NAIROBI, Kenya, Sep 17 — President William Ruto has defended his administration’s shift from consumption-driven subsidy interventions to budget support targeting production.
Ruto who spoke while taking lawmakers allied to his Kenya Kwanza Alliance through his priorities in Naivasha on Friday said his government will seek a departure from unsustainable subsidies on consumption and instead focus on production and manufacturing to make goods more affordable and stimulate economic growth.
“We are not going to be subsidizing consumption. That is why we are going slow on the matter of subsidizing consumption. We are going to work and support producers,” he said.
He cited his predecessor’s Sh7bn subsidy on maize flour effected for four weeks ending August 9 as a demonstration of the ineffectiveness on consumption-focused subsidy programs saying the market suffered acute unga shortage with most Kenyans unable to gain from the program despite the utilization of their taxes to finance it.
“The Unga subsidy that was done, I was being briefed by the Ministry of Agriculture for one month, the taxpayer was asked to pay Sh7 billion for the unga that cost Sh100 which was nowhere in the first place. Only few people laid hold of it,” he said.
“If we had spent Sh7 billion shillings in fertilizer it would have been a different ball game.”
Ruto went further to explain that with Sh4.2 billion spent on his proposed fertilizer subsidy, the government would avail 1.4 million bags of fertilizer for the short rains and a further 1.7 million bags for tea farmers at an average Sh3,500.
“As I had announced the other day, we are intervening on fertilizer for the short rains. 1.4 million bags of fertilizer for short rains, we are intervening for tea fertilizers that is another 1.7 million bags for KTDA (Kenya Tea Development Agency),” he said.
“It is costing us less than the subsidy of unga that is for one month, and yet the subsidy we are providing is going to reach close to half a million farmers.”
Speaking during his inauguration at Kasarani Stadium on Tuesday, Ruto promised to avail 1.4 million bags of fertilizer, which would sell for Sh3,500 each, compared to the prevailing price of Sh6,500.
He noted the cost of Calcium Ammonium Nitrate (CAN) fertilizer for top dressing ranged between Sh6,000 and Sh7,000 depending on the outlets, and the cost of urea was over Sh7,000 per 50 kg bag.
Most farmers had decried President Uhuru Kenyatta’s intervention on fertilizer in June as inadequate saying they were forced to grow their crops with insufficient inputs, a move that would compromise productivity at the end of the season later in the year.
The use of fertilizers in agricultural productivity was threatened following spikes in fertilizer prices attributed to the COVID-19 pandemic as well as restricted efforts in countries like China, Russia and Turkey to protect their farmers.
The situation was also compounded by heavy demand from India, Brazil and USA which bought large quantities hence reducing available global supplies.
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