Kenya: Small-Scale Farmers to Get Sh3 Billion in Stimulus Package

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Small-scale farmers will receive Sh3 billion from the stimulus package announced by President Uhuru Kenyatta through an e-voucher system, which subsidises inputs.

The vouchers, with a value of Sh20,000 per acre, will be given to about 200,000 farmers to enable them to access fertiliser, seeds, chemicals, post-harvest tools and soil testing services.

Only vulnerable farmers with five acres and below will get the support.

The government hopes the plan will cushion farmers against the effects of economic contraction occasioned by the Covid-19 pandemic, desert locust invasions and bad weather.

The World Bank has supported the fight against locusts in Kenya with up to $43 million (Sh4.59 billion) in credit.

The funding, under the Emergency Locust Response Programme (ELRP), builds on the bank’s earlier emergency financing of $13.7 million.

“The e-voucher is a subsidy system that will allow farmers get inputs from multiple providers. They will use the voucher to pay for 40 per cent of the cost of whatever input is needed,” Agriculture Principal Secretary Hamadi Boga said.

“The remaining 60 per cent will be catered for by the farmer.”

In a programme with Kenya Commercial Bank and Safaricom through mobile telephony, the farmers will receive e-vouchers that can only be redeemed at agro-vet outlets pre-qualified by the Ministry of Agriculture.

Prof Boga said the government has already signed contracts with service providers, including agro dealers.

“The idea is to secure the food chain, at least according to what President Uhuru Kenyatta said,” chief economist at Mentoria Economics Ken Gichinga said.

“The e-voucher system can only be used to buy inputs, so it keeps the beneficiaries honest in the sense that you have to participate in the farming ecosystem. This means there is less opportunity for plunder or misdirection of funds into things that are not agriculture-related. The idea of locking this funding into vouchers is profound.”

According to Mr Gichinga, the challenge is in the fact that there are five million small-scale farmers around the country, many of whom are not in any formal union or organisation.

“Many of these farmers still do not have access to credit. We did some research and found that only about three to four per cent of bank loans go to agriculture, yet the industry contributes about 25 per cent of Kenya’s gross domestic product,” he said.

“If the inputs are quality, the farmer will get quality outputs. But people who are into organic farming and are used to resilient methods might be wary of this model as it introduces chemicals.”

He added that the other good thing about the programme is that some extension services are hooked onto the farmer’s activities.

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