National spreadsheet for agricultural distortions

At independence in 1963, Kenya inherited a relatively open and export-oriented economy with a policy environment that was favorable to the agricultural sector. Unlike many other developing countries, the ruling elite in Kenya had strong links to agriculture and implemented policies that supported both smallholder and large-scale producers. For most of the next 20 years the agricultural sector thrived, the economy in general grew, and the country enjoyed political stability. In contrast, the second 20 years of independence were marked by agricultural and economic stagnation and persistent struggles with corruption and other forms of poor governance. In recent years there have been signs of recovery and growth in both agriculture and the economy generally. This chapter first reviews major developments in the structure of the Kenyan economy and summarizes economic policies up to independence. It then presents measures of policy-induced price distortions over the 1963-2004 period. Distortions are measured through estimated rates of assistance based on comparisons of domestic commodity prices with undistorted world market prices. Finally, the paper links changes in rates of protection and disprotection to the evolution of various policies over the same period.