NAIROBI, Kenya, Jun 14 – The government has allocated Sh1.5 billion to write-off farmers’ debts in the sugar, rice and coffee sectors.
Finance Minister Njeru Githae said farmers across the country are overburdened by debts, arising from past mismanagement of farmers’ production and marketing institutions.
“This has consequently had adverse effects on farm output and productivity as some farmers cannot access credit,” he said while delivering the budget statement on Thursday.
Githae added that the government has made significant efforts to make subsidized fertilizer available to reduce the burden of high prices to farmers, and petitioned the private sector to do their part in easing the financial burden on farmers.
“I wish to challenge the private sector players to begin to seriously consider local production of fertilizer so as to bring down our dependence on imports in this sector,” he said.
The fertilizer subsidy to insulate the farmers from the rising prices in last year’s budget, however was one of the factors that led government to incur higher expenditure.
Overall in the area of agriculture, Githae stressed the government’s aim to not only to attain food security but create gainful employment opportunities for citizens.
“To this end and in order to scale up the on-going irrigation program and initiate new ones in FY2012/13, I have allocated an additional Sh8 billion. To complement these efforts, the National Irrigation Board will explore ways to shift to drip irrigation method as a more economical and efficient way of expanding irrigation coverage,” he explained.
The minister once again lobbied the private sector to establish manufacturing plants for producing irrigation kits locally and avail them to farmers at affordable prices.
The Agribusiness Fund was allocated Sh1 billion to enhance investment in agriculture and transform it into a business venture, making it attractive to the private sector, particularly the youth.
“Given the agreement with banks to invest Sh10 for every Sh1 of Government invested toward risk sharing, this allocation will bring the total resources leveraged from commercial banks for Agribusiness Fund to Sh10 billion,” Githae said.
Agriculture remains Kenya’s single largest sector contributing 24 percent to GDP.