Monetization for Food Security and Development: Kenya Food for Progress Program

1. Monetization for Food Security and Development:Kenya Food for Progress Program Mara Russell May 23, 2011

2. Kenya Food for Progress: 2007-11 • Kenya’s Eastern Province • Food insecurity due to drought • Many dairy farmers and processors in the area • But, productivity is not good

3. Rationale for Food Aid • Conducted Required “Bellmon” Market Analysis • Analysis ensures monetization does not create disincentives to local production or marketing. • Findings of Bellmon Analysis: • 70% of wheat requirements met by imports • Monetization represents less than 3% of annual demand • Stagnant and poor quality wheat did not meet miller requirements • Wheat would support the Kenya market • Supported two agriculture sector objectives: • Increased dairy production and incomes among drought affected farmers • Helped meet Kenya’s wheat and flour demand

4. Local Trade Capacity Built • Challenge: Differences between Kenya Plant Health Inspection Service (KEPHIS) and USDA Animal and Plant Inspection Service (APHIS) on quality standards for commodity imports. Limited entry of ALL commodity imports. • Solution: USDA sent a group of APHIS people to Kenya to negotiate with KEPHIS on quality standards and an agreement was reached. This built KEPHIS trade capacity and facilitated both commercial and humanitarian imports.

5. Support to Relief Efforts • Challenge: Wheat shipment was diverted to Lebanon by USDA to address needs of conflict victims, enabling immediate response • Solution: USDA replaced the wheat shipment and compensated the buyer, Rafiki Millers, for some of the expenses due to late arrival

6. Program Approach Improve Dairy Production & Incomes: • Increase farmer productivity • Support dairy cooperatives & marketing • Develop small businesses that provide products and services to dairy farmers

7. Productivity Enhancement • Training and technical support on the farm • Water supply increased • Taught farmers sustainable ways of growing feed. Results: • Over 80% of farmers trained producing environmentally sustainable feed. • 87% reported higher yields in the face of drought conditions Aspen Orchids has improved production through feed conservation activities.

8. Water for Animalsand People • 118 rural community water schemes • 16,500 farmers served • Animals walk less & consume more water • Farmers’ walking distance reduced from 8 to 1 mile • Children spend more time in school – less time herding animals • Women spend less time getting water New water points are providing people and animals with the water needed to enhance productivity and ensure health

9. Dairy Cooperatives and Milk Marketing • Cooling tanks put in place to collect milk, sell to processors • Cooperatives established to manage milk collection & build sales  Results: • 17,000 farmers reached through co-operatives • 137 Coops demonstrated higher profitability • 69% increase in household incomes Cooperatives collect milk together now across Eastern Province in cooling tanks and sell it to processors

10. Small businessesdevelopment • Instead of the project delivering products and services, small businesses were trained to do this. • At the end of the project, these businesses continue to deliver. • Jobs were created around dairy production. Results: • 1280 Service providers trained • 278 jobs created at dairies This agricultural supply store owner accessed credit through KFP, enabling him to purchase a motorbike and Artificial Insemination kit, and provide breeding services to dairy farmers.

11. Experience • Land O’Lakes has diverse and rich experience with commodity programs: • Food for Education – 14 programs in 6 countries ($106M) • Food for Progress – 8 programs in 10 countries ($35.6M) + 2 new programs in new countries ($22M) • Local/Regional Purchase – 2 programs in 2 countries ($5.8M) • PL 480 Title II Development – 3 programs in 2 countries $30.3M First food aid programs were in Jamaica in the 1980’s

12. Thank You!