Kenyan consumers are set to face higher prices for essential commodities like sugar, coffee, and tea due to the reintroduction of levies on these cash crops. This development comes as agriculture stakeholders propose new taxes to help fund the fertilizer subsidy program. The move is part of a broader strategy to address the challenges faced by farmers, particularly those related to fertilizer costs.
The government had allocated Ksh10 billion for the fertilizer subsidy in the current financial year, but agricultural experts argue that this amount is insufficient to meet the growing needs of the sector. To bridge this gap, stakeholders are looking for alternative funding mechanisms, with the introduction of levies on key cash crops like sugar, coffee, and tea being one of the proposed solutions.
Eng. Laban Kiprotich, the Agriculture Engineering Secretary, emphasized that these levies would be aimed at ensuring that the funds raised are reinvested into the agricultural sector, specifically for the benefit of farmers. “We are looking for where else to tax for the benefit of our farmers,” Kiprotich said. “I know we have different commodities like sugar, coffee, tea, which we had proposed that let there be a small levy for these particular crops to be plowed back into its input.”
The proposal has sparked concern among consumers, who will inevitably bear the brunt of these increased costs. The rise in prices for sugar, coffee, and tea, staples in many Kenyan households, could significantly impact the cost of living. The government’s decision to reintroduce these levies is part of a broader strategy to ensure food security and support local farmers by increasing agricultural productivity.
However, the move has raised concerns about its potential negative impact on consumers and the agricultural industry. Dr. Clement Breisinger, the program leader of the International Food Policy Research Institute (IFPRI), highlighted that while levies on agricultural products might help raise funds for subsidies, they could also have adverse effects on farmers in the short term. According to research conducted by IFPRI, agricultural withholding taxes and levies can lead to higher production costs, which could, in turn, reduce the profitability of farming for many small-scale farmers.
IFPRI, which works closely with government ministries, including those of planning, social solidarity, and agriculture, has advocated for a more balanced approach to taxation and subsidy programs. The organization has called for a review of some of the taxes on companies handling fertilizers to reduce the cost of production. By lowering the cost of fertilizers, farmers could have access to more affordable inputs, which would ultimately benefit both the agricultural sector and consumers.
As the debate over the new levies continues, there is also a push for farmers to adopt more sustainable and modern farming practices. Experts are encouraging the use of organic fertilizers, improved land use techniques, and intercropping methods. These practices are believed to optimize the benefits of farming and improve the long-term sustainability of the agricultural sector.
The fertilizer subsidy program, which is part of the Kenya Kwanza government’s plan to support farmers, aims to enhance productivity and ensure food security. In preparation for the 2025 long rains season, the government procured 7.4 million bags of fertilizer, the majority of which were delivered to stores by mid-January 2025. Distribution of the fertilizer is expected to commence at the end of January, ensuring that farmers are well-prepared for the planting season that begins in mid-March.
Despite the challenges faced by the agricultural sector, the fertilizer subsidy program is seen as a critical step toward improving productivity and reducing the cost of food. However, the introduction of new levies on cash crops like sugar, tea, and coffee may lead to increased prices for consumers, potentially exacerbating the financial burden on households already struggling with high living costs.
In conclusion, while the government’s efforts to support farmers through subsidies are commendable, the introduction of new levies on essential crops may have unintended consequences. Consumers are likely to feel the impact of these price hikes, and it remains to be seen whether the benefits of the fertilizer subsidy program will outweigh the costs of increased taxes on agricultural products. As the situation evolves, it will be important for policymakers to strike a balance between supporting farmers and protecting consumers from rising costs.
