Presentation prepared by Clemens Breisinger, Xinshen Diao, Paul Dorosh, Juneweenex Mbuthia, Lensa Omune, Edwin Ombui Oseko, Angga Pradesha, and James Thurlow, all with the International Food Policy Research Institute, Washington, DC. This is part of the Global Crisis Country Series.

1. Version: 19 June 2022
Kenya
Impacts of the Ukraine and Global
Crisis on Food Systems and Poverty
Clemens Breisinger, Xinshen Diao, Paul Dorosh, Juneweenex Mbuthia, Lensa Omune, Edwin
Ombui Oseko, Angga Pradesha, and James Thurlow
International Food Policy Research Institute, Washington DC
These country studies are conducted by IFPRI with financial support from
BMGF, FCDO, and USAID. All studies use data and models developed with
ongoing support from BMGF, USAID and the CGIAR’s “Foresight and Metrics”
initiative. The Kenya case study benefitted from working with the CGIAR’s
“National Policies and Strategies” initiative, IFPRI’s Kenya country program, and
national partners.
Clemens Breisinger (c.breisinger@cgiar.org) | Xinshen Diao (x.diao@cgiar.org) |
Paul Dorosh (p.dorosh@cgiar.org) | James Thurlow (j.thurlow@cgiar.org)

2. Version: 19 June 2022
Overview
• Series of country case studies
• Economywide modeling
• Capture world market shocks
• Estimate impacts on economy, agri-food
system, poverty, food security, etc.
• Simulate policy responses
• Three phases of analysis:
1. Initial data collection and impact assessment
2. Data revisions and analysis of broad policy options
• Cash transfers, food aid, and fertilizer subsidies
• Fiscal implications for national governments
3. In-country engagement and tailored policy analysis
Impact
assessment
Policy
analysis
Country coverage
Countries with IFPRI RIAPA models
May June
July

3. Version: 19 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations World Price Shocks
Source: World Bank Pink Sheets
Global data
11%
-13%
100%
56%
34%
88%
101%
Maize Rice Wheat Palm oil Crude oil Natural gas Fertilizer
Change in real world prices (June 2021 to April 2022)
30 Jun 2021 - 31 Jan 2022 31 Jan 2022 - 30 Apr 2022
30 Jun 2021 - 30 Apr 2022

4. Version: 19 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Supply and Demand
Supply
(% by source)
Demand
(% by use)
Kenya data
Source: IFPRI Kenya RIAPA Model
98%
82%
55%
4%
18%
45%
96%
Maize Wheat Edible oils Oil products
Imports
Domestic
23%
35% 40%
76%
77%
63% 52%
24%
8%
Maize Wheat Edible oils Oil products
Exports
Final use
Input use
+ Others = 100%
+ + +
2.3% 0.9% 0.9% 2.8%
Products’ share of the
value of total demand
throughout the economy
Notes: Wheat includes wheat grain and flour. 40% of wheat grain is imported, while wheat flour is
processed domestically.

5. Version: 19 June 2022
Shocks | World Food, Fuel and Fertilizer Prices
World price
Trade share
Direct use
Indirect use
Incomes
How big is the increase in world price?
How important are imports in local market?
Can local producers substitute for imports?
Which sectors use the product as an input?
Which other sectors are affected via supply chains?
What kinds of workers and households earn
incomes within the affected sectors?
Final use Which households consume the affected products?
Impact Channel Considerations Consumption Baskets
Kenya data
Source: IFPRI Kenya RIAPA Model
7.5%
12.7%
4.6%
20.2%
6.1%
38.7%
44.0%
37.9%
51.1%
38.8%
53.8%
49.3%
60.4%
37.2%
58.6%
All households Rural Urban Poor Nonpoor
Composition of household consumption spending
Cereals & edible oils Other foods Non-food goods & services

6. Version: 19 June 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations Fertilizer Adoption Rate
Source: IFDC Kenya
Timing When is the fertilizer needed?
Kenya data
71%
36%
94%
91%
27%
78%
44%
64%
10%
70%
18%
100%
55%
100%
Maize
Sorghum & millet
Rice
Wheat
Pulses
Irish potatoes
Leafy vegetables
Other vegetables
Sugarcane
Tobacco
Other fruits
Leaf tea
Coffee
Cut flowers
Share of cultivated land using fertilizer

