Deteriorating terms of trade and food security among pastoral livestock producers in Kenya

Abstract

Over 80% of Kenya’s land mass of 58.3 million hectares is classified as arid and semi-arid lands (ASALs). In spite of the unfavorable weather conditions, the ASALs make a significant contribution to the country’s agriculturally driven economy, by supporting more than half (52%) of the livestock population geared primarily towards the production of beef. Households practicing pastoral livestock production experience a myriad of problems including drought, poor infrastructure for communication and marketing, low incomes and food insecurity. With changes in lifestyles and decreasing capacity of livestock to provide for their basic needs, these households are increasingly dependent on the market for their non-livestock based food and non-food needs. Their purchasing power is dependent on income levels, economic conditions and the terms of trade between livestock and cereals, all of which change over time. This study investigated terms of trade for pastoral livestock producers in Kenya, finding that the price of maize has risen much faster (about twice) than that of livestock, diminishing the purchasing power of livestock keeping households, and thereby eroding their terms of trade. The emergence of these unfavorable terms of trade has in turn eroded their capacity to meet basic needs and compromised their food security situation and overall socioeconomic welfare, resulting in significant increases in the demand for relief and food aid at a major cost to government relief funds and development agencies. Through market information systems like LINKS, however, the provision of market information can equip planners and policy-makers with the tools to track price trends and enhance decision-making and the development of appropriate interventions aimed at mitigating the effects of these deteriorating terms of trade.