Farmers get Sh2.5bn extra fertiliser subsidy in mini-budget
Workers offload bags of subsidised fertiliser from a truck at the National Cereals and Produce Board depot in Elburgon, Nakuru County on April 06, 2024.
What you need to know:
- Some 202,512 farmers expected to benefit from the subsidised farm input.
- Fertiliser has been an area of focus for President William Ruto’s administration.
Farmers are among the few winners in the first Supplementary Budget of the financial year 2024/25, after the National Treasury allocated an additional Sh2.5 billion to the fertiliser subsidy programme.
This comes even as most programmes under the agriculture sector and the national government were hit by spending cuts following rationalisation of the budget.
In the new budget, the Treasury has increased the allocation for the fertiliser subsidy to Sh10 billion marking a significant increase from the original budget of Sh7.5 billion approved by Parliament last month.
The increased budget has seen the government raise the coverage of the programme with some 202,512 farmers expected to benefit from the subsidised farm input compared to an estimated 152,265 farmers in the original budget.
The State also targets to distribute 93,283 tonnes of subsidised fertiliser during the financial year, marking a significant increase from the initial target of distributing 70,138 metric tonnes of the key input.
However, this budget still marks a significant cut from the Sh16.2 billion that the government spent on the fertiliser subsidy in the financial year 2023/24 following additional allocations through the fiscal year’s second supplementary budget.
Fertiliser has been an area of focus for President William Ruto’s administration, having identified low-cost fertiliser as one of the main interventions to increase local production of food and other cash crops.
But even as the budget for the fertiliser subsidy got a raise, the agriculture docket suffered major cuts following Dr Ruto’s major budget cuts, following the withdrawal of the controversial Finance Bill, 2024 after heated protests.
In the new spending plan, the budget for the State Department for Agriculture has been reduced by Sh1.7 billion to Sh44 billion down from the initial budget of Sh45.7 billion.
The spending cut has reduced allocation to recurrent spending on administration and general support, crop development and management, and agricultural research and development.
The budget for the State Department for Livestock Development has also been chopped by Sh848 million with its spending reduced to Sh11.4 billion down from Sh12.31 billion.
At the same time, the Treasury has handed the State Department for Blue Economy and Fisheries a budget cut of Sh2.6 billion, with its spending brought down to Sh9.3 billion from Sh11.9 billion.
In May, agriculture experts warned that the significant cuts to the agriculture sector budget in favour of other programmes threaten the country’s food security.
The Agriculture Sector Network (Asnet), a national lobby for agriculture sector players, said that the proposed budgetary allocation for the agriculture sector is still a far cry from the 10 percent threshold mandated by the Comprehensive Africa Agriculture Development Programme under the Malabo Protocol.
“We implore the government to diversify public spending that crowds out the private sector, and invest in enabling public goods such as infrastructure, reduction in the cost of production to improve local competitiveness, central data collection and management for use by potential investors and less onerous regulation that come with numerous levies,” said Anet Chief Executive Agatha Thuo, at the time.
