Agriculture ministers have reaffirmed the importance of scaling up financing for smallholder farmers to enhance agricultural productivity through targeted subsidies, irrigation projects, and other financing mechanisms.
The ministers spoke during a panel discussion on "Showcasing Current Results of Public Investment, De-risking Private Investment, and Creating Enabling Environments for Scaling Finance" at the Scaling Finance for Smallholder Farmers in Africa Conference, held on March 17-18, 2025, in Nairobi, Kenya.
Mutahi Kagwe, Kenya's Cabinet Secretary for Agriculture and Livestock Development, emphasized that small interventions, such as subsidies on seeds and fertilizers and comprehensive soil analysis, are crucial for increasing smallholder farmers' productivity.
Referring to Kenya's fertilizer subsidy program, Kagwe stated: "The fertilizer subsidy intervention has been crucial and is based on a policy shift: Don't subsidize consumption -- subsidize production. If you subsidize production, you increase output significantly, and the challenges are much less than when you subsidize consumption."
He also stressed the need to involve farmers in subsidy policy decisions to ensure maximum impact.
Similarly, Mandla Tshawuka, Eswatini's Minister of Agriculture, highlighted the role of subsidies in boosting production and food security. He cited his government's initiative, where farmers contribute 50 percent of the input costs, while the government covers the rest.
"We target just one acre of land to produce maize and beans, and production has greatly improved," he noted.
Additionally, Tshawuka acknowledged the African Development Bank's support in constructing a dam on 10,000 hectares of land to provide smallholder farmers with irrigation, thereby increasing their resilience to climate change while improving agricultural output.
Abubakar Kyari, Nigeria's Minister for Agriculture and Food Security, underscored the critical role of infrastructure in ensuring a seamless transition from production to consumption.
"Investing in water resources--such as building and maintaining dams--is essential for boosting agricultural productivity," he stated.
He also highlighted Nigeria's African Development Bank-funded Special Agro-Industrial Processing Zones (SAPZ) program, launched to drive agricultural transformation through infrastructure development. The program focuses on enhancing value chains for key crops, including rice, cassava, ginger, and tomatoes, as well as livestock.
Also each SAPZ will deliver infrastructure (transport, power, water and processing) and facilitate improved access to finance and markets, and technology transfer.
Dr. Musa Kpaka, Sierra Leone's Minister for Agriculture, pointed to matching grant facilities as an effective way to provide credit to smallholder farmers. Under this arrangement, eligible farmers receive a one-time investment grant in the form of agricultural equipment, processing machinery, and other services. However, farmers must contribute at least 30 percent of the required investment, either financially or in-kind, to qualify.
Guismala Hamza, Minister for Agriculture and Rural Development of the Central African Republic, emphasized the importance of formalizing smallholder farmers into cooperatives to enhance access to financing.
In his country, the cooperatives are able to develop business plans and create an account enabling them to access funds from lending institutions as well as government grants such as the one by African Development Bank, he said, noting that this method had worked successfully in his country. The Bank grant he referenced was approved in 2022. The $5.39 million facility sought to assist the production of an additional 32,000 tons of foodstuffs and enhance food security for 100,000 people in CAR.
