corporation is in the course Of buying.

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146. The Government's project which provides for these developments overa five-year period proposes a total investment of i9.42 million (see Table 8)of which IBRD has been asked to finance IE5.9 million. The Governrment hopes,that as a result of this investment, output of beef cattle from the pastoralareas will increase from 179,000 head in 1966 to 395,000 head in 1976, and thatin addition the development will bring major social benefits to the pastoralpopulation. Without disagreeing with the principles of the project, we believethat it is unduly optimistic to expect such a large increase in commercialproduction of cattle over the next ten years. Staff limitations and sociol]ogi-cal problems are likely to retard implementation of the program, with the resultthat the offtake of livestock will. increase much more slowly, especially in thenext three or fouar years.

Table _8 COSTS OF RAINGE DEVELOPMENT PROJECT(in f million)

Item Amount

RanchingRanlch development in traditi ona-l pastoral areas 4.17Improvement of commercial ranches and develop-

ment of coastal range lands -I.41Mobilization and marketing of livestock 0.77

Staffing 1.53

Ancillary RequirementsTanA registration 0.°0).U %4'J .LCX Li aUJ.LUII ' .c~'-

Staff training and education 0.45Rsar ch o.65:

Resettlement and grants 0.24

Total 9.42

1147. Complete a l of a proJect of this size and 1 ty clsf

much more detailed information than the mission was able to gather. In particu-la ,)~ -_4' - - - -_ - - - K.2; A - 4- - . 54 a _ _ _ _ A - I - - _ _ _1 _ -_ - on th -_ _ r a success. _LL 4, ujie±UU11= .Lt =1 t=U L:uJJuu ueL .U U.t=lluDz 5,eJL Li t;J uul,C W U UCbJ . CtU b ULUCbL UI V =L.roUs

forms of ranching enterprises which are so far relatively novel and untried.Coopertattive ardL ir,divid±ual HfLi raur,ces are fe-w in nur,ber at preueuL, gruL Lp

ranches are a novelty and community grazing schemes have been tried in the pastw~ith1 li"ied success. No doubt each of these -4lm of orgrlzaio ha a parWi. tui Lim-Lb ue 1 * VA U UUUI U 11 01 ULieb lOLu llb 04. U.LCtUL_L -LuU±_UI IIUZ~tb d. as.uL

to play in future development, but the present evidence does not show thataltogether three hundred and forty-five of these enterprises could be success-fully established over 14.3 million acres within five years as proposed in theproject. Much more also needs to be known about incentives in relation to pricesand particularly the existing structure of prices. We believe that a far moreselective and experimental approach will have to be adopted where there aredoubts about the ability or willingness of the cattle owners to play their partsin coirmercial ranching.

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i48. The schemes for developing holding grounds in order to improve thequality and weights of cattle for slaughter and to even out the flow of supplies,deserve priority attention. At the same time, as discussed in paragraphs 310-319, below, the operations of the Livestock Marketing Division and marketingfacilities in general need to be reviewed in order to determine whether theyare effectively encouraging pastoralists to sell cattle and to develop thecommercial outlook without which the ranching schemes cannot succeed.

The Research Services

149. The maintenance of an expanding economy based, as in Kenya, mainlyon agriculture, livestock and their products, continually creates researchproblems requiring examination by trained, experienced specialists. Appliedresearch and investigations, which adapt to Kenyan conditions- nrincinles andmethods already established in other countries, can solve many of these prob-Ievms for Kenvya i,I1e,- this iminisThps the need for bhsic and fundaenpnt21research, the scope of research must be broad owing to the extensive range ofcrn-ps that cnn be crnwn srd the vnriou,s tvypes of livestonk h1sahndrv that cnn

be practiced in the many ecological zones of Kenya.

150. Existing facilities in Kenya for agriculturel anid livestock research,which have evolved over the last 60i vears, albeit on an ad hnoc basis show a

well-sited network of stations havin-ig a good ecological coverage for thep-rinrci Tpal canh n food crop,n r- rt. -iriI ture, -cd li-vestock nO -rnnce mnnage-

ment. (See Appendix 3 for a list of research stations.) They are backed bythe central Nationai Alg T.rnict,'r Rsachccy' a or+ri e and by t.hp n1ircleu

headquarters research Clivision of the .Mlinistry of Agriculture and AnimalHusb an d y .

1*11-ItWle V-uch of th- s.r W s V .st1 . a f.Jfi twia Idt dir b 1 c . . y o5Vern-l1

ment ministries, regional institutions operate for certain crops, e.g. the TeaRiOesearCh Ins4-tltus at leri cho. The11 -East Af rica Ag -4. F U- t--A

Research Organization and some crop marketing boards control, maintain, orcontribute financially to, research stations, e.g. for coffee, sisal andpyrethrum. Agronomic investigations on tobacco are carried out by the cigarettemanulaclurers wh IoU supervisbe aUl1nost aUll obUUu Uk wn n dUW11t, Uproces

152. Division of responsibility for research, although not necessarilyintolerable, can be frustrating. On the one hand, central government controlof the financing aLnu direction of alil research n ight be defended on the groundsthat it would make possible economies in specialist staff and high cost researchequipment. On the other hand, there may be definite aLdLvantages in entrustingresearch on a specific commodity to a particular organization, when thatcommodity is sufficiently profitable to support the research cost and tneorganization in question can assunme fuil responsibility for the research, witha relatively free hand to recruit staff and pay salaries competitive in tneinternational market. Many instances are known where such an arrangement ishighly successful, e.g. on a large scale in Maiaya with rubber, and on a muchsmaller scale for essential oils in Guatemala.

153. No overwhelming argument can be made for either of these methods oforganizing and directinrg research. in the case of pyrethrum, wheat and sisal,

there seems to be a convincing argument for giving full responsibility forresearch to the Boards which handle these crops, particul-ly since they have thespecialized staff and the financial reserves. In cotton, however, it appearsdesirable to tr.insf.er to the Jo-overnmlen-. ful.l. responsibility If)or Lboth ac

and extension work.

154. Total annual recurrent expenditure on livestock and agriculturalresearch h'1as been ouver lu UU,UUU anU fnew capital ex1peUndiU1re oUf5 U1U3r ,OUUestimated within the Plan period. There is a serious shortage of qualifiedand experienced research officers in the agricuitural and livestock services.Of the 48 A-scale officers filling research appointments at the end of 1962,two-thirds had left by the end of 1965. The Plan indicates that 250 University-trained officers will be re(uired over the Plan period not only for researchbut for implementing all the proposed agricultural projects. The latestassessment of research staff requirements in the Ministry of Agriculture andLivestock indicate that the present staff (34) should be doubled by fillingvacancies in the existing e!stablishment (7) and creating new posts. The pros-pects of achieving this goal are poor owing to financial stringencies andlimited availability of suitable candidates. Past staff losses have beencaused not so much by immediate prospects of Africanization but rather by thefear among expatriate officers that there are no continuing career opportunitiesin Kenya. Since relatively few qualified Africans have been available, Kenyahas had to rely excessively on temporary overseas staff who often do not haveall the qualifications and experience that are really required. Current anldfuture training programs will help to provide a more adequate number of Kenyansby 1970. Meanwhile, however, vacant posts must be filled by expatriate staff oncontract. To ensure continuity and effective prosecution of research it isimportant to extend the contracts for such personnel, now generally for twoyears, to at least three or four years.

155. In general, it seems desirable to give the field and extensionservices priority over research in the assignment of professionally trainedKenyans over the years immediately ahead. Qualified Kenyans are likely to bemore effective than expatriates in work involving more direct contacts withthe farmers; and the experience gained in the field will also enable theseofficers to acquire a grasp of the practical work of the farmer which couldlater be of great help to them should they be assigned to research work.

156. As the result of past research and field trials farmers in manyinstances are now benefiting from new planting materials of improved yield andgreater disease resistance, more efficient methods of reducing pest damage andmore profitable practices of husbandry.

157. The grave personnel problems that do arise are exemplified by theexperience of the Njoro Station where continuation of vital wheat breedingwork was jeopardized by the reduction of the staff to one professional, who asDirector, also had to handle all administrative matters. This situation hasnow been improved by the recruitment of six expatriate research staff (plantbreeders, ecologists and an agronomist). However, except for one agronomist,there have been no Africans available for appointment, so that the advantagesof in-service association and training with the temporary expatriates arelargely being lost.

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158. A serious research problem has also arisen in connection with CoffeeBerryr Disease whirc.h has r-ce,rntly bee spreading ranjidr tol ooffe,e .Tino ara

below 5,000 feet, and becoming a threat to Kenya's coffee production. Althoughi+ has ben knowrn +n exitC+ a+ the higrhezr altitu+dsA fonr al onng +time,n +aOm te

specially assembled scientists (ten in all) is only now making an intensiveSt A nf' t¾i A ti Qc!n mC +fn rli '2fcnT(-'r -r r+ h r, c n+ v.rl rrm ~ nvr +n ,-~v'-l .~std of the disas -_ -_ todiscoer effective coto esrsto _eplacethe partial control achieved in the past.

159. Cotton research in the past has been inadequate. The Cotton Stationat- Ki,bos in Cent-ral1 NaT 2 ha b---1 1een the mai - exper4imenta cener -u its -- 4 -- 4 soilsda.. JJL~~.I '.-' Lu I -.J ailZE Li £LO, E, U11~Z MLU'2L±. 4.A ±1i1 UL 1 UC.L U UU L bO L L

and climate are not typical, particularly of the areas in which the Governmentnow hopes to bring about the major expansion of output. It will be necessaryto establish experimental stations in Eastern and Central Provinces with theappropriuatle technical s'Lal i a. agronomist and an entomologlst), andu Lo

strengthen the research unit in the Coast Province. New varieties of cottonare required to repiace UK 51, which has oeen in use for about i0 years, andwhich has a low ginning output of only 32 percent.

160. It is desirable that sugar cane investigations should be concentratedaround the main development zones adjoining the two new factories at Muhoroniand Chemelil, and upgraded to experiment station status, with at least anagronomist and a fieid experimental officer. A sugar technology chemist shouldbe appointed for the two factories. A decision is required on the siting ofthe regional sugar cane breeding station, site selection being related tosuitability of climate for cane flowering, for which the Mombasa district hasstrong claims.

161. Investigations on paddy growing have largely been concerned withvariety tests. The Mwea Irrigation Scheme produces 70 percent of the country'srice and is to raise its output from 177,000 bags of paddy in 1964/65 to340,000 bags of paddy by 1970. It is important to assign an irrigation agron-omist and other technical staff to i\Mwea to do extensive field trials on waterusage and fertilizer requirements of paddy on the "black cotton" soils, and toascertain the production potential of the red soils for other crops.

162. Despite the potentiality of horticulture crops in Kenyan conditions,the main horticultural experiment station at Thika and a sub-station at Molo,have both languished through lack of staff and supporting finance, the sub-station at Molo being on a care-and-maintenance basis. A current assessmentof the Thika station is expected to result in recommendations for expanded andimproved research which, if combined with appropriate marketing studies, shouldgreatly stimulate the development of horticulture.

163. Coconuts, occupying a very limited area in what has sometimes beencalled the "forgotten" Coast Province, have never received more than tokenattention. The Muthucumaru Coconut Inquiry report of June 1966, offers sensibleadvice worth full consideration by the Government, and early action should aboveall be taken on its recommendation that a coconut agronomist be appointed towork at Mtwapa Experiment Station after preliminary training in Ceylon.

164. In view of the ambitious plans to develop ranching, it is particularlyurgent to expand livestock and range management research. A program for this

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purpose has just been startled under the United Nations Development ProgramSpecial Fund Project, which will provide also for the training of Kenyancounterparts to the U.N. specialists.

165. If Kenya is to move into the profitable production of pigs whichappears feasible and worthwhile, given the low cost feeds which are available,the newly formed livestock section of the Ministry of Agriculture and Livestockshould organize research investigation on breeding, nutrition and management.

166. Research on pastures, which is done at the Agricultural ResearchStation (Grasslands Research Institute) at Kitale has been principally concernedwith pasture species and mixtures, their suitability, establishment and manage-ment under large farm conditions. The emphasis in future is required on thepractical and economic aspects of livestock feeding under African grazingconditions. Staffing of the station is a problem, and lack of suitable Africaninvestigators to replace departing expatriates may cause restriction in thescope of future investigations.

Agricultural Credit

167. As part of its plans for raising farm revenues in the smallholderareas, the Government intends to make much greater use of agricultural crecit.It is important to recognize that much of the credit is required for purposesof mixed farming which increases the problems of loan control and repavment. Asimpler type of smallholder credit is that provided under the current Kenya TeaDevelopment Authority Plans. Loans are in the form of fertilizer and plantingmaterial. The subsequent production of tea is necessarily sold to the Authorityand so the recoverv of the credit is relatively straightforwarc

168 More general development of sma Ilholder ortpn_t calls for rred9it fonr

various capital items and inputs to promote efficient mixed farming. Theprofiftable use of siich cred7it by the selected farmer normally e-Pall for ndv-i e

and supervision from the extension service to make a plan of operations andens1]re its fulfilment Slffieqcent onlleotion of loan repaVments must ofteh beactively pursued by loan officers, where there is no secure means of makingdeductions directly from nroduce sales nroceeds- Consequentlvy an exnansion ofcredit facilities for mixed-farming operations must be associated with closesupervision by ngrirultural extension servires nnd a snpecinl orgniz.ntion for

loan administration.

169. These prerequisites are demonstrated by the experience of limitedprograms of agrin-cultul reiet in thep past. Emphcsis ha ria .htlV bhen Iaid1

on the association of credit facilities with land registration, partly becausecredit+ ocan be more efWfect;nively ulosed on anenlos-ed- and registered holding and

partly because of the advantages in obtaining collateral. In practice, however,it ls extremely difficul't- to ±foreclose on a defa--'a-ting borrower. Rates of loar,repayment in the past have been discouraging, less on account of inadequatesecurity for loans than on account of insufficient supervision and slack - resen-tation of repayment demands.

170. The recent measures to make the Agricultural Finance Corporatiorresponsible for almuost all fomils of agricult-ural credlt outside settlemLent

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schemes , and to strengthen its h-ea`dquarters and 0. 4eld orga.J Z cu ,C4 care neces-sary preliminaries to an effective exparision of the credit program. Up to now,4thIe limit4-ed4 staff- and4 orgariizatlon ol'1- both t,4he Corporatlon 4itsel-f- and of- 4theUll .L±JLL u~U C U J. I ic .) ai CL~aUJ. '.J. i,'J I'lJ UliC '..)jJJ CU 4/L ±L ULI QJ_L U 'A 1 U J.l_

Ministry of Agriculture field services, have been a serious restriction on newsmal_lho.lder.L_ crdt=1 cbhlemes.* InJ L195 bile 'IntU lernUational Deve IOlopmient Association

(IDA) was asked to finance a major project which would have involved totalexpenditure of 14.3 million and provided credit for 50,000 smailholders. Inthe actual agreement concluded with IDA in April 1967 total project expenditurewas cut to a1oouL 12.14 million and the IDA financing to the equivalent of11.29 million because of the limited staff availab:Le for screening of loanapplications, administration of credit and supervision of the agriculturalaspects.

171. It is apparent that the "many fold expansion" of credit to smallholderagriculture which is envisaged in the Plan is overambitious for the immediatefuture and that the actual rate of expansion will be severely limited by thestaffing and capacity of the organizations required for administration of thecredit.

172. It seems possible that, within the next few years, seasonal creditin some small farm areas might be more widely administered by cooperativesocieties. In principle, this is an economical way of issuinig fertilizers,seeds and other inputs and payments can be recovered out of the sale proceedsof crops which the smallholder members market through their cooperatives.However, the prospects of expanding short-term credit in this way presupposea great improvement in the managerial and accounting efficiency of the cooper-ative societies. In Western Kenya in 1965/66 the Cotton Lint and Seed MarketingBoard used the services of cooperatives for what should have been a relativelysimple program of seasonal credit. In most instances the result was a fiasco.The overall rate of loan recovery was about 10 percent and the cooperativescould not be held responsible for the defaults of their members. However,given integrity and efficiency, the case for developing seasonal credit throughcooperatives is still attractive. The Government has recently launched acomprehensive program to transform standards of management, accountancy andoverall efficiency in the cooperative societies and it is to be hoped that, asthis program proceeds, some of the better societies and unions may be able toassume responsibility for handling seasonal credit for the Agricultural FinanceCorporation.

173. As already indicated, there is now an urgent need for more creditservices in the large farm sector where lack of finance is a major reason forlow output on many of the new African farms. Because of their lack of collateraland experience, most of them are unable to obtain credit from their commercialbanks, as did their European predecessors, but in any case their outstandingdebts already preclude further borrowing on normal terms. For more financethey must depend on special assistance from official sources and a program of"rehabilitation credit" is now being drawn up to meet this particular problem.

174. For the large farm areas, the established procedure provides seasonalcredit in the form of crop loans. Under the Agriculture Act of 1955, maize andwheat are classed as "essential" crops for which the Government can issue plant-ing orders as necessary to safeguard the national food supply. At the same

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time, the Government guarantees a minimum financial return for these crops mndprovides loans (at 8½- percent interest) to assist in their production. Atpresent, the AFC acts as the agent of the Government in issuing these loans,The whole system was devised for circumstances which no longer exist and theroutine procedure of tying a loan to the security of a particular crop - ofwheat or maize - is in need of revision. The same volume of credit could bemore effectively used if the Agricultural Finance Corporation became the princi-pal lending body for this as for other finance and was able to lend againstsecurity other than a specific crop. it is understood that a. change on theselines is now being considered.

Agricultural Development Corporation

175. The Agricultural Development Corporation was established in 1965 cndgiven the functions of "promoting and executing schemes for agriculturaldevelopment and reconstruction in Kenya." The Plan gave it a leading role withresponsibility for investments totaling 18.6 million. It is already a partnerin the Chemelil Sugar Company Ltd. and has purchased several of the propertieswhich it is to manage as "national farms. `

176. Up to the present, however, the Corporation has only receivedoperational funds on a piecemeal basis from the Government for specificprojects; its head office budget is still being met by the Treasury, and itsown fund-raising is limited to a bank overdraft of f75,000 at 7 percent interest.A corporation established for agricultural development projects should be ableto operate with some independence and adopt a commercial approach which is notalways possible for a government. For this, however, the corporation must haveunder its control, adequate capital resources and a staff competent to managelarge technical projects. In this sense, the Corporation is not yet organizedto fulfill its proper role.

177. It is particularly important that it should be able to manageefficiently the 'national farms" that are one of its main responsibilities,since these farms are to be a source of pedigreed cattle, pigs and seeds for therest of the country. The Corporation should also be able to assume responsibil-ity for managing the scheme for growing wheat on up to 50,000 acres of Masailand. At present the first stages of this project are being handled, incooperation with the Masai, by the Ministry of Agriculture. Initial directGovernment management may well be defensible in view of the socio-politicalproblems that must be dealt with in the early stages of the project. In thelong run, however, the scheme calls for the type of organization and commercialoperation that the Corporation should be especially able to provide, and it isto be hoped that the Corporation will be suitable strengthened to undertake thiskev Droject in 1967.

Marketina Arrangements

178- Thn Statutorv 'Rodie. Since Wrorldl War TT there has been a remarkablie

growth in the numbers and fumctions of statutory bodies concerned with agricul-tural production and marketing. This is largely attributable to the existenceof the "large farm sector" where there has always been a well-informed andart-.icla body ~-,Axr o-f prdces T1he Bad we T -re i n some cases an ee Tiv me C

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of associating representatives of these producers with Government decisions oncrop production and price policy. In other cases, they were producers' marketingorganizations operating within the terms of Government policy.

179. Later, the concept of statutory bodies as instruments of crop develop-ment policy became more prominent and, under powers given by the AgricultureAct 1955, the Minister of Agriculture has created authorities for the developmentof tea, pineapples and coffee. Appendix 1 gives a list of the official organi-zations now concerned with agriculture and livestock marketing in Kenya and itwill be seen that, although their functions and powers differ greatly, in oneform or another they provide for the handling of almost all the crops widelyproduced in Kenya.

180. Except in the case of cotton, the Marketing Boards do not maintaingenuine price stabilization funds and they do not guarantee producer prices.For export crops and other crops sold on the open market, they aim to breakeven on their operations. For other locally sold commodities, the Minister ofAgriculture fixes the producer prices and agrees on selling prices with the Boardthat will allow them to cover costs. In varying degrees, the Boards use theservices of agents for their crop handling operations instead of maintaininglarge field organizations of their own. In the cases of tea and coffee, theBoards are directly responsible for major research; for sisal, cotton andwheat this responsibility is shared with the Government. The costs of thiswork and other expenses incurred by the Boards are in most cases recovered bymeans of a cess levied on produce handled.

181. The existence of no less than sixteen assorted Boards and otherstatutory bodies to deal with agricultural commodi-ties inevitably attractscriticism. In 1965, the national shortage of maize was associated with seriousallegations against the West Kenya Marketing Board. That Board has since beenabolished and there are now no regional Marketing Boards, but the episode hasstrengthened a feeling that the statutory Boards are due for review and rational-ization. Accordingly, a working party has recently been set up under thechairmanship of the Minister of Commerce and Industrv to examine the powers,organization and operations of all statutory Boards and Corporations. Theworking nartv has not yet qnnounred its fin9ins hbut. wt- believe that there is

limited scope for reducing the number of Boards in agriculture.

182. A special case is the Central Agricultural Board, supported byP~xrovincial hAn rrii1+irrn1 Rnn-rtc and Tq+-r ict Acri rnil1+ural n1 mmittee.r} Tnn m;

statutory duty of these organizations is to advise the Minister on matters ofagricultural policy and serve as ameans of cormmnicating producers' views tothe Government. In addition the Central Agricultural Board carried out certainexecutive duties entrusted to it by the Minister, notably, aat present, theoperation of 117 mismanaged farms. It appears that these duties could be moreapproprla-tcly hkaAledA Iy or+l'r-4 -odie -ch +1t-h A -- 4-1+-1'l T,rolT ------Corporation. In the changed circumstances since Independence, it is alsodoubtfv' 4whethe t Ba.rd and its subsidLAiaray bodi.es are effective or necessaryas channels of cornmunication between producers and the Government. Under arecentlu ru'le, lthle ChI-a4rrnen of17 Prov-inc4a'l Agricu'Itural Boards arid DistrictAgricultural Committees are now, respectively Provincial Commissioners andDis5tric I CuUIsIUi S Sioner s . Co nLI u1eq.jL.'uuKnty , it appar that± : UL; aiLL VLce uo ute MinistCer

could equally well -be conveyed through official channels. The function ofgenerally representing producers!1 views andu interests tLLo t,ihJe Government oughIt

to be undertaken by farmers' associations rather than by statutory bodiesfinanced from public f-uLnds. It appears that the Central AgriculZtural Boa.rdl andits subsidiaries have served useful purposes but are now outdated. The justi-fication for the Pig Industry Board should also be reconsidered since itofficially exists only to license bacon factories and butchers and to advisethe Minister.

