How farming became a loss making venture in Kenya

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Agriculture has been a lucrative venture for farmers in Kenya. With farming alone, farmers were able to cater for their bills, take their children to school and save enough for their personal use. Agriculture product prices were relatively low, prices that would neither throw the farmer into losses nor hurt the final consumer. It was a balanced field until recently. Farming is now never the same again, farmers have been subjected to too much borrowing to keep them productive in their venture. Loss making has become an integral part of farming in Kenya. Agriculture has become a venture that farmers are not supposed to fully rely on. Some farmers have run out of it and ventured into other things. It is a total mess for farming. But how did the once lucrative economic venture become so unprofitable.

What made farming in Kenya unprofitable

Over-taxation of agricultural inputs: In 2020, the treasury in the Tax Laws (Amendments) Act imposed a 14% Value Added Tax on on farm implement. Their argument for this was that with this farm implements, farmers would require less labor on their farms which would still reduce their expenses and realize more profits. This was the beginning of agricultural woes in Kenya. Since this bill became a law, farming has never been the same again. Everything associated with farming drastically shot up. Whereas in some countries agriculture production is subsidized by the government, Kenya has seen an opportunity on how they can acquire taxes from it. Taxes have literally killed the agricultural sector.

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High cost of production: The cost of agricultural production in Kenya has become so high. Taxation of agricultural input means the cost of agricultural production products is affected. The cost of keeping chicken for instance, from the time they are chicks until they start laying would be easily higher than the income a farmer gets from sale of his/her chicken products. I was doing some calculations with one poultry farmer on how feeds his chicken and how much profits he gets from, and he just realized he was making losses. That farmer X has 300 chicken, according to his calculation, he says he used close to Ksh200, 000 in growing his chicks until they started laying. This is a crazy amount which as things are right now, would take the farmer very a very long time to get it back as profit.

Corruption and embezzlement of funds: Kenya has been on the world map for corruption and disappearance of funds from government organization, funds that were meant to improve different sectors of the economy. Agriculture as a sector has experience rampant corruption and stealing of funds. A mega case is the Arror and Kimwarer dam candle,. A dam which would be built to help farmers irrigate their crops and water their animals, all ended in some individuals’ pockets. Its crazy the government hasn’t done much about it. And after all the thieves are in government so nothing can be done to them.

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Cheap products from neighboring countries: Inter country trade is is a good idea that needs to be culminated and markets streamlined so that traders from both countries can sell their products and make reasonable profits. However buying of agricultural products from outside countries has become a huge challenge for farmers in Kenya. For instance eggs from Uganda are way cheaper than eggs in Kenya due to the fact that agricultural production in Uganda is way cheaper. Importation of those eggs has made it ard for Kenyan farmers to survive in the market due to what seems as an overpricing of their products. It is an unhealthy competition which negatively affected the Kenyan farmer.

What should be done?

If the government of Kenya wants to revive the agricultural sector, it should consider the following:

  • The government should remove all taxes on agricultural input to make agricultural production cheaper.
  • It should ensure streamlining of imported goods so that they do not affect the local farmer and cause losses.
  • The government should ensure farmers are sensitized on sensitive farming issues and provided with necessary information to ensure that they make right choices and decisions in their venture.
  • The government should provide farmers with high yield crops which takes into account the farmers soil type in order to ensure maximum produce.
  • Agricultural funds should be assigned to farmers on merit, not based on how well connected a farmer is.

If this and several other factors are taken into consideration, agriculture would get back into its lucrativeness in Kenya and we will be able to achieve food security as a country.

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