Kenya_SO7IEE_final_20Apr09.pdf

INITIAL ENVIRONMENTAL EXAMINATION

AND

CATEGORICAL EXCLUSION

USAID/KENYA AGRICULTURE and PRIVATE ENTERPRISE PORTFOLIO (SO7)

Program Number and Title: 615-007: Increased Rural Household Incomes (IRHI) Country/Region: Kenya/East Africa

USG Foreign Assistance Framework:

Functional Objective 3: Investing in People Program Area 3.1: Health Program Element 3.1.8: Water Supply and Sanitation

Functional Objective 4: Economic Growth Program Area 4.5: Agriculture Program Element: 4.5.1: Agricultural Enabling Environment Program Element: 4.5.2: Agricultural Sector Capacity

Program Area 4.6: Private Sector Competitiveness

Program Element: 4.6.1 Business Enabling Environment Program Element: 4.6.2 Private Sector Capacity Program Element: 4.6.3 Work Force Development

Program Area 4.7: Economic Opportunity Program Element: 4.7.1 Inclusive Financial Markets Program Element: 4.7.3 Strengthen Micro-enterprise Productivity

Functional Objective 5: Humanitarian Assistance Program Area 5.2: Disaster Readiness Program Element: 5.2.1: Capacity Building, Preparedness and Planning

Funding Begin: FY2006 Funding End: FY2013 LOP Amount: $ 400,000,000

IEE Prepared By: Christopher Dege, Regional Environmental Advisor; Beatrice Wamalwa, USAID/Kenya Program Management Specialist; Robert Buzzard, USAID/Kenya Mission Environmental Officer

Current Date: March 28, 2009

IEE Amendment (Y/N): NO. This IEE supersedes the previous IEE: 31Kenya3_SO7_Rural_Income.doc (September 2001)

Relevant IEEs: Kenya_FY08_Water_DCA_IEE_091908.pdf; 31Kenya3_SO7_Rural_Income.doc;

Pesticide Evaluation Report and Safer Use Action Plans (PERSUAPS) for activities in the following:

Kenya Business Development Services Program, 2003; Dairy, 2003; Maize 2003; and Horticulture, 2004.

33Kenya1 SO7 ESF amend.doc (June 2003), Strategic Objective 7 (SO 7): Increased Rural Household Incomes for Coastal Micro-Enterprise Development Project (CMDP) and North-Eastern Province Development Program (NEPDP).

ENVIRONMENTAL ACTION RECOMMENDED:

Categorical Exclusion: X Negative Determination: X Positive Determination: Deferral ____

ADDITIONAL ELEMENTS:

CONDITIONS X PVO/NGO: X____

SUMMARY OF FINDINGS:

The purpose of this Initial Environmental Examination (IEE) is to provide environmental review and threshold determinations for the activities of USAID/Kenya’s Agriculture and Private Enterprise portfolio (Increased Rural Household Incomes Strategic Objective 7). This IEE consolidates the threshold determinations for current and new activities that the Agriculture and Private Enterprise portfolio will undertake using FY06 - FY 2013 resources. It replaces the previous IEE for Increased Rural Household Incomes (SO7), completed in September 2001 - 31Kenya3_SO7_Rural_Income.doc.

Section 1 covers the Purpose and Scope of this IEE; Section 2 provides an overview of Kenya’s Country and Environmental Information; Section 3 provides a program description of USAID/Kenya’s Agriculture and Private Enterprise program; Section 4 provides an evaluation of the potential environmental impacts of current and anticipated Agriculture and Private Enterprise activities and the threshold environmental determination and mitigation measures for them; Section 5 describes environmental monitoring and compliance assurance responsibilities for the Agriculture and Private Enterprise portfolio.

Recommended Environmental Determinations:

The following activities under the three foreign assistance objectives (Investing in People, Economic Growth and Humanitarian Assistance) to support Increased Rural Household Incomes are Categorically Excluded from initial environmental examination as no environmental impacts are expected as a result of these activities. All are excluded per the following citations from Title 22 of the Code of Federal Regulations 216 (22 CFR 216), subparagraph 2(c)(2):

(i) Activities involving education, training, technical assistance or training programs except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.);

(ii) Activities involving controlled experimentation exclusively for the purpose of research and field evaluation and carefully monitored;

(iii) Activities involving analyses, studies, academic or research workshops and meetings;

(v) Activities involving document and information transfers;

(vi) Studies, projects or programs intended to develop the capability of recipient countries and organizations to engage in development planning.

However, if any topic associated with these activities is one that inherently affects the environment, such as training in agricultural land preparation or training under Development Credit Authorities (DCAs) to enhance the capacity of finance institutions in rural lending, then such training will include information on how to minimize and/or mitigate these impacts. Examples include: instruction on land preparation that minimizes erosion and maximizes the retention of soil moisture or training for rural investment banks in screening loan portfolios of micro-finance institutions for potential negative impacts.