183. The Canning Crops Board is largely ineffective in its present form,since its powers only relate to fruit for canning and not to fruit which isdiverted from canning to the fresh market. Early in 1967 legislation was beingprepared to establish a Horticultural Authority to regulate and promote thedevelopment of production, marketing and processing.

184. There is also a prima facie case for amalgamation of the Coffee Boardwith the Coffee Marketing Board and the Pyrethrum Board with the PyrethrumMarketing Board, but it should be noted that in both cases, the operations ofthe two Boards and their staffing arrangements are already sensibly integratedin practice. The main financial saving would be in the relatively small itemof members' sitting fees and travel expenses.

185. We believe that the continuation of other Boards, and the proposednewly combined Boards, is jjustified by the functions which they are performning.In general, it is evident that the Boards are well-run; their administration isnot extravagant and Board members receive modest sitting fees and allowances.In most cases, the whole cost of a Board is met by the industry which it servesand not from public funds. There is, however, a risk of a serious fall in theBoards' efficiency in the next few years -through lower standards of manageinent.At the present the key Boards appear to depend heavily upon a small number ofhighly qualified and experienced men who have no obvious successors. Theproblem of training within the statutory bodies is recognized in Kenya but isstill unsolved. Experience in other countries has shown the heavy cost ofneglecting this problem un-til standards of commercial efficiency actually beginto fall. In order to ensure the training essential to good management, westrongly recommend that the Boards be enabled to recruit promptly Africandeputies for training by expatriates holding key posts in management andaccounting.

186. At the same time, we urge that attention be given to the relationshipbetween the individual Boards and the Government, particularly as reflected inthe composition of Board membership. Producer representation on the Boards nolonger has the significance that it had several years ago when marketed produc-tion of each crop came principally from a few hundred large farms. Theitproducers" now must be regarded as including innumerable smallholders for whomrepresentation on the Boards is a vague concept. Meanwhile, the Boards havebecome increasingly identified with the Government as instruments of developmentpolicy. But to reflect this change, there has been no substantial increase inministerial representation at the exnense of producer representation. TheDirector of Agriculture is a member of several Boards but in most cases - as onthe Mqi7 nnd Prodncre Board for examnle - all of the remaining members areunofficial persons, representing producers or other special interests.

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187. The composition of each Board should be reviewed to give less emphasisto producer representation and broader representation to the Ministry of Agri-culture and other Ministries particularly concerned with the Board's operations.Seats should still be given to persons of special knowledge or qualificationsof value to the Board's work. The object should be to ensure that the Boardscould take full account of the Government's policy on all matters and at thesame time benefit fully from the contributions of members both official andunofficial with special knowledge and experience. Furthermore, the Board's re -sponsibilities for crop research need to be reviewed in line with our recommen-dations in paragraphs 149-166, above.

188. The Cooperatives in Produce Marketing. In the small farm areas, thenational marketing organizations do not deal directly with producers but takeover produce from agents, or more commonly from producers' cooperative societies.The cooperatives thus play a major role in crop marketing by collecting, grading,bulking and delivering produce and by distributing payments to their members.Their part in marketing is especially large for milk, pyrethrum, cotton and,above all, coffee, where they own and operate factories for processing cherriesinto parchment coffee.

189. The history of cooperatives among African smallholders, dates froma Cooperative Societies Ordinance of 1945 and at present about 500 to 600societies are active with more than 98 percent of their total turnover derivedfrom agricultural production and marketing. It is officially estimated that,in 1964, 17 million worth of produce was handled by African societies and thatby 1970 the figure is likely to be more than trebled.

190. In general, the cooperatives have not been able to maintain standardsof efficiency and integrity commensurate with their growing responsibilities.Their failures have attracted most attention in connection with coffee marketing,bhotrh because this is the largest nnd most rnni(91v i ncreasing itpm in theiir turn-

over and because it involves special responsibilities for grading and processing.Producers have suffered badly no only fro the s' i-¶neffic-ipencyv hut, alsofrom the serious misuse of the proceeds of crop sales. In the case of somecoffee soci-eties it Ihaas been s1no-.T +h1+Tatmler.hersae received les c than 50 er

cent of the proceeds of their sales. Another field in which cooperative societieskOa¶-T notably rfailed, 1 and so hkamered local development, has bee In the m-arkretingof horticultural crops. Smallholders in the Taita Hills, for example, are veryfavor-ablly pl-aed to ro- -A -upply vegetables nd fruit to Mm-basa an are

conspicuously short of other development opportunities. Yet, we were informed,thLIC'e local. cooperative society C 11as provi--ded such1 a poor Ularklet.__ sice, thatthe trade has been lost to areas in Central Province, three times further awayfr1 zLVll-10mbasai: G.

191. Desp-ite theJr shortcomings, Ile future development ofI local marketing1L~ _ L _L*U LI LiIC .L Jil I)1 U AJI1L1 U LiC IU U.L UC V _L'JJU ji 'I. JUd L US.L l.C ULIgV

services will be the responsibility of the cooperative societies in accordancewilth the Government's deUCUlared poliLcis. INUo UonLy ar.Le tihe a1ricuULUaULd. L Ucoper-atives to serve as organizations linking individual producers with their marketsor Marketing Boards but they also have a potentially important role in breaking-bulk and distributing agricultural inputs and in the administration of seasonalcredit.

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192. Ma,jor measures are needed to fit the societies for the role assignedto them. These measures include the closer public reglation of the affairs ofcooperative societies and action in this direction is now being taken under anor.r Pcr\ororcr+1 i rn Qr 1 o; o+ ; cc, An+ IThc Ar,+ A';4 ,ro arboe nnoA -ncw.TraC. + r,+1ho f('rsn,n; c;~ norlo

of Cooperative Development and should lead to closer inspection and control overcooperative society budgets ^and expenditures. It has -Iready been prescriibed,for example, that in coffee marketing, the societies must not withhold more than20 percer.t of` salles proceecds to co-ver ex-penses and normla"l servTices, rendere,' tomembers. It might be desirable to reduce still further the societies' discre-

iL±UIId.LJ powers iLnI f.LIxing UdeUUcLtoUns for exApen1s cud serLvices cUnd t-o seeCk. to

standardize these items, even if this curtailed some of the more enterprisingsocieties' real services to their members. The iixing oI standard rates oicommission would simplify cccounting and inspection and help bring inefficientsocieties to order. It is acknowledged that more regular inspection of recordsand accounts by teams of traveling Government auditors would greatly improvediscipline and efficiency, but it has not yet been possible to provide thenecessary extra personnel for the teams.

193. The other aspect of the development program for the cooperatives isthe improvement of staffing. As in other African countries, the cooperativemovement has been at a disadvantage in attracting qualified staff and has beenseriously handicapped for want of competent managers, accountants, and book-keepers. This is largely due to the lack of adequate training facilities anda major program is now being mounted in order to correct this. Importantfeatures are to be a national cooperative college and five provincial cooperativetraining centers and the program will also include direct measures to improvemanagement, equipment and organization within the cooperative societies andunions. Most of the project is being financed by the Scandinavian countries atan estimated cost of between 13 million and B4 million in cash and kind over aten-year period.

194. To fit the cooperative organization for the vital role assigned toit in agricultural development, it is imperative that management and staffshould be generally upgraded so that cooperative service is not merely anoccupation for those who are unqualified for government service. The long--termaim must be to set such standards that cooperative service is regarded as afirst-class career, requiring formal training, giving security and promotionprospects comparable with those in other forms of public service.

195. The Private Sector and Horticultural Marketing. The only majorsector of the produce trade which is not officially regulated is horticulture.The Canning Crops Board controls the marketing of pineapples for industriaLcanning but otherwise trade in fruit and vegetables is handled by privateenterprise. At present, competition in the trade is not widely effective andproducers often have difficulty in disposing of their products on reasonab:Leterms. The shortcomings of many cooperative societies have already beenmentioned in this connection.

196. We do not believe that the interests of producers or the efficiencyof marketing would be served by statutory control of the horticultural trade.The perishable nature of most fruit and vegetables calls for on-the-spotdecisions and a flexibility of operations that Marketing Boards cannot easily

provide. An extension of official activity in the domestic horticultural tradeshould be mainly in the form of advisory- and information- services though theremay be a need for some direct regulation of the potato trade to help preventtle spread of disease anu to establish grades and standards more effectively.

197. There is, ho-wever, a case for more acti-ve intervention in the exporttrade in fruit and vegetables by air. This trade has developed rapidly and isworth almost half a million po-unds per y-ear in landed val-ues. Air Lreight isnow a limiting factor and it is important that it be used to the best advantageof the trade as a whole. It is also obviously important that standards ofquality and packing should be maintained. If Kenya is to derive the maximumbenefit from this thriving but sensitive trade, there is need for some regula-tion to ensure that standards are maintained and that opportunities andfacilities are fully used.

198. For these purposes in particular, the proposed Horticultural Develop-ment Council would be valuable. The draft legislation has been prepared, asstated above, and a shadow body, known as the Interim Horticultural DevelopmentCouncil, already exists. With statutory powers the Council could effectivelyhelp to promote the orderly development of this export trade. A particularproblem at present is the once-for-all consignments by individuals who have nointerest in maintaining a reputation in the trade but have an immediate interestin circumventing exchange controls. There appears to be a clear case forlicensing exporters in order to maintain standards of quality and performance.

199. At the same time there would be advantages in cooperation betweenexporters to help make fullest use of available freight space. There shouldalso be opportunities for economies by sharing transport and airport facilitiesand in the provision of cold storage space. The Council could help promoteand maintain an association of the exporting companies for these purposes.

200. Marketing Services of the Government. Outside the large farm sector,there is virtually no direct contact between the producers and the statutorymarketing organizations. Crop purchases are generally made through cooperativesocieties or through traders operating as agents of the Marketing Boards. Inthe case of horticultural crops, purchases are handled by cooperatives or byprivate buyers. Official advice to the individual producer on marketing mattersis either filtered through the cooperative organization or given where possibleby the local extension officer of the Ministry of Agriculture. These methodscannot be efficient and our impression is that the typical producer is poorlyinformed on the market prospects for his crops, the sales opportunities opento him and the requirements of the market on grading and presentation. To someextent this is probably true of the cooperative societies themselves. Withoutbetter information and guidance, producers cannot make best use of marketopportunities or adjust their production plans in time to suit changing marketrequirements.

201. Marketing services are particularly needed in the production of fruitand vegetables which will become more imDortant in future years. Horticulturalmarketing is especially difficult and schemes which were basically sound havef'ai1ed bei cause nroducitrs have not u3ndprstnod the need for regular supnlv 2nd

quality control. Hitherto the need for specialist marketing services seems to

have received insuff'icient attention from the Ministry of Agriculture, both atthe central planning level and in the field services and we believe that thereare now special needs for these services. One concerns the planning of produc-tion on settlements and the particular problems of settlers in marketing theircash crops, mentioned in paragraph 97 above. There is also a special need forwork on the marketing of potatoes and pig products, now that productionpotential has increased. Beyond this there is a whole range of special mark<etingproblems in connection with the prospective expansion of horticulture, andqualified staff are needed -to give these problems continuous attention.

202. At the planning level in the Ministry of Agriculture, there is alreadyone professional officer responsible for marketing matters but to deal adenqutelvwith the marketing aspects of production planning as well as individual marksetstudies and surveys, additional staff is needed Tn nrovit9e marketing servicesin the field, within the framework of the general extension and livestockservices, a snecialized nrofessional offircer is needel and he shop i nuld bei3-nnrt.t9by field staff who have at least some training in economics, marketing mattersann nrodnce inspnect-inn Tt. is nbvimqslv (9esi'irabe1P that this s-t_aff shol wnrk

closely with the cooperative societies.

Agricultural Education and Training

203. Kenya operates a number of institutions for education and traininc inthe various specialized fiel ds of agriculture. The Government plans to expandor improve the various programs so as to prepare the technical personnel neededt- ri ,nnr+ nor, inl + , nl - 30rnlnr.mon+

204. The Ministry of Agri-1+-lt- Apera+es a Agricultural Training Cen-erat Embu for training Agricultural Assistants (or Agricultural Instructors) forits field s1 .A e - CS. [Cely C Cere are 1c0 0 Utrainees who II-lave entered at about

the school certificate level and attend a two-year course. Fifty trainees areAsiILItt u LAgi Ura Ul Instrul.uct1lors wL! Who a rde already emploU- tyed by the MinistrIy ofI

Agriculture but have had no formal agricultural training. They attend a one-yeai- course af'er wh1i ch tiey wi'l be t-4 graued to Agricuitural Ir,tuctors. TheEmbu Center has a farm of about 200 acres, a dairy herd, a beef herd and pigsandlu pouLU.Ly . TLIZ7 .1nstruLcto.LlUhl Pro'.cuill .lludeuuus bJUo1t1 .L classroomI a-ldU practical

work in the f'ields and laboratories. In addition to the Principal, the CenteremploU,y- 1s ine tualif.ieL.1 lecULtUrrC 01 GfWII w Uh foul tre exptriates, provided u msit ly by

the U.K. Volunteer Services Overseas. The staffing is adequate and the courseoffered Is of good quality. Ho-we-ver, the Center needs additional trainingfacilities and student accommodation which are insufficient for the enrollmentof i50 trainees. There is also neeu for surue adUdLiltoaL staldl hoUs±Iig.

205. Abou-t. 1,200 Agricultural Instructors are presentl-y employed by theMinistry of Agriculture, mostly in its field services. The implementation ofthe agricultural development program re qu±lres 300 additional agriculturalinstructors by 1970. With provisions for replacement, requirements of theMinistry for training of new agricultural instructors by 1970 are es alutue tototal 600. Other services may also require 100 more agricultural techniciansof this level. in order to meet the increasing demands for AgriculturalInstructors, the Ministry plans to establish a second training center similarto that of Embu but with a capacity of 200. The two centers may develop special

- 50 -

one-year courses for trainees who have completed the agricultural course in theecondarv scrhonls Some upgrading one-year rssm>r ber 'hp so given to selected

assistant agricultural instructors. An output of 200 agricultural instructorsa vyer mav thusc bh reahedl wh;ichir will allnw for meefting t.he nrpcont v-vq:anncies

and for future replacement of the untrained assistant agricultural instructors(o-tu.r 2 onn ye) TnvnInnrpull the c.ei- npnte-rs Tmayr lucse nart of their rpan-cit

for farmer training programs.

206. Egerton College (a semi-autonomous institution) offers diploma-level,three=year courses in Agr-Ic+ure, A-imal Husbandry, Forest-y, AgriculturalEngineering, and Range Management, and a two-year course in Dairy Technology. AneJw three-year c.ourse in Iva= ManageUment iLs to b0e estCab-lJ.ish.ed in th'le near ± utu4e.Students are admitted at S.C. level, preferably with credits in chemistry andbio'logy. The College occupis some 4,00 ace fld disffligoea

tions include both cropping and animal husbandry enterprises. A demonstrationdairy plant was established latel-y with help from UNICEF /FAO. About 120 st-ude-ntsare admitted every year and enrollment totals some 280. Only 65 percent of thestudents are Kenyans. Tanzanian students muake up 25 percent oI the enrollment,5 percent are Ugandans and the remainder from other African countries.

207. Requirements of Kenya for diplomates have been estimated at about 80a year and neighboring countries pian to contilnue using Egerton for preparingtechnicians of this level. Their more or less specialized knowledge and skillsshould enable them to play a central role in the various agricultural develop-ment projects, the settlement schemes, the cooperatives and private farm serviceenterprises. The new farm management course should also prove very helpfulespecially to the new African owners and managers of larger farms in Kenya andthe group farming projects in the Region.

208. The College staff comprises about 35 lecturers and demonstrators,of whom about two-thirds are expatriates. The staffing is adequate and thetraining program is good. However, the financial resources of the Collegehave been limited in the past and the program would benefit from the additionof new and upgrading of some of the existing facilities. This assistanceshould enable the College to continue serving the agriculture, not only ofKenya, but of the whole of East Africa.

209. Kenya has been sharing with Uganda and Tanzania the facilities ofMakerere College for university training of agriculturists. Some 40 Kenyanstudents are presently enrolled at Makerere. In addition, about 180 Kenyansare studying abroad for a degree, and to a minor extent for a diploma inagriculture and animal husbandry. Foreign study is financed through scholar-ships provided by foreign agencies, but experience indicates that such studyshould be limited mainly to postgraduate training of selected scientists andadministrators.

210. Recent manpower studies concluded that Kenya needs every year 50degree agriculturists for its basic services to agriculture. This is aconservative estimate based on the assumption of a limited supply of graduatesand the use of diplomates for functions customarily assigned to graduates -teaching agriculture, for example, in secondary schools. A more accurateappraisal of requirements would be over 60 graduates every year. While the

secondary school system can supply the 75 candidates for higher studies inagricultulre required every year, ------ College i8 u le to +at tthisnumber. Makerere College is preparing to expand its facilities so as toincrease its intake to 80 a year, but this would provide for the admission ofonly 25 Kenyan students annually, of whom 20 would probably graduate. Thisoutptis c a C~ ('~1 +1 ( inadequa+e fo. mee+ing -h _on_ry s needs. For thireason, the Government is considering the establishment of a faculty of agricul-ture. An Agric,ultural Education Commission has been appointed prim: arily tostudy this question and make appropriate recommendations. In addition totraining th-c required dg - -ru14u- the fc' should i animportant contribution to the research and extension programs. Therefore, if-l-Ii Governsm ent A C4:1A- 4 _1 4- A1- -s-'ac sAu- 1e enAtA_q5|A A___)Asure

uuCLVsstIx:LDts v±|~~ ~e uau.L.J CD .wCllil11U LlGt .idluLUy 5bt;;:.iD CiUtlLe ollUU±WU u)e eil UI CtU

for meeting the capital expenditures and also for technical support to the new4. 4.._4.4 _instit UtULi.LUL

211. The '±iuaL Health and Industries Training Institute (AHi-iTI) wasestablished in 1965 at Kabete, Nairobi with help from many bilateral sourcesand the United Nattions Developmient Prograri, with the later providing speclal-ist staff and equipment. The Institute offers two 18-month courses to traineeswith School Certificates to train them as animal health assistants and rangeassistants. It also conducts shorter specialized courses in various fields ofanimal husbandry and especially in artificial insemination. The Instituteplans also to start courses in hides and skins.

212. About 400 animal health assistants are presently employed by theVeterinary Department, including a few who have been seconded to the SettlementDepartment. About one-third of these assistants have had technical trainingwhile the rest have had only on-the-job training. Trained veterinary assist-ants are needed to replace retiring untrained staff members; to expand theregular veterinary service so as to help the large numbers of small farmerswho undertake dairying and other livestock enterprises; and to staff variouslivestock improvement and range management schemes. It is estimated that a.total of 80 veterinary and range assistants must be trained every year.

213. Accommodation and teaching facilities at the Institute are of higzhstandard, but classrooms and laboratories are sufficient only for 160 students,as compared to housing accommodations for 220 students. The Government proposesto build additional classrooms and laboratories to use the entire boardingcapacity of 220 students. This would enable the Institute to train the requirednumbers of assistants while continuing also the specialized short courses. Theplans for completion of the facilities of the Institute provide also for alivestock farm (at the Livestock Institute of Ngong, 14 miles from AHITI) wherestudents would receive practical training.

214. The staff' of the Institute includes twelve qualified lecturers of' whomeight are expatriates provided by UNDP/FAO and the U.K. Technical AssistanceProgram. Furthermore, the Institute can draw on the specialists of theVeterinary Department and the Faculty - both located in Kabete - for occasionallectures on special subjects. Teaching staff should -thus offer no problem forthe expansion of the Institute, provided that present arrangements for externalsupport are continued.

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215. A Veterinary Faculty is operated by the East Africa University at theT Tnivesit Col'e- g I - Nf i Mrobi an sel rv all three East Afriv-n r o'n-ri s.

Five Kenyans graduated in 1966 and graduates through 1970 will total about 50.This n,,-ltb -r. 1 1 be.; *. rd ent 4. -FJ I 4; e1 X 1 tin+ ,rlc_l-, ces rFd net.- pCs+ts J1

the veterinary services, so that the services of some 40 expatriate veterinar--as o em.ployed will need to be continued and more wlll need to be recruited

in the near future. However, enrollments have increased recently and after19n70 th-1e output ofl over C20 Krynvtrnrirse yya should ensure stroing

-;I I u U1 I LuVUX U t UI ~ ± 1v'at,,:1 1 u Vt=U'Z.L itiCtiI.iiLU1; ~ Vz_L~y Y ~_CuL i _IULU ~1 I~~UL11

support to the already advanced and growing livestock industry. The facultyis well suPppLieU With LbUiLdns iIU Ja e ientl. I. t is 1aJlso s5u z Oppr Lte bU largeteams of specialist teachers provided by the Veterinary Faculties of theUni-versities of Colorado, Glasgow and Uiessen (Germllanly).

2i6. A li[Lited -progralrl ol personnel training for the cooperati-ve IRivemeriluis conducted by the Cooperatives Department at the Kenya Institute of Admini-stration. A one-year course in accountan-cy -was gi-ven in 19ou uo 14 bookkeepersof cooperative societies and 12 members of the Department Staff. A three-monthcourse was also offered to scme 75 trainees to prepare them as cooperativeassistants for the Department or for managerial jobs in the cooperative unions.A large project for cooperative development is being negotiated between theGovernment and the Nordic group of countries. The project provides forassistance to the Department of Cooperatives to administer its cooperativedevelopment program. It also provides for a Cooperatives College to beestablished in Nairobi and six Cooperatives Wings to be added to the FarmerTraining Centers in the agriculturally and population-wise most importantregions. The College would have a capacity of 90 trainees and would offercourses of three to four months intended for managers of unions, one to two monthsfor accountants and one or two weeks fcr committee members of unions. TheCooperatives Wings would concentrate on extension-type short courses for membersand coumittee members of the village cooperatives. The British Legion Park inLangata (12 miles from Nairobi) has been tentatively selected for siting theCollege. It consists of 68 acres and includes a number of buildings. It isestimated that the project may involve capital expenditures by the Nordic groupof about T0.5 million by 1970 and the services of teachers and advisers estimatedto total 300 man-years in -the next 10 years.

217. The Large Farmers Training Center at Thomson's Falls aims to trainowners or managers of farms-bought by Africans from European owners. It offersa 10-month course to about 80 trainees. It has been estimated that over 200managers need to be trained each year and the Government has been consideringthe establishment of a second center. However, the new center seems unneces-sary since the above objective may be achieved through a small expansion ofthe Thomson's Falls Center, to say a capacity of 100, and a revision in theprogram to shorten residential instruction and supplement it with apprenticeshipor on-the-job training. Staffing has been adequate in the past but will needto be increased to cope with the larger enrollment and to ensure on-the-farmsupervision of the trainees. Former owners or managers of European farmsshould be a good source of instructors for the program.