7. Version: 19 June 2022
Shocks | Fertilizer Response (crop productivity effect)
Adoption
Application
Price
Demand
Response
What share of cultivated land uses fertilizers?
How much fertilizer is being used?
(i.e., fertilizer application rate)
How big is the domestic fertilizer price increase?
How do farmers react to rising fertilizer prices?
(i.e., price elasticity of fertilizer demand)
How do yields change with reduced fertilizer use?
(i.e., fertilizer response ratio)
Impact Channel Considerations
Crop Calendar
Source: FEWSNET Kenya
Timing When is the fertilizer needed?
Planting for Kenya’s main 2022 season is already underway
Kenya

8. Version: 19 June 2022
Results | GDP and Employment
• National GDP and employment decline
• Negative terms-of-trade shock
(i.e., negative effect of higher import prices outweighs positive
effect of higher export prices)
• Rising import costs reduces spending on
domestically produced goods
• Falling production leads to job losses
• Impacts occur throughout the economy
• Agri-food system GDP and employment also fall
• GDP declines in both primary agriculture and off-
farm agri-food sectors (e.g., processing, trading)
• Larger GDP declines in agriculture (equal to 30% of
overall GDP losses in the country)
• Faster job losses in off-farm sectors, especially in
food-related services, incl. trade and transport
Source: IFPRI Kenya RIAPA Model
Contribution to total change
GDP
Jobs
-0.8%
-1.0%
-1.1%
-0.7%
-0.8%
-2.6%
-2.1%
-1.8%
-4.8%
-3.3%
-6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Change in GDP and employment due to
food, fuel and fertilizer shocks (%)
GDP Employment
30%
10%
60%
Agriculture
Off-farm
Outside AFS
37%
13%
51%

9. Version: 19 June 2022
Results | Drivers of GDP Losses
• Fuel and fertilizer shocks drive most of the decline in
national GDP
• Agri-food GDP losses mostly driven by fertilizer shocks
• Fertilizer directly affects primary agricultural production
• Disrupts downstream processing via supply chains
• Off-farm also adversely affected by higher fuel prices,
which raise the cost of transport services
• GDP losses outside the agri-food system driven more
by higher fuel prices
• Higher transaction costs
• Lower consumer demand
Source: IFPRI Kenya RIAPA Model
Contribution
to change
-0.2%
-0.1%
-0.4%
-0.2%
-0.3%
-0.1%
-0.4%
-0.4%
-0.8%
-1.0%
-0.3%
-0.2%
-0.8%
-1.0%
-1.1%
-0.7%
-0.8%
Whole economy
Whole AFS
Agriculture
Off-farm
Outside AFS
Agri-food
system
Percentage change in real GDP due to food, fuel
and fertilizer shocks (%)
Food prices Fuel prices Fertilizer prices & response
18%
37%
45%
Notes: About 15.4 percent of the effect on agriculture GDP under “fertilizer prices and response” is directly from rising fertilizer,
while the remaining 84.6 percent is from the productivity shock caused by lowering the use of fertilizer.

10. Version: 19 June 2022
Results | Household Consumption
Source: IFPRI Kenya RIAPA Model
• Household consumption falls significantly
• Larger than GDP losses as households are hit twice by rising
prices and falling incomes
• Rising food prices is a more important driver of
consumption losses than for GDP losses
• Importance of shocks differs across population groups:
• Fertilizer shocks important for rural and poor households
• Rely more on farm incomes
• Consume more domestically-produced foods
• Fuel shocks important for urban and nonpoor households
• Earn more income outside the agri-food system
• More import-intensive consumer basket
• Consume products with larger transaction cost margins
• Food prices affect all households
• Higher food consumption share for poor households, means
slightly larger impacts
Contribution
to change
-0.8%
-0.7%
-0.8%
-1.0%
-0.7%
-1.1%
-0.9%
-1.3%
-0.8%
-1.2%
-0.7%
-1.7%
-2.0%
-0.5%
-2.6%
-3.3%
-2.2%
-3.8%
-2.4%
National
Rural
Urban
Poor
Nonpoor
Percentage change in real consumption
Food prices Fuel prices Fertilizer prices & response
29%
43%
27%

