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Government to allocate Sh10 billion to AFC to offer cheap loans to farmers

The Agricultural Finance Corporation (AFC), will be allocated Sh10 billion in the Medium-Term Budget period to finance priority value chains identified in the Bottom-up Economic Transformation Agenda (BETA) on revamping agriculture.

Government Spokesperson, Isaac Mwaura, said that AFC has an annual loan demand of Sh15 billion against its revolving fund of Sh4 billion per year resulting in a shortfall of Sh10 billion of unfinanced applications.

“To mitigate this funding gap, President William Ruto, has directed that AFC be allocated the funds which will ensure that Kenyan farmers get access to affordable loans which are 7 percent cheaper than the commercial loans further having a positive impact on the economy by lowering the cost of living, creating more jobs and earning us foreign exchange through export of agricultural produce,” Mwaura said.

Speaking in Nairobi, Thursday, while highlighting the government’s initiatives to enhance agricultural productivity, Mwaura said that in readiness for the planting season, the government is distributing subsidized fertilizer for the long rains at Sh2,500 per bag.

The distribution started with a consignment of 240, 000 bags of NPK23:20:0 being dispatched to NCPB depots and other distribution networks.

“So far a total of 32, 400 bags have been delivered to early planting counties of Narok, Nakuru, Bomet, Kisii, and Nyamira,” said Mwaura.

He explained that the short rains subsidized fertilizer was distributed from August 1, 2023 to January 26, 2024, through the E-voucher system. A total of 2.44 million bags were sold to farmers worth Sh6.2 billion, and a total number of 449,191 farmers were served during the short rains period.

Mwaura said that the 6.4 million farmers registered under the Kenya Integrated Agriculture Management Information System (KIAMIS) can access subsidized fertilizer through the E-voucher system.

“To make the fertilizer more accessible to farmers in the villages, 15, 590 Agro-dealers and 7, 115 stockists have been registered and are in the process of being on-boarded to participate in the distribution of fertilizer, to registered farmers,” said Mwaura.

The Government Spokesperson said that additionally, the government is procuring several fertilizer varieties at an estimated cost of Sh28.2 billion including two million bags of NPK 23:20:0; 2.5 million bags of assorted NPK-based soil and crop-specific blends for planting, and a further 2.5 million bags of top dressing totaling to seven million bags.

“In our further commitment to sugarcane farmers, the government is set to pay arrears owed to the farmers to the tune of Sh1.33 billion beginning today, Thursday. These payments will be done through the E-voucher payable to 17, 330 farmers/cooperative societies,” said Mwaura.

He said farmers from Nzoia Sugar Company will get Sh213 million, Chemilil Sugar Sh182.7 million, Muhoroni Company Sh250 million, while those from Sony Sugar will get Sh684 million.

“The government has also imported 21 metric tons of sunflower seeds from Zambia costing Sh250 million to be distributed free to farmers as our key commitment to the edible oil value chain. This will in turn reduce the cost of cooking oil by reducing edible oil imports, which is the second biggest import to our country after petroleum despite our potential to produce enough and even export the surplus,” said Mwaura.

He added that in the coffee sector, the government has set aside a Guaranteed Minimum Return (GMR) of Sh80 with Sh40 paid instantly when the farmer takes the produce to the factory and the remaining half is paid within a month.

“As of January 26, 2024, the government has disbursed Sh2.9 billion to 221, 382 farmers in 24 counties through the Cherry Advance Revolving fund,” said Mwaura.

By Joseph Ng’ang’a


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