218. Kenya was the first country in East Africa -to conceive and developthe training centers for residential short courses for farmers. There are atpresent 30 Farmers' Training Centers offering courses of from five to ten days'

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duration to a total of scme 15,000 farmers and farm women per year. The policyof the Government is to expand the FTC's program and to make it an integralpart of the village-centered advisory program. Two training centers are underconstruction to serve the Masai population. There is demand for more centers,but expansion of this program must be adjusted to the need to consolidate theaccelerated development of the past decade. There is need to develop teachingstaff for the centers, to ensure supervision by competent specialists at theheadquarters and to integrate the work with the field advisory program.Expansion during the plan may thus be limited to five new centers added to theexisting 30.

219. Kenya has been implementing a significant educational reform in thepast four to five years aimed at the introduction of agricultural instruction inthe secondary schools. Some 1,300 students were enrolled during 1966 in the agri-cultural course offered by 7 secondary schools. The program was initiated in1961 through a pilot course given at the Chavakali Secondary School withtechnical support by AID. A syllabus for a course on "Agriculture - Principlesand Practice" was developed in this project and was approved by the Universityof Cambridge. In 1965, the program was extended to six more schools with AIDhaving provided a total of seven specialists and financial help for buildingsand equipment. A project aimed at developing secondary education, supported byIDA, provides for the establishment of required facilities and for teaching theagricultural course in 14 more schools.

220. Capital expenditures in the AID--sponsored schools amounted to 17.,000per school, E3.500 per school for a classroom and workshop and B3.500 forequipment; AID's total contribution per school was 15,000. This was based onconservative estimates of the numbers of students who would be interested inthe course. However, the course has been very favorably received and thenmount allocated to each school must be increased to E9,000. Investment inbuildings and equipment is thus estimated to average about 150 per studentplaee Recurrent exnenses, including maintenance - renairs, teaching materialsfor the workshop and expenses for operating a small school farm are estimatedat. -E10 per s,tiir1nt/vyar.

221. The exnenditure of E30 ner student completing the agriculturalcourse (in addition to the regular cost of secondary schooling) should provea very gocod in±vestment A large pronorti on of these students sre exneeted to

take up professional studies in agriculture or follow careers related toagrir, c- 1 t1 -

+ire. (nc+l%r c!r-no;-en1J7. Ar +t,rnining r-n,niirZrI ;n nri Trnri n mn, TnJ91 P.91,_1-rS1

personnel for agricultural services, farm cooperatives, etc. may be shortenedconsiderably for trainees who have taken the agricultural course.

222. The Mission's estimates of prospective expenditures unltil 1970 onall types of agricultural education and training, discussed in the foregoinig

parg h, ar seout in Table 9. It is T+ p ced tha-t+ +te total will b1 e

close to the figure of '600,000 stated in the 1966-70 Development Plan. Thisdoes not include possfigrle capulture nor ondfiithine thfe period on a newUniversity faculty of agriculture nor on facilities for cooperative traini-rig.

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Table 9: DEVELOPMENT OF AGRICULTURAL EDUCATION AND TRAINING, 1966-70(in if thousand)

Recurrent ExpendituresCapital above 1966 level

Institutions or Proposed Expendi- Annual TotalTraining Programs Development tures 1970 1967-1970

Embu AgriculturalTraining Center Upgrading 150 places 55 a/ 5 20

New AgriculturalTraining Center New 200 " 110 b/ 40 e/ 125

Egerton College d/ Ungrading 300 64 h/ -

(Aari c'il t.nrq1

Faculty) e/ New 200 " (350) a/ (100) c/ (200) fl

Animal Health &Tnriiutrv Tr. Tnst. Compl etion 220 " 60 hI 15 40

Co-op- Training g/ New expanded facilities (!500) 25 r 75

L.ar-e Farmers

Training Center Addition 20 places 15 10 25

Farmer TrainingCentI-ers 5 new cent±ers -1 75 , a/ 2 CZ

Agr4cult4-ral Courses

in 14 Schools Expanded facilities 156 h/ 15 25

a/ No specific provisions aIe made in the Plan.b/ As provided in the Plan.c/ Excluding salaries of teacner6 expected to be provided m16ostly- by foreign

aid agencies during Plan period. Teachers' salaries would add in futureabout i20,000 annually for the second Agricultural Training Center and150,000 for the faculty.

d/ Small increases of recurrent expenditures of Egerton snouid be covered byadditional fees and larger income from expanded farming operations.

e/ Project not finally decided yet. Capital cost estimates based on jointuse of certain facilities by faculties of Agriculture and Veterinary Science.

fl Expenditures for sending students abroad must be subtracted from thefaculty current expenditures.

g/ Includes one Cooperative College and six Cooperatives Wings in FTCt s.Capital expenses to be provided by the Nordic Countries Group.

h/ 14,000 to be added to the 15,000 allocated to each of the 14 secondaryschools in the IDA-aided project.

Agricultural Development Planning

223. In principle responsibility for agricultural planning rests with theDevelopment Plnning Division o-f +he Ministry of Agriculture working in liaisonwith the Ministry of Economic Planning and Development. The Division wasestablished in _19.65 and at th-e end of 1.66 had an effectiv professional

strength of seven specialists. Five of these had been recruited on two-yearassign-ments. by arrangement with.- thle For-d Fovun-dation aundd the Governments of theiUnited Kingdom, Western Germany and the Netherlands; the sixth had been prco-vided onatmoaJ ai y uo-AIDI and the seventh was a l'11errya GlovernmentL

officer. Much of the Division's work, however, has not really been concernedWlLIt pl an ni ng. t1s work -as beenC largely OI an aa noc cnaracter, co-nsisting

of special assignments and studies. In part it has even been concerned withthe administration of overseas aid. The British, West German, Dutch andAmerican staff members are each closely associated with projects financed hytheir respective home governments. While their participation in the adminis-tration of these projects may well be useful, it is hardly an appropriate partof the planning function. On the whole the Mission considers that the Divisionhas not been allowed to discharge its planning responsibility effectively.

224. It seems to us that a proper planning unit should have the followingfunctions:

(1) To determine what data are essential for effective planning andensure their collection and subsequent analysis. Frequentlydevelopment schemes and programs have been launched without anadequate knowledge of facts that may be critically relevant totheir success. In many cases little is known about the responsesof different types of farmers and livestock owners to pricechanges, about actual production costs on the farm in relation tcfarm incomes, and about marketing, labor and other constraintsthat might limit output and deter farmers from acceptinginnovations that do not take these constraints into account.

(2) To work out and recommend the basic strategy of agriculturaldevelopment and the associated production goals. These musttake cognizance particularly of existing constraints on develop-ment and the measures that can be taken to eliminate them.

(3) To estimate the personnel at various levels of training andeducation that are required both in the short run and the longrun, and recommend how these requirements might best be metthrough a combi-nation of foreign technical assistance and thetraining and education of Kenyan staff. Responsibility forpersonnel planning now appears to be diffused, and the Missionnoted in the course of its visit that several sets of personnelrequirements were being worked out by various parts of theMinistry with little or no coordination.

(4) To make sure that concrete and detailed projects and sub-sectorprograms are worked out to achieve the agreed production targets,wit.h due attention not only to the investment required but also

to the staff, organization and policies that are essential toeff-ctive implem.entatlon. Tn t'his connect-ion the Mlssion -- +-d

1c ±I . 4 t2 .Jl..x±i iUL. '.; 11 U4.ii-. -...4¼). -i'. i*J .2 .sin noJ.

that the Ministry had only a very small number of projects thatI-a' been e`aorated Jn sufflcient detail to merit JLmmed-;ateuu.u U CL.) I -C.LaL'. CLUC L, J..L 4.1L.. L X L.JI '.f L.J -.'2.) 4U.. J.4. .LJ.iC .J

consideration for foreign financing.

(5) To initiate periodic evaluations of various projects and partsof the a gr ic uitrl deelplln urga to aeemn Iwhat progress-- 4- '-4-- ---

is being achieved, what difficulties are being encountered andwhat' meas-ures carn be tLakllen tLo cope with- 4n po1-1. ha hvWLIU. UICd ULUbCuLl C LLkCII U CU~ WI..LII iIy J~)1UU±CIllZ bIIdbU iiuVC:

arisen. Evaluation is essential for the realistic revision of oldand the elaboration of new plans. Now there is often littleknowledge, for example, of the impact which various types ofcredit and extension programs are having on production or of thespecific reasons why farmers or herders are failing to respondto certain measures.

225. We do not suggest that the Planning Division should itseif do aliof the work implicit in discharging these functions. Most of the work willin fact have to be done by others, with the Division confining its role toinitiation, coordination and synthesis. The details of project preparation,for instance, will have to be the responsibility of many professional experts

in various parts of the Ministry of Agriculture, but the Planning Divisionwill have to make sure that they all do their work, that costs and benef-itsare worked out and that all other relevant aspects receive appropriateattention. Similarly, it would not be the Divisionts task to gather essentialdata or to carry out farm economic surveys, but to determine what data andsurveys are necessary. In the Ministry of Economic Planning and Developmentthere is a Statistics Division and, within it, a Farm Economics Survey Unitwhich can do this, but they should work largely on the request and under theguidance of the Planning Division of the Ministry of Agriculture. TheStatistics Division is attempting to expand its data collection in the fieldof agriculture, despite continuing staff shortages, but; the lack of statisticsrelating to the small farm sector particularly still handicaps planning andpolicy formulation. The Farm Econcmics Survey Unit has demonstrated itscapacity for useful work, but it is far too small and poorly staffed to dowork on an adequate scale. The future of Kenya's agriculture depends primarilyon developing production of the many small African farms, but successfuldevelopment can in large part only be realized if it is based on a properdiagnosis of the problems encountered at the farm level.

226. If the Division is to serve the central needs of development planning,it should be freed from administrative and executive duties, If it is to bringthe necessary authority and experience to its tasks it must have not onlyexpertise in economics and planning but also practical experience of the countryand its agriculture. For these purposes, it ought to include at least twosenior professional officers from the agriculture and livestock divisions ofthe Ministry as soon as such men can be spared from their present duties. Atthe same time, to provide continuity and build up experience, the Divisionshould offer prospects of more permanent employment than is suggested by thepresent two-year contracts. There is also a need to introduce more trainedKenya staff into the Division as they become available and in this connectionthere is a need to increase the very small number of students at presentpursuing studies in agricultural economics and marketing.

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V. PRODUCTION PROSPECTS AND PROBLEMS

A. Crops

Maize

227. The Plan sets no particular production targets for maize, which ispredominantly a subsistence crop, but the Ministry of Agriculture expects tobring about a significant increase in yields through the dissemination of thenew maize varieties which have been developed and by attendant improvements inhusbandry. By raising maize yields it hopes to permit the release of someland to other crops and to reduce prices to a level which might even eventuallymake possible maize exports at world market prices. There are no reliablefigures on total maize acreage, nroduction and consumption, but the annualmarketed produletion, contributed by small and large farms in roughly equalAmounts- has been around 1.5 million to 1.7 million bags a year,l/ which may beapproximately 10 percent of total output. Imports over the last ten years havebhen ne1iPih1e, exeepnt in the dronght years of 1961 an9 1965, when 1.1 millionbags and 0.9 million bags, respectively, had to be imported. Exports have goneup at times to 600,000 and 800,000ba agn,pninAL on the annual harvest. Innormal years, Kenya is more than self-sufficient in its maize requirements.The food needs of the riqing popunlation have been met mainly by increasing themaize acreage in those areas where it is grown for the market; the subsistencef'armer in rkAnseI¶ rTnru nn,,+i1 +ter a"nz 'hnr fnnimti ;+ i v +tn ineor,-sq hiq oill;t.i

vated area.

228. The current area umder maize is assessed around three million acres,-4 -.,-, -v nr-.rn,-s--,± # CZ 'k-, +- r, r, 1--,rc -ay - n. / VSa c n,+- 1cgJ.vjj.j an. aver.Lage output ofA 5.J bag tJAo 5J.5 basJL perJ. ace2 Yild on'he .arg

farms have averaged around 6 bags to 7 bags per acre, but in 1963 and 1964 wereup to 9. b ags and 10 bags per acre, respectively. In large part this was Urob-ably due to improvements in husbandry and the use of better seed.

229. Improved maize seed has been developed through a sustained programof L se'lecltion an--d b-reedn,' 4 carri-4ed out+ over the last ten years at the mainUL ~~.±.L LL. .Ju U1.UL J1,, _L.Q.L J.±aU. LUUL YVaI-Q.JLa.±aU. UJa.

Research Station and now extended to the two sub-stations. Such seed has becomeavailable1 co="rlrcia-l inX,~ 4rcras4 qurttes over th-e lat tree years.~ LA1IUU~1 ULd..LJ..Y 1 ±i'.. LaL±±a ~jLO I..L L ~ ~.- Ii J.QU Ui _ . '. '.'JLJ OJ~ . .

20 Re~searchi was concentrated jUin Utz lVl±y on the develupmentII, fruo

Ecuadorian parent material, of high yielding, late maturing varieties, with~~ 1 ...L.~~~~~~4.. 44~~~~_I -.-..- 44-strong disease rteislstaUce quaU-lites Ear l .X±±y mUatUuring slt'Ii'.11ce and comps;LUsU ,

which are more suitable for the drier areas with less reliable rainfall, areno-w beg-inning tL'o replaee thie earlier hybrids. LII prved seeds car. yield up

to twenty bags per acre in years of average climatic conditions and with good

1/ Statistical Abstract, 1Y65, Ministry of Economic Planning anU Development.

2/ Based on the 1960/6i Agricultural Sample Census, knowwn chaLges in largEfarm maize areas and trade figures.

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husbandry practices. Research emphasis is turning from hybrids towardssynthetics and composites, which enable the farmer to retain seed from his owncrop by simple selection from the better plants, whereas, in the case of hybridmaize he must buy a fresh supply of seed each year in order to maintain yields.

231. The output by commercial growers of improved maize seed is expectedto be sufficient by 1970 to plant one million acres. The interest by largeand small farmers in using better maize seed is increasing raDidlv. The fieldservices are popularizing the new varieties through district trials and arealso nlacing great emnhasis on imnroved husbandrv treatments, such as correcttime of planting, density and spacing, and adequate weed control. Fertilizersare probably a less important factor in improvlng vields and 1theiir widespreadapplication is in any case dependent on additional investigations. Althoughthe new maize varieties can by themselves glve 30 percen.t to 50 percent moreyield, their potential is much greater with such better husbandry practices.

232. If the program for disseminating these improved varieties is fullysucessf', , it will h -1 ,-,.+ nn-.'- -4 mi prices total output ,d

s -~LA. 1.SV.l... -4k- .- 1-cj .JLaAJ Jtions UC-LZ~. .LO n'U. JL-jYI 4LJ

exports. By 1970, total production could rise to 20-22 million bags if one_L_LL.LU11L OA-.~0 Wc±' J,.UWLWiI LU4 uiic; IL1W VCLI.L_L%:bi L~0) Y LL ±I,IL Ul It 0.v V-I 0.5,z; .L'.JLC.

bags per acre (about double the recent average level, but considerably lessthan the theoretic potential -leld) and the refmaining million -cres continued

to grow unimproved maize. At this level of output there would be a substantials tlus . or export and lJvcstock f-edIn g since hLan consmption is likely

to exceed 18.5 million bags. However, the new maize varieties can be producedat subIstanti- ally lower cost, and it 4-w4i ll e necessafry lo reduce prices- if' -theCL U O uL I J U0.L 0..L.Ly ..L.Jc tJS , IU. LU WL.L.L.L .Lt.ZOZt..,y u.J±tuc U J±4.L..0 Li U.L c

