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Agriculture gets additional Sh5b as sector allocated Sh54.6b

Business
 Treasury CS Njuguna Ndung’u (centre) and PS Chris Kiptoo (left) arrive at Parliament Buildings ahead of the CS’s budget speech on June 13, 2023. [Boniface Okendo, Standard]

In a move to bolster Kenya’s agricultural sector, the government has allocated Sh54.6 billion in the 2024-2025 financial year.

This substantial increase of Sh4.7 billion from last year’s Sh49.9 billion is geared at ensuring sustainable food and nutrition security while positioning agriculture as a key economic driver.

Treasury Cabinet Secretary Prof Njuguna Ndung’u in his budget address yesterday said the economy is projected to grow at 5.5 per cent in the 2024-2025 financial year.  

The budget outlines strategic interventions focusing on value chains, including leather and leather products, textiles and apparel, dairy, tea, rice, edible oils, and the blue economy.

These initiatives aim to transform the agricultural landscape through enhanced value chain support, ensuring farmers have access to adequate and affordable working capital via cooperative societies and modern agricultural risk management tools.

“The government’s focus will be on agricultural transformation and inclusive growth through value chain support. This aims at providing adequate and affordable working capital to all farmers through cooperative societies and deploying modern agricultural risk management instruments that ensure farming is profitable and incomes are predictable,” said Prof Ndung’u.

Revitalise exports

The government’s strategy also includes transforming farmers from food deficit to surplus producers.

This will be achieved through input finance subsidies and extensive agricultural extension support, enhancing productivity across key food value chains, reducing reliance on basic food imports, revitalising export crops and expanding into high-value emerging crops.

Additionally, the tea value chain will see improvements through blending and branding initiatives.

To support these ambitious goals, the Treasury has allocated Sh54.6 billion for various agricultural programmes.

Key allocations include Sh10 billion for the fertiliser subsidy programme, Sh6.1 billion for the National Agricultural Value Chain Development Project, Sh2.5 billion for the youth enablement programme, Sh2.4 billion for the youth and women in agriculture initiative, Sh747 million for small-scale irrigation and value addition, and Sh642.5 million for the food security and crop diversification project.

In comparison, the 2023-24 Budget dedicated Sh8.6 billion to the National Agricultural Value Chain Development Programme and Sh2.7 billion to the National Agricultural and Rural Inclusivity Project.

Livestock production is also set to receive a boost, with Sh2.4 billion proposed for the Derisking, Inclusive, and Value Enhancement of Pastoral Economies Programme; Sh1.5 billion for the livestock value chain support project; Sh1.5 billion for the Kenya Livestock Commercialisation Programme and Sh192.5 million for the Embryo Transfer Project.

An additional Sh300 million has been earmarked for the development of the Kenanie Leather Industrial Park in Athi River, underscoring the government’s commitment to diversify and strengthen the agricultural sector.

“To raise agricultural productivity and enhance resilience to climate change risks in targeted small-holder farming and pastoral communities, I propose an allocation of Sh340 million to Ending Drought and Emergencies Project,” said Prof Ndung’u.

To revitalise and maximise benefits from cash crops, the government will make further investments towards revival and enhancement of output.

“In this respect, treasure proposed Sh2 billion for coffee cherry revolving fund, this is in addition to Sh4 billion allocated in the current fiscal year. Sh1.5 billion for payments of debts owed to sugarcane farmers, arrears to employees and maintenance of cane testing units,” said the CS.

“Sh120 million for cotton industry revitalization project and Sh150 million for pyrethrum industry recovery.”

To reduce over-reliance on the importation of edible oils, and encourage local production and processing, the Treasury proposes Sh90 million for the Coconut Industry Revitalisation Project and Sh260 million for National Edible Oils Crops promotion and support for Cashew nut development.

To enhance milk processing the government proposed Sh1.5 billion for excess milk mop-up, Sh500 million for the modernisation of KCC milk factories and Sh250 million for the construction of a milk factory in Narok. 

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