Discussion Paper No. 25 of 2003 on Agricultural Trade Reforms in Kenya Under the World Trade Organization Framework

Abstract

The agricultural sector in Kenya has shown mixed performance with the onset of liberalization of the Kenyan economy. Under liberalization policies of the structural adjustment programs (SAPS), agricultural monopolies were abolished for some commodities including maize, wheat, milk, sugar and cotton. Furthermore, the Government of Kenya has reduced expenditure on the agricultural sector and encouraged cost-sharing in the provision of services such as animal health and research. Reforms in the agricultural sector have come about as a result of implementation of the Agreement on Agriculture (AoA) of the World Trade Organization (WTO). This paper analyses the implementation of liberalization under the AoA’s elements (market access, domestic support and export subsidies) and the impact on the performance of the agricultural sector in Kenya. It also indicates the major concerns for the country to benefit from the Agreement and the concerns that need to be considered during the Doha Round. The major impact of the AoA is that high tariffs on commodities such as food crops, livestock products and processed beverages limit Kenya’s access to markets in developed countries. Non-tariff barriers such as SPS and TBTs have also affected Kenya’s access to markets for commodities such as fish and horticulture. The benefits from domestic support measures have been limited because of the structural programs Kenya has implemented under the SAPS. The impact of subsidies in developed countries has also affected domestic production of commodities such as cereals. These experiences necessitate the need to review the AoA to take into account Kenya’s concerns.