larger supply is to be absorbed either by exports at world market prices orby feeding maize to livestock. A significant reduc-tion in price, together witha greater assurance of a reliable market supply at lower prices, might in turn

~~~~~~~~~~~~~~~~~~~~~~~~- - ;5_ -_ - S -. .1 4 -4- - - -_ 4-l 4 -1I lnlLUd c f aL r 0- c i W I II ll4JW 5,1 4.W LUCiL b JU1Ly . 51 L UU D D c J LI-IC Uo rd uLce theL1

acreage in this crop, particularly when the land can be used for profitablecash crops. Lhe current producers price for 1967 planted r, deliv atrailhead store is Sh28/- per bag, compared with Sh33/- per bag paid lastseason.

233. Although the effect on output cannobe reliably estimated at thibtime, it is certain that the volume of maize entering the market will increasesignificantly and that this will require an expansion of storage and handlingfacilities. At present the Maize and Produce Marketing Board's storagefacilities have a capacity for only 500,000 bags. Due to the crop failures in1961 and 1965, caused by shortages of rain, and the large crop in 1966, theGovernment has decided to provide immediately additional capacity for holdingat least one million bags as a "strategic reserve." For this purpose theMinistry of Agriculture is acquiring Cyprus bins, which provide hermeticallysealed, bulk storage for periods up to five to ten years. Although costly interms of investment - about 1700,000 for 1 million bags capacity - these binshave the advantage, judging from experiences in other countries, of eliminatinglosses from rodent damage and the need for costly frequent handling and fumi-gation. While their suitability under Kenyan conditions has not been conclu-sively established, their adoption has been prompted by the advantage of speedyconstruction and the urgent need to provide a strategic reserve.

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Wheat

234. Wheat production, mainly from the large farms in Kenya, has beenexpanding; despite some fluctuations caused by adverse weather, disease lossesand price variations, and the total crop more than doubled between 1962 and1966. Consumption has increased at home/ as well as in Uganda and Tanzania,to which Kenya exported a total of 0.5 million bags in 1965.

235. The Plan expects wheat production to have risen in 1969/70 bynearlv 30 percepnt to 2.05; millinn bas T'his is to) bef a_hieved th~rougrh 2

small expansion in acreage and by raising the national average yield by 22.5percent to .bags pr acre T The an +t ri it i1c n of produton from 1 rSTLI- */t r__ a _ _ * _ V ._ BV_ -- - an i ipaJ.ted _-- - V ---------

farms, due to the change in ownership, is expected to be offset by additionalnew uhean-+v-r -w on ri,,l grou faII orn +he Masai

236. The total wheat acreage will possibly surpass the target for 1969/70.Reflecting a renewed interest by the large-scale farmers in the crop, due toUC us J 1 l- 0s CLlJ vCS4±1o1s4 P)4 E.0~C V v UD 0 , Wti1U cOA_. C a 5 C ha W UCCI± risfingl LVJ aLJS CL'/i

20,000 acres yearly since 1961, and reached 340,000 acres in 1966, which ismore than the Plan target. The big potential for wheat is not, however, inthe traditional areas but in Narok district of Masailand where a start hasbeen made towards the Plan goal of 50,000 acres out of a total of 200,000acres thought to be possibly suitable for wheat growing. The scheme essen-tially uses rented Masai lands, 'the rent paid is a share oI the crop) anaemploys a staff (at present Government officers) to supervise and coordinateproduction which is fully mechanized. The scheme, now in its initial year, ismaking a slow start owing to the shortage of staff, the scattered nature ofoperations and the limited number of Masai cooperatives who are willing toparticipate. Provided proper management can be organized, other Masai groupsare expected to become actively interested and the 50,000 acres should beplanted by 1969/70. Growing conditions are good; in the best plots trialshave given over 14 bags per acre and a yield of 6b½ bags to 7 bags is expectedfor the first plantings. Later, when the effect of fertilizers is more certainlyknown, yields up to 10 bags may well be achieved.

237. Attainment of the higher yield forecast for 1969/70 depends notonly on the use of improved field techniques with the better yielding wheat.varieties, but also on the maintenance of rust-resistant characteristics inall the new wheats. If experience in other wheat-growing countries is a guide,the use of fertilizers has a big potential for raising wheat yields.

238. We conclude that the 1969/70 wheat production target is likely tobe reached and possibly surpassed. After satisfying home demand, which isgrowing at 5 percent a year, there will be a surplus of about 36,000 tonsavailable for export.

Rice

239. Rice is a much less important food staple than maize and wheat,since it is consumed principally by Asians and Arabs. Total consumption ishowever increasing and the Plan aims to raise annual output from the currentlevel of about 12,000 tons, which is supplemented by imports of 2,000 tons,

- 6o -

to 22,050 tons by 1970. About 70 percent of the increase in output is tocormne from the Mwea irrigation scheme which has hben qcir',f'1A1v growing ricewith high yields.

240. There is little doubt that the increase in production can be realized.At Mwea, there is sufficieent lard and water for the necessa y expansion, andthere should be no difficulty about increasing the number of tenants on the-ch--nl because incomes are very attractlive. Extension 04 the prje is---; +

_-_ -11 - 0 - -~~~~~~~~a -A t I t LStL± .tlL t' ti.- .L 'j- '.. .- 4

already under way. A new rice mill, financed partly by the growers and partlybJy the GovernmUent is Iuder constructionrCat,L at il ea; and this showl'd hellp tobring down the present high differential between the farm price of paddy andluil1e constmer pr c 0 1 .L rL Uce Wll cl. 1lb is larg ly d --UC tud U1C1IILUClenes ofI -) ill

mills from the centers of production. Although yields at Mwea are high, theyprobably Lould be f uruijer incureaseu uy reseaUr ch. iuwlegUre f tLe Ulack

"cotton soils" at Mwea is still deficient, and research could usefully becarried out on fertilizer responses in both nursery and field as well as onoptimum water usage. Additional work should be done on new varieties, partic-

n . , _ I, n , 1 1 _ 1 1 _1_ , _t 8,I A zularly because the Sinudano variety, a jajponica type, though hig in yld, is

not as palatable to consumers as indica types.

241. It remains scmewhat uncertain whether a market can be found for allof the increase in outp-ut attanable by 1970. I f the mLarke does develop

favorably and demand continues to rise beyond the current Plan period, thepossibility of developing additional output will be largely determined by theprospects of growing rice under irrigation in the Kano Plains and the Yalaswamp, where pilot irrigation schemes are now being initiated.

Coffee

242. The Development Plan forecasts that by 1970 about 70,000 tons ofclean coffee will be produced from 216,755 acres of mature trees yielding anaverage of 6.5 cwts. per acre. Of this amount, it expects 60,000 tons to besold in quota markets and most of the balance in nonquota markets. Productionfor 1964/65 was about 39,000 tons of clean coffee from nearly 210,000 acres ofwhich only part was in bearing. Almost the entire increase in output is tocome from already existing but immature plantings.

243. The Mission strongly doubts that Kenya will be able to sell 70,000tons in 1970. The country's 1966/67 export quota under the InternationalCoffee Agreement is only 41,085 tons and it is doubtful that it can be raisedto more than 47,000 tons by 1970. Nonquota exports, which are becomingincreasingly difficult under stricter international marketing controls, maynot reach the current level of 10,000 tons. The Mission estimates totalpossible exports of clean coffee in 1970 at no more than 53,000 tons with localsales of about 2,000 tons.

244. During the early 196 0's there was a very rapid expansion of theacreage of coffee planted, confined almost entirely to smallholdings. Thetotal planted acreage in the small farm sector rose from 42,000 in 1961 to126,000 in 1964 when further planting, except for infilling, was prohibited.The last of these new plantings should come into bearing in 1968, reachingfull maturity in 1971. When account is taken of unauthorized plantings since

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1963 and the area of estate coffee, it is clear that the 1970 acreage willapproximately conform to that expected by the Plan.

245. The Mission also believes that the yield of 6.5 cwt. of clean coffeeper acre is attainable. This yield was obtained from mature plantings even inthe unusually dry year of 1965, and in some years yields have been from 7.5cwts. to 8.5 cwts. For various reasons, however, we do not expect yields in thefuture to average significantly above 6.5 cwt. Much of the estate coffee isquite old, and the trees have a lower yield potential. The trees on Africansmallholdings generally have higher yields because the planting material wasbetter. However, the rush to plant coffee in the early sixties, particular]yin 1963, led to some deterioration in standards of planting and subsequentmaintenance. There was a fairly high rate of mortality among young treeswhich was probably not fully offset by the 5 percent "infillings" permitted bythe Government. Finally, account must be taken of the effect of Coffee Berrydisease which has been spreading into new coffee growing areas. While theintensive research into methods of combating this disease may well bear fruit,it is unlikely to have any significant effect for several years at least.

246. Thus, the Mission concludes that the Plan output target of 70,000tons by 1970 could readily be achieved, and that in the following five yearsproduction could rise by another 10-20 percent through gradual improvement ofyields. Given our estimate that no more than 55,000 tons can probably bemarketed in 1970Q this could mean that Kenya would face a surplus productionof up to 15,000 tons. Kenya can not afford the cost of storing surplus coffeewith the rather dim hone that it ean eventually be marketed. Nor will it b,epracticable each year to refuse to accept for marketing a significant portiononf the harvest. Sunnlv an9 demmnd c2n -e kepnt in balance only by a combi-

nation of measures, some of which would discourage marketings by growers whoseopportu1nity cost of production is high nnd ot-thers of which would offer suchgrowers positive incentives to diversify. The overall aim should be to retirefroTm production at least 30,000 acres ofcoffee, or enough to accounnt for about10,000 tons. Some marginal coffee land might go out of production naturally-in r n cnsieiqnce o-f E-lliner yirlrlds nn9/n-,- arc.d/r r-nc c of 'r n7tnAiiM inn ut 1-it

would be desirable to hasten the process by raising the export tax on coffee.The reduction in the expor+ tax from 20t p to rn per ton which was made in1967 seems to us ill-advised, since this measure will help to keep alive themargin-al pnrodiceprs. AmTncr the latte+'r are a rfRc4 able nv er of' European

coffee farms which have older and lower-yielding trees and large outlays inlabor. If their profitability declines still further they might be u nderpressure to sell their land or to take advantage of whatever incentives thebGovernment can offer for d s ation. P ars-- A dirs,i.fica+4vn Twrill, f

course, have to be carefully worked out in the light of practicable alternativeland use possibilities in var1ous areas. We believe that the Goverrument should

promptly formulate a program to deal with the potential coffee surplus.

Tea

247. The Plan forecasts production of "made" tea in Kenya to expand14 I_ s - ),r 1 z or _-- _ --_A_ 4, -- 10 ,oe )J Igz 4- -. 4A ' - - ,-consuderably, rising fromW I tJ .95 ml±lior.1 L ,ujLu £JI in tJ U14 UtJ.3 LLI

pounds in 1969/70. The total planted area is to increase from 59,300 acresiLn lqs/, Or (nnQn acres '- lQns. .rc.rn m-t.l;r -are .fr, ctnt

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56,840 acres. Exports of made tea from Kenya, which were valued at 16 millionin 1965, have roughly trebled in the last 10 years. This expansion has comemainly from estates and large farms, which produce about 80 percent of thecountry's total crop. In the last five years, however; smallholders havebecome greatly interested in tea growing, and a special program to increasethe smallholder tea area is being carried out in three stages by the KenyaTea Development Authority.l/ By 1969, when the second stage should be com-pleted, the smallholder area is to be nearly 28,000 acres, more than doubleits area in 1964/65; and of this area 10,900 acres will be mature. The areain estate tea will be expanded by only 7,000 acres- reaching 53;000 acres by1969/70.

248. The Plan targets are likely to be achieved. The estate plantingsare being earried ou+ by exp rienced9 and lnri stablhet mnnagemPnt= The rTnAprogram for smallholders is soundly based and there is no lack of farmersnyinius to plnnt. tea- Expected yiels are bhaed on thnse already achievedi-

249. Thrlughmit. theyarsn ofp Ynnnding tean npro-dt9nfion, the quanlitv of1

the product has been maintained. World tea prices are expected to fall inthe next few years. Howev-er, the smal-lholder tea practice of fine pnliuc-kinc,which is now being followed by the large estates, together with modernproessing f_etor-ies, should ledrl tn an improvement nin qunlityv which nhrlHnr

help Kenya to sell the higher output without a fall in average export prices.

250. Not included in the Development Plan is the proposed "third phase"of KTDA's program n.ow planned to start in 1969. During this phase, uhi c isjustified by the large amount of land suitable for tea and the continuiedinterest of small farmers in tea production, a further 3 n4, 800acrs abe planted between 1969 and 1973, raising the total area of smallholder teato 60.600 acres. Some 13,600 acres of 1his thrd program would be planted by

1970. During this phase, there is to be a switch to vegetative propagationWicihill W-Lp UviUe pj±lWLiln, mUatUerLL, WIL.Ii t 1a hi±h,IJ yiet.XLLd adJ.iu C"LLC:1 rUie U maurity

than the "stumps" produced from seed. However, a careful evaluation of theworld market prospects for tea is necessary before a definite commitment ismade to this additional program.

Sisal

251. The Plan envisages no significant change by the end of the Planperiod in Kenya's total output of sisal which is likely to be about 65,000tons of fiber, tow and flume. Estate grown sisal is expected to maintain thesame planted acreage of 265,000 acres and to provide all of the planned output;but the Mission believes that the small farmer, who in 1964 provided nearly14 percent of the total crop, will cease production under the pressure of lowerworld market prices. This means, in effect, that the output of estate sisalwould have to increase somewhat, if the Plan target is to be reached.

1/ The.. Keirya' tha Dev6lofment Auth6ritir was created. b2r a Government LegalNotice in Januarv 1964 when it took over, from the Special CropsDevelopment Authority, all responsibility for smallholder tea growing.

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252. Exports of sisal from Kenya nearly doubled between 1955 and 1963,when 63.700 tons were exported and the world price touched a peak of l148 perton. At the price of about 175 per ton c.i.f. European ports which prevailedat the end of 1966 sisal growing is only likely to be attractive and profitableto the more efficient producers. The Government's policy and plans to encouragesmallholder sisal growing and to use it as the main crop in some settlementshave been dropped. Most smallholder sisal has been grown as hedges which serveas field houndaries or cattle fences as well and are cut only if nrices arefavorable. Some of the older estates planted with "sucker" plants of widelyvarying yields may go on to "care nnd maintenance" standards of upkeep, thulpossibly lowering outputs, and replanting may be put off or given up comple-tely.

253. Increased production of sisal by other countries and the threat ofgrow- compe+ito from synthetic poyropy ., lene flbers, -e it +,nlikely

that Kenya's output and exports will be more than about 50,000 tons by 1970.

production.

254. The future of the Kenya estate sisal industry will depend on thesuccess of the studies being ur,dertaken b-y thet Hiig Level Sisal Reseaic

Station at Thika to reduce production costs and raise yields. The mostp-UmLsLig uvexiues for exmiatoln1UL ar1e l-abor-sUavLng technLlques, incU:luudinL, the

use of herbicides, the improvement of planting methods, and, in the longerrun, the breeding of better varieties in cooperation with rie main Sisal

Research Station in Tanzania. The possibility of supplementing income fromsisal by iriterplanting with such crops as maize, beans, cotton, etc. arid byusing it as a cattle feed and as a soil improver should also be explored.On some estates cattle ranching, as an alternative to sisai, is being adopted.

Pyrethrum

255. Pyrethrum has long been an important crop on the large, European-owned, higher altitude farms, and has in recent years increasingly interestedAfrican smallholders as well. Its output rose steadily until 1961/62. Insubsequent years, the market was severely disturbed; first, because of anoverestimate of demand, production had to be sharply cut back for severalyears; second, after a balance between supply and demand had been restored,output declined considerably because of the transfer of a considerable numberof large European farms to African settlers. Recently there has been a revivalof production and the Plan forecasts an output rise from 6,200 tons in 1965 to12,500 tons in 1970.1/

256. It is doubtful whether the present yields of around 400 pounds peracre of dried pyrethrum flowers will increase significantly during the Planperiod, but there will probably be a sufficient increase in the number ofAfrican growers on settlement schemes and in other parts of the highlands toraise the planted acreage up to the level required to achieve the outputtarget. Extension efforts are largely focussing on improving the pyrethrin

1/ The output in 1964/65, which fell to 4,400 tons, was the lowest for sixyears; the fall in this year was partly caused by the drought.

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content of flowers, which should lower costs of production and enable farmersto combat more effectively any eventual comnetition from synthetic substitutes,which active research is trying to develop elsewhere in the world.

257. Emphasis is shifting to vegetative propagation of clonal materialwith a more reliable and highpr nvrethrin content BRv testing flower anrnlpfrom farmers' plots, it is hoped that farmers will be enabled to select thebest of their ownm plants for multiplication by "splitting.'" This type ofselective multiplication will require, however, a considerable extensioneffort which couild probably be more efficiently conducted if the presentadvisory staff under both the Ministry of Agriculture and the Pyrethrum Boardweree unified uinder the Board. M-nnilThiln +.hn pv;C:+½ng -rnare-m of' rjcz+-rjii+;nir

better clonal material to farmers should be continued; and the drying offlowers by cooperatives shoulrd beimproved.

Suga. Can-e and Sugar

ZQ M D1 Pa uut- 4 n wh r4a F41 1 -A r A * * n n 1

30,000 tons in 1965 to 146,000 tons in 1970. During this period, consumption,-W'I i c 11 r Lts e 'IU r J.)'L" . up0 JJL.JU1ILU CJ.L 1....j?Lp L AO. 11 .LY)J L, C) r *J_ j)lJUiIU.O .3.1 .LIVC, .LZ

expected to increase from 110,500 tons to 170,000 tons. Thus, Kenya would haveto i 1I4mport only 2c5,000 tons Jin 1970 as against V -74, 000 tons n4 14.,<) 10,000 t.40ons

(net) from Uganda, 4,000 tons from Tanzania and 30,200 tons from overseassources)

259. M I9.illing will pro-ve no problem because W1l-le ne-w capituLuy, L;uVpp±elelIu-

ing the existing Miwani mill and the renovated Ramisi mill, is already assuredthrough a new factory at M, uhoroni, which will go into production in November1966, and another at Chemelil, which is scheduled for completion by mid-1968.

260. We expect some lag, however, in increasing the output of cane. Asmall part of the cane - perhaps 60,o00 tons to 70,000 tons - required for thenew mills should become available due to the reductiorL in jaggery productionwhich abosrbed 193,000 tons of cane in 1965 and which is dropping becauseUganda and Tanzania, which used to buy 33 percent to 38 percent of Kenya'soutput, have discontinued imports. The great bulk of the increased supply ofcane is to come from the Districts of Central Nyanza and Nandi - from settlementschemes, individual smallholders, large farms and nucleus estates. A substantialexpansion of acreage as well as an increase in yields would be required.

261. There is undoubtedly enough land for cane growing, and the Governmentundertaking to buy milled sugar at a price of i45 per ton, which is substan-tially above the world market, should provide an adequate incentive. However,ecological conditions in the main producing areas are not ideal for sugar cane.Under good management average annual yields of up to 20 tons per acre can beachieved (frcm three crops over a five-year cycle), but it is unlikely that thisyield will be achieved except on factory estates. Moreover, supplies from themany scattered small growers involved in the program will require considerableorganization at all stages; land preparation and planting, extension super-vision during the growing period and harvesting and transportation to thefactories. We doubt that this task can be accomplished without delay and weanticipate that there is likely to be a shortfall of 20-25 percent in cane

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deliveries to mills in 1970. Kenya will therefore probably still have toimport 50,000 tons to 60,000 tons of sugar in that year.

262. The conclusion that Kenya will be able to expand its sugar outputsubstantially involves no judgment on our part that this is necessarily in thebest interest of East Africa as a whole. The Mission believes that beforecommitments are made to additional expansion in any of the three countries ofthe Common Market it would be well for the three Governments to sponsor acareful study of where and in what measure such expansion could most econom-i-cally take place.

Cotton

263. In the Plan, cotton is regarded as the crop with the greatestpotential for relative expansion. Total output is to quadruple, from 24,000bales of lint cotton in 1965/66 to 95,000 bales in 1969/70.1/ Acreage is tobe doubled, with new planting concentrated largely in Eastern, Nyanza, Westernand Coastal Provinces; and the average yield is to be raised by at least 50percent. These yield increases are to be achieved with a special extensioneffort focussed on more timely mechanized ploughing, land preparation and thegreater use of insecticides and fertilizers through a program of short-termcredit to farmers.

264. The average yield of seed cotton has shown little advance, in spiteof known techniques for its improvement, and remains very low at its currentlevel of about 200 pounds to 250 pounds per acre. This is largely because itis a small farm crop, secondary to and competitive for labor with food crops,and inadequately serviced bv field extension staff. Research too has beeninadequately prosecuted. Since yields in experiments, employing all the normaltechnical inputs, but excluding irrigation, have reached 2,000 pounds per acreof seed cotton, the Plan forecast of 360 pounds per acre should not be diffi-cult to achieve. Kenya cotton, which is all hsnd nicked and sorted and rollerginned, and, therefore, free of foreign matter, has remained good in qualityand thus commaRnds relstivPlyv gon9 nrice Thp amalgnmation of the fieldstaff of the Cotton Lint and Seed Marketing Board with that of the Ministry ofAgriculture should remove many of the previous weaknesses in extension andthus facilitate the campaign to improve crop husbandry techniques and encourageadoption of the inputs required to raise yields. Farmers in the distrietswhere cotton is being newly introduced are reported to have responded quiteenthusiastieallv to this crop.

265. There are however a number of obstacles to the realization of thePlan target. The organization of short-term seasonal credit presents diffi-milties, as is indicated bv the nast. exneri ence of the ontton Seed snd LintMarketing Board. Production incentives may also prove inadequate owing to theArclinme in world prices and the vf n2nr-inl need to) eliminate the small szisiiy

which the Board has in effect extended to growers in recent years. Mechanicalland preparation, which is to be the practice on settlements nd "block" farms,

1/ Estimated production in 1966/67 season was a record 32,450 bales and4-,1.,1 Tzr^--4li^ in, 4 1 O!a /Z,s .s O 000 nnni9P

- 66 -