Pursuant to 22 CFR216.3(a)(2)(iii), a Negative Determination with Conditions is recommended for activities in the Agriculture and Private Enterprise portfolio that have potential for negative impact on the environment and /or human health in the following categories, and as presented in Table 2 in Section 4 of this document:

Micro-credit, loans, micro-finance institutions (MFIs) and micro-enterprises, loan guarantees, and development credit authority (DCA) activities;

Bio-safety systems and biotechnology Agricultural productivity technologies and inputs (e.g., hybrid seeds, fertilizers, pesticides, land and water management practices, livestock and fisheries development, irrigation, new crop com-modity sub-sectors and construction)

Water, sanitation and hygiene; and Sub-grants

The conditions for these activities are presented in USAID’s “Environmental Guidelines for Small –scale Activities in Africa” (EGSSAA), found on-line at http://www.encapafrica.org/EGSSAA. In addition, there are certain requirements that apply to all activities falling under the threshold determination of “Negative Determina-tion with Conditions”. These include:

1. The responsibility for implementing activities in accordance with the findings and conditions of this IEE must be incorporated into all contracts and grants that serve to implement activities cov-ered under this IEE.

2. Bi-lateral implementing partners under USAID/Kenya’s Agriculture and Private Enterprise portfolio will complete an annual Environmental Mitigation and Monitoring Report (EMMR) of all activities, using the guidance and forms in Section 5 and as explained further under “Monitor-ing and Reporting” in that section. Provision for completing EMMRs in October of each year should be a part of annual work plans.

3. Contracting and Agreement Officer Technical Representatives (COTR/AOTRs) in USAID/Kenya’s Agriculture and Private Enterprise program will undertake field visits and con-sultations with implementing partners to jointly assess the environmental impacts of ongoing ac-tivities, and the effectiveness of associated mitigation and monitoring plans.

4. AOTRs/COTRs and Activity Managers will undertake a review of the existing PERSUAPs and determine their continued applicability and, with the USAID/EA REA and AFR BEO, establish the need for amendment or preparation of new PERSUAPs. In the event new PERSUAPs are required for new sectoral programs (e.g., livestock), then no pesticides shall be procured or used until the PERSUAP is approved by the BEO.

5. Organizations receiving USAID/Kenya funds and transferring them through grants or other mechanisms to other organizations must incorporate provisions stipulating:

a) the completion of annual EMMRs, and

b) that activities to be undertaken will be within the scope of the environmental determinations and recommendations of this IEE.

6. USAID/Kenya will ensure that implementing organizations have sufficient capacity to complete the environmental screening process and to implement monitoring and mitigation measures.

7. For activities that are not funded by USAID/Kenya, but are an identifiable part of an Agriculture and Private Enterprise program activity (for example if another source of funding is supporting agricultural activities), the implementing partner must assure that, at a minimum, the equivalent USAID standards for mitigation, as presented in Section 5, are followed.

8. Adherence to applicable GOK environmental laws and policies.

Monitoring and Reporting As laid out in ADS 204.5.4, USAID/Kenya is responsible for the monitoring and evaluation of the environmental effects of all ongoing and proposed program development activities, so as to ensure they remain as Categorical Exclusions or within the bounds of the Negative Determination with Conditions.

The process of environmental monitoring and evaluation will be integrated into the Agriculture and Private Enterprise Team's Performance Monitoring and Evaluation Plan.

USAID/Kenya Agriculture and Private Enterprise program will use an annual EMMR to ensure programmatic compliance with 22 CFR 216 and ADS 204.5.4 by documenting that any conditions applicable under this IEE have been met for relevant activities carried out under bi-lateral awards.

EMMRs will be reviewed and approved by the COTR/AOTR and the Mission Environmental Officer.

The EMMR consists of 3 parts:

1. The Environmental Verification Form

2. The Mitigation Plan for specific environmental threats carried out by the implementer

3. The Reporting Form

The EMMR Environmental Verification Form Because of the integrated nature of the USAID/Kenya’s Agriculture and Private Enterprise program, a single bi-lateral award (along with any sub-awards) might contain activities having different conditions required for prevention or mitigation of environmental impacts. This form indicates the categories of activities carried out by implementing partners (or their sub-awardees).

The EMMR Mitigation Plan The Mitigation Plan describes specific actions that will be undertaken under each category of activity when screening reveals potential environmental threats as outlined in Section 4 of this IEE. In these cases, mitigation will be undertaken as described in Section 4. Also, it identifies the person responsible for monitoring compliance with mitigation and the indicator, method and frequency of monitoring.

The EMMR Reporting Form This form reports on the results of applying the mitigation measures described in the Mitigation Plan and identifies outstanding issues with respect to required conditions. In some cases, digital photos will be the best way to document mitigation and should be included in the report.

