Principal Secretary for Agriculture Kipronoh Ronoh has emphasized the need for a policy framework to guide the financing of the agriculture sector in Kenya. He believes that such a policy will enhance productivity and ensure sustainable support for farmers. While acknowledging that the government’s plan for agriculture is progressing under the Bottom-Up Economic Transformation Agenda (BETA), Ronoh highlighted the critical challenge of financing agriculture effectively.
Ronoh pointed out that agriculture is central to transforming the economy and creating employment, noting that it employs 70% of the rural population and contributes over 22% to the country’s GDP. Despite its importance, the sector has faced neglect in terms of attention and funding, and Ronoh is advocating for the establishment of a structured legal policy framework that will offer a sustainable approach to financing the sector.
The PS made these comments during the launch of the second Financing Agri-food Systems Sustainably (FINAS) 2025 Summit, which is set to take place from May 20 to 21 at the Kenyatta International Convention Centre (KICC) in Nairobi. The summit is sponsored by the Ministry of Agriculture and Livestock, along with several partners, and will bring together African Ministers of Agriculture, international partners, and other stakeholders. During the summit, a draft policy on sustainable agricultural financing is expected to be launched to provide an operational framework for the sector.
The policy framework, which was developed from the discussions held during the FINAS 2024 dialogue, aims to consolidate and optimize public finances to support food systems development in Kenya. It is designed to support initiatives that will enhance agricultural productivity, improve food security, and promote sustainable practices. Among the key topics to be discussed at the summit will be strategies to increase farmer satisfaction, the role of cooperatives, mechanization, commercializing agriculture, and making it more attractive for young people.
The agriculture sector’s budget allocation for the 2025-2026 fiscal year is Sh77.7 billion, a rise from Sh73.9 billion in the previous fiscal year. This allocation represents 3% of the ministry’s total budget share and is expected to strengthen the entire agricultural value chain, improving food security and creating more job opportunities. The funding is also intended to improve market access and support the implementation of various initiatives across the sector.
Despite the government’s efforts, there are concerns that the Malabo Declaration’s commitment to allocate 10% of the national budget to agriculture by 2025 may not be achieved. The Fourth Comprehensive Africa Agriculture Development Programme (CAADP) Biennial Review Report indicates that none of the African Union member states are on track to meet the target by 2025.
The agricultural sector faces significant challenges, particularly in accessing financing, which is hindered by the high risks and costs associated with lending to the sector. According to Aceli Africa, agriculture accounts for one-third of all jobs and economic activity, but it receives only 4-5% of commercial bank capital. To address this issue, there have been calls for removing collateral requirements for agricultural financing, particularly for youth entrepreneurs, and using big data to assess the eligibility of applicants.
The global landscape of development funding is also undergoing significant changes, leaving gaps in resources for financing agri-food systems. The UN Food Systems Summit has called for the mobilization of an additional USD 300-350 billion per year to transform food systems and curb the environmental, social, and economic costs associated with current practices. In Kenya, food waste and loss amount to nearly USD 0.6 billion annually, highlighting the urgent need for more effective resource management within the food system.