may also encounter difficulties. Competition among growers of cotton for thelimited amount of machinery and equipment, and possibly competition from othercrops may well make it hard to achieve in many cases the timely planting whichmechanization is designed to promote. Also, with a rapid expansion of thecotton acreage, a harvesting bottleneck due to labor shortages may emerge incertain years. Moreover, the fields in the "block' schemes, particularly thosecreated out of existing individual farms, are difficult to lay out in such away as to make possible the efficient operation of machinery. Finally, research,field tests and demonstrations have not yet provided the requisite informationon the effect of various types of inputs, particularly fertilizer, for allcotton growing districts. This information should be speedily developed bythe proposed new cotton research station.

266. In the light of these considerations, the Mission concludes thatthe output of lint cotton by 1970 is likely to be about 65,000 bales (84,500tons of seed cotton) as compared with the target of 95,000 bales. In theory,Kenya has enough capacity to gin a crop of this size, but additional ginneriesmay be needed in the new cotton planting districts in order to avoid hightransportation costs. The expanded output of cotton should enable Kenya toreduce its imports of cottonseed oil from Uganda and Tanzania, valued at over1900,000 a year. Kenya's present demand for cottonseed oil is equivalent to35,000 tons of cottonseed a year.

Horticulture

267. Owing to the wide range in climate and altitude and, particularly,the high sunshine values in many areas, there is a large potential for growingmany tropical and temperate fruits, vegetables and flowers. This potentialhas been partly recognized and the two Government horticultural centers, oneat Molo and the other at Thika have introduced many exotic varieties fortesting and experimentation. However, as pointed out in paragraph 280, thesecenters have been allowed to run down. Moreover, until very recently, littlewas done to promote a more effective organization of the many small growersand to improve the marketing of horticultural products.

268. Most horticultural products are primarily grown for home consumptionand limited local markets. The small grower is usually unaware of the need toorfnniz nproduction, eoiln-Letion, trqnsnortation- grading and selling of hisproducts; and even when the need is perceived and cooperative societies areset un fo-r this purpose the latter often function hballv RFw stntisties are

available on the production of horticultural crops. For these reasons, horti-ciiltuire ha not. d9evelopedr nsn much a it conl(l habvpe

269. The Plnn's references to hortircultureare confined to two fruits -

pineapples and passionfruit - and to proposals to establish a HorticulturalDevelop ren+ Cundil, ntnn hen horticultural extension nd t-rainirng anlencourage processing.

270. Pineapples have become the most important exportable fruit crop. Theprincipal growingareas are concentrated in Kimambu, Thrit, + in the virci nit+r

of the research station at Thika, which was established in 1955/56, althoughthere are smaller n-mbers of growers in the Fort Wall and Nyeri districts nnd

at the Coast. Quality has been variable, largely because output has come froma wi d e ra n ge ofJ ~ a1t i t-ud es- T. It Ia bee - salse tha pleppe of -good1- -,4-- --- -- 4

L2J. Q.J. ~ , ~ L-, I1CL; UZ::1=1 dU± bIU UildA, J)II1_LJ ~~and uniform quality, suitable for canning, should be grown in areas with analtltude. between'. 4,000 feet ±I.S~ZU andU. 5,700 feetL~ c aboave sea lec vel. * ~JIn the1e drierao s areevasat these altitudes, coffee is often marginal and to a limited extent couldoften be replaced by pineapples, provided plans for the expansion of .marketingand processing are realized. In some areas, pineapple has replaced wattle.

271. Pineapple growing offers no serious agronomic problems in KenyaslncL much;iI ofil the feldU jpi.ct,uice is based oln eApe.Lieie ini other cLtriL±

Standardization of planting material by the use of one variety for canning,UUooIt Ca_yenu11ne, oiL. ±±11iatUingii fUrI naUWii, avuoLub serious variaiona s in tLhie

quality and condition of the fruit. Most of the growing area is in the beltof fairly -uniform. red lateritic soil, and disease problems are limited to e-el-worm attacks which are controllable by soil fumigation and by alternating withMVexlcan Marigolds.

272. Until 1957, organized production was mainly located on estates inthe Thika area where Kenya Canners Ltd. had established the country's firstpineapple canning factory in 1950. More recently, small farm production hasbeen growing steadily and by 1965 about 4,500 smallholders were licensed toproduce 54 percent of the total crop for canning. The typical smallholder'syield is around 25 tons of fruit over a four-year growing period, giving agross return of approximately 137 10/- per acre per year. On estates usingfertilizers and fumigants, typical total yields over four years are between28 tons and 32 tons per acre. The present producer price for grade I pineapplefor canning is Shl68 per ton, with much lower prices for inferior grades.

273. Production of pineapples for canning is formally controlled by theCanning Crops Board but the Board's powers are defective since they cannotprevent the diversion of pineapple to the fresh market at growers' discretion.The establishment of the proposed Horticultural Development Council, withauthority to regulate fruit and vegetable marketing in general, would correctthis situation.

274. The fresh fruit market is absorbing approximately 10,000 tons ofpineapples, and there is a small but valuable export trade, particularly byair-freight to Europe. In addition to the Kenya Canners factory, whose annualthroughput recently has been around 15,000-20,000 tons, there are two smal:Lerfactories taking respectively approximately 5,000 tons and 1,000 tons of pine-apple per year.

275. Arrangements made in 1965 by the Government with the CaliforniaPacking Corporation and Kenya Canners envisage a substantial expansion of thepineapple industry. Under management and sales agency agreements, theCorporation is now operating the Thika factory and marketing the productionunder its "Del Monte" label, and is conducting field trials to confirm thatno basic problems exist in producing the high-quality canning pineapplesrequired.

276. The Kenya Government has undertaken to increase local supplies ofpineapple for the factory to 35,000 tons per year by 1968. A program for

assisting smallholders to develop the necessary acreage has been initiated-ar 148X00 hn -as been earml-lred for developmenlt loans. Trgrs -a -o -kept-- --- I-_4dLiu. JU'.) IJJ IIQv Li u 1 ~ dL Id±fLA I.LU UC V~.LUP iIU -U CUi;DI1 * I .LLUV,1I D; lId.= JiUL ru p

up to schedule and the original smallholder program will not be completed onti:me _ . ____n ___u___u_ _i _ __ - - 4- - __ , _ va __ __ -_ Trs __ _ t_ time 111 H owever, licenses lhave beenl givenL tU ettcLes, aIndU Kenya Canners hIlas

doubled its own production acreage.

277. When this first development phase is completed, California PackingCorporation have an option to purchase the canning factory and to ieaseapproximately 20,000 acres of suitable land from the Government for the furtherproduction of pineapples on an estate basis. Further expansion pians up to1975 then provide for the production for canning of up to 170,000 long tonsof pineapples per year, of which approximately 35,000 tons would be small-holders' output.

278. With export markets, mainly in Europe, assured by the "Del Monte"trade mark, such a development would be a major step in canning crop develop-ment. There are possibilities for the processing and exporting of otherfruits and vegetables under similar arrangements.

279. Passionfruit has attracted many farmers, mainly in Kisil and otherhigh rainfall districts, partly because it is an easy crop to grow and partlybecause Cottee, the large Austraiian processor of passionfruit, was inducedto participate in processing. However, the vast uncontrolled upsurge ofplanting in 1964 and 1965 has created a serious problem. In the next three orfour years, output may well be up to six times the available processing capac-ity for juice extraction, and additional processing facilities do not appearjustified on the basis of recent market prospects. The amount of fresh fruitthat can be sold locally is negligible and overseas sales in Europe must meetkeen competition and exacting standards. Accordingly it has been suggestedthat quotas be imposed to regulate the amount of fruit which each producercan present for processing. However, two serious diseases, Brown spot andWoodiness virus, drastically curtailed outputs and "solved" the problemof overproduction, since the former is difficult and rather expensive tocontrol and the latter can be combated only by complete eradication ofinfected plants. Despite the effect of disease and market limitations, theMission believes it will be possible to produce and market by 1970 the equiv-alent of 196,000 gallons of canned juice, which is 2.4 times the actualproduction in 1965.

280. The efficient and optimum expansion of output must be soundly basedon horticultural research and on economic and marketing studies. A specializedextension staff to interest and assist the potential grower, either on smallor large farms, is also required. Horticultural investigations in Kenya havelanguished for a number of years, chiefly because there has been relativelylittle interest shown by farmers in the "lesser" horticultural crops. Avail-able funds have been reduced and diverted to other projects, and the numberof horticultural staff has been declining. No facilities for horticulturaltraining exist in East Africa. The station at Molo, once the main station,is now only on a minimum care and maintenance basis, and two sub-stations wereclosed five or six years ago. The main station, now at Thika, has just lostits most senior officer, leaving only one trained horticulturist in charge,together with one agricultural reesearch officer and a pineapple research

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officer. Measures to help the horticultural industry are outlined in theDevelorment Plan, but these are inadequate to achieve any real measure ofadvancement and cannot be implemented without senior staff expansion. InDecember 1966, the first Horticultural Handbook for Kenya was nublished;although of great practical value, it will achieve little, unless there is anadequate extension staff to pass on its advioo to growers.

281. A studyia on horticultufiral reseaRrch and educati;on wxhicoh has ;llst beencompleted directs attention to the possibility of producing a number of fruitcrops, apart from pineapple, such as mangoes, avocadoes (f'or- oil exrct-

as well as for fresh consumption), citrus, peaches, grapes (for wine making),temperate climate -fruits , parti- I culJarl -Jy pears and apples , and all types ofvegetables. The study puts particular emphasis on revitalizing the experi-mental center at Thika; the research station would be resited on a nearbycompact area of land of 300 acres, which would be large enough for current

worIZ and ru I utu re ex1tensior,s t1Che spec1 aist u research r coff icr estaIblshr,,ent

would be expanded to at least nine; a horticultural training institute would bese t up to offer diploma courses in hortic-ulture in cUUperation with EgertonCollege which would provide the basic instruction. These proposals, ifaccepted by the Governrrient, will take somte years to imilement and will notaffect the period of the current Plan. They do not include provision foreconomic studies or or r,alrketing surveys whic are essential for any advancesin horticultural production.

282. The requirements for a Special Horticlltural Extension Service often tralned staff are given as a -maximiuia, but thiis seemis nearer a minimum thana maximum, since it will be necessary to cater to the research requirementsof widely separated districts and quite different areas ranrging from-i the CoastProvince, with its special tropical products, up into the Highlands from MountKenya to Kisil, and those areas wh-ere irrlgateEd orticulture would be relevaInt.

283. Processing, dehydrating and canning, which may well be left to thecanning operators who are already established, are expected to play animportant role in expanding crop produce for export and will demand a highdegree of organization, under extension service supervision, to ensure themaintenance of regular supplies of uniform quality materials for the economicrunning of processing plants.

Potatoes

284. The Plan contains no specific production target for potatoes, butdoes forecast a reversal of the past declining trend in output. For someyears, smallholders took rapidly to the growing of "English" potatoes for themarket and also increasingly for their own consumption, but from 1961 to 1965the area devoted to this crop fell from an estimated 134,000 acres to some-where between 35,000 acres and 50,000 acres. This reduction was caused largelyby the rapid sprea.d of blight and bacterial wilt, which was aggravated by poorhusbandry and the failure to develop and use supplies of certified seed freeof disease. Recent research appears to have succeeded in producing varietiesimmune to bacterial wilt, although the results still need further confirmationby field trials. More important, a project has been launched with Germanassistance to multiply and disseminate good, disease-free seed at reasonable

70~- I'-=

prices. Credit will also be available to smallholders. Altogether, it isnlot, unreasonable toJ ) assumle thiat output will rise from -i nn tn innJW +JJL

1966 to around 135,000 tons by 1970. At this level, some 10,000 tons may beavailable for expotL to nearby markets.

mI obacco

2U8. mAe soil au ecologicaL cUltuu i-Us in the Utbccou gow-ilg reas ofu

Kenya are not ideal for this crop. The current small output of about 112 longtons a year comes from 550 acres in the Embu and Kitui districts. Technicalsupervision and credit advances are supplied by the tobacco company and a goodproducer can have a gross return of nearly z-10 per acre. Imports oI unmanu-factured leaf from Uganda and Tanzania were about 1,700 long tons in 1964.

286. Sales of locally manufactured cigarettes, currently about 160 millionmonthly, have risen over the last 10 years at an annual average rate of 4 per-cent, and factory capacity is 200 million per month. The continued annual in-crease of 4 percent expected in cigarette consumption gives some scope forexpanding tobacco growing in Kenya.

287. In the Shimba Hills Settlement area trials are being sponsored by theGovernment and directed by a tobacco company. if these demonstrate the suita-bility of climate and soils, an output of about 3 million pounds of flue-curedand 0.7 million pounds of fire-cured leaf for cigarette and heavier types oftobacco could be developed in these districts.

Wattle

288. Production of wattle bark and wattle bark extract have declinedsteadily over the last decade due to the competition from synthetics. Salesof wattle bark to the Kenya Manufacturers Association fell from 67 thousandtons in 1955 to 46 thousand tons in 1964 or by 33 percent. The area underwattle declined from about 184,000 acres in 1960 to about 138,000 acres in1964 or by about 25 percent. Exports of wattle bark and wattle bark extractfell from 12.53 million in 1955 to 10.83 million in 1965. Although production

and exports revived significantly in 1966 (exports were nearly x1.6 million),*this gain may well prove to be temporary and the longer-term prospects are stillrather unfavorable.

Cashew Nuts

289. The growing of cashew nuts, which is restricted to the coastal zone,has been expanding notably in recent years and yielded a record output of 8,300tons of nuts in 1964/65. The Plan target of 12,000 tons in 1970 should bereadily attained because a considerable area already planted will have comeinto bearing by then. The latest plantings have been of specially selectedvarieties with higher yield potential. However, little attention has beenpaid to other agronomic factors through which production might be increased.Most of the crop is exported for processing, as the local factory can onlyprocess (by hand) about 1,500 tons a year. Establishment of an up-to-dateprocessing factory could considerably enhance the value of the industry to thecountry, but up to the present it has not been possible to interest anyinvestors.

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Coconuts

290. Little attention has been given to the agronomy and the organizationuLL processing 01 ccoUU prodUUUUction iLn th-e re6Lati Vtey 0poor UCoDa P.rovi.nce oil

Kenya, where most of the coconut palms are grown. The Coconut ImprovementScheme was discontinued in the la'te 1950's through lack of funds; the cropdoes not feature in the Plan. A program for the planting of 10,000 acres ayear is lagging badly. In 1965, only 2,000 acres were plaited because OIinsufficient funds for nurseries. Imports of coconut products, principallycocon-ut oil, have been around ^250,000 (1965). Yet, coconut products, including"tembo," 1/ are the most important single cash crop in the Coast Province, pro-viding about 25 percent oI its total output of agricultural produce valued at11.67 million.

291. A special Coconut Enquiry Committee, which reported in June 1966.,recommended that the output of coconuts should be increased to meet domesticrequirements, particularly of coconut oil. It suggested new plantings inexisting and new settlement schemes and some rehabilitation of already estab-lished plantings. Its recommendations covered improvements in supplies ofnursery seedlings and in field hygiene, particularly for controlling therhinoceros beetle; the overhaul of the processing and marketing of copra, withthe idea that the Government's Agricultural Produce Marketing Board mightitself undertake copra making; the licensing of palms be organized for "tenbo"tapping; and the provision of a more adequate technical and extension staf:f.

292. To increase present output by 150 percent would require a totalplanting program of about 30,000 acres to 40,000 acres, or 1.8 million to 2.4million palm trees, plus the maturing of existing immature palms. Since it takesat least ten years for a coconut palm to reach full maturity, a program to in-crease planting and improve husbandry must be launched soon if the current lowlevel of farm income in the Coast Province is to be raised in the measurab:Lefuture and some progress is to be made in raising the output of vegetable oilsin which Kenya is now particularly deficient.

B. Livestock

General

293. Until 1961, commercial livestock farming was still dominated by -thelarge farm sector in the "scheduled areas," where dairying and the ranchingof beef cattle had reached high standards of development. In 1961, largefarms held over 92 percent of the grade dairy cows in the country and provided66 percent of the beef cattle slaughtered by the Kenya Meat Commission. Conse-quently, the general fall in output from the large farms in the next threeyears, with the running down of assets and the transfer of land, was especially

1/ Tembo tapping: tembo is the fermented juice obtained from the palm anidgives an estimated annual return of Sh25/- per tree compared with Sh5/-from nuts. An estimated 60,000 trees at any one time are being tappe1.The total output of tembo, about 1.7 million gallons a year, is valuedat 1300,000.

serious for the livestock industry. Large numbers of grade dairy cows weretra.sfUerred tUo small1holdings and settlement schemes butL mauiy were also solud

for slaughter and there was a serious loss of breeding stock.

294. Since 1964, the situation has improved. The total size of dairy andbeef cattle herds on the large farms is recovering aid at the same time thesmall farm areas are playing an increasing part in the dairy industry and nowhold more than a quarter of the national herd. But there is still an urgentneed to increase milk and meat production both to meet the fast-growingdomestic requirements and to take advantage oI tne wider East African marketfor dairy products and the overseas markets for meat, despite increasingdomestic production in Uganda and Tanzania.

295. Estimates of the total livestock population in the country are subjectto a wide margin or error but numbers in 1964 were thought to be approximatelyas follows:

Cattle 7,083,000 (including 360,000grade dairy cattle)

Goats 5,086,oooHair Sheep 3,481,000Wool Sheep 396,400Pigs 51,700Camels 1,265,000Donkeys 162,600

296. Livestock products all together contribute approximately 8 percentof the Gross Domestic Product compared with 31 percent contributed by agri-culture and, of this, more than half represents subsistence production of meatand milk.

Disease Control

297. The highly efficient Veterinary Services of Kenya have been primarilyresponsible for the good control that has been achieved over the major livestockdiseases particularly in the large farms and ranches in the former scheduledareas where prophylactic treatments and prompt diagnoses could be readilycarried out.l/ The need for maintaining this important service has increasedwith the emphasis being given to livestock in the Government's DevelopmentProgram and it is regrettable that until 1967 there was a continuing loss ofsenior staff for which replacements have been difficult to find.2/

298. General measures of disease control which have been in use for manyyears include the extensive vaccination program, particularly against rinderpest

I/ Cattle cleansing routine widely followed in the former scheduled areafarms were costing an estimated 1450,000 a year.

2/ Toward the end of 1966 there were twelve professional staff vacancies outof a total of 9Q pnrts. -R JTilv 19Q7 the staffing situation was reported

to have improved markedly.

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and foot-and-mouth disease, the control of cattle movements along restrictedI nnd routes, provided with quarantine holding grounds and dipping facilitiesand the provision at port areas of adequate quarantine arrangements. Anexpansion of these facilities along the routes will be essential as the cattlemovements increase with the planned development of the beef industry.

299. East Coast fever, the most serious of the tick-borne cattle diseases,canU only. be controlled1 by -u-l- Aipping or .sa of- c4att le at, weekly

intervals. This means of control has disadvantages because it takes time,luema.As somue deLgree of discip"line and oraizto -on catl ower -d ---- is~_ -__u~LUa1±~ ~tAu~~ 131 u~I21jJ~ue WIL U.W1Vci_LuU_LU1I dU1Oi1fii L:cL ujet UWII=.L b WLIU .LZD

expensive. Investigations to develop a vaccine for East Coast fever have beenlaunched and merit a high priority.

300*. As small farmers acquire more grade cattle, particularly dairy stock,and as the comprehensive and ambitious range development scheme gets going, theeffective maintenance of cattle disease control measures will demand more staffand facilities. Although a new livestock division has been created within theMinistry of Agriculture to be responsible for animal husbandry, animal diseasecontrol remains the responsibility of the Veterinary Department, which needsconsiderable staff increases during the period of the Development Plan. Theincreases required are 50 veterinary officers, 66 technical officers and 3114animal health assistants. Recent estimates of requirements, which have yet tobe approved, point to the need for 50 more veterinary officers. Without t:heseappointments there could be a serious shortfall in livestock program.

301. The Government intends to build 200 additional cattle dips to helpimprove general disease control in dairy stock areas, but this program will notbe fully effective unless sufficient supervisory staff is also available.

302. Apart from East Coast fever, other major diseases are reasonablyunder control. Rinderpest has been virtually eliminated; vaccination iscompulsory and over 85 percent of the stock have been immunized. However, theoccasional outbreaks which still occur in remote parts of Masailand and in thenorth emphasize the need for continued control by regular vaccination, par-ticu-larly along international borders and where wildlife may carry the disease.Foot-and-mouth disease is also important, not because it is a "killer" disease,but because any outbreak provokes restrictions on beef exports overseas. Theinfecting virus has a number of strains and vaccination has had only limitedeffectiveness against some of the more prevalent strains. Early diagnosis,embargoes on movement of infected animals and quarantines seem likely to remainthe most practical measures against foot-and-mouth. However, considerationashould be given to obligatory block vaccination of all cattle against theprevalent virus types in districts where high grade and exotic cattle are kept.

303. Contagious bovine pleuro-pneumonia, next in importance, is endemicin a few places, but more or less localized. Carrier animals, who are symptom-less, are very difficult to detect, and there is no safe effective vaccine.Control or restriction of the disease, therefore, must be based on testing allcattle entering quarantine areas and the segregation or destruction of provedcarriers.

304. Rapid diagnosis of diseases is extremely important in view of the

7),

large number and scattered nature of holdings and the inexperience of manycattle owners. 'hen the 4-, eld staff are unable lo mal'-e satlsfac-t diagnoses -,

