Jeff Otieno
7 May 2008
Nairobi — A Sh3.2 billion credit facility to help farmers buy quality seeds and fertilizer was launched Tuesday, amid looming hunger in the country.
At the same time, President Kibaki directed the Ministry of Finance to allocate more funds to its Agriculture counterpart to increase the strategic grain reserve from the current four million bags to eight million.
The four-million-bag stock can service the national food requirement for one and a half months. Estimates had indicated that about three million tonnes of maize would be harvested in the 2007/08 marketing year.
It is, however, feared that national output could decline by up to 15 per cent, resulting in a significant shortfall later in the year, according to the latest food security update. To ensure key crops have a sustainable source of development credit, President Kibaki announced that the Government will increase the Sugar Development Fund from the current Sh3.2 billion to Sh4 billion and the Coffee Development Fund from Sh750 million to Sh2 billion.
The new measures come amidst spiralling world food prices, highest in almost half a century. The cost of cereals like wheat, maize and rice has skyrocketed, prompting food riots in Africa and Asia. The UN and the World Bank have described the crisis as a humanitarian tsunami with the potential of destabilising the world order.
The credit facility dubbed Kilimo Biashara is the brain child of the Government of Kenya, Equity Bank, Alliance for a Green Revolution in Africa (AGRA) and the International Fund for Agricultural Development. Thousands of small scale farmers are expected to benefit from loans of between Sh1,000 and Sh100,000 to buy farm inputs. The repayment period will be one year, at an interest rate of 10 per cent.
It will be adjusted to fit the crop cycle. Large scale grain farmers will secure at least Sh100,000. The repayment period will be three years at an interest rate of 1.25 per cent per month, also adjustable to crop cycle.
Speaking during the launch of the programme at the Grand Regency Hotel, President Kibaki said the agricultural sector had made tremendous strides but the post-election mayhem was a major setback. He said over 3.5 million of bags of maize were destroyed and thousands of farmers displaced from their farms.
As the farming season commenced, the high prices of inputs discouraged some farmers from cultivating their land.
Produce food
Agriculture minister William Ruto, said although small scale farmers produce about 75 per cent of the total food consumed in the country, only 30 per cent of those in the high potential areas have access to credit.
He noted that the percentage was even lower in dry regions. Agra chairman Kofi Annan, said the country faced major challenges in the agricultural sector and in rural areas. "There are lots of internally displaced persons that you need to cater for. Many have lost their lands and ability to produce food," Mr Annan said in a speech read by Agra vice-president Akin Adesina.
"The country faces a large food deficit. Unless urgent measures are taken food, insecurity will deepen," he added.
Equity Bank chief executive officer James Mwangi said Kenya must strive for self sufficiency in food production. Prime minister Raila Odinga attended the function.
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