Kagwe demands 10% budget for agriculture -

By Daisy Okiring

Agriculture Cabinet Secretary Mutahi Kagwe has sharply criticised the government’s current funding for the agricultural sector, calling the allocation of just three per cent of the national budget “unacceptable” for a sector that anchors nearly half of Kenya’s economy.

Speaking at the FINAS 2025 (Financing Agri-Food Systems Sustainably) conference, Kagwe made a passionate appeal to policymakers, pledging to work with the National Treasury, Parliament, and stakeholders to increase agriculture’s share of the national budget to 10 per cent—a move he said is essential to “unlock the true potential of Kenya’s food systems.”

“Despite contributing a staggering 50 per cent to our GDP—22.5 per cent directly and up to 30 per cent indirectly—agriculture currently receives just 3 per cent of the budget,” Kagwe said. “This is unacceptable. I am committing to gradually raise that figure to 10 per cent.”

Kagwe tied the funding gap to broader goals, including Kenya’s obligations under the Malabo Declaration and the Kampala Declaration on agricultural development. He said a 10 per cent budget allocation could boost productivity by 45 per cent, reduce post-harvest losses, and triple intra-African trade in farm products by 2035.

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He also decried the lack of financial support from commercial banks, noting that only 3 per cent of the KSh6.4 trillion ($49 billion) in loans disbursed in 2023 went to the agricultural sector—largely due to perceptions of risk, lack of collateral, and underdeveloped rural financial markets.

“This is a sad indictment,” said Kagwe. “But it doesn’t have to remain this way.”

The CS urged banks to shift away from short-term, high-interest loans and develop long-term, low-interest products that align with farming cycles. He also proposed reinstating a policy requiring financial institutions to allocate a portion of their loan portfolios to agriculture, arguing it could help create a stable pool of capital for farmers.

“We once had such a policy, but it has been quietly dropped. Today, I’m calling for its reinstatement,” Kagwe said. “This pooled fund would offer affordable and accessible capital that the sector desperately needs.”

Kagwe also advocated for the establishment of a dedicated agricultural finance facility, backed by the exchequer, akin to the Constituency Development Fund (CDF). He revealed plans to recapitalise the Agricultural Finance Corporation (AFC) and merge it with the Commodities Fund, aiming to enhance financial capacity and reach.

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Further, he underscored the role of technology in transforming the sector, citing the Kenya Integrated Agriculture Management Information System (KIAMIS), which has already digitally registered over 6.4 million farmers.

“We must embrace innovation and collaboration,” Kagwe said. “No farmer should be left behind as we build an inclusive, sustainable agricultural economy.”

Kagwe’s remarks come at a critical moment, as drought, climate change, and high input costs continue to strain Kenyan farmers. His call for a budget overhaul and financial reform signals a push to reposition agriculture not as a struggling sector, but as the engine of Kenya’s economic renewal.