Sh7b EU funding to grow agricultural sector

September 19, 2011
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, NAIROBI, Kenya, Sep 19 – The Government has signed a Sh7.82 billion (£60 million) loan agreement with the European Union to boost the agricultural sector.

The money, to be spread over three years, will go towards solving challenges of accessing credit as well as developing insurance products for farmers.

EU Head of Development cooperation in Kenya Bernard Rey said on Monday that the country has potential to scale up the impact of agriculture on the economy and the financial assistance will go towards speeding up the process.

“We are working with the Ministry of Agriculture in trying to solve bottlenecks that have slowed down the growth of the sector from access to credit to creating markets for produce,” Rey said.

Agriculture continues to dominate Kenya’s economy with expansion in the sector credited with boosting growth in 2010 to 5.6 percent from 2.6 percent a year earlier.

Agriculture Permanent Secretary Romano Kiome said the ministry was working on a structure to prioritise agricultural activity to achieve maximum output.

“We have not had a good mechanism of prioritising agricultural sub-sectors because we have not known which sector is better than the other. We have also fallen into a trap of trying to please everyone (farmers) with what they are producing,” Kiome said.

Kiome said the ministry had set out a strategy where seeks to change the perception of farming to make it a more commercially viable venture.

The ministry has identified horticulture, dairy, tea and sugar as the four key sectors it intends to focus and grow.

“If we take those four and make the best out of them in terms of contributing to the economy we think we can influence the world,” Kiome said.

Other thematic areas the ministry is looking to improve include availability of farm inputs, creation of ready markets, access to finance and increasing arable land under irrigation.

The PS said that there was also need to raise the application of technology in farming to boost yields.

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