Kenya’s economy is reaping the benefits of a policy shift from consumption subsidies to production-based support, a core pillar of President William Ruto’s administration. Guided by the Kenya Kwanza manifesto, the new approach is anchored on the Guaranteed Minimum Return (GMR) strategy under the Agriculture and Food Security Pillar of the BETA Plan.
Previously, the government subsidised consumption items like unga and fuel at a cost of over Sh16 billion monthly an unsustainable path. Now, with the focus on subsidising production, farmers across the country are recording higher incomes and improved livelihoods.
Take macadamia farming, for instance farm-gate prices have quadrupled from Sh24 to Sh100 per kilo, making Kenya a leading global producer. Similarly, the coffee sector has flourished under the Coffee Cherry Fund, with payouts rising from Sh50 to Sh130 per kilo, and delivered directly via M-Pesa. Notably, coffee is now being cultivated in non-traditional areas like Kisumu, Trans Nzoia, and Uasin Gishu.
In the dairy sector, milk prices have increased from Sh37 to Sh50 per litre, while sugarcane farmers now earn Sh5,300 per tonne, up from Sh4,500, with some receiving bonuses for the first time. All 16 sugar factories are operational, reducing Kenya’s Sh23 billion sugar import bill and empowering farmers.
Miraa farmers have also benefited from revised GMR prices, despite resistance from entrenched cartels. Grade One prices rose from Sh700 to Sh1,300, with government reforms ensuring fair pricing and license vetting.
The fertiliser subsidy programme has been a game-changer. With donations from Russia and Algeria, over two million bags of fertiliser were blended locally, saving farmers nearly Sh3 billion. This allowed for additional investment in healthcare, including a Sh3 billion allocation to the Primary Care Fund under Taifa Care.
Beyond agriculture, investments in tanneries are boosting the leather industry, reducing the reliance on imported school shoes. Kenya’s food reserves are at an all-time high, securing national food security.
The shift to production subsidies is not just policy it’s transformation in action. As Government Spokesman Isaac Mwaura notes, a clear vision, paired with decisive implementation, is steering Kenya toward sustainable prosperity.