APPROVAL OF THE RECOMMENDED ENVIRONMENTAL ACTION:

Recommended by: _________ss/_____________________ __4/14/09____________ Allen Fleming, USAID Agric & Date Private Enterprise Team Ldr

CONCURRENCE:

Bureau Environmental Officer: __ss/________________ Date:_5/07/09_____ Brian Hirsch

File No: Kenya_FY09_EconGrowth_IEE_01xx09.doc

CLEARANCE:

USAID/Kenya Mission Director: __ss/_________________ Date: __5/5/09___________ Erna Kerst

USAID/Kenya Deputy Mission Director __ss/___________________ Date : _5/4/09______________ James Hope

USAID/Kenya Environmental Officer: _ss/__________________ Date: __4/14/09___________ Robert Buzzard

Regional Environmental Advisor (USAID/EA): __ss/_________________ Date:__4/20/09___________ Walter Knausenberger

INITIAL ENVIRONMENTAL EXAMINATION

AND

CATEGORICAL EXCLUSION

USAID/KENYA AGRICULTURE and PRIVATE ENTERPRISE PORTFOLIO (SO7)

1.0 PURPOSE AND SCOPE OF THIS INITIAL ENVIRONMENTAL EXAMINATION (IEE)

This IEE consolidates the threshold determinations for current and new activities USAID/Kenya intends to undertake using FY2006 – FY2013 resources to Increase Rural Household Incomes. Activities will be carried our mainly under the Foreign Assistance Objective 4: Economic Growth, Program Areas 4.5, 4.6, 4.7. In addition, resources will be committed for activities under Foreign Assistance Objective 3: Investing in People and Foreign Assistance Objective 5: Humanitarian Assistance. This IEE replaces the previous SO-level IEE for Increased Rural Household Incomes (SO7), completed in September 2001: 31Kenya3_SO7_Rural_Income.doc.

This IEE provides a basis for Threshold Determinations for new program activities not covered under the previous IEE including: biotechnology, financial services; new initiatives in horticulture, maize, dairy, livestock and fisheries development, water resources development; and disaster readiness programs.

2.0 SUMMARY OF COUNTRY AND ENVIRONMENTAL INFORMATION

2.1 Locations Affected by the Program Objectives

The program objectives support smallholder agriculture focused in the medium, high potential and Arid and Semi Arid Lands (ASAL) in the country’s eight provinces; i.e., Central, Rift Valley, Western, Coast, Nairobi, North Eastern, Eastern and Nyanza. The Title II program, active in the ASALs, is not dealt with in this IEE since Title II programs have a separate environmental review process to examine and address potentials for negative impact on the environment and human health.

2.2 General Overview

Kenya is situated in East Africa, straddling the equator between longitude 34 E and 42 E. The country has an area of approximately 582,646 km2 (about 97.8% land and 2.2% water surface) and a coastline of 608

km. Eighty percent of its lands are arid or semi-arid. The remaining 20% is classified as having medium to high potential for agriculture, and 80% of the population resides here. The high and medium potential areas are devoted to crop and dairy farming. Also, Kenya’s most productive forests and the sources of the country’s more important perennial rivers and streams are found here. The ASALs are used primarily for extensive livestock production under commercial ranching and pastoralist systems. Also, community-based ecotourism is an increasing important economic pursuit in the ASALs as these areas provide important habitat for wildlife.

Administratively, the country is divided into eight provinces and further sub-divided into 207 districts.

The 2007 population was estimated at 34.7 million. Sixty four percent (64%) of the economically active population depends on agriculture, and this exerts extreme pressure on natural resources.

Kenya ranks 152nd out of 177 countries on the United Nation’s Human Development Index, an indication of low life expectancy, literacy and standard of living. According to UNICEF, the life expectancy at birth is 48 years, the adult literacy rate is 78% for men and 70% for women. Kenya has primary school drop-out rates between 5-6% and repetition rates between 15-16%. Access to improved drinking water sources ranges from 83% in urban areas to 46% in rural areas, and in both urban and rural settings less than half the population has access to improved sanitation facilities.

In 2004, Kenya was selected as a Millennium Challenge Account (MCA) Threshold Program-eligible country. Kenya benefits from a hard working, comparatively well-educated population; a dynamic entrepreneurial private sector from micro-enterprise to multinational levels; a relatively diversified economy; and basic infrastructure, albeit in need of repair and modernization.

Over the past 45 years, the population of Kenya has more than quadrupled -from eight million in the early l960s to over 37 million in 2007. This has contributed to significant degradation of the country's environment and natural resource base. Drought in many areas of the country has led to a decline in agricultural output. Land tenure and land use are sensitive and hotly debated issues. Over half of Kenya’s population lives below the poverty line, and per capita income has declined every year between 1992 to 2003 ($378 dropping to $360). The nation struggles with significant regional disparities in rates of growth and investment, as well as with a prevalence of gender inequality in the distribution of income and wealth. Kenya’s economic growth rate declined from 1.4% in 1998 to a negative 0.3% in 2001 mainly due to severe drought, crumbling infrastructure and insecurity. The economy began to recover after 2002, registering 2.8% growth in 2003, 4.3% in 2004, 5.8% in 2005, and 6.1% in 2006. This expansion was fairly broad-based and was built on a stable investment climate fostered by government, and on the resilience, resourcefulness and improved confidence of the private sector. Nairobi continues to be the primary communication and financial hub of East Africa. It enjoys the region’s best transportation linkages, communications infrastructure and trained personnel, although these advantages are less prominent than in past years. In the opening months of 2008, a political crisis associated with a disputed Presidential election in December 2007 rocked the nation. It resulted in deep polarization along ethnic lines; a breakdown of law, order and security; a humanitarian crisis that was triggered by mass population displacements in Rift Valley, Western and Central Provinces; and over 1,000 deaths. The social, political and economic impacts of these events will be far-reaching as investment and lending rates decline and the tourism, manufacturing and transport sectors take dramatic downturns.