11. Version: 19 June 2022
Results | Changes in Inequality
• Differential effects on poor/nonpoor households are
driving changes in inequality:
• Fuel shocks cause larger consumption losses for
households in the top quintile
• Fertilizer shocks affect lowest quintile much more than
top quintile, causing inequality to increase significantly
• Food prices have similar impact across the income
distribution
• Overall, inequality rises
• Slightly larger consumption losses in Quintile 2, which
spans Kenya’s poverty line
Source: IFPRI Kenya RIAPA Model
-4.5%
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
Q1 Q2 Q3 Q4 Q5
Percentage change in quintile consumption
Food prices
Fuel prices
Fertilizer prices & response
Combined food, fuel and fertilizer shocks

12. Version: 19 June 2022
Share of population
falling into poverty
Results | Poverty
• Poverty rises significantly
• Headcount rate up 2.5% points
• 1.4 million more people pushed into poverty
• Larger increase in poverty in rural areas
• Four-fifths of expanded poor population
• Larger increase in rural poverty headcount rate
• Rural population much larger than urban population
• Mainly driven by fertilizer shock
Source: IFPRI Kenya RIAPA Model
Contribution
to change
0.7%
0.5%
0.7%
0.7%
0.6%
0.7%
1.2%
0.3%
1.8%
2.5%
1.4%
3.2%
National
Urban
Rural
Change in poverty headcount rate (%-point)
Food prices Fuel prices Fertilizer prices & response
347
81
256
368
94
260
667
48
643
1,383
223
1,159
National
Urban
Rural
Change in poor population (1000s)
Food prices Fuel prices Fertilizer prices & response
25%
27%
48%
16%
84%
Urban
Rural
Notes: About 37% of the country’s population have adult equivalent consumption levels that fall below the US$1.90 poverty
line. The poverty rate is higher in rural, about 48.6%, than in urban, about 15.6%.

13. Version: 19 June 2022
• Food, fuel and fertilizer shocks together increase the
cost of a healthy reference diet
• Reference diet is the EAT-Lancet’s “healthy” diet
thresholds for the six major food groups
• Rising prices for edible oils (in added fats) and cereals
(in staples) increase the cost of the recommended
healthy diet, while falling incomes reduce demand for
fruits, diary and proteins (meats & fish), and thus lower
their costs slightly
Results | Diet Quality
Source: IFPRI Kenya RIAPA Model
• Rising food prices and falling incomes cause diet quality to
worsen for many households
• Prior to the crisis, few households had consumption levels and
diversity needed for a healthy diet
• Rising food prices become much more important for
worsening diet quality than impacts on income and poverty,
and it is a leading factor for 3.5 million people to become
deprived in at least one additional food group for a health diet
• Rural population accounts for more of the deterioration in diet
quality
2.2%
0.7%
-0.4%
-0.6%
-0.6%
3.1%
Net change in
cost of healthy
diet
Contributions of
food groups to
change
Change in the real cost of a healthy
reference diet caused by rising world
prices (%)
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
11.7%
11.2%
13.6%
23.1%
30.7%
9.8%
Shares of six food groups in
total cost of a healthy diet
prior to the crisis
Added fats
Proteins
Dairy
Fruits
Vegetables
Staples
2,461
1,394
1,079
950
740
3,458
1,635
1,823
National
Urban
Rural
Number of people to become deprived in at least one
additional food group for a healthy diet (1000s)
Food prices Fuel prices Fertilizer prices & response

14. Version: 19 June 2022
Headlines
• Food, fuel and fertilizer shocks lead to large reductions in
GDP and employment in Kenya
• Agri-food system adversely affected, alongside the broader
economy
• Agriculture is particularly at risk to fertilizer shocks, esp. if it
leads to lower fertilizer use in the current season
• Poor and rural households are especially vulnerable
• Larger income losses
• Greater increase in poverty (esp. number of poor people)
• Larger contribution to the deterioration in diet quality
• Next steps
• Evaluate policy options available to governments and
development partners to mitigate impacts on food systems,
poverty, and food insecurity (e.g., cash transfers, food aid,
fertilizer subsidies, fiscal support, etc.)
Impact
assessment
Policy
analysis
Country coverage
May June
July