Policy Monitor, Issue 5 No. 1, July-December 2012 on Addressing Food Price Volatility in Kenya

Abstract

Kenya is a low-income country with a GOP per capita estimated at USS 775. Agriculture is a major economic activity. Currently, one out of every four Kenyans suffers from chronic food insecurity and poor nutrition. Several factors are responsible for high food prices in Kenya. On the supply side, rapid and significant seasonal fluctuations in supply, and high global petroleum prices, have led to increased costs related to local food production and supply. On the demand side, population growth has also outstripped food production in most parts of the country. Moreover; liberal trade policies have also contributed to food price volatility. Policy interventions to address food price volatility include: adoption of yield increasing technologies; increasing access to affordable inputs; increasing production of traditional high-value foods; encouraging peri-urban agriculture; empowering farmers with relevant information and management skills to run these institutions efficiently; and ensuring a favourable legal, institutional and political framework for these institutions to thrive.