2.3 Environment and Natural Resources

Kenya has a wide variety of physical environments, from tropical coral reefs to alpine environments on Mount Kenya. Soil erosion is a major problem, causing loss of nutrients, siltation of lakes and pollution of marine ecosystems. Water is crucial to Kenya's development and though total water resources probably exceed total demand, distribution is uneven. In many areas of Kenya, water has become scarce or is polluted. The National Environmental Action Plan (NEAP) considers water to be the ultimate constraint on industrial development. Demand for water resources has caused conflict among industrial and agricultural users. Demand for land for agricultural production has caused encroachment and destruction of water catchments and wetlands, thus reducing flows and lessening the land's ability to adjust to drought. Kenya has significant biological resources, with an estimated 3,500 species. The NEAP considers use of these natural resources to be currently unsustainable. Forests, woodlands, national reserves and game parks cover 10% of Kenya's land area (draft National Land Policy, May 2007) and provide not only habitat for many of Kenya's species, but wood fuel for over 80% of the nation’s households.

2.4 Agriculture and Private Enterprise

Agriculture is the largest sector of the economy, and accounted for about 23.8% of Gross Domestic Product (GDP) in 2007. Agriculture also contributes indirectly to GDP in other sectors through its linkages to transport and processing of agricultural products. Direct and indirect linkages with the agricultural sector provide close to 75% of all employment. Yet, the sector has failed to live up to its potential. The government launched the Strategy for Revitalizing Agriculture (SRA) in March 2004 as a sector-wide response to the Economic Recovery Strategy for Wealth and Employment Creation (ERS-WEC) - the economic management blueprint for the period 2003-2007. Its implementation is intended to transform the agricultural sector into a more competitive sector capable of attracting private investment and providing higher incomes and employment. The SRA addressed the poor performance of the agricultural sector and sought to redefine the role of government in the development of the sector. The strategy outlined the vision and development objectives to be pursued to realize goals for sustainable development. To hasten the implementation of SRA, the following ‘fast-track’ intervention areas were identified for implementation:

Review and harmonize the legal, regulatory and institutional framework;

Restructure and privatize non-core functions of para-statals and ministries;

Improve the delivery of research, extension and advisory support;

Improve access to quality inputs and financial services;

Improve access to both domestic and external markets; and Formulate food security policy and programs.

To facilitate the implementation of SRA, the Agriculture Sector Coordination Unit (ASCU), an inter-ministerial coordination unit, was established. The unit is comprised of the three core rural sector ministries

– Ministry of Agriculture (MoA), Ministry of Livestock Development (MoLD) and Ministry of Cooperative Development and Marketing (MoCDM) - and three advisors funded by USAID, DANIDA and GTZ.

The Government of Kenya is currently finalizing its “Agricultural Development Strategy, 2009-2020” (ASDS), which will succeed the SRA as the country’s overarching sector strategy coordinating the efforts of 10 Government ministries and all development partners. The ASDS will build on SRA implementation progress and ASCU coordination mechanisms while aligning itself with “Kenya Vision 2030” - the country’s overall long-term development blueprint - as well as the African Union’s Comprehensive Africa Agricultural Development Program (CAADP).

The two main options for agricultural growth are considered to be i) intensification of competitive crops and livestock products and ii) diversification into higher value commodities. The future is perceived to lie in transforming smallholders into a more commercial orientation by accelerating a change in the mix of farming activities to those that add more value per unit of land and labor. Major improvements in the supply and use of key inputs (fertilizers, pesticides and seeds) are considered crucial along with policy change, divestiture of para-statals, reform in the public sector, provision of support/extension services, reinvestment in rural infrastructure and strengthening the rural financial market.

Assisting Kenya to achieve rapid, sustainable and equitable economic growth is a priority of the US Government. USAID/Kenya's “Strategy Statement: 2006-2011” notes the effects of Kenya’s extreme poverty on economic prospects; on social and political stability; and on its democracy and its security.

Under the strategy, the USAID/Kenya Economic Growth program will support Kenya’s agricultural sector in ways that boost the capacity and the power of markets, trade and the private sector.

While poverty is found in both urban and rural areas, 75 percent of the poor are in rural areas. In addition to agriculture, most rural households obtain substantial portions of their incomes from off-farm activities.

Some 66 percent of micro-enterprises are found in rural areas and these supplement on-farm income.

Off-farm income often finances agricultural activities and acts as a safety net in times of decreased production. Many rural medium and small enterprises (MSEs) are linked to the marketing, processing, production, or supply of agricultural inputs and tools. MSEs currently contribute 20 percent of Kenya’s GDP (GoK, 2006), up from 14 percent in 1995, demonstrating the growing importance of MSEs to the economy.

USAID/Kenya’s Economic Growth program has to date focused mainly on increasing the incomes of rural households in the high and medium agro-ecological zones. Key challenges to the success of the program include: the confused state of Kenya's agriculture policy environment; poorly sequenced market liberalization; limited use of inputs such as improved seeds and fertilizer; high costs of production making Kenyan farmers non-competitive with farmers of neighboring countries; soil fertility depletion;

inequitable access to property and security of tenure among the agricultural labor force (women constitute around 52% of Kenya’s population, provide over 70% of agricultural labor, but represent only l% of land title holders); the collapse of Kenya Government's extension services hampering technology transfer to farmers; encroachment into marginal areas due to high population pressure and low yields; degradation of the natural resource base; non-transparent and inefficient marketing systems; weak farmer organiza-tions/cooperatives; limited access to financial services by micro- and small entrepreneurs; and an unfriendly policy environment that provides limited security for informal sector operators.

