Deputy President William Ruto says despite the small scale farmers contributing highly to the agriculture sector they remain poor and are unable to access credit to grow their yields.
Ruto says if the issue is not addressed, the continent may not be able to transform and grow the sector into full agri-business.
“You know farming does not exist in isolation. How do we as governments’ make sure financing to agriculture does not become an impediment to unlocking our potential?” Ruto posed.
He was speaking on Tuesday during a forum on revolutionising finance for agri-value chain which brought together over 1000 agriculture and financial stakeholders from Africa.
The issue of lack of access to credit by small scale farmers has been blamed on high risks involved in lending by the financial institutions.
But Ruto says it was time to come up with attractive products that will ensure these farmers can get affordable loans to be able to venture into serious agriculture.
He called on the banks especially in Kenya to bring down the cost of borrowing considering the recent development to facilitate the move including the introduction of Kenya Banks Reference Rate (KBRR).
“Matters of interest rates is a subject that informs access to credit by entrepreneurs, by industrialists and by farmers,” Ruto said.
The Kenyan government targets to export over five million tonnes of grain in the next five years which Ruto says cannot be achieved if serious financing is not put toward farming just like any other investments.
“I will give you an example. Today in Kenya, a small holder farmer produces 15 to 18 bags of maize weighing 90 kilograms on an acre. A farmer using irrigation on the other hand, will produce between 80 to 90 of 90kgs bags of maize on an acre,” Ruto lamented.
On his part Agriculture Cabinet Secretary Felix Koskei said there was need to reduce taxes that in the agriculture sector on farm inputs as we deal with other bottleneck.
“Agriculture in Africa is facing a lot of challenges, challenges that have become a chorus everywhere including, high cost of input, resulting to high cost of production and lack of use of technology. It is time to deal with these issues now,” Koskei said.