specimens have to be sent to the central laboratories at Kabete, which usually4-~ v2D e. s s~. u -10 s a I- i. Q-12 an. 0±4 ` 4-J t 4 -.I UJ A.L-LC%- - . m,- 1J.' - _ II V4Z I -JIL 41 ~ I A.

PlVV |_L vL Dlo W iDDC- C>llJCVi UDb ST D . 111= -11 VC I b L1r, l J uCL_L -lU 1

centers for which the Plan provides are urgently needed and should greatlyILiU1 V41 -1 .{CL Lj- -.II _JzJ_4Z 4)1 A 2e1b CII.LC-1 WJOin.luv L th lualt4L2Ly cu 4-il s dUI Dt:IJ u fL Wulsa control work.

facilities centering in the Veterinary Research Laboratories at Kabete are- .... t..~~~..fl TT.--2..,Z4. 2.. 2 r ,. . - -- I2 I~ 4- t.-seriously overtLLaxedu. U'UJer presentL condit-ions it is diff1icu ILuLL LU ill ti shL o rtL

notice emergency orders for large amounts of vaccines. The production ofvaccines needs to be sepUarated from the general work in bacteriology, andadditional production capacity should be provided to cope with unforeseenemergencies. The Treasury is expected to release funds for a vaccine produc-tion unit in the financial year 1967/68.

Artificial Insemination Scheme

306. At the present stage of livestock development, an artificial insemi-nation scheme is important for the dairy herd rather than the beef cattle. Itsmain purpose is not to exploit the genetic potential of outstanding animals butto give small farmers the advantages of using a selected pure-bred bull and toreduce disease hazards.

307. In 1966, with technical assistance from Sweden, the Government begana large-scale program for the improvement and extension of the A.I. servicecentered at Kabete. It will be difficult to realize the proposed increase inthe number of inseminations from the present rate of 73,000 per annum to 500,000in 1970/71 owing to the great administrative effort entailed and the need toget sufficient cooperation on the part of the cattle owners. For eventual suc-cess, it will be necessary to sustain a propaganda campaign among farmers infavor of the new method and also to train and support efficient A.I. fieldstaff in adequate numbers. It is especially difficult for the farmer to recog-nize the cow's estral period and to arrange the prompt attendance of the insem-inator when required. Consequently, repeated inseminations are commonly neededand this has largely accounted for high costs which, in a recent study, wascalculated at Sh70/- each for 30,000 pregnancies. It is hoped that, when theservice has been improved and expanded to cover 200,000 pregnancies, the costwill be under Shl4/- per pregnancy. Meanmhile, on the basis of a charge ofonly 5 shillings per pregnancy for grade cows livestock owners are being gener-ously subsidized.

Beef

308. The pasture lands already fenced and developed for commercialranching in 1965 covered less than 5 million acres but supported approximately450,000 head of beef cattle, in spite of the depletion of numbers in theprevious three years. Tha annual rate of offtake from some of these ranchesis as high as 20 percent and the averaae cold dressed weight of slaughteredsteers is approximately 430 pounds compared with 270 pounds for steers fromthe undeveloped pastoral areas.

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309. The outputs achieved by the present commercial ranches are primarilydue not to the special quality of their pastures and stock but to organization,capital investment in water supplies, dips, fencing and other equipment and tosound husbandry and commercial management. Plans to increase the overallproduction of beef in Kenya are based mainly on an extension of commercialranching in various forms to progressively wider areas and the Government'scomprehensive project for the development of the pastoral areas has alreadybeen outlined in paragraphs 137-146, above.

310. The basic problem in the traditional African grazing areas is toorganize the more effective use of available pastures by controlled grazingin place of the unrestricted communal grazing which is traditional over mostof the pastoral areas. Experience has shown that the provision of water pointswithout grazing controls does not help development; it is essential that thecontrolled and rational use of grazing be promoted at the same time as improvedwatering facilities otherwise local overstocking and the degeneration of thepastures is bound to follow. For this reason, the rate of livestock develop-ment on the pasture lands must depend on the rate at which the pastoralistsare able and willing to accept the new forms of organization and disciplinerequired for private, cooperative or group ranches, or for the more elementarygrazing schemes.

311. The total output of cattle can also be improved from the presentlevel by improving the condition and weight of animals for slaughter. To thisend, emphasis is correctly being given to the establishment of more extensiveholding grounds under the management of the Livestock Marketing Division andthe Agricultural Development Corporation so that thin or immature animals canbe held in quarantined areas and fattened for several months before deliveryto the Kenya Meat Commission. The arrangement can also help to even out theflow of supplies to meet slaughter requirements.

312. In some imnortant areas, the establishment of a cash economv inplace of a "cattle economy" requires a basic change in the owner's attitude tohis cattle Thtre is already evidence, notably Tmong the Masai of KAnAido,that this can be successfully brought about, but it will require a prolongedeffort by the extension services. Ineentives as well as education are needLedand effective facilities mnust be provided for the sale and marketing of cattlein all develoning areas.

313. At -nrvrent. t.he pnirrhq. rof' rcattflp qnl rel livprv fovr clnngrh+tr isundertaken partly by private traders and partly by the Livestock MarketingTDi irsion of the Veterinarv Servi ce The veterinary department has provided a'

buying service because there were no other facilities for the marketing ofinferior qnimnlq frnm outlying areas and hecaeiic the offt+ake o-f these c-anttle

was closely bound up with questions of disease control and stocking rates. Toa large extent this is still true. Competitio n nrivAtp cattle dealers isactive in the more important markets, but in outlying areas there is still aneed for an official bu,ying organization.

314. It has- been- suggest-ed that livesock~l ?.rnketio+nn s'houlld ben ont-rusted

to a specialized non-Government organization operating on commercial terms, butwe believe that i. wot woU 'de impLudent to put I .uyin, and marlketing ar-ngeLents

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into other hands at this stage. The Livestock Marketing Division is responsiblefor the control of stock routes, watering and grazing facilities and other re-lated functions as well as the actual marketing of cattle. Under the Govern-ment's present plans for range development, the purchase and movement of cattleis so closely integrated with measures of disease control and quarantine, themaintenance of prescribed stocking rates and credit; arrangements, that the off-take of cattle needs to be closely controlled and organized as part of theoverall development project. For these purposes, the Livestock MarketingDivision will need to be enlarged and adequately financed so that it can operatemore widely. More saleyards need to be established and, in general, producersshould be given more opportunity and encouragement to sell at livestock auctions.Competitive buying through private traders should be promoted where this ispractical, with the Livestock Marketing Division operating as a residual buyer.

315. There are approximately 3.2 million head of Zebu stock on small farmsin the high potential areas and, because of the emphasis on dairying, thepossibilities of increasing beef production in this sector are often neglected.Generally, grazing is very limited and dairy cattle have priority, but on someholdings it may be profitable in future to fatten one or two steers by makinguse of crop residues and maize. especially if the market price of maize fallsfurther.

316. With lower maize prices there is a new interest in the possibilitiesof finishing beef cattle under intensive conditions, making use of cereals andconcentrates. Unless Kenya obtains access to high quality export markets forbeef; the scope for this type of enterprise is probably very restricted, sinceproduction costs are unlikely to be competitive with the production costs ofpasture-fed beef. It may, however- be possible to develop some economic useof maize for supplementary feeding and the subject merits further study.

317. Increases in population can be expected to raise domestic consumptionof marketed beef from 18n millinon noind.s in IQ63 to at least 220 million noundsin 1970, even if per capita consumption remains unchanged at approximately 20½poulnds per year. Meat prices have been increasing on the local markets and atpresent the Kenya Meat Commission, whose prices are fixed by the Government, ispV--yingC (ln 1967) Sh1 peir poc,i (-old ^ressed eigh ) for first grade cattle,

compared with Shl/30 per pound in 1963. However, this price is still wellbelow the corresponding world m.arket value of chilled meat whic^h, is expected

to increase very slightly between 1965 and 1970 so that Kenya's exports are_i1l. expect;d 't Lku Vully cmA pAtitAve.m r As t r i4. i ; ti E OA . A 4 LI o A4 a 40 e- -, - A O e- LA

will be the limited availability of supplies in excess of domestic needs and,db c 4 ).4- -L- - - -iij -4 -a -pi- IL4 1 ),7 _L 1 - _~U4 -v'kW 14 -V + -4LL +41'- -1LU. 1 1--as explaiLned in1 paragra1CLphs 146-147J abovVe, we: be_lle_ve Uthat theincras lnI beef

cattle production in the next three or four years will be substantially lessthan projected in the Government's range development program. Although thevalue of the Kenya Meat Commission's exports rose from T2.2 million in 1964to approximately -3 I mllion in 1966, further increases up to 1970 are likelyto be modest.

Hair Sheep and Goats

318. Particularly in the less-developed pastoral areas, measures topromote cattle production will also benefit the production of sheep and goats.

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Because of a shorter life cycle, the number of small livestock will respond morerapidly than cattle to an improved environment. Sheep contribute 8 pounds tothe total per capita consumption of marketed meat of 28-2 pounds. Although morethan 100,000 head of sheep and goats were purchased by the Kenya Meat Commissionin 1965, small stock is more important for local consumption. With risingprices and improved marketing facilities for beef, some substitution of sheepand goat meat for beef in the local diet may be expected and this will increasesupplies of beef for export markets.

Dairy Products

319. In 1964, just before the decline in dairy cattle numbers was reversed,the size of the national grade herd was estimated at 362,000 head, with 271,000of them on large farms, 40,500 on settlements and 50,500 on smallholdings. Inthe same year, total sales of whole milk and cream through channels controlledby the Kenya Dairy Board were the equivalent of 50.4 million gallons of wholemilk. By 1970, it is expected that the eqZuivalent of 57 million gallons willbe needed to meet domestic demand and to satisfy established and profitable!markets in Uganda, Tanzania and overseas. In addition Kenya has a "convenience"market for butter in the United Kingdom and, although export butter prices areunattractive, it is desirable to aim for a safety margin in milk productiorLwhich can either be processed and sold on the butter market, or diverted toother uses in times of need.

320. If a milk shortage is to be avoided, a rapid increase in the size ofthe national herd is required. Although the Plan aims for an addition of90,000 head of dairy cattle between 1966 and 1970, to bring the national gradeherd9 pn to 460 onn head, prent evlde,nce suggespts thatth. t argeo tpv+t Trnhnba1vy

cannot be reached until 1972. Making due allowance for the efforts that arenow being madfe to increase cattle numbers and to increase productivity, it islikely that the marketed output of milk and milk products in 1970 will beabo*t 57 million gallons, or equiivalent to the basic needs of ea smarkets, with no margin of safety.

321. Despite the substantial transfers of grade cattle to small Africanfarms, it is clear that the large farms (especially the Eirrn-opan farms), whiich

still hold two-thirds of the dairy stock and achieve higher yields per cow,must pla-r adominn+. role -in the rlai-ry industrv fonr srm years ahead_ Standards

of management, in particular supplementary feeding practices, are still im-proving on the large farmTs. There is a prospect of average yields rising abovethe 1964 figure of 290 gallons per year and of more even production of mil1k

h+1o,g t rh r. The coimnrr must also depend on the large farm sector forsupplies of young stock to expand the numbers of grade cows on smallholdings.T- +i; fnno,+ 4 + n A r' onl+ ,va7 1o rolonmon+ ('r-nro+ 4n r>or mnlr0 On im-cnr.

tant contribution by rearing calves on the national farms. Schemes by theYenr,ya D airy BDoard anr,d thle Kenya Meat Com,

4slon to bu up fro + toe

unable to rear them and to resell them as breeding stock after 2-2 years maya'Lso be efctiJvely 4developed1, lf the necess y skille4 staff are obtaina-'-l'

* ULI iu~~ bIUUuv=LLuL1LI, WIU±1 UJ.L±eleIU ~eneD 11~D± -IV LCV.L1322.~ ~ li Ontesr'lholdingss and in settleruent sclemies, there is a lively

demand for additional dairy stock since milk production is considered a profit-able activity. A st-udy in N-yeri iu±strict in 196f,3/U4 conclude'd litht rU±L±LiU1Utr

- 78 -

milk production yields an average income of 891 shillings per cow or 2.47 shil-

lings per man-hour of labor. African smallholders have, however, frequently

encountered great problems in this new specialized form of production, notably

on the settlement schemes where milk is by far the most important single product.

Yields per cow appear to be low, although there is difficulty in obtaining

statistics because ulnknown quantities of milk are consumed by the farmer and

his family. Where A.I. services are already provided, they are often inef-

ficiently used and calving intervals are unduly long. On the settlement schemes

the average interval is thought to be at least 18 months. Husbandry in many

cases is still of a poor s+andard, with insufficient attention to such matters

as nutrition and supplementary feeding, calf rearing and routine measures of

disease control, particularly regular dipping or spraving to combat tick-borne

diseases. There is great scope for increases in milk production through the

improvement of management standards from the present levels, but. close super-

vision by the veterinary and animal husbandry extension services will have to

be maintained.

323. The basic task of the Kenya Dairy Board is to mee+ econmicallV a

regular daily demand for fresh milk out of a supply which is fifty percent

greater in the "flush" season than it is at the end of the dry season. Its

price policy, therefore, gives a special incentive to the production of a regular

quantity of -whole milk and it purchases tunder a system of quotas which have to

be supplied regularly, as well as contracts which allow more latitude to the

producer. At present, the basic price for contract milk is 2 shi lings per

gallon and for quota milk 2.50 shillings per gallon. For butterfat, which is

taken as produced, the basic price is equivalent to 1.25 shillings per gallon

of whole milk (with the producer retaining the skim milk). So long as Kenya

exports its surplus dairy production overseas in the for -f butter at low

prices, the value of marginal cream purchases is correspondingly low. Therefore,

if an expansion of cream purchases is in effect destined for the export butter

market, such purchases should be paid for at the economic price, otherwise they

will have to be subsidized out of the proceeds of whole milk and milk products

sold at higher prices on the East African markets.

324. Most of the Kenya Dairy Board's planned capital expenditure of

1400,000 up to 1970, is to develop numerous rural dairies and two large milk

plants, that will extend the collection services and attract new commercial

supplies of whole milk and cream. There is also the possibility of collecting

centers associated with "dairy ranching" and the attractions and problems of

this type of organization are illustrated by the Mariakani Milk Scheme near

Mcmbasa. A milk collection service operating from the bulking center and

processing plant at Mariakani has successfully stimulated milk production over

a wide radius and now purchases 6,500 gallons per day, partly for supply to

the Mlombasa market and partly for manufacture. The scheme provides an average

cash income of T'4O per year for each of 3,000 producers and is a conspicuous

commercial success. Unfortunately, however, grazing and water rights in the

area are still communally owned and since the producers have tried to build up

commercial dairy herds without reducing their traditional herds, the result has

been serious overstocking and soil erosion. To restore the impoverished

pastures and rationalize their use in future is now proving a major problem

for the field services.

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Pig Meat

325. The pig industry has been in the doldrums since 1961 when productionfell sharply. This was partly a reaction to overproduction between 1958 and1961 and a slump in prices, and partly a result of the unsettled conditions inthe European farming areas after 1960. The local market for pig products wasalso contracting as the European population of Kenya fell and as Britishmilitary forces were withdrawn. Costs of production rose sharply in 1964 andagain in 1966 when maize prices were increased and, during the shortage of1965/66, maize for stockfeed was largely unobtainable. The whole industry isclosely geared to the operations of the Uplands Bacon Factory Limited whichpurchases roughly 95 percent of pigs marketed. In 1965/66, the factory handled51,048 pigs compared with 47,931 in the previous year.

326. Since more than three-quarters of the total cost of pig productionis food cost, a reliable supply of cheap cereals is essential for successfusldevelopment of the industry. With the maize price for 1967 reduced fromSh33/50 to Sh28/- per bag - representing no more than Sh25/- for home grownmaize on the farm - and no prospect of price increases in the next few years,this basic condition is met. Considering also the availability of home-grownbarley, skimmed milk in most areas, the availability of meat and bone meal assources of high-protein- the favorable climate and the com-petent veterinarvservices, the country now undoubtedly has opportunities for low-cost pignroduction.

327 These onnortnmiti e cann^t be ex'hp Ploited without more intpnqivi e eifort

by the Ministry of Agriculture to promote pig keeping by Africans, both largefarmers and smaj1hol ersr Tn 1Q965 African smallhol1der' nigs still arcoillter3for only 12 percent of total production. Extension service officers withspecialized kn^wledge of nig keeping arp bhdly needed Pigs have not been

widely kept in African areas in the past and it will be necessary to encourage-nd -i-nstruct potent+ia pn r oducr and to organize csunppli es h ofn hreeding stok,

feed concentrates and other requirements before the industry can flourish.

328. It is especially important that the pedigree breeding herds formerlymaintained on large European farms should be prTerved on a national basis andthat breeding and nutrition trials and other research work should not lapse.The national farms infter the Aa-rjeicltiira'il nDe.e_l opntn1. Crp orat-ion ecan plan an

important part in this.

329. While the infrastructure and efficiency of the industry is beingimpro ved n increases iIn p ,ro- du c t iro1n must b e ce- coorat with marke+

developments. At present, the domestic market depends largely on the expatriateAs S1 +~~~~_; _ n__ - 4A;_ _A_+ -S 4 FA1 Sr- _ + A S ;_ V - - MIT{A T T-1 -, A

A-L aCl V L. .A VU . WCOA Lo V1 W.LLj.U aat± .1 1 ,,J .a ,,p L ',

Bacon Factory Limited is campaigning to promote sales through local butchers,bULt UemladIu ls L gULr igUWL rapidl aMt presentard arIi auillU. CPc-lio of irly

3 percent is envisaged up to 1970. From a nutritional and economic point of-view, a concerted effort should be made to develop a much larger domestic

market.

330. Exports of fresh meat to Europe are precluded by veterinary anddisease restrictions, although sales in other markets have been increaslng an.din 1966/67 exports of fresh, cured and tinned pig meats represented 36 percent

- 80 -

of total production. Because its immediate sales opportunities are limited,and because pig production is difficult to regulate, the Uplands Bacon Factoryis necessarily cautious in encouraging an expansion of the country's pigpopulation. If it were able to process a larger part of its production andsell in canned form, output could be increased more confidently. For thispurpose, association with an overseas canning company with internationalmarkets has obvious attractions and might make possible a considerable expan-sion of production.

Wool and Mutton

331. Wool sheepn farming is important only in the higher narts of the largefarming areas and, as in the case of dairy cattle, numbers declined sharply inthe enrlv 1Q6o's. Tn 1961, the rcensus qhr)ewPi 48 nnon head andl by 1Q65 the fipirre

had fallen to 384,000 of which 53,000 were on settlement schemes. In recentyears, stock thefts have been one of the cheen fqrTnprqf mnin nr'hipmem sncr fbhere

is also considerable trouble in some areas from wildlife predators. However,at the -resent time +h,ere appars to bh increas,ning intprest. in sheep-r- farmingr

and, in certain areas the economics of production are distinctly favorable.

332. The rearing of wool sheep requires special skill, and the success ofmo+S of the nresent Slheepn masters dPneipn uynon longa exnprie-nop ce rl andoo mannag_

ment. In general, sheep in Kenya thrive best in those regions above 7,000 feetwhich are practically free from ticks and where annual rainfall is above 40inches. There may be additional opportunities in l4asai Narok where it isproposed to try shieepfamnincnncinwtwhagrwgude+ecorlof the Agricultural Development Corporation. The production of wool sheep doesnot le nA 4itsel3f Ito sm.al -s c a'e operati4ons an' so 4t IS ur isexecedtoli

almost entirely with the large farmers.

333. The Development Plan proposes the establishment of a Sheep Develop-menri-iu-t h-i ty and a oSheep Instit-utSe for pui-soIes of research, vetuerina-.ry wo±rke

and training in sheep husbandry. The development of the industry has hithertodepended heavily on the private enterprise of quite a smlall num-ber of individu-als and is now in need of the supporting organization which is being planned.

334. The official target of 600,000 head of sheep by 1970 appears to beattainable and justified by the market prospects. The long-terimi trend of woolprices will probably be downwards, but Kenya has a particular competitiveadvantage in sheep production since the fat carcasses are particularly wellregarded on the local market and fetch Sh8O/- to Sh90/- each.

Poultry and Egg Production

335. Although the problems of competitive marketing and the risks ofoverproduction may deter any significant increase in commercial poultrykeeping, we believe that the small scale of production of eggs and tablepoultry for household and local market consumption should now be more activelyencouraged. The recent fall in maize prices makes it more economical for asmallholder to keep a few birds, provided he can obtain stock at reasonableprices; and on nutritional as well as economic grounds, home economics workersshould try to promote the consumption of more eggs and poultry in the ruralareas.

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VI. FORESTRY

336. The develnrment rrogrnm fnr fnrestryv rnhraes rpeff'orestation

projects, forest road development and forest product industries for which E.considerable investm.ent is required.

337 . Thn min n -eaf-foretat+on+ r -oosl- are based on a co ntin+uion of'the earlier successful planting program with exotic softwood plantations, tutat a higher WJ-l-- rate of 1, 000J aCres. Th.e 'ltiimate target is 3,50,00C0 ac.res,

two-thirds of which will be spread through 5 forest divisions scattered throughthe western part ofL th11e iRlf -t Val-1 ley Pro-vice It ls relate to -- _ estlm -- -I, 4 --ate

VIJ..~ ~ ,t.±U1 19c.L i 0 Li~ 1Lj.u V cL-LL , J. I 0 V -iL;1=U .* LI U L ±D Lt= I L± U ) U. LiL Li1. U ~; U ±LrJd,Liu ._

future needs of Kenya and deficiencies of production in Uganda and Tanzania.The hilgher planting rate should comeplete the progrM by 1980, and the fullcycle of 35 years to clear felling, permitting four thinnings, is estimatedtoL give 105) nl±lion cubuic fee u per ain-uLii of1 saw logs auld -veneer logs . Ihe

exportable surplus in the year 2000, after meeting the needs of Kenya, Ugandaanud TLZiUl6ia, could be up to 10 illion cubic feet. Exports of sawn soft-wcodplantation timber in 1965 in equivalent roundwood logs was 710,000 cubic feet,or about 20 percernt of the plantation produce.