Given rising global food insecurity and the impacts of the current worldwide economic crisis, there is a growing consensus within the U.S. Government and the development community that a much higher level of funding must be invested in agricultural development over the coming years. Kenya has been selected to receive supplemental “bridge funding” in FY09 under the USG’s Global Food Security Response (GFSR) initiative. This will set the stage for a much higher level of funding beginning in FY10.

2.5 Water and Sanitation

Kenya is classified as a water scarce country, with an annual renewable fresh water supply of only 647 cubic meters per capita (1,000 cubic meters per capita was set by the World Bank in 2004 as the threshold mark for water scarcity), and this amount is projected to fall to 235 cubic meters by 2025 as the population increases. ASALs comprise over 80% of the land base. The uneven distribution of rainfall in addition to temporal and spatial variations often lead to recurring droughts in the ASALs and flooding during the rainy seasons.

In addition to difficult natural conditions, the country also faces significant deficits in water supply and in the coverage of sanitation services. Only 46 per cent of the rural population has access to improved drinking water supply from a variety of sources. The 2003 Kenya Demographic and Health Survey (KDHS) collected information on the source of drinking water. Almost one in four (24 percent) Kenyan households draws its drinking water from unprotected rivers or streams; 21 percent have piped water connected to their dwelling, compound, or plot; and 11 percent use a public tap. Almost one in five households uses wells as a source of drinking water, the majority of which are covered or protected wells.

Less than 5 percent of households use other types of water supply sources. A majority of households (53 percent) are within 15 minutes of their water source. However, a large proportion of rural dwellers must travel much longer distances to reach an improved water source.

There are marked urban/rural differentials in the total coverage as well as type of drinking water service available. Urban water supply coverage in Kenya reached about 62% in 2002. More than three-quarters of the households in Nairobi have piped water in their dwelling, compound, or plot, compared with only 2 to 4 percent of households in Western, Nyanza, and North Eastern provinces.

Water policy and law in Kenya is progressive and empowering for rural communities. The Water Act of 2002 decentralized water provision and opened the door for new approaches for peri-urban and rural service delivery by increasing the autonomy of rural water supply providers and small-scale water providers. Under the act, water service providers can enter into contracts with water services boards and be subject to regulation by the water services regulatory board. These small-scale water providers are able to serve slum communities and rural areas because they are not bound by the same regulations as the formal utilities.

About 48 percent of Kenyan households have access to an improved sanitation facility, with about 43% coverage in rural areas. Traditional pit toilets predominate in all rural provinces (i.e., with the exception of North Eastern Province, where toilet facilities are rare). In rural areas, the proportion of households with private toilets is almost identical to the proportion with shared toilets. There is little national scale information about the actual use of these facilities or the adoption of associated hygiene behaviors with the highest health benefits, including hand-washing, feces handling, and point-of-use water treatment.

Extreme environmental conditions and huge gaps in service access have negatively affected the development of Kenya as a whole, and its most vulnerable regions in particular. The country’s ASALs are populated by more than 10 million people with more than 60% of them living below the poverty line.

Basic services are neither adequate nor adapted to the population's needs, and inhabitants have poorer health and lower levels of education than people in the rest of the country. The ratio of livestock to human population continues to decline as pastoralists lose high numbers of animals during extreme climatic events. There has been a severe lack of public and private investment in infrastructure and economic development in these regions, and overall economic opportunities are severely constrained due to lack of water resources or water services for income generating activities.

2.6 Biotechnology

The major constraints to maize production are irregular and inadequate rainfall, insect pests (stem borers, large grain borers, and the maize weevils) and foliar diseases (e.g., maize streak virus, maize blight and gray leaf spot). Post-harvest loss of maize especially due to storage pests is estimated to range from 15 to 60% of the produce. Two of the most important storage pests include the maize weevil and the larger grain borer. The maize weevil occurs in all maize growing areas of Kenya and causes a loss of 10 to 20% of the produce. The larger grain borer was introduced into Kenya 20 years ago and causes yield losses of up to 60%. Reducing post-harvest losses of maize by developing maize resistant to storage pests would greatly improve smallholder farm incomes through reduced yield losses and would also decrease the amount of pesticides used to control maize storage pests.

According to an FAO study, $2 billion worth of livestock is lost per annum due to poor quarantines, mortality, non-vaccination and loss of trade. Common endemic livestock diseases in Kenya include Contagious Bovine Pleuropneumonia (CBPP) and Contagious Caprine Pleuropneumonia (CCPP). There are also concerns about Rift Valley Fever that limits livestock exports. Disease vaccines and diagnostic measures currently used in Kenya are ineffective. Development of effective animal disease vaccines and diagnostic measures would substantially reduce losses in production and translate into increased milk and meat production.

