Farmers demand sector reforms, warn against budget proposals

KENAFF CEO Dr Daniel Mwenda M'Mailutha addressing the media at their office grounds calling on the Govt to reconsider proposed tax measures on agriculture in the 2025 Finance Bill. [Paul Mbugua, Standard] The Kenya National Farmers' Federation (KENAFF) has raised alarm over several proposals in the Finance Bill 2025, warning that the changes could cripple smallholder farmers and undo recent gains in the country's agricultural sector. In a strongly worded statement issued on Wednesday at the Farmers' Conference Centre in Thogoto, KENAFF National Board Chairman Prof Kaburu M'Ribu called on the government to urgently reconsider tax proposals that threaten the cost of food production and the livelihoods of millions of Kenyan farmers. At the top of the list of concerns is the proposed removal of VAT exemptions on key agricultural inputs, such as fertilizers, seeds, and pesticides, now set to attract a 16% tax. "This move risks increasing the cost of production at a time when farmers are already grappling with climate shocks, declining yields, and rising input prices," said Prof Kaburu. Fuel prices are also in the spotlight, with excise duty proposed to rise from Sh21.95 to Sh24.95 per litre. KENAFF argues this will directly inflate transport costs, making farm operations and market access even more expensive, especially for small-scale producers in remote areas. The federation also flagged the reclassification of fertilizers and pest control products from zero-rated to VAT-exempt. While this might sound harmless, it prevents suppliers from claiming input tax, a hidden cost that is passed on to farmers. "From increased freight tax on imported inputs to punitive levies on packaging materials for value-added products like tea, the cumulative effect is a blow to both local production and export competitiveness," warned Prof. Kaburu. While acknowledging the government's allocation of Sh77.7 billion to the agriculture sector and Sh10 billion towards the fertilizer subsidy program, KENAFF insists that such investments risk being undermined if the Finance Bill proceeds in its current form. Beyond taxation, KENAFF is also pushing for structural reforms in Kenya's agricultural markets, which it says remain fragmented and dominated by middlemen. "The market is tilted in favour of large-scale, well-financed players while smallholder farmers are stuck in informal, low-return supply chains," said Prof Kaburu. The federation is calling for a National Inclusive Agricultural Market Policy to address issues such as price volatility, lack of market infrastructure, and weak farmer bargaining power. Among the proposals is the establishment of rural aggregation centres, investment in cold chains, digitization of market information, and strengthening of farmer cooperatives. "The current system is unjust and unsustainable. It is no wonder the youth are shunning agriculture," he added. "Structured markets will empower farmers, increase incomes, and restore dignity to food producers." KENAFF also used the platform to advocate for stronger social safety nets for farmers, saying many are excluded from mainstream programs like the National Social Security Fund (NSSF) and Social Health Insurance Fund (SHIF). Prof Kaburu noted that smallholder farmers remain economically vulnerable, with limited access to health care, rising cases of stress and mental health issues, and minimal protection against crop failure and climate shocks. In response, KENAFF has partnered with Britam to roll out a tailored health insurance product for farmers and is establishing Farmer Wellness Clubs across rural communities. However, it insists that lasting change must come from the government. The federation is calling for a National Farmer Social Protection Policy, subsidized insurance premiums, better mental health support, and simplified registration for farmers under national schemes. With over 1.6 million members across the 47 counties, KENAFF says it is ready to work with national and county governments, development partners, and the private sector to ensure farmers are not left behind. "We are not just raising concerns-we are offering solutions," Prof Kaburu said. "Our farmers deserve fair taxation, structured markets, and reliable social protection. Anything less is a betrayal of the people who feed this nation."

Farmers demand sector reforms, warn against budget proposals

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