By: Tim Njagi
The past decade saw Kenya’s poverty rate decline, in line with most of sub-Saharan Africa, from 46% in 2006 to 36% in 2016 (according to national poverty lines). Analysis of poverty dynamics, however, highlights important nuances: whilst 50% of households in rural Kenya that were poor in 2000 managed to escape poverty in subsequent years, only 11% managed to sustain the escape – with 39% falling back into poverty by 2010.
These insights are drawn from the results of a recent USAID-supported study by CPAN, which leverages a panel dataset, collected by the Tegemeo Institute from 2000–2010, and new qualitative data collected by CPAN to understand poverty dynamics in rural Kenya.
How can sustained escapes from poverty best be promoted?
Agriculture has long been considered the best option to help rural households move out of poverty. CPAN’s study found that farming does indeed provide routes for sustained poverty escapes in areas where land is still relatively plentiful, and where markets are dynamic. However, agriculture in Kenya faces challenges that limit its potential to lift households out of poverty:
First, land subdivisions have left rural households with less land available for agricultural activities today than in previous decades. Studies by the Tegemeo Institute highlight the negative effects this has on productivity, with smallholder farmers unable to intensify their operations as optimally as they could with larger land parcels.
Second, farming households experience production and market related shocks due to disease and pest outbreaks, and unfavourable weather, such as occurred between 2000 and 2010. Furthermore, as many farming households are in fact net buyers of farm produce, they are impacted particularly severely by events such as food price shocks.
Third, insecurity in rural areas also affects households’ well-being. Female-headed households are at greatest risk of being targeted by thieves. In addition, land markets in less populated, rural areas have not been well developed, possibly due to insecurity around land tenure. As such, smallholder farmers often only access season-to-season leases.
“I had cassava in the farm, but they were stolen when I went to bury my brother; he died in the election period , he was drowned by some people… when I came back from his funeral I found all my cassava stolen”. – Life history interviewee in rural Kenya
What measures can contribute to sustaining household poverty escapes?
Developing an insurance programme to mitigate against shocks – both agriculture-related and otherwise – is crucial. Kenya has a national health insurance scheme providing universal health coverage since 2008, and although its uptake is still very low among non-salaried households in rural areas, its benefits are well illustrated in Leonard’s words:
“In 2009 May I got my first-born child. I had also registered with NHIF (National Health Insurance Fund), so the hospital bills were catered for. I remember I even got a taxi to bring my wife home after the operation. It could have cost me 30,000 [Kshs] if I were not under NHIF.” – Life history interviewee in rural Kenya
An insurance programme covering agricultural-related shocks could compensate for the loss of income or sale of assets to settle bills, and therefore contribute to reducing vulnerability to poverty.
Diversifying income sources such as engaging in opportunities that increase off-farm income, either from salary, wage, business income, or remittances, could also help rural households. In 2000, off-farm income accounted for 42% of total household income, compared with 55% in 2010. The ability of a household to generate significant off-farm income is constrained, however, by the capital and skills available to the household, as well as accessible non-farm opportunities in rural areas.
The below interventions are recommended to help household to sustain poverty escapes, as outlined in CPAN’s policy implications brief:
- Agricultural activity should be sustainably intensified and commercialised, and be complemented by safety nets to protect the most vulnerable households and efficient land markets. There are lessons to be learned from Kenya’s agriculture and livestock insurance pilots, which can inform the scaling up of agricultural and livestock insurance – something for which the government already plans.
- The rural non-farm sector needs to be developed. There is need to focus on skill development through technical training, to enable people to take up opportunities in value addition, agro-processing, and other opportunities.
- Social protection and insurance needs to be further enhanced, in order to lessen the burden placed on households through medical expenses, and the uptake of insurance offered through the NHIF must be promoted.