In Kenya, the National Council for Science and Technology (NCST) oversees regulatory issues related to biosafety in biotechnology under the auspices of the National Bio-safety Committee (NBC). Several other agencies or offices with current or future putative bio-safety regulatory functions are the Ministry of Health, Ministry of Environment and Mineral Resources, Ministry of Agriculture, Ministry of Livestock Development and the Ministry of Trade and Industry. For example, the Kenya Plant Health Inspectorate Service (KEPHIS) and NBC currently handle approvals for entry of genetically modified organisms (GMOs) into the country. Applications for GMO importation are reviewed by the NBC with expertise from NCST, MoA, MoLD, KEPHIS, local universities, environmental groups and local and international research institutes. KEPHIS enforces the regulations and guidelines for bio-safety as stipulated by the NBC (www.kephis.org).

On February 12, 2009, Kenyan President Mwai Kibaki signed the Biosafety Act of 2009 into law. Thus, Kenya became the fourth African country to enact legislation establishing the legal framework to govern trade in and use of GMOs as required by the Cartagena Protocol on Biosafety. The law mandates establishment of a National Biosafety Authority (NBA) to steer regulatory approvals and decision-making in moving on-going confined field trials of GM insect- resistant cotton, maize and other products to the next level of commercialization.

2.7 Kenyan Environmental Policies and Procedures

The National Environmental Action Plan (NEAP) Kenya’s sectoral environmental policies have been in place since independence, and there are over 70 statutes related to environmental management and conservation. These are poorly coordinated and difficult to implement. For this reason, the Kenyan government, with the support of the World Bank, put in place a National Environmental Action Plan (NEAP) in 1994.

The NEAP provides guidelines for achieving integrated sectoral resource development and management.

Concerns about the environment led to the enactment of the Environmental Management and Coordination Act (EMCA-1999). Thereafter, a Sessional Paper on environment and Environmental Impact Assessment and Audit (EIA/EA) guidelines were developed.

Development of EIA/AE Guidelines The Ministry of Environment and Mineral Resources (MEMR), with the support of National Environ-mental Secretariat (NES) developed EIA/EA guidelines for various economic sectors in Kenya. The guidelines provide an administrative framework for ensuring that EIA/EA studies are properly conducted and that information obtained is incorporated in development programs/projects planning, implementation and management activities.

Environmental Management and Coordination Act (1999) This Act was passed by Parliament in December 1999, and received Presidential assent in January 2000. It created the National Environmental Management Authority (NEMA) as the administrative body to implement the Act. The role of NEMA is to ensure project proponents abide by EIA/EA guidelines that apply to their respective project activities in accordance with the requirements of the Act. NEMA also coordinates sectoral project development activities among various government ministries for achieving sustainable development. Finally, NEMA has environment officers stationed throughout the districts who are gazetted environmental inspectors with powers to enforce the terms of EIA licenses, initiate EA and respond to citizens’ complaints of infractions of environmental regulations.

EMCA provides all Kenyans with the right to a clean and healthy environment, and also grants the public, communities and organizations ‘standing’ (recognizes locus standi), before the Court to sue those whose actions might negatively impact environmental quality even when no personal interest or injury is involved.

Also, the Act allows the enforcement and implementation of environmental mitigation, monitoring and restoration measures.

Water Resources Management The Government of Kenya recognizes that accessible potable water will result in poverty alleviation and improved health. The goal of the National Water Resources Management Strategy (NWRMS) is to eradicate poverty through the provision of potable water for human consumption and water for productive uses. The strategy is informed by the Water Act (2002), which is aligned with the Economic Strategy for Wealth and Employment Creation and the Millennium Development Goals. Under the Water Act, the GOK provides an Environmental Impact Assessment Checklist for new water points, and guidance on the development and use of water sources in ways that are economically, socially and environmentally acceptable.

Kenya’s Environmental Management and Coordination, (Water Quality) Regulations were finalized in 2006. These Regulations apply to drinking water, and to water used for industrial, agricultural, recrea-tional and other purposes ( ref: http://www.elaw.org/assets/pdf/ke.WaterQualityReg.pdf ).

For domestic water use, the regulations elaborate on the prevention of water pollution, standards for sources of domestic water; protection of lakes, rivers, streams, springs, wells and other water sources;

bans and restrictions on the use of water sources; compliance with water quality standards; and water quality monitoring.

For industrial use and effluent discharge, the regulations outline compliance with industrial standards;

restrictions on discharges into the general environment, aquatic environments, and public sewers;

discharge monitoring standards; and effluent discharge license protocols.

For agricultural use, the regulations define water quality standards and monitoring for the use of water for irrigation; water bodies and environmental management plans; provisions for buffer zone creation for irrigation schemes; and provisions for compliance with these regulations by owners/operators of irrigation schemes.

Pesticides The two main regulations governing pesticides in Kenya are the 1983 Pest Control Products Act, dealing with import, export, manufacture and distribution of products to control pests, and EMCA (1999). The Pest Control Products Board is a statutory organization of the GoK established under an Act of parliament [Pest Control Products Act, Cap 346, Laws of Kenya of 1982] to regulate the importation and exportation, manufacture, distribution and use of pest control products and to mitigate potential harmful effects to the environment. Before any pest control product is registered for use in Kenya, the Board considers the product’s safety, efficacy, quality and economic value in line with the Pest Control Products Registration Regulations LN 46 and 109 of 1984.

