Win for farmers as fertiliser subsidy gets Sh18b in budget

Agriculture CS Mutahi Kagwe joined by other leaders as they inspect a maize variety at the Kenya Seed stand during the Nakuru ASK Show, July 4, 2025. [Kipsang Joseph, Standard]

The fertiliser subsidy programme is the biggest winner in the 2026-27 budget estimates, with its allocation more than doubling from Sh8 billion in the 2025-26 financial year to Sh18 billion this year.

On the other hand, the National Agricultural Value Chain Development Project (NAVCDP) is among the biggest losers in the budget estimates for the upcoming financial year. The programme’s allocation has been cut by more than half, from Sh10.2 billion in the 2025-26 financial year to Sh4.6 billion this year, after previously receiving the lion’s share of funding.

“Following the success of the fertiliser subsidy initiative, a seed subsidy programme has also been introduced to complement the intervention,” state submissions by the Departmental Committee on Agriculture and Livestock.

The seed subsidy programme has received Sh2 billion. Agriculture remains a cornerstone of Kenya’s economy, supporting millions of livelihoods and playing a vital role in food security, employment and export earnings.

Food security

The sector encompasses crop production, livestock farming, and agribusiness activities across the country. 

The Agriculture and Rural Development sector has been allocated Sh106.8 billion in the 2026-27 budget estimates to support food security and agricultural transformation. 

The government has placed greater emphasis on food security and climate resilience programmes. However, concerns are emerging over declining budgetary allocations relative to other sectors. 

It continues to support key agricultural interventions aimed at boosting production, improving value chains and enhancing farmers’ resilience to climate change. 

Investments in irrigation infrastructure, water harvesting projects and climate-smart agriculture are expected to cushion farmers from the effects of erratic weather patterns that have increasingly disrupted production. 

The agriculture committee indicates that the Sh42.98 billion development allocation for the State Department for Agriculture will primarily support key government programmes aimed at enhancing agricultural productivity and sector reforms. 

These include the fertiliser subsidy programme (Sh18 billion), the sugar reforms support project (Sh2.47 billion), the seeds subsidy programme (Sh2 billion) and seed cane multiplication and popularisation (Sh300 million). 

Other allocations include the tea reforms programme (Sh300 million); Micro, Small, and Medium Enterprises (MSMEs) agricultural credit through the Agriculture Finance Corporation (Sh1 billion); the food systems resilience project (Sh5.4 billion); and the National Agricultural Value Chain Development Project-Bottom-Up Economic Transformation Agenda (NAVCDP-BETA) (Sh4.6 billion). 

Stakeholders in their submissions to the committee highlighted the need to address the post-harvest component of the value chains to improve agricultural productivity and support sustainable food production across the country. 

They said youth empowerment and economic transformation initiatives should be more closely linked to productive sectors of the economy, particularly agriculture, livestock, agribusiness and micro, small and medium enterprises (MSMEs), which have significant potential to create employment and income-generating opportunities for young people. 

There is also a need for increased financing and targeted support for key agricultural value chains, including irrigation farming, horticulture, dairy farming, livestock production, rice farming, poultry farming and other related enterprises. 

Stakeholders, at the same time, emphasised the need to improve access to affordable credit, expand market opportunities, promote value addition, strengthen business incubation programmes and enhance entrepreneurship development to enable youth-led enterprises to grow and compete effectively. 

They also highlighted the importance of supporting youth-owned enterprises operating in digital services, retail trade and transport services.

The submissions also underscored the need to strengthen labour mobility opportunities. The committee noted that the budget contains several interventions addressing issues raised by stakeholders, including allocations under BETA, value chain interventions and agriculture. 

These include Sh18 billion for the fertiliser subsidy programme, Sh1 billion for the agribusiness MSME credit scheme, and other key government interventions contained in the budget, such as the Nyota Programme.