With expected government interventions, having farmers involved in the same line of crop production will enhance their earnings and boost food security efforts.
Aggregation of Kenya’s agricultural activities based on crops or the dairy sub-sector has been identified as vital in unlocking the cooperative sector’s huge potential.
According to the plan, working with maize farmers in one group will enable them to negotiate good prices for their produce and get affordable farm inputs, among other benefits.
Subsequently, this will enhance their earnings and boost the country’s food security initiatives.
The aggregation will improve farmers’ earnings and so the performance of cooperatives and Saccos.
Farmers involved in coffee and tea, maize and rice, edible oils, leather, garments and textiles will also be aggregated. Others include artisanal mining, fishing, horticulture, and housing.
“Under a highly promising collaboration with the county governments, we are setting up aggregation and distribution centres for storage, value addition and marketing of agricultural products,” said President William Ruto. President Ruto spoke during the Ushirika Day celebrations at the Kenyatta International Conference Centre, Nairobi.
Speaking recently at State House Nairobi, President Ruto noted that “addressing the cost, quality and availability of inputs and associated direct production expenses, will liberate the agriculture sector from chronic underperformance and transforming it into the primary driver of the bottom-up economic transformation agenda, and the foundation of Kenya’s prosperity, industrial capacity and competitive advantage.”
“We are increasing the budget for the Agriculture Finance Corporation (AFC) from Ksh 2 billion to Ksh 10 billion, to facilitate affordable credit available to farmers. The credit will be provided at single-digit rates to further reduce our cost of production and enhance productivity,” he added.
The President also said they are working with the private sector and county governments on a comprehensive mechanization program, to increase available tractors and other farming machinery to further enhance the efficiency and productivity of farmers.
With the government pursuing its bottom-up economic model, farmers are largely on the bottom of the pyramid and working on improving their incomes will sync with the agenda.
Githunguri Farmers’ Cooperative Society, according to Cooperatives PS, Patrick Kilemi sets the best example of what aggregation can achieve for farmers.
Each family owns a cow, and every 5th of the month, they are able to get a regular income from their dairy cooperative.
To produce a litre of milk is around Ksh 30-35, and the cooperative pays between Ksh30 and Ksh35 per litre; hence farmers get a profit of about Ksh20.
The farmers also belong to Githunguri Dairy Cooperative Sacco (GDC), and any improved earnings will translate to improved savings.
According to Kilemi, people will produce more if organized and assisted in production through cooperatives.
In a past event, the PS revealed that the cooperative ministry has 17 priority value chains which seek to improve farmers’ incomes.
The government, he said, has seven priority value chains it is working on to promote the country’s economic activities.
The PS regretted that despite the maize value chain being the biggest in the country, it has very few cooperatives.
“We have like six maize cooperatives in the North Rift but this is not enough as the sector is so big and can accommodate more,” he said.
Kenya’s cooperatives sector has its origin in the agriculture sector, which is considered the country’s economic mainstay.
According to the SASRA Annual Supervision Annual Report, 2021, despite agriculture-based Saccos having a majority of members, their asset base lagged behind government-based Saccos.
According to the report, 49 agriculture-based Saccos had the highest proportion of total membership at 46.79%.
However, they had the lowest total assets’ market share proportion amounting to only 10.96% of the total assets.
“Cognizant of the fact that a Sacco’s assets portfolio is its main source of income, the low asset proportion of Agriculture-based Saccos implies that their respective incomes or revenue generated from these assets is equally low thereby bringing into fore the issue about their stability and sustainability,” stated the report.
Out of the 49, seven are in the dairy production subsector, with a proportion of 4.80 per cent of the total membership, while the remaining 42 are in the crop production sector, with a proportion of 41.99 per cent of the total membership.
Consequently, working in agriculture will uplift the majority of Kenyans in the cooperative sector’s living standards.
Early this year, the Cooperative Alliance of Kenya (CAK) presented a memorandum to the Cooperatives and MSME Cabinet Secretary Simon Chelugui on areas of intervention.
The high cost of production on crops such as tea and coffee, according to CAK, has eroded farmers’ earnings.
With a huge potential given the increasing demand for food such as maize, rice, wheat and dairy products, government intervention in fertilizer and animal feed is deemed as assisting farmers realize better returns.