In October 2006, the following regulations were gazetted:

• Pest Control Products (Registration) (Amendment) Regulations - L.No. 123/2006

• Pest Control Products (Licensing of Premises) (Amendment) Regulations, 2006 - L.No.

124/2006

• Pest Control Products (Importation and Exportation) (Amendment) Regulations - L.No.

125/2006

• Pest Control Products (Disposal) Regulations - L.No. 126/2006

• Pest Control Products (Labeling, Advertising and Packaging) (Amendment) Regulations — L.No.

127/2006

• Pest Control Products (License Fees and other Charges) Regulations - L.No. 128/2006

3.0 USAID/KENYA AGRICULTURE AND PRIVATE ENTERPRISE PROGRAM DESCRIPTION

What follows is a description of current program priorities, projects and activities for USAID/Kenya’s agriculture and private enterprise program. It presents overviews of existing projects and a view of USAID’s future plans to assist various sub-sectors.

Agriculture and Private Enterprise is one component of USAID/Kenya’s Economic Growth program, Environ-ment being the other. The underlying principle of USAID/Kenya’s Agriculture and Private Enterprise program is one of market-led, value chain development that primarily targets three of Kenya’s important agricultural commodities – maize, dairy and horticulture. The program aims to i) expand adoption of productivity-enhancing, sustainable agricultural technologies; ii) enhance viable business linkages throughout value chains, from small farmer to end consumer, including producer and marketing associations; and iii) promote domestic, regional, and international trade in agricultural products, thereby improving Kenyan agricultural products’ access to global markets. In addition, the program identifies and supports appropriate roles of the public and private sectors in agriculture and business services, especially in rural areas, and advocates for policy, regulatory and legal reforms that heighten performance in the sector.

While most of the Agriculture and Private Enterprise program focuses on high and medium potential agro-ecological zones, it makes a concerted effort to integrate development assistance (DA), Economic Support Funds (ESF), food aid resources and to apply the above principle when appropriate within the Mission’s Title II and Humanitarian Assistance programs.

The Agriculture and Private Enterprise program contributes to the Africa Bureau’s Operational Goals of a more productive population and a vibrant private sector and to all its Economic Growth and Agriculture sectoral objectives. Moreover, the program is consistent with and contributes to the achievement of the USAID/EGAT Agricultural Strategy – “linking producers to markets” – and to the objectives of IEHA (Initiative to End Hunger in Africa) , as well as those of the NEPAD-Comprehensive African Agricultural Development Program (CAADP). The Mission’s food aid and other humanitarian assistance programs support the Agency’s core Humanitarian Assistance goal and are congruent with DCHA/FFP’s 2006-2010 Strategic Framework.

Agriculture and Private Enterprise also supports the US Mission’s Investing in People objective by funding and managing programs in water supply and sanitation.

Foreign Assistance Objective 3: Investing in People

Health Overview (Program Area 3.1) For the US Mission as a whole, major interventions in this Program Area focus on reducing the transmission and impact of HIV/AIDS; preventing and controlling infectious diseases; reducing maternal and child mortality; and improving family planning and reproductive health. With respect to the Agriculture and Private Enterprise program, the focus is improving access to safe drinking water and sanitation.

Water Supply and Sanitation (Program Element 3.1.8) - current and future activities The goals of USAID/Kenya’s water program are to increase sustainable access to safe drinking water and sanitation and to improve hygiene. Program activities address these goals by increasing access to drinking water supply and sanitation services, by providing better quality services and by promoting hygiene. The interventions are either direct support for water supply, sanitation and hygiene or indirect support through activities in water management, water productivity or water security. As a result of these interventions, there is increased access to water supply and sanitation services amongst poor and needy communities. Longer-term impact is expected in reduced prevalence of water-related diseases through appropriate household hygiene interventions; sustainable management of water supplies and services; and higher resiliency to climatic shocks among vulnerable popula-tions. It is expected these interventions will lead to improved health and nutritional status, increased school attendance (especially among girls), reduced food insecurity and more sustainable livelihoods. Currently, there are two active projects implemented by the Millennium Water Alliance and the Aga Khan Foundation.

The future – a continuation of activities with the same focus with the intent to award two more projects from applications received under an Annual Program Statement. Target areas will remain the ASALs as defined by the GoK’s “Draft National Policy for the Sustainable Development of Arid and Semi-Arid Lands of Kenya (2005)”, particularly those associated with recurrent droughts.

Foreign Assistance Objective 4: Economic Growth

Agriculture Overview (Program Area 4.5) Agriculture remains the backbone of the Kenyan economy, contributing more than 25% of GDP (over 50% if agriculture-based manufacturing is included). Some 80 percent of Kenya’s population (and 75% of its poor) live in rural areas, relying on agriculture for their livelihoods. For Kenya to accelerate its economic growth, it must make concerted efforts to increase agricultural productivity and market competitiveness to link the rural poor to growing markets. The U.S. remains in the forefront in advancing the competitiveness of key agricultural sub-sectors through comprehensive, market-driven, value chain programs and in supporting sector reform. If progress is maintained, agricultural sector growth should accelerate, accompanied by significantly higher investment, and ultimately increased rural household income.

