Rotich sweetens sugarcane and tea farmers' lives

Sugarcane and tea farmers were the biggest winners in the 2016-17 budget after the Government removed taxes on their products.

Treasury Cabinet Secretary Henry Rotich removed transactional tax on the two products after the Government realised that farmers were losing income. "In order to improve farmers' earnings, I propose to remove these levies,” said Rotich yesterday in his budget speech.

An ad valorem tax is based on the value of a transaction or of property. It is typically imposed at the time of a transaction.

The Government also set aside Sh4.9 billion to help farmers subsidise fertiliser and seeds. It also moved to replicate the 10,000 hectares scheme in Galana-Kulalu to other small-scale irrigation schemes as it moves from rain-fed agriculture.

Coffee farmers continued with their gains from where they left in the last financial year after the Government set aside Sh3.4 billion for waiver of their debt.

This comes at a time the Government is seeking to resuscitate the Agriculture sector.

Sugarcane farmers will also be a happy lot after the Government allocated Sh2 billion more for the revival of Mumias Sugar.

EL NINO RAINS

According to the Economic Survey 2016, improved production in maize, fresh horticultural produce, marketed milk, wheat and rice saw agricultural sector’s gross value addition grow from 3.5 per cent in 2014 to 6.2 per cent in 2015.

Now agriculture accounts for 30 per cent of the total national Gross Domestic Product. The growth was attributed to the abundant rainfall characterised by El Nino.

However, not much of maize, a valuable food crop for most Kenyans, was sold to Kenyans.

According to the survey, this was due to lower prices offered to farmers and this saw the value of maize in the market drop by 11.4 per cent from Sh9.6 billion in 2014 to Sh8.5 billion in 2015.

Just like tea, coffee production fell by 16 per cent in 2015. Deliveries of sugarcane to factories rose by 4.6 per cent from 6.5 million tonnes in 2014 to 6.8 million tonnes in 2015.

However, value addition in the sector, although rising, is still dismal. Agriculture value addition rose from 3.5 per cent in 2014 to 6.2 per cent in 2015. As it stands, the country still exports most of its produce including coffee and tea as raw materials.