Farmers reap benefits in Uhuru Budget

June 8, 2011
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, NAIROBI, Kenya, Jun 8 – Kenya has received Sh876.5 million from the International Fund for Agriculture Development as a risk sharing facility to be used as leverage by local commercial banks on behalf of Kenyan farmers.

The allocation will enable approximately 700,000 households access Sh10 billion in form of loans to enhance various agricultural projects aimed at facilitating food security.

While reading his Sh1.155 trillion budget on Wednesday, Finance Minister Uhuru Kenyatta explained that the grant would help build the financial capacities of rural populations and vulnerable groups under the Kilimo Bora project.

"We are also expanding this project by establishing a Sh5 billion impact investment fund under the Kenya Incentive Based Risk sharing agricultural lending programme to be implemented over a four year period," he said.

"This will help leverage Sh50 billion lending to the agricultural sector and rural development targeting another 1.5 million small holder farmers and 10,000 agribusinesses across the country," he explained.

The government also announced that it had set aside Sh400 million to be used in the creation of a Livestock Fund aimed at cushioning livestock farmers against the harsh effects of unfavourable climate changes.

Mr Kenyatta has in the same regard set aside an additional Sh492 million to fund the existing slaughter houses and also facilitate the creation of new ones.

"This money will help set up additional slaughter houses in arid areas. Honourable members from these regions should however note that these allocations are intended to scale up the projects initiated in the 2010/2011 budget under the Livestock Ministry," he said.

The Finance Minister added that it had set aside Sh10.2 billion for the establishment of a comprehensive irrigation programme aimed at providing food security.

Mr Kenyatta said that there was a need for the country to shift to irrigation based farming methods in order to improve food security adding that the government would gradually irrigate 1.7 million acres of potentially arable land.

The government also plans to use Sh8.6 billion to support existing irrigation programmes, Sh1.2 billion to initiate large irrigation projects in Nyanza province and Sh400 million to expand small holder irrigation projects.

"I know some honourable members are wondering why we allocated funds for irrigation and other critical interventions under the Ministry of Finance," he noted.

"But you will agree that where there has been famine in our county ministries rush to the Treasury to secure additional funds without bothering where such funds will come from," he added.

The government announced an additional allocation of Sh6.4 million for the provision of water in 170 constituencies across the country. Mr Kenyatta noted that the money would be placed under the ministry of agriculture and would require approximately Sh1.1 billion in the rolling out phase.

He however added that the government had already decided to set aside the additional Sh1.1 billion to be used in setting up water pans for 35 constituencies located in semi arid and arid areas.

"We are doing this to kick out hunger once and for all. This allocation translates to approximately Sh30 million for each of these constituencies to set up 20 water pans with a capacity of 100 cubic meters each," he said.

"I am confident that with these timely and much needed interventions we will be able to improve in a measurable way the living conditions of the people in these areas," he added.

The Finance Minister noted that water harvesting and storage remained vital to food security and further allocated Sh474 million, as a conditional grant, to 1,900 schools countrywide to promote water conservation programmes among school children.

"Given the perennial water scarcity in our country we must start inculcating the value of water conservation to our children. I have therefore allocated Sh250,000 per school for 10 primary schools per constituency and in 192 rural based schools in our constituencies," he explained.

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