Friday, July 19, 2024

Farmers Face Higher costs as Kenya Cuts Fertilizer Program Funding

By Natasha Gamalie

Farmers face a setback as the government reduced funding for discounted fertilizer from 16.2 billion shillings to 10 billion shillings, causing a major impact on them.

The Treasury has proposed a reduction in the fertilizer subsidy budget, seeking approval from Members of Parliament to implement the cut in the financial year 2024/2025.

The Agriculture and Food Security sector received 48.23 billion shillings in the 2024/2025 budget, a mere 977 million shillings increase from 47.253 billion shillings allocated in the previous year.

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This raises concerns considering the sector’s critical role in the country’s economic transformation.

If approved, 16.2 billion shillings will go towards the subsidy this year but will drop to 10 billion shillings in the next budget.

This action is most likely to reverse gains made in boosting food security and easing monetary expansion.

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“Agriculture forms the backbone of our economy and the budgetary allocation will have minimal impact in motivating farmers to increase acreage under crop production, due to the rising cost of farm inputs and unsteady markets for produce,” Kipkorir Menjo, a director Kenya Farmers Association (KFA) stated, during a farmers meeting in Eldoret.

Farmers who are part of the subsidy program pay only 2,500 shillings for a 50-kilogram bag of fertilizer. This is a significant decrease from the market prices that can go as high as 6,500 shillings.

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As per the Treasury, the initiative plans to distribute 70,138 tons of fertilizer in the upcoming financial year, with an estimated 152,265 farmers having access to the product.

The National Agricultural Value Chain Development Project received 6.1 billion shillings.

In addition to this the Food Security and Crop Diversification Project got 642 million shillings, and Livestock Resource Management and Development was allocated 1.2 billion shillings.

Furthermore, To boost livestock farming and improve the value of products, National Treasury Cabinet Secretary Njuguna Ndung’u allocated 300 million shillings for Development Leather Industrial Park-Kenanie and 10 billion shillings for MSMEs Agricultural Credit.

Additionally, 11.3 billion shillings were designed for Blue Economy Priority Projects, and 182 million shillings for the National Drought Emergency Fund.

In the 2024/2025 budget estimates, the allocation for manufacturing decreased from 22.789 billion shillings to 22.754 billion, showing a 4.54% decline that could impact investments in the sector.

The cut in funding will harm investors in agro-processing and textile and apparel manufacturing.

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