Agricultural Enabling Environment (Program Element 4.5.1) - current and future activities USAID has two areas of intervention under this Program Element – i) policy analysis, capacity-building, collaborative policy outreach and monitoring of the agricultural sector and ii) developing a “Functional Bio-safety System” in Kenya.

There are six thematic areas of focus in the agricultural policy arena – i) agricultural supply chain development;

ii) action research and outreach to support the Strategy for Revitalizing Agriculture (SRA); iii) monitoring trends and salient new developments in the agricultural sector; iv) identifying strategies to promote agricultural competitiveness and trade; v) contributing to cost-effective strategies to reduce poverty in Kenya, especially using the maize, dairy, fish and horticulture sectors as vehicles for rural income growth; and vi) effective management of food assistance programs. Future programs will include consolidating legislation for the sector and supporting the development of policy papers, cabinet memos and bills.

The aim of the Program for Bio-safety Systems (PBS) is to ensure that biotechnology research and development are safe to humans and the environment. Specific support includes establishing the National Bio-safety Commit-tee (NBC) secretariat, improving handling of application dossiers and harmonizing the roles and responsibilities of bio-safety regulatory agencies. USAID support to PBS has led to informed decision-making by policy makers and responsible adoption and use of biotechnology.

Agricultural Sector Capacity (Program Element 4.5.2) - current and future activities USAID/Kenya focuses on three high-value commodities – maize, dairy and horticulture; proposes to expand into two more commodity areas – livestock and fish; supports research in agricultural biotechnology and in the development and use of improved agricultural inputs and practice; and supports livestock-related development in Kenya’s northeastern pastoral zone. Common aspects of intervention for existing and future commodities include:

organizing and supporting commodity production groups; providing technical assistance across commodity value chains; emphasis on entrepreneurship at all points of supply and value chains; linking commodity groups to national and regional trading institutions such as the Eastern Africa Grain Council; improving access of smallholder producers to business development services (BDS) and inputs; supporting private sector-led demonstration and extension of enhanced production technologies; promoting quality standards and certification;

and creating linkages with successful private, public and non-profit development programs.

With respect to agricultural research, USAID supports the development of pest-resistant maize, virus-resistant cassava, and animal disease diagnostics and vaccines. There is a focus on developing and commercializing diagnostic protocols for Rift Valley Fever (RVF), contagious bovine pleuropneumonia (CBPP), contagious caprine pleuropneumonia (CCPP), and lumpy skin disease (LSD). In the maize sub-sector, USAID supports research to isolate effective Bt sources against storage pests and to develop effective candidate genes. Longer term research will develop and commercialize pest-resistant maize varieties. Other research initiatives include developing, maintaining and producing breeder’s seed of maize varieties with high yield potential and with resistance to and/or tolerance of economically important diseases; i.e., Grey Leaf Spot maize streak virus and Striga or witch weed. Soil fertility research highlights soil amendments and improved water resource manage-ment. In the livestock sub-sector, research focuses on better disease management, immunization against East Coast Fever, vaccination against heart water tick, validation and dissemination of Helminthes control strategies and improved nutrition and management of dairy stock. Another important area of research is in improving infant nutrition through diet formulations that are subsequently marketed by rural women’s nutrition groups. Finally, participant training is supported at the graduate level in various sub-sectors.

Thus far (2005-2009), livestock development has been restricted to the four districts in Northeastern province and to one district in neighboring Coast province. Support is provided for improved market access and extending animal health services. Activities include livestock value chain financing; strengthening the institutional capacity of local organizations involved in the promotion of livestock marketing; strengthening the capacity of the GOK Department of Veterinary Services for service delivery in animal health and disease control; lobbying for an improved enabling livestock policy environment; and strengthening private-public sector collaboration in market access and service delivery.

The future –building on its ongoing portfolio, as well as complementary regional and humanitarian initiatives, USAID/Kenya will utilize FY09 Global Food Security Response (GFSR) ‘bridge funding’ to implement activities that better integrate Kenyan smallholder farmers and pastoral livestock producers in local and regional staple food markets. This bridge funding will be targeted on two key areas: a) expanding smallholder farmer participation in structured grain markets; and b) addressing key market and trade constraints, including critical animal health and related sanitary issues, within livestock/livestock product value chains. These and future year activities will build on and scale up, as appropriate, longstanding USAID/Kenya agricultural and livestock sector development programs supported by IEHA and other resources. New programs will continue to emphasize USAID’s approach to agricultural development; i.e., i) increasing agricultural productivity and market competitiveness of targeted commodities (likely to be expanded to include livestock products and other food staples such as drought-resistant grain/cereals, legumes and root crops); ii) improving natural resource management in agricul-tural landscapes and iii) improving the enabling environment through policy reform and institutional capacity-building. These activities will be undertaken in close collaboration with GFSR emergency response, asset-building and local and regional procurement activities supported by OFDA and Food for Peace, with the aim of building resilience and reducing dependence on food and non-food emergency assistance in chronically food insecure areas of Kenya.

Private Sector Competitiveness Overview (Program…