Agriculture is among sectors under economic pillar

Tea farm in Kericho County

Kenya’s drive to become a newly industrialised upper middle-income country is enshrined in Vision 2030. The achievement of this target is driven by a series of five-year medium term plans.

The third medium plan will strive to move the economy towards achieving 10 per cent from the current 6 per cent economic growth rate target by the end of the plan period in 2022.

Agriculture is one of the sectors under the economic pillar intended to drive the country’s growth. It contributes about 24 per cent of the GDP, 75 percent of industrial raw materials and 60 per cent of export earnings. The sector accounts for 65 per cent of Kenya’s total exports, 18 per cent and 60 per cent of the formal and total employment respectively. 

The agricultural sector comprises of industrial crops, food crops, horticulture, livestock and fisheries, and employs such factors of production as land, water, labour and farmer institutions. The three industrial crops that have been pivotal in boosting the vibrancy of agriculture include tea, coffee and floriculture.

Tea contributes 4 per cent of the country’s GDP, equivalent to Sh97.7 billion, and 26 per cent of the country’s export earnings, according to the Tea Directorate, 2016. About four million (almost 10 per cent) of the Kenyan population derives their livelihood from the tea sub sector.

On the other hand, coffee brings foreign exchange of 6 per cent of the total agricultural exports. Horticulture sector contributed about 1.6 per cent to the country’s GDP in 2016. According to Kenya Flower Council, the floriculture sector currently employs more than 90,000 directly and over 500,000 indirectly. 

But horticultures viability is now threatened by high labour costs and low productivity. If this challenge is not resolved, horticulture will not be able to play its part in driving the economic growth rate to 10 per cent.

For Kenya to achieve its vision 2030 goal of agriculture, these three sub- sectors must modernise to ensure this contribution is achieved. 

However, the vision to spur the economic growth through the agriculture sector will be a pipe dream if the myriads of challenges facing tea, coffee and flower sub sectors are not urgently addressed.

One of the many challenges facing these sub sectors is the ever-rising cost of labour and lack of increases in productivity that would enable employers to sustain the increasing labour costs. For the sector to remain viable, ways have to be found to increase labour productivity.

But how are the workers in these different sub sectors remunerated? According to records in public domain, the plucking labour rate in the large tea producer estates now stands at (Sh13-16 per kg) while the plucking rates in the smallholder sub-sector ranges from Sh8 to Sh12 per kilogramme.

The smallholder initial payment for green leaf supplied to their factories is Sh16, which leaves the farmer with little amounts after meeting the plucking labour costs. The minimum piecework per day in the large producer estates has not increased from 33 kgs since the 1960s.

Further, owing to industry research and development investments in high yielding clones of tea bushes and improved crop husbandry practices coupled with continuous training, workers are able to pluck over 45 kgs per day.

With the plucking labour piece rate, it implies that the minimum daily earnings for tea plucking ranges from Sh450.45 to Sh516.45 

MOST RECENT CBA

On the other hand, the total annual production of coffee has been fluctuating widely due to climate change and adaptation as well as socio-economic factors. Coffee sector is composed of two categories of farms: the plantation sub-sector comprising of about 3,300 farms of which 300 are greater than 25 hectares; and the co-operative sub-sector of some 523 co-operative unions with about 700,000 smallholders cultivating about 120,000 hectares of coffee, equivalent to about 0.2 hectares apiece. Close to a million people depend on the coffee sector for a living.

The most recent CBA between Kenya Plantations and Agricultural Workers Union (KPAWU) and Kenya Coffee Growers Employers contains provisions including pay rates, leave, acting allowance, housing, and burial expenses.

In addition, all have detailed provisions covering probation, the warning system with regard to disciplinary action, termination of contract, redundancy, severance pay, and “gratuity” or service pay upon retirement

The tea industry rates remain higher than the other subsectors even when its industry CBA is two years behind the others and will obviously continue to be ahead when the 2016-17 and 2018-19 CBAs are concluded.

Labour productivity needs to rise through modernisation in order to sustain these additional costs.