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Farmers worried as key agricultural corporations fall into financial mess

By Michael Ollinga | August 25th 2016 at 00:00:00 GMT +0300

National Cereals and Produce Board's (NCPB) Eldoret Depot. It is said most agricultural parastatals are in financial distress. [PHOTOS: KEVIN TUNOI/STANDARD]

Farmers in North Rift have expressed concern over the country’s food security status. This came after it emerged most State corporations they rely on are on the brink of collapse due to financial crises.

The maize, wheat and dairy farmers who met with the parliamentary committee on Agriculture said they were unable to sustain or grow their enterprises because of credit access challenges, lack of quality inputs and reliable market for their products.

Lt. General (Rtd) Augustine Cheruiyot, while presenting farmers’ needs to the committee chaired by Mandera North Adan Noor, said public corporations instrumental in supporting farmers and developing the agriculture sector are underfunded.

“Agricultural corporations instituted decades ago that have been directly helping farmers and making farm-related investments viable are sadly laden with debts and can do little to grow the sector,” he said.

Thomas Gorgoren, a large-scale maize farmer in Soy, Uasin Gishu County, pointed out Agricultural Finance Corporation (AFC), Agricultural Development Corporation (ADC) and the National Cereals and Produce Board (NCPB) as key organisations that have been destabilised by debts and poor funding by the Government.

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“AFC is the genesis of the success some of us can look back to because it offered us low-interest loans that helped us invest more and expand our businesses but currently it has been underfunded and can only support fewer farmers,” said Gorgoren.

Gorgoren said AFC was underfunded by Sh4 billion, saying the Sh3 billion given to the parastatal can hardly satisfy the needs of seasonal crops farmers let alone other agricultural development. “It is clear in our petition that AFC needed at least Sh7 billion to increase credit access to more small-scale and large-scale farmers and also help write off loans of individuals that lost their produce and livestock in the 2008 post-election violence,” he said.

Back on its feet

Kenya Farmers Association (KFA) Director Kipkorir Menjo said development of the sector cannot be realised when most of the key corporations to aid growth of farmers are on the brink of being auctioneered due to debts. “The Government needs to intervene urgently and bail out ADC, address the taxation saga surrounding NCPB which was nearly auctioned by the taxman over an alleged Sh1.2 billion unpaid returns,” said Menjo.

According to Menjo, the challenges facing this sector can easily be overcome if the Government commits to implement the Maputo Declaration of 2003 and allocate 10 per cent of the national budget to agriculture.

ADC Board Chairman Bifwoli Wakoli admitted the institution that is instrumental in crop seeds and semen production is in financial crisis. “I was taken out of the corporation’s car on the second day I reported to work by Kenya Commercial Bank’s debt collectors over a Sh300 million debt, which was acquired to purchase fertiliser. We have debts amounting to Sh1.6 billion as at now and cannot do much, hence destabilising farmers who relied on us on quality seeds and hybrid livestock,” explained Wakoli.

Wakoli told the committee that the corporation needs Sh4 billion to get back on its feet where Sh1.6 billion will offset debts with Sh2.4 billion going into the revival of the corporation. “We were only given Sh700 million and have used Sh200 million in the establishment of the country’s second bull station in Kitale. Help us get this amount and ADC will never borrow again because we have enough land and potential to produce seeds, semen and food for sale and sustain our operations,” Wakoli told the committee.

Uasin Gishu County Governor Jackson Mandago backed Wakoli, saying there is need for a proper alignment of agriculture-based parastatals to ensure adequate funding.

He said Kenya Cooperative Creameries (KCC) and AFC need to be directly under the Ministry of Agriculture and not Cooperative Societies.

“We do not want to hear about auctioning of agriculture-based corporations but we need them in the right departments and to be well funded. The North Rift Economic Bloc (NOREB) governors are ready to be involved during budget proposals to avoid misrepresentation of our farmers,” Mandago said.

Noor called on the farmers to write formal petitions to the committee, reiterating that they are willing and able to help eliminate perennial challenges that have been dogging farmers.

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