What the 2019/20 Kenyan Budget Had for Farmers

Overview

The 2019/2020 Kenyan budget estimates were presented to parliament by National Treasury Cabinet Secretary, Henry Rotich a few weeks ago and it’s good we look at what he had for Kenya’s backbone, agriculture. The theme for the 2019/2020 budget is “Creating Jobs, Transforming Lives – Harnessing the Big Four Plan” as a foundation for accelerated growth and shared prosperity. However, the budget has already received criticism from the Council of Governors and the Senate Committee on Agriculture for underfunding the sector. Out of the Kes 3 trillion budget, agriculture’s allocation is 2.5% which is far too below the 10% recommended by the Malabo Declaration. Here are the major takeaways from the budget on the agriculture sector.

VAT Exemption on Insecticides

The government has proposed to exempt agricultural pest control products from Value Added Tax. This will make the products affordable to farmers.This will eventually lead to competitive prices for local agricultural products both locally and in the region. However, as much as this is a good move, zero rating them would have been a better option.

Buy Kenya Build Kenya

There’s a proposal to promote locally grown products by introducing punitive tax measures on products that are locally available. Although, this affects manufacturing substantially, it touches on agriculture in a huge way as a source of raw materials for agro manufacturing sector.

National Value Chain Support Programme

The government has set aside Kes 2 Billion to support the development of various products value chains to increase value to the farmer. Already various development partners have been supporting farmers develop value chains for various agricultural products in the counties.

Irrigation Projects

There’s a proposal to allocate Kes 7.9 Billion to ongoing irrigation projects. With three quarters of the country being arid and semi arid and coupled with the unreliable weather patterns, it’s important the country reduces reliance on rain-fed agriculture by constructing dams and water pans. However, this being additional funding, the success of these projects depend on how the government solves the Kimwarer and Arror dams scandal.

Smallholder Dairy Farmers

In an effort to help small scale farmers commercialize their operations, the government has allocated Kes 700 Million to the sector. This is a laudable as previous policies were favorable to the big players locking out small scale dairy farmers from maximizing their returns from the multimillion industry.

Crop Diversification

The government allocated Kes 1 Billion for crop diversification and to revitalize the miraa industry. As Kenyans, abandon traditional crops for new high value crops such as avocados, it was necessary to support this initiative. However, the diversification should be backed by evidence of markets otherwise we might find ourselves with a glut of certain products.

Fish Farmers

The government has also set aside Kes 800 Million to rehabilitate fish landing sites to increase the volume handled. This will promote the food and nutrition security in the country as we’ll boost this sector that contributes 0.5% of the country’s Gross Domestic Product (GDP) whose potential can be tripled.

Coffee Farmers

The government has allocated Kes 3 Billion to set up the Coffee Cherry Revolving Fund where farmers can access advances at 3%. The funds will also be used to implement prioritized reforms in the coffee sector.

Sugar Cane Farmers

The government has set aside Kes 700 Million to pay debts owed by sugar cane farmers by public millers. This is in addition to previous years allocation of Kes 2.1 Billion allocation for the same.

Conclusion

Despite agriculture contributing over 50% of the country’s GDP both directly and indirectly and being among President Kenyatta’s Big Four Agenda,, the sector remains underfunded. In addition the allocation seem not to target the real issue of food security among the poorest. Apart from the meager Kes 700 Million for commercialization of smallholder dairy farmers and the exemption of VAT on pesticides, the budget seems to favour large scale farmers. This is despite, the fact that 70% of Kenyan farmers being small scale who often go hungry for lack of food.

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