338. The cost oI piantation development is projected to De ^611,000 ayear (for the next 20 years), with a rate of return of 9.1 percent, includingroyalties calculated at 70 cents per cubic foot and indirect benefits (waterconservation, increased employment and agricultural produce, grown by forestworkers for the market in areas under afforestation for two years prior to andafter tree planting).

339. The chief constraint on the realization of this target is likely tobe staff and supervision. Out of an authorized professional forestry staff-of 33 only 21, or 64 percent, were in post toward the end of 1966. Although23 prospective Assistant Conservators of Forests were in training, the increasefrom 21 to 39 in the graduate staff in post (including a road engineer) expectedby 1970 will be difficult to attain, particularly since staff must also be pro-vided for other projects (Turbo plantations, forest inventory, forest industrialcenter, etc.). A more realistic target rate of planting would be 10,000 acresinstead of 12,000 acres per annum, which would prolong the program until 1985,although this could be avoided if a higher rate of planting were adopted in thelater years with some adjustment of the clear felling age.

340. The main reafforestation project excludes the 50,000 acres of pulp-wood plantations required at Turbo for a proposed pulp and paper industry atBroderick Falls.l/ The Turbo Pulpwood Afforestation Scheme would be sited onland with good growth potential previously owned by Europeans and situatedadjacent to the proposed paper mill site, so that wood freight costs would below. Afforestation techniques would be similar to those employed in the mainafforestation scheme, and plantings at the rate of 6,000 acres per annumafter the first three years, would be on a ten-year cycle to clear felling.

1/ Until the Turbo plantings mature, pulpwood would be taken from softwoodplantations already established.

= 8O -

The total cost of the project has been estimated at n1.6 million, but onlyJUL. flt~~~L~flw ~ A -4 - - 1 £ - ~ ± DI - - ± -LUAPI 029 million would bke nceeded durlng -he Plu e:id

3~41.* Apart from the finance, which has not yet been fo.d , t -

constraints are likely to be scarcity of staff with training, experience andskill~~~~~~~~~~~~~~~~~~~~14 to 4ue-Fs the- Anesv plnainvelop-lent porl oa

political difficulties caused by the use of ex-farm land and possibly resettle-ment problems. The project actually e a--4athe low planting -rat atthe start, followed by a higher rate in later years; with this phasing theplanting target mlay be attainable.

342n BOthi th ese aff rtaton projts are _ __tinu-tion o_ - long_)4, .iu DUI ltbittlrb1Uv0L )UU:J t: u: :uuliulllUu:l J. U -ungLl

established forestry policy. Kenya's gazetted forest reserves of 6,670 squaremiles, though only 3 percent of the total land area, are actually 15 percentof the more restricted area with an annual rainfall of over 25 inches wheremost of the forest tree types grow. Exploitable indigenous timbers, comingvery largely from Government-owned and managed forest reserves, have in thepast provided much of the country s neeas of sawn timber, but, after longcontinued exploitation, supplies of indigenous timbers are running out andlocal timber industries are turning to softwood plantation timbers.

Table 10: VOLUivE OF TIMBER SOLD FROM FOREST RESERIVE, 1958-65

(cubic feet true measure)

Year Total Cut Plantation Cut

1958 7,309,550 1,526,8001959 6,917,350 1,610,7501960 7,590,450 1,690,8001961 4,065,500 1,068,2001962 4,893,950 1,788,9501963 4,738,150 2,090,9501964 6,030,500 2,897,6001965 6,607,200 3,525,250

343. Two types of exotic softwood are grown under the reafforestationprogram: Cupressus and Pinus. These grow well under the climatic and soilconditions found in parts of the Highlands, have proved suitable replacementsfor the indigenous timber resources, and actually make possible an earlierreturn on investment because they mature more quickly. The area planted bythe end of 1965 was 177,000 acres, at an overall average annual rate of 7,000acres.

344. In the Mission's view, the two afforestoration projects might meritexternal financing, if justified by more detailed appraisal of the costs andbenefits. The Plan also calls for the expenditure of nearly 10.5 million onthe maintenance, projection and development of small forest areas which are ofDarticular importance for the conservation of water supplies and soil resources.Two other small projects call for a study of the Mau forest resources and con-tinuation of the general inventory of indigenous -forest species. Provision is

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also made for the expansion of training facilities for rangers and forestersat Landiani.

345. The industrial asnects of the forestry program are discussed inAnnexes II-B and II-D. Forest roads construction, for which an expenditureof i8g3,ooo is proqietfd, will clearly play an impnrtant part in the forestrydevelopment program and therefore should be given high priority.

346. In view of Kenya's planned future exports of timber to Uganda andTanzania, there is a need for oan ovrerall review of the forestry programs ofthe three countries, particularly with a view to the possibility of coordi-n_-+-n +the develop menrr 4A t I- of m-eAr reAourc +r A m .- rkA+

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VII. FISHERIES

347. The Development Plan expects the total catch of fish to be raisedfrom around 20,000 tons to 60,000 tons a year. Of the latter amount, 40,000tons would come from inland waters and the bal anee from coastal waters. Tn1964 and 1965 net consumption in Kenya, in fresh fish equivalent, was between20,000 tons and 25,000 tons or around 9 nniinp d to 5•o pouJnds per nerson ThePlan hopes that per capita consumption will rise to 10 pounds by 1970, eventhough Kenvans are not traditironlly large fis.h connuimers -

Rh8_ Kenya hn- qn-nrvrer;iAhI fishery rFsouYrrrp 1 / off its shnres^ andi inits lakes, (see Table 11) which can be more intensively exploited. Theprincipal areas of high immediate potential are the two inland lakes, Rudolfand Victoria, and the coastal inshore waters. Other smaller inland sourcesare in the lesser lakes, r-v-ers and fishponds. In the longer rAn the largestmay be in deep sea fisheries, but their resources and the possibility ofdA5c VS..o g th i LX5Jv v .J.5o. 5 by Ke.nya -s.s r_EquirA LSJ A

Table 11: ACTTAT AIJD POTENTIAL SOrURCES OF FRESH FISH, 1964 ATnD 970(in tons)

1964 1970

Lake Rudolf 850 15,000LCL,d 11WL~ , r7UU n UUUSo-uth Nyanlza 4,700 9F,000Central Nyanza 7,500 11,000Lake Baringo, Lake Naivasha,Tana River, fish ponds 2,000 4,000

Coastal waters 5,000 2i,000

TOTAL 20,000 60,000

349. Lake Rudolf, whose waters have an abnormally high algae populationon which fish thrive, has potential annual catch of between 50,000 tons and160,000 tons. Actual production is modest; in 1965 it was about 1,000 tonsrising to 2,000 tons (estimate) in 1966, with much of the output exported assun-dried salt fish to the Congo, where a large market exists. By the end ofthe Plan period, the catch is expected to reach 15,000 tons, mostly for salein the Congo and the gross sales value may amount to E1.8 million. The Turkanainhabitants around Lake Rudolf, who eke out a precarious livelihood undersemi-desert conditions, are likely to benefit considerably from the development

1/ Various reports: FAO EPTA No. 990, 1958, Sea Fisheries of Kenya; FAOEPTS No. 2102, 1964 Tuna Longline Fishing and Inshore Fishing in Kenya;FAO, 1964, Report on Kenya Fisheries; FAO 1965, TA 2191, Survey ofLongline Fishing Resources in E. African Waters; FAO 1966, TA 2144,Fisheries Development Possibilities in Kenya.

- 85 -

of the Lake Rudolf fisheries, although the internal financial return on theinv.estment (including the road discussed helow) mav not. be igh.-

350- Although the Take Rudolf project envisages some xendintitr on s-mpnle

storage facilities and office accommodation at Ferguson's Gulf, its principalin=vrestmen is a fisheries road costing t300,00 , which woulnd replace the dilrttrack from Ferguson's Gulf to the railhead at Kitale. Without such a roadappreci -able increases in OltpUt canot be marketed. At a futu-e date, coldstorage facilities are to be provided in order to assure access to higher-priceM,, ke4ts. Tn the long run it- -ill ^1-- Iencsayt-ar u ihbooia

studies on a wider scale in order to determine the optimum rate of exploitation.

351. The Plan envisages improvement of the existing techniques of fishingon Lake Victoria and other inland lakes, e.g. through the supply of betterboats, nets, the use of outboard motors, etc. and better storage facilities onthe shore of Lake Victoria. A concentration of canoe landing points is deSire-d,

because their present wide distribution is an adverse factor when feeder roadsrequirements are being considered. The expansion of output from the current12,000 tons to 20,000 tons by 1970, requiring capital expenditure of !f49,5(0,should be an attainable target, but will require considerable effort by theextension services.

352. The planned development of coastal fisheries to raise the currenltoutput of 5,000 tons a year to 20,000 tons is, in principle, quite possible in

view of the large potential. However, in the past the rate of expansion hasbeen slow. Trawling is restricted, because the area between Mombasa andMalindi has practically no continental shelf and the hard, rough, coral bottomwould in any case cause considerable trawl damage. The best fishing groundis,some 30 miles up the coast north of Malindi, are the "North Kenya Banks." Toreach these Banks power boats are required and a safe harbor for these wouLdhave to be provided at Malindi, the nearest and most convenient port fromwhich they could operate. There would also be a considerable expenditure onnew types of gear and equipment. Finally, the market for the extra 15,000 tons,considerably in excess of' the current imports of fish, would have to be surveyedand organized.

353. In view of these problems, it seems unlikely that the planned expan-sion of coastal fisheries will be fully attained. A cautious approach to thedevelopment of coastal fisheries seems necessary until further surveys andstudies have been made, including a more accurate assessment of the availabilityof coastal fish and the feasibility of the whole coastal fisheries plan.

354. A fisheries training school is to be started to provide practicaltraining in three-month courses for deep-sea and inshore coastal fishermen, Theemphasis appears to be on sea fishing, and further provision for training Lakefishermen may be desirable.

355. The fisheries advisory service has been weak. A considerable increaseof staff at all levels has been envisaged, including about 40 more senior staffand about 350 additional junior staff. While there is little difficulty infinding Junior staff, senior personnel is short and must still be largely

supplied by expatriates such as the four Norwegian experts who are being made

- 86 -

available under a technical assistance program early in 1967. Until more

senior staff is approved and made available, the fisheries program is likely to

make much slower progress than the Plan suggests.

- 87 -

VIII. GENERAL PRODUCTION AND EXPORT PROSPECTS

356. Our forecasts of the oLutput of individual crops that can be achievedby 1970 are shown in Table 12. For tea, wheat, rice, pyrethrum, cashew nutsand pineapples we consider that the targets set ouit in the Developnment Plan canbe reached. For cotton and sugar, the planned rate of expansion appears over-ambitious: at present it seems likely that there will he a shnrtfall of at

least 30 percent in the case of cotton and perhaps 25 percent in the case ofsugar. For sisal, market prospects hav.e deteriorated further since the Planwas prepared and it is evident that production by 1970 will fall well belowthe Plan forecast. For livestock products, the Developm1ent Plan ta s areoverambitious, and although the plans which have now been prepared couldcrreatlyr increase pnrodutiroin o-f menatn andr milk pro+u ctTi +lY witinth nex decade,r i

the actual achievements up to 1970 are likely to be relatively modest.

Table 12: DEVELOPMENT PLAN AND MISSION FORECASTS OF THEorimurvr 0P PPTT\TrTPAT. A PTO1TTT.rTPLnr. rFJPp 10o9/7n

Development MissionCommod i ty TTit Plan Esimate Estimat _

T.11-e -4- -L ('nrnc i-~ I (rC ~I 0 nrn nnncO t,OOWhiiCIL, bag s -L* (2. lb.2U).J 2,50,0 2,0-5,0-'-00

Rice (paddy) bags (160 lb.) 490,000 490,0004- -. I 01 n 1 C\0ryietu±r-ui tons 12,50)U0 12,5

Sugar cane tons 1,500,000 1,210,000Clo.tt.on lir,t b4 - ales 95 ,00 6sci

Cashew nuts tons 11,900 12,000Pineapples tons 442,000 147,0Coffee tons 70,000 55,000Sisal tons 65,000 50,000Tea (made) lbs. 68,290,000 68,290,000

357. Coffee was expected to contribute more to the growth of agriculturein the Plan period than any other crop but, as discussed above, we believethat market conditions will prevent the sale of more than approximately 55,000tons in 1970 instead of 70,000 tons as projected in the Development Plan. Thisalone represents a loss of over l6 million in export earnings or a reductionof about 0.4 percent in the expected annual rate of growth of agriculturaland livestock output.

358. Our forecast is that producers" gross cash revenue from agriculturaland livestock products at current prices will increase by 12.0 percent between1964 and 1970. On this basis, the annual rate of growth will be 1.9 percentcompared with a target figure of 4.7 percent set in the Development Plan. Wemust stress that this prospective shortfall will be principally due, not toinability to achieve the physical production targets, but rather to unfavorabledevelopments in world markets.

359. We estimate that the exports of agricultural and livestock products

- 88 -

to other East African countries and to the rest of the world at current priceswi11 increase from -146.1 million in 1964 to 152.2 million in 1970. This

represents an annual growth rate of 2.1 percent, compared with the DevelopmentPlan target of not nipte 4 perrent- Here again the shortfall is mainly due to

the restriction on coffee sales.

360. It is expected that the index of export prices will fall by approxi-

mately 7,- percent from 1964 to 190Q This is nrimarilv due to the collapse

of sisal prices, but coffee and cotton prices are also expected to fall. At

constant 1964 pr ces, the grow+h rate for export+s wo 'b 3.4 percent perannum.

- 89 -

APPEND)IX 1

St.atuton-ry Boards, and( rtothr Officrial 0O~,rianizationsq

Responsible for Agricultuiral Production, Marketingand Development in Kenya

Title Date Established a/ Main Functions b/

A. Commodity Boards

1) Coffee Board of (1933) 1960 To license and regulate productionKeny-a and processing.TofrneCfe

Research Foundation. Empowered tollevry cesses on production.

2) Coffee Marketing (1946) 1960 To arrange marketing and sellingBul o a r d ard Aremission- of ne-t salles pro-

ceeds to producers.

3)lea Board of- (151 1960u To _lcenset andI reg8u_late: prodUuct'ion

Kenya and processing. To promotleresearch. AI-Jpo-wered. to levy cesseson production.

4) Pyrethrum Board (i938) igG04 To ilcense production and promoteof Kenya the industry by research, etc.

Empowered to levy cesses cn pro-duction.

5) Pyrethrum Marketing (193u) 1964 To market pyrethrum and organizeBoard processing and overseas sales.

Remit net proceeds to producers.Provides limrited research andfield extension service.

6) Maize and Produce (1959) (1964) To purchase and market maize atBoard 1966 prices fixed by Government. To

purchase and market scheduledminor crops and to fix producerprices. To collaborate withGovernment in maize import., exportand storage arrangements.

a/ Dates in parenthesis indicate establishment of predecessor bodies.b/ Most of the Boards also have general advisory duties.

Title Date Established Miain Functions

I , J.L ,vca> aU W .i Jl2a± tL ±7 fit V-t ~.. ifl aJ.,'- t.kJ11 U V U. *IIIV Cilitiui DU

storage and marketing of wheat andsu,,m,ervlse deliverie ofP ir1port4eVi t: _L L V t:1~Z 7 L _ _ A il.iii})LA U Cu

or locally grown wheat to millers.

8) Kenya Sisal 19)46 To promote advancement and welfareBoard of sisal industry. To register

pro(ducers an'1 -license f'actoruies :::

and exporting agents. To financeresearch. Empowered to im-posecess on production to coverexpenses.

9) Cotton Lint and Seed 1954 To purchase from ginners and toMarketing Board market and sell cotton lint and

seed. To recommend producer pricesto Minister and mianage the CottonPrice Assistance Fund. To financeresearch, trials, etc. with approv--al of Minister.

10) Canning Crops i950 To controi and promote productionBoard of scheduled crops for canning

industry; to fix prices withapproval of Minister.

(i'.B. Draft legislation now waiting to go before Parliament would set up in placeof Canning Crops Board a lHorticultural Development Council with powers to regu-late and promote production and marketing of all horticultural produce.)

11) Kenya Dairy 1958 To organize, regulate and developBoard efficient production, marketing, dis-

tribution and supply of dairy produce,to improve quality, secure reasonableprices, etc. Sets maximum urban con-sumer prices with approval of Minister.

Title Date Established Main Functions

11) (a) Kenya Cooperative 1958 Originally ordinary producers'Creameries cooperative; now licensed as sole

executive agent of Kenya DairyBoard to fix producer pri^es andindertake collection, pro-essingand sale of milk and dairy products.

(N.B. The Dairy Industries Bill 1966, to establish a Kenya Creameries CDmmissionwhich would discharge present functi ons of the Kenya Dairy Board and the T(KnernCooperative Creameries has been referred by Parliament to a Select Committee.)

J12) Keny 1aMC± pu c ase 0 A U__J.It , IJj± A

Commission toirs, storage and processinginst a.L.al lat ions; Uto se2l-l meat andmeat products locally and overseas.TI/flae regulatiJons 'or grading andilcLrt. I -L L Id LJ- 1 J.A).u Lt1 19

fix prices in consultation with

(T.B.~~1) Th ey ;eat Cor,LUiSSi0I- PLLUiCLZ1tse Atc -, a rK e t ed byprvae traders and--eI*I A YAenya If 1'tr O!I1~~±L LL ~ ~ U~tiId.'A U*y 191 VU.U v ) CLtI:dAt

by the Livestock Marketing Division of the Ministry of Agriculture.)

13) The Fg I- Elnustry 94n) 1966 _T`_io license butchers an' con

Board factories.

ID. SDpeciUal Crop Developri-ient A-LUt1horlties (iIstabl isned Uy thiAe PIVIni stuerof Agriculture under authority of the Agriculture Act 1955)

1) Kenya Tea Develop- (1961) 1964 To promote and regulate the devel-mient Aiuthioritly opmientu of tUea i-n sm,allhiolder areas.

(formerly Special Crops Responsible for implementing theDevelopment A-uthority) major Tea Development Plans.

2) Pineapple Develop- 1965 To promote and regulate develop-ment Authority ment of pineapple production,

especially in connection withKenya Canners Ltd. factory projectat Thika.

3) Coffee Development 1966 To improve efficiency of small-Authority holder coffee production, especi-

ally concerned with estalblishmentof efficient pulping facilities.

- 92 -

Title Date Established Main Functions

C. Other Development Boards and Corporations

1) Central Agricultural (1955) (1963) To advise Minister on agriculturalBoard (with Prov- policy, crops, Drice fixing, etc.incial Agricultural To carry out executive functionsBoards and District as may bh conferred by 1aw or byAgricultural Com- the iinister. To nominate membersmittees) to rcrtain othe'r Boards=

2) Agricultural Finance (1931) 1964 To assist development and promotionCorpora+.inn r/ rf' nrculfure, making loans to

farmers, cooperatives, companies,etc.

3) Agricultural Devel- 1965 To promote and execute schemes forOpmern+ Gornnpr+ i nn n -gr-i --r developr.ent an d re-n=

struction in Kenya.

4 ) National Irrigation 1966 To investigate, develop and manageBoard all major irrigation schemes.

c/ Shortly to be amalgamated with the Land & Agricultural Bank of Kenyaunder the title Agriculturai Credit & Mortgage Corporation.

93 -

APPENDIX 2

The Marketing of Maize and the Disposal of Surpluses

Maize is the staple food of most of the rural nopulation of Ksenya,so that t;he bulk of production is consumed locally and only a minor fractionenters commercial channels. In the ten years up to 1964/65, the average annualtotal officially marketed was 1,614,000 bags and it is believed that thisrepresented little more than a tenth of total production.

Officially all maize offered for sale, except that sold direct fromproducer to consum-er within the same or adjacent districts, has to be offeredto the Maize and Produce Board. For small-scale producers, the Board appointsofficial agents to buy and arrange delivery in bags to official Board storesat railheads. Large-scale Producers may make their own deliveries to the Boardat railhead stores. There are forty of these main storage depots, some ownedand operated directly by the Board and others through agents, and it, is fromthese points that the Board makes sales of maize to millers or traders,

The producer price for maize (Grade I and Grade II) is fixed by theMinistry of Agriculture on the basis of deliveries naked ex-scale at railhead.The prices actually payable to producers at local markets are then abalted byofficial rates of commi,ssion and transport allowances payable to the buyingagents. The prices of the Board's sales to millers and merchants, and thewholesale and retail prices of maize meal and maize flour are also fixed withprovision for storage, transport, milling and other costs at standard :rates.

Maize production policy has hitherto aimed at self-sufficiency, witha margin of safety. Miaize is a bulky crop and the transport and otner marketingcosts between up-country producing areas and overseas markets are heavr so thatexports cannot be made without subsidy In most years Kenya has been a, netexnorter. but short crons entailed substantial imnorts at relatively hiah pricesin the years 1961/62 and 1965/66. For both exports and imports, the extra costhas normally been recovered in the following year by means of a cess on allmaize marketed by the Board, so that the effect is to widen the margin betweenproducer and consumer prices. In 19669 for example, part of the cost of therecent large importations was met by a cess of 3.50 per bag on home-grownmarketed production.

The comnrehensive official control of maize marketing has been heavilvcriticized, especially after the short maize crop of 1965 when the system failedto nrevent a crave shortaae of domestic supplies, an extensive "black market" athigh prices and a heavy bill for the emergency import of supplies fror,m the U.S.A.The failures of that year were due to the severe drought; counled with a neglectto maintain reasonable reserve stocks of maize and a remarkable dilatoriness inobtaining imnorts once the shortage was foreseen. But since the controls ofthe Government and the Maize Board had often been defended on the grounds thatthey-r safeguarded stear r rices n reguiilar splies, the merits of the svyter_as a whole came under fresh scrutiny.

The basic criticism has been that controlled marketing through an

- 94 -

official organization entails heavy overheads and inflexible operations andconsequently an unnecessarily wide margin between producer and consumer prices.Since maize is the basic national foodstuff, this significantly affects theconsumer rrice index and real incomes. Insofar as this is true, it encouragesa 'iblack market" in maize by those who can link producers and consumers moreeconomically. It also tends to perpetuate the growing of maize for subsistencein marginal areas where some producers would switch to more suitable crops ifthey could buy their recuirements of maize more cheaply.

At the sarme time, the need for some degree of control is generallyrecognized. Since little more than one-tenth of the maize for consumption inKenva comes on to the market- auite moderate fluctuations in total annualproduction, drastically alter the tonnages offered for commercial marketing.To ensure supolies of food to the urban areas and other parts of the countrywhich do not grow sufficient maize for local needs, it is essential to havearrangements for stahulizina orices and regulatinor supplies.

It has been suggested that these ri,rnoses mipht he sdeaoiatelv met-if the Marketing Board operated in the market only as necessary to provide a'flnnor" and a "ofi iinor" nrie . Under normral conditions, the trade would he inthe hands of private enterprise and prices would be determined by supply anddemand. In times of heavy surpluses, however, the Board would enter the marketto buy at a guaranteed minimum price and stockpile its purchases. In times ofshlortness -the Bonrd would prevent nrienes from eXreeclino an sgreed maximulmlevel by supplementing supplies from i-ts stock. The intention is that thecosts onf the nord opneratinon-s wound lhe met frnm, the dif'ferenne betweer its

"floor" buying price and its "ceiling"' selling price.

The main argument for this scheme depends on the assumption thatfree m.arket operations would signlificantl-y reduce the costs of maize marketingand thus lower consumer prices. Like any national system of controls, thepresent arrangements involve a lar-e r3e i ie_tratirn cost which might be reducedunder private commercial marketing. On the other hand, the M'laize Board has thebenefit of certain economies of scale. Its storage facilities and qualitycontrol arrangements (which are now. being improved) are already more efficientth-n those n-f prate mrcrts are !rl,r tn Tmg nd avrage rcl 1osse s

of maize from all causes in the past f'ive years have been at the loW level ofo. 63 p-rcent. Schedu,le T g-4-- an anal -ysis 'f the various ite+ms of cost which

make up the margin between the net producer price at local market and the Board'sse' -1 4 -- __o4- eri1a - t- l -A EA-4+ T + 14&- A1;-r + 4f +I1- A Ac; n-. A -4TlA + i--; vn +h ;C1JL16 Pi_t ± WU C AJ-1 at wicoatV aC UIJU U. X -1 UJA'. & L U1 -JL U U I JSA 1'. VJU. u i I - X 1

difficult to demonstrate that maize marketing through private traders, with -the-14-- -_ - NK,, 1- 4a,n inrl 1 R--;- r

4-4-P;-Boart oper a-ctig on a stiandy basis, would bit si5 nificant U'.o-Ji±iL

Mhr 1-us -4obesrous Adoubt4s about,4 4the practica workin of4 suchtl : U U W U Ql u at±u uo . Lt. IO aLuu UUll _ t.a a a 0a' ai' '

an untried scheme. Unless the range between the Board's "floor" and "ceiling"prices is so widet a lacg -r of-t prc i-ns--tabilit±4y is acpe a tii4-ts4

well prove impossible for the Board to cover its costs out of its tradingprofits. The practical management of buffer stocks without financial subsidyis notoriously difficult and if the Bocrd ran out of funds or out of stocks,outside finance would be required imrimediately.

It is also questionable whether the pri-vate trading sector Ws-ald be

- 95 -

able to handle the marketed maize crop through its own resources and whethercompetition would be adequate to maintain fair prices to producers. The factthat commerce in Kenya is largely in the hands of non-Africans, raises aL partic-ular political problem in this respect.

In view of these considerations we do not think that the establishmentof a free market in maize within upper and lower price limits would be prudent.The failures of 1965/66 are attributable to poor management of the system by theGovernment and the Board, rather than to the system itself. In particular, itis regrettable that the authorities did not recognize the need to maintain asubstantial reserve of maize as a precaution against a short crop. This omis-sion is now being corrected and the Government is organizing reserve storagefor one million bags; at the same time the Maize Board is planning storagefacilities for an additional 500,000 bags. The total quantity to be marketedfrom the 1966 planted crop is now forecast as three million bags so thai; it willbe possible to establish promptly the full `strategic reserve7' of one and one-half million bags.

The producer price for 1967 planted maize is to be Sh28/- per 200lbs.delivered at railhead, compared with Sh33/50 (net of cess) in the previousyear. Given normal weather, it is expected that this will produce a marketedtonnage at least adequate for domestic needs. In subsequent vears, as thewider use of improved seed and better husbandry increases productivity andreduces unit costs of production. there is a nrospect of obtaining an ndequatesupply from farms at still lower prices.

At the present level of producer prices, any production surplus todomestic needs for f'oodstiuffs, -nimal feed or stocks wonlcli have to be exnortedat a substantial trading loss. The current export value of maize in buLk isnnaroxinmately S3/2!n per 200 1 hs f.o.b. Monnhp,_ ard ns shown in Schepdiul TT

this is equivalent to a railhead producer price of just under Shl7/50. The-iubsidv Pntai1 ed in Ta3vi nr a p rodurer price of qh2P(/- wonild thus he Shl0/C50

per bag.

It is likely -that world market values of maize will remain nearpresent levels for the nlext few years. so it apnears that a substantial furtherreduction in the producer price of maize in Kenya would be necessary to allowexports to be made without snhsidi - However_ there are, meanwhilf e 7onrrrtnni -

ties for reducing the present schedule of costs between railhead and f.o.b.pnin+ as girvren in Sechdriill TT F- enPriql1v if' r:ms maivz nprnroidedr on 1 cra- farmsq

can be handled throughout in bulk instead of in bags. If maize intended forexport can be consigned di rec-'t-ly from the pocing areas to ort in hulk

there is a prospect of savings in handling, storage, bag costs and MarketingBoard expenses. It appears that the railhead producer price equivalent to anf.o.b. selling price of Sh32/50 might then be in the region of Sh23/- perb a g r

It thus seems quitn e ptossibl e tihnat, if the present Ari to increace

productivity of the maize growing areas over the next few years is successful,Kenya mlay -be a-ble -to export*razovreswtlilernoubdyrdodevelop a new source of foreign exchange.

In the meantime, the recent reduction in the producer price of maize

- 96 -

should lead to its much greater use for livestock feeding. The 1967 railheadprice of Sh28/- is equal to an on-farm price of Sh2l/- to Sh24/- dependingon transport costs, and at these values there are new opportunities for pig and

poultry keepers and for dairy farmers providing supplementary feeding. Beyondthis there are possibilities of much greater quantities being used for supple-mentary feeding on large-scale beef cattle enterprises.

- 97 -

SCHEDULE I

Forecast Schedule of 1967 Marketing Costs forMaize Produced in Western Province a/

(per bag of 200 lbs)

Shillin-s

Producer Price at Market per 200 lbs f.a.q. bi Maize 22.90

Trader's commission for delivery to stores or railheads 1.55

Transport pool costs (based on 7 cents -per mile per bag) 1.45

Marketing contribution (for inspectors, etc.) .80

Grade differential (to give weighted averacŽe Grade I.- A r-A- TT -- 4 - ) \)Xii W CJ. 1 X , L *-o *

County Councill cess 1.0

_510

Gluaranteedu price a-t railh11ead' per 200lbs (wthu bag) 28.0ITJc. ~L1AU i I J ttJ..LeU jJ uu L-U~ kWI LuiOUU Ud4V_ I CUt * Jt

Executive an.u s'uoraure agen'ts comrUission (kaveraged) 1.36

Interes,, on -workLing capital 0. 40

Interest and redemption oDf loans to purchase landand stores 0.20

Other Costs Connected with Physical Handling.. Storage. Distribution

Government cess for cereals finance 0.10

Grading 0.18

Shrinkage and physical losses of maize 0.40

Bag replacements and twiine 0.02

Fumigation and insecticide 0.20

Entomological and experimental costs 0.05

a/ The producer price is that announced for 1967 planted maize and ofthe schedules of marketing costs are based on earlier Marketing Boardexperience. Some individual items of cost will alter for 1967 butthe total is unlikely to differ significantly.

b/ F.a.q. means fair average quality.

- 98 -

SCHEDTUTR. T (cont'd) c

Shillings

Rents, rates, water, light and fuel 0.11

Depreciation, repairs and maintenance of fixedassets and equipment 0.43

General insurance 0.05

Costs of General Administration

Salaries of staff, etc. o.60

Motor vehicles running costs and traveling 0.03

Investigation services 0.06

Audit, printing and office expenses, BoardMeetings etc. 0.16

4.35

LESS: Sundry Revenue 0.35 4.0o

32.00

Cost of new bag 2.65

Basic Selling Price of Maize per 200 lbs net in Bag ex-storeProducing Area or f.o.b. Sender's Station 34.65

SCHEDULE II

Exports of Maize

Schedule to Show Present Marketing Costs betweenProducing AreaStaton na,d ,-. Londo

Per Bag of'200 lbs

Price of Maize c.i.f. London, 460 shillings per ton 41.07

LESS Ocean freight and other changes betweenf..o.b. . arL ,d c . i .J.f. .1p.o J. n.7

F. .o.bL,,. Pri ce MIomIba-sa ln b) 'k- 3.34-

fT)T~ fl…--Z-, ---- I-- /'

P.LIu Residual vtlve LOI 01 eIRP+y bag -L. 00

33.94

LESS Costs between f.o.r. producing area stationand f.o.b. Mombasa

Port charges 3.25

Fumigation at port .20

Rail freight 5.50

Maize and Produce Boardcosts 4.50

Cost of new bag 3.0016.45

Equivalent price payable to producer for200 lbs maize without bag f.o.r. producingarea station 17.49

Source: Ministrv of Agriculture, Nairobi.

- 100 -

APPEN1)IX 3

Existing Agricultural and Livestock Research Centers and Experiment Stations

Name, Location Type of Investigation

National Agricultural Basic research on soils, entomology,Laboratories, Nairobi plant Dathc,loavg coordination of

experimental results

Maize Research Station. Plant breeding and agrononvKitale investigations.Sufh-stations at: nPveopm1en-t of short-term and

Katumani medium-term varieties; seed production

Embu

wheat Research Station, Breeding and selections of rust-

Njoro resistant high yielding wheats;agronomi c~1 ri1stiga onr patholocryof wheat rusts

Thrrc.hr,n,m Reearch ,nl Statio+-n., Variet n+j +udiess productio+n of hi cr1

Molo yielding, high pyrethrin contentclones

Horticultural Research Agronomical research on fruits andStatnio, Thik .a vege_tables, espci&a.l.ly pinaysSub-station at: Molo horticultural produce inspection

_Nati~onal Agr4cultra Resarc P --- 1asture development ar, A nutriti- onalI 1±t1 . L -L ±U J U±UU dLL Ilteoteaa Un I d.u LL U, V ;_UJJ

11JzIIUI U 2L LIU, LU ULJId

Station, Kitale value for livestock feeding; animalo-uu bsatlonL iLoo Lusbandry researcdl- ga d eeuSub-station: Katumani (F.I.C.) production

Coffee Research Station, In-vestigations for controlllng CofLfeeRuiru (Thika) Berry Disease; entomology; plantSub-stations: Meru nutrition

KisiiKitaleKoru

- 101 --

Name, Location Type of Investigation

Tea Research Institute, Selection and breeding investigations;Kericho agronomy, plant nutrition9 entomaology

and plant pathology9 processing, teaquality

Tea Experiment Station, Studies on vegetative propagationKagochi (Nyeri) techniques

Cotton Research Station, Variety selections; cultivation trials,Kibos (C. Nyanza) pest controlSub-stations: Busiu

Ms ububa

Sisal (high-level) Research Yield improvement studies; methodsStation, Thika of lower-cost productionq uses for

sisal waste; mixed livestock andsisal studies

Veterinary Research Animal diseases;, development ofLaboratories at: low cost vaccines, livestock

Kabete improvementNaivasha

Central Artificial Tnsmiinationn Tmprovement. of rnnceptinn rntesService, at Kabete

EPat. Africn Vpteprinnarv

and Agricultural and ForestryReseareh Organizatinns (2), at

Mugugu

Wellrcom Tnttit-te Development and testing vaccinesfor Research in Foot-and-Mouth against foot-and--mouth virus si;rainsRi see-, Kahbte

Name, Location Type of Investigation

Minor Centers

Agricultural Field Investigation Variety testing, assessment of farmingCenters: (8) systems, agronorm-y and animal husbandry

Kitale, Trans Nzoia; investigations.Eldora, Uasin Gishu;KisiiKakemegaKatumani, Mvlachakos01 Toro Orok, NyandanuaEmbuivitwapa, Kilifi

Irrigation: Agronomic and economic studies!*iwea on irrigated cropsGalolePenkerra

Livestock Improvement and Improvement of milk yields andAnimal Industry Centers (9): calving rates

Baraton, NandiChebororwa, Uasin GishuMachakosMariakani, KwaleMarimba, Merullaseno, C. NyanzaNdomba, KrinyazaNzong, KajiadoSangalo, Bungoma

Beef cattle improvement at: Bush control; improvements inKatumani livestock performance, game stockMacKinnon Road relationships, range ecologyBuringo

Clinical and Faculty Farm, Part-time studies in fundamental andKabete applied research, for university

students

Pronosed New Centers (Plan Projects)

Msqiz P Fmbu Breeding program for medium rainfallareas

- 103 -

Name, Location Type of Investigation

Sugar Cane Research Station, Yield improvement; disease resistanceC. Nyanza

Main Ranger Research Station Bush control; pasture and livest;ockfor Beef Cattle improvement; game stock relationships;Sub-stations (2) range ecology

(sites not selected)

APPEDDI 4

Additional Tables

1. Production for Sale of Principal Agricultural Crops, 1956 and1960-65

2. Prices Paid to Producers for Principal Agricultural Products,1956/57-1966/67

3. Land Use Categories by Provinces

4. Imports of Fertilizers, Insecticides, Agricultural Machineryand Hand Tools, 1955-65

Mission Projections

5. Projection of Gross and Net Output of Principal AgriculturalProducts, 1964 and 1970 at Current and Constant Prices

6. Quantity and Price Assumptions Used in Projecting PrincipalAgricultural Exports

7. Projection of Principal Agricultural Exports 1964 and 1970at Current and Constant Prices

8. Projection of Public Sector Development Expend.ture inAgriculture. 1966/67-1969/70

Table 1: PRODUCTLON FOR SALE OF PRINCLPAL AGRICULTURAL CROPS,1956 Am 1960-65

(Thousand Tons)

1956 1960 1961 1962 1963 1964 1965

SisalSmall farms 0.8 3.0 6.1 2.0 7.0 q.0 (','C)Large farms 38.8 59.7 56.0 56.7 63.2 61.14 (58.i,

Total 396- A62.A 623 58.7 70n2 6A6A. (c'60'

Pyrethrnrna/ Small farms 0.3 1.8 2.8 2.7 1.8 2.2 3.,T.n-gerfans 2.8 6.7 7.5 7.3 3.9 2.1 2.,

Total 3.1] 8.5 10.2 10.0 5.7 4.3 6.'

TeaSm-all f ,-s - 0.1 0 0 .*3 o.L o.A6 , o

Large farms 9.5 13.5 12.2 15.9 17.4 19.3 18.'7

b/Wattle Barl-

Small farms 38.2 19.2 16.8 22.0 22.3 21.6 14.5Targe 'arm,s 23f3. 3.1 39 I 0 26. 23.2) 20.1v

Total 62.0 50.2 53.9 61.0 48.8 4h.8 34,9

1955/56 1959/60 1960/61 1961/62 1962/'63 1963/64 1964/65

WheatC/Small farms - 0.7 (.2 1.U 1.1 1.1 2.0Large farms 120.9 26.7 99.5 83.1 107.,8 121L3 118.L

Total 120.9 27.4 99.7 84.1 108.9 122.4 120.14

MaizeSmall farms 58.1 73.4 62.7 71.3 111.3 46.7 75.0Large farms 96.5 70.4 70.4 85.4 100.4 63.4 55)2.

Total 154.6 143.8 139.7 156.7 211.6 llo.1 130.8

BarleySmall farms - - - - - - -Large farms 12.6 24.0 13.3 9.9 19.2 14.7 13.3

Total 12.6 24.0 13.3 9.9 19.2 14.7 13.3

Clean Coffee-'Small farms 0.8 4.6 7.9 8.1 9.4 15.3 L5.4Large farms 23.1 18.8 25.2 19.3 26.1 28.2 23.4

Total 23.9 23.4 33.l 27.4 35.8 43.5 :38.8

a IX 4--4- -4es of -ied Plowers toteP+t,-=.'-keignad~/ IJ-±.LVV. Luo 'J± U,1 ± 'U ± L'V ± t IA w1cJ. v .~.U iL 11 .V1 L~J4.I6 Uoad~ Ub/ Purchases by Kenya Wattle Manufacturers' Association of green and stick bark.c/ Total Prod.uction, in,cluding seed retentions.d/ From 1962/63 and in subsequent years data for coffee refer to the Internal;ional

quot year aun notU WVhe Ldc±iA year as -UL prLVJ.oUs yeLr.

(Contiinued)

Table 1: PRODUCTION FOR SALE OF PRINCIPAL AGRICU'JTURAL CROPS,

1956 1960 1961 1962 1963 1964 L965

Rice PaddySmall 'arms 4. 9. '614.3 32.u 1284L.Large farms

CottonSmall farms 9.4 il.O 9.0 5-3 8. 4 :3.9Large farms - - - - - -

Total 9.4 11.0 9.0 5.3 8.5 9.4 :3.-9

Sources: 1965 Statistical Abstract.

Table 2: PRICES PAID TO PRODUCERS FOR P]RNCIPAL AGRICUITURAL PRODUCTS, 1956/'57-15966/67

Est.ProdtLct Unit 1956/57 1957/58 1958/59 19'59/6( 1960/61 1961/62 1962/63 1963/64 196la/65 196-5/66 1966/67

Sh per 200 lb .Wheat'V Grade I 52.66 51L68 52.33 48.62 46.62 46,93 46,93 47.92 47,.OO 47'.O 51,10

a/ Sh per 200 lb.Maize'- Grade III 37.98 34. 98 27.00 32.00 35,5C 35.50 240O0 27.00 32.50 34h.75 28o00

Coffee L per ton average 518 1435 393 389 315 340 280 335 318 298 ...

Sh per cwt. flowersPyrethrum 1.5 pyrethrula content 292 288 285 303 314 261 21:3 218 274 320 ...

SisalJ) T. per ton fiber 53.3 53.3 6708 81.3 74.0 78.2 118,L 105.8 67.1 61.3

Cents pBr lb, seedCotton cotton 55 57 46 47 54 56 56 5;0 56 50 48

1957 1958 1959 1960 1961 1962 196:3 19614 191S> 19c66 1967Sh per lb0 co Ld dressecL

(Cattle-/ weight 1st Grade 1.20 1.20 1.20 1.25 1.30 1.30 1.30 1.34 143 1.53 1,61GAQ 1.20 1.24 1.22 1.24 1,31 L1.40 1.4714th Grade 0.91. o88 o.86 088 0.93 1.00 1.05

Butterfat Sb per lb. 3,07 2.38 2.77 2.83 2.82 2.89 2092 2.99 3.26 3030 3.32

a/ Guaranteed producer prices net of cesses, delivered raiLhead store, without bag,

1D Average f.o.b. prices,

C/ Fixed Kenya Meat CormtLssioii prices. Nearly all cattLe bought f'rom African livestock owners fall in the fourth grade.

Sources: Kenya Statistical Abstracts; Cotton Lint & Seed Marketing Board.

Table 3: LAND USE CATEGORIES BY PROVINCESa/000 acres (except where other-

wise stated)

Agricultural Land Classes.'

Game Otheir Total TotalTotal. Reserves (railways Total land Open Area Square

Province I II III I+II+I:[I and Forest roads reserva- area Water (9)+ MilesNational1 townships tions (4)+(8) (10)P'arks etc.) -(7)

1) (2) _ (4) (5) (6) (7, (8) (9) (10) (11) (12)

Central 2,247 37 99 2,383 175 697 25 897 3,255 1 3,256 5,0137

Coast 924 1,967 14,700 1'7,590 3,459 179 252 3,889 21,228 139 21,366 33,385

Easter 1,243 5,408 27,590 34,240 2,703 537 1.10 3,350 37,480 1,322 38,802 60,628

Nairobi 42 ---- 93 134 28 6 35 '70 169 --- 169 264

Northeast --- ---- 31,358 31,358 --- --- 63 31,358 63 --- 31,3358 48,997

wanza 3,011 84 --- 3,095 --- --- 15 15 3,095 8599 3,994 6,4'14

Rift Val:ley 7,463 305 30,523 38,29:L 1,19'1 2,565 1L71 3,927 42,048 916 42,964 67,131

Western 1,831 ---- --- 1,83:L --- 201 5 20i6 2,032 34 2,066 3,054

Keny-a (total') 16,761 7,801 104,363 128,9214 7,555 4,185 676 12,416 140,664 3,310 143,974 224,960

% of' TotalLand Area 11.9 5.5 '74.2 91-7 5.4 3.0 0.5 8.8 10.0.0

iaTDeve enetl 'an- 1966--70, Appe ndix Table 1.b/ FXcluding all reservations except "other" (column 7), which have not been allocated by land classes. The three

land classes are defined as follows:I: Land of high potential for agriculture or forestry with not less than 35" annual rainfall (40" in Coast

Province).II: Land of medium potential for agriculture, suited to stock raising and limited cultivation (though sonie

areas are densely populatedi. Annual ra.imfall as follows:Coast Province (30"-40") Eastern Province (25'-35") Nyanza and Rift Valley Provinces (30"-35")

III: Land with less thaLn 25"-30"'l annual rainfall, suited exclusiveLy toc stock raisirg an,d/or wildlife withthe exception that sisal does well in areas near upper rainfall limit.

Table 4: IMPORTS OF FERTILIZERS, INSECTICIDES, AGRICULTURAL MACHINERY AND HAND TOOLS, 1955-65

1955 196o 1961 1962 1963 1964 1965

ELIOOO Tons l'C00O Tons I'OOO Tons E IO'O Tons LI!QQQ Tons Ioco Tons L'OOO Torns

1otalManuf ac tured a/Fertilizers 842 29,754 988 38,523 885 35,,053 781 33,11:2 906 37,118 1,330 54,179 1,794 69,435 -

]!nsecticides,Fungicides,Disinfectamts 535 2,612 569 1,899 546 2,056 733 2,702 808 3,139 971 3,641, 1,143 4,276

Agricultural Hand 367 - 177 - 120 230 - 219 - 171 - 94 -ToolsAgriculturalMachinery:

(tractors, crawlerand other wheeledtypes) 1,645 - 1,607 - 599 641 - 1,082 _ 1,468 - 1,699 _

1 955 1958 1960 1962! 19563 1964 1965

Fertilizer types: lons Tons Tons Tons Tons Tons Tons

Nitrogen 8,097 5,386 14,733 17,131 16,676 31,665 47,138

Phosphate 20,954 14,795 12,972 11,665' 16,567 12,509 11,697_./

Others 703 914 10,818 4,316 6,470 10,287 4,276

E/ Exclud:Lng imports from Uganda, believed to be about 16,000 tons.

Source: Stati.stical Abstract, 1965

Mission Projection

Table Co PROJECTTON OF GROSS AND NET OUTPUT OF PRTNCIPAL AGRICULTURALPRODUCTS, 1964 AND 1970 AT CURRENT AND CONSTANT PRICES

(Lz thousand)

Gross Gross Output, 1970 Net Output, 1970Outpnut. rlrrrnt Gonstan.t Ciurre-nt Constant

1964 Prices Prices Prices Prices

Agriculture

Wheat 3,652 5,330 5,330Maize 1,902 1,925 2,L494

Rice 343 752 698

Coffee 14,991 11,710 14,7L0Tea 915 109926 10,585u .9-' u

Sisal 7,161 2,700 5,300ryr ethr'a 910 24730 2,90Sugar cane 1,177 2,892 2,892Cotton 550 1,625 2,031Tobacco 76 95 95Pineapples ) 292 292Other fruits, vege- ) 979tables and flowers ) 1,650 1,650Cashew nuts - 538 538wattle ) 889 350 350Coconuts, copra & tembo) 600 600Other crops 1,901 1,620 1,620

Total Agriculture 42,609 46,341 52,761 40,134 45,351

Livestock & Dairy

Cattle for slaughter 49,80 6,250 5,666Sheep and lambs 565 886 770Pigs 496 737 640Poultry 375 470 470Livestock for breeding 1,479 1,000 1,000Wool 354 650 650Dairy Products 5,236 6,280 6,280

Total Livestockand Dairying 13,309 16,273 159476 11 6 119,37

GRAID TOTAL 55,918 1 4 68,237 51,750 56,398

Table 6: QUAFTITY ANID PRICE ASSU¾PTIOiTS USED I\I PROJECTIRMG PRINICIPALAGRICUT,TURAL E'XPOF TS

1'1)64 1970 ' - Change 197_ ore_r 1964_ __ _ __ _ __ _ ___ __ _ _ C_np 1_7_ o _ _

Produ ct Quantity Unit price Quantity Unit price Quantity -_ Unit pricetons f per ton tons I per ton -tons percentage f per percentage

f. o.b. f,o.b,. tonCof'fee -l, 76 3 363. 5 T3 5O 31,200 3 71+L,37 + 2 (6 -5TTT-1

Tea 17 ,O9 373.20 25,785 392.00 + 8,726 + 51.2 +18.80 + 5.0

Meat and meat preparations 7,394 147.84 1/ 1L0,2:30 170.12 1/ + 2,837 + 38.4 +22.28 +15.0

Pyrethrum 7,5(0 4/L 305.00 2/ 12,000 4/ 305.00 2/ + 4,500 + 60.o - -

Sisal ',6,976 105.79 4 ,4000 58.oo -:12,9'76 - 22.8 --7.79 -45.2

VlWleat ELnd flour ',2,2L15 32.60 3/ :36,000 35.35 3/ -16,245 - 31.1 + 2.75 + 8.4

Pineapples (canned) 10,387 84 .14 L6,500 8!4.14 + 6,1'13 + 58.9 - -

l^Tattlebark extract l8,154 56.30 L5,1:L3 56.30 - 3,OQ1 - 1S.7 -

Cashew nuts !4,781 6L.70 12r-0n 6l 70 + 7,219 +151.0 -

W#ool 1,283 40(.62 1,7140 400.62 + 457 + 35.6 - _

Cotton 2,672 242.51 3,571 185.94 + 899 + 33.6 -56.57 -23.3

Hides cmd skins, 5,o20 234p34 7,028 23l4.34 + 2,008 + 40.0 - _

Marnufactured dairyproducts 40'31 332.92 3,365 332.92 - 666 - 16.5 -

Fresh milk and cream 2.963 3.52 sh. I.000 3.52 sh. +2.037 + 68.8 - -

r_million gal. per gaLlon mnil'Lion -al. per gallon million gal.

1/ Price of beef 3// Price of T.heat, unmilled2/ Price of dried flowers ./ Represents dried JlowuDrs plus dried flowers equivalent of powder and extract

Table 7: PROJECTION OF PR -NCIPAL AGRICULTURAL EMO'RT-S,1964 AND 1970 AT CURRENT AND CONSTANT PRICES

(f thousand)

1 9 7 01964 Current Prices Constant Prices

AgricultureMaize, milled and unmilled 71 148 148Wheat and flour 2,079 1,512 1,404Feeding stuffs for animals 278 350 350Coffee 15,396 16,538 19,610Tea 6,366 10,108 9,566Sisal fibre and tow 6,028 2,552 4,655Pyrethrum, flowers and extract 2,453 4,000 4,000Wattle bark and extract 1,081 900 900Cotton 648 664 730Cashew nuts 295 739 739Wool 514 700 700Animal & Vegetable Oils & Fats 3b9 350 350Oil seeds, nuts, kernels 460 475 485Pineapples in tins 87L 1.386 1,386Potatoes 24 250 250Peas, beans and lentils 521 530 530Other fresh fruits & vegetables 826 1,100 1,100Other foods, etc.= 13;90 1- 1;905

Tot±al AgriculltLnre 4_05166 1L207 18,808

LivTestock and Dairy

Meat and meat preparations 2,583 4,070 3,550

Milk ad 2,000 ) 2 000Butter and ghee 1,228 ) 2 ) 05Tggs

-.6 3535

Hides, skins and leather 1,8483 1,54 1,854

Total Livestock & Dairy 5,985 7,959 7,439

GRAND TOTAL 46,131 52,166 565247

Mission Projection

Table 8: PROJECTION OF PUBLI]C SECTOR DEVL(OPMENT EXPENIHT1JRE IN AGRICULTURE; 1966/67-1969/70

L thous andOfi Ndic h Tot; al

Total Non-Cernt ral Central Government1966/67 l967/68 1968/69 1969/70 1966/67-1969/70 Governummnt t1

Formier Afric an Are asLj'nd Consolidation & Regiatration 700 850 1,0J0 1,200 3,750 - 3,750Smsllx)lder Credit (AFC) 530 476 657 764 2,427 2,421Development of Pastoral Areas (partly AFC) 153 337 700 900 2,090 2,090Irrigation (National Irrigation Board) 433 400 400 .400 1,633 1,633Tsetse Control 61 87 85 85 318 - 318Siettlement - 50 50 50 150 - 150Ru.rpl Development Schemes 85 25 25 25 160 _160

Total Fconmr African Arsas 1,962 2,225 2,917 3,424 10,528 6,150 4,378

Former Scheduled AreasSesttle:ment

Million Acre Scheme, etc. 2,000 1,895 - - 3,695 3,3951966/70 Programme 400 400o 4oo 450 1,650 _1-_5O

Total Settlement 2,h4-) 2,295 boo 450 5,545 - 5,545

Transfer to Large-scale Farmers 200 200 300 300 1,000 _ 1,000National & rransitional Farms 125 25D 275 350 1,000 1,o0oCompsssionate Case Farms 100 200 300 400 1,000 l,00(Abandoned and Mismanaged Farms _ 2OI0 300 500 o1,00

Total Formsr Scheduled Areas 425 850 1,175 1,550 4.000 3,000) l

Functional ActivitiesCredit n.i.e. 530 50D 500 500 2,030 - 2,030Research n.i.e. 79 80 85 90 334 - 334Education and Training 14; 1145 146 59 490 - 490ADC - Administration & Projects n.i.e. 100 100 100 100 0o 4oo -

Miscellaneous 80 80 80 80 320 _ _320

Total Functional Activities 929 905 911 829 3574 400o 174

(Continied)

Table 13: PROJECTION OF PUBLIC SECTOR IEVELOPMENT EXPENDITURE: IN AGRICULTURE, 1966/67-1969/70 (Continued)

T thousand Of Which Total.

Total Non-Central Central Government1966/67 1967/68 15968/651 1.969/70 1966/67-1969/70 Goverrnimnt Only

Crop ActivitiesPasision Fruit (ADC) - - - - - - -Pineapple - - 40 hCo 80 80 -

Tea (Kenya Tea Development Authority) 287 435 328 30() 1,350 1,350 -Sugar 670 230 - - 900 900 -

Wheat - , 3() 90 _- 90

Total Crop Activities 957 695 398 370 2,42(0 2,330 90

Livesitock Activities n.i.e. 71 150 300 500 1,021 - 1.,021

Items not included iLn PlanCoffee Facto Eqipmet 50 30 20 - 100 _ 100Large-scale Farms in Transnzoia 34 25 25 2'5 109 - 109Maize Stores 170 700 - _ 870 170 700

Cyprus Bins (100) (600) ( - ) i - ) (700) ( - ) (700)Conventional Storage (70) (100) (-) I - ) (170) (170) ( -

Coast Water Survey 20 50 50 - 120 - 120HorticulturaL Research and Trairning 10 70 10. - 90 - 90Coffee Diversific ation - 800 2,000 2,90 5,700 - 5,700Miscellaneous 16 8 8 - 372 - 32

Total- Not Incluided in Plan 300 1,683 2,113 2,925 7,02.1 170 6,851

Grni Total 7,o44 8,803 8,214 10,048 .34, 109 12,050 22,059

Less Non-capital FormationDievelopmnent Expenditure 3,651 4,940 4156 5,653 18,40o 4,485 13,915

Gross' Fixed Capital Formation 3,393 3,863 L ,o58 4,395 15,709 ______

Total. Development Expenrdituire 7,o44 8,803 8 ,2 1L4 1(,048 34,109 12,050 22,059Lr;s AL:Lowae for "Slippage" 704 704 493 402 2 303 814 ] 489Revised Total. Deve.lopment Expenditure 63 30 U o_99 3646 3__ 11 _rt

Less Non-Capital Formation Development Expenditure T8,hooLess jalowarce for "Slippage", 365 395 249 226 1.235 _301 934Revised Non-cap ital Formation

Devel.opment Exlpenditure 3 286 h5207 7.42 72 h 184 __

EquaLs lRevisied Gross Fixed Capital Formation 3 _,5 3,814 14,219 L4,641 7,052 7,589