Govt issuing e-vouchers for 60% of fertiliser, chemicals for smallholders

: 31 May 2020; Hits: 5220

Govt issuing e-vouchers for 60% of fertiliser, chemicals for smallholders

By Jolene Njambi

The government is launching e-vouchers to give smallholders discounts of up to 60 per cent on fertiliser and agrochemicals, as part of a Sh53.7bn economic stimulus package program designed to help the country through the current COVID-19 crisis.

The government has set aside Sh3bn for the supply of farm inputs through an e-voucher system targeting 200,000 small-scale farmers in a move to cushion farmers from the effects of adverse weather and to secure food supplies in the months and year ahead.

The stimulus package comes after the World Bank approved a Sh4.6bn International Development Assistance (IDA) credit for Kenya as part of the larger Sh53.4bn Emergency Locust Response Project (ELRP) in Africa and the Middle East.

Under the system, the Ministry of Agriculture will work together with Kenya Commercial Bank and Safaricom as its implementation partners to offer small-scale farmers the 60 per cent subsidy on farm inputs, being mainly fertilisers and agrochemicals.

The government will select agro dealers in different counties. It will then reach out to registered farmers through cooperatives, collect their information and assign those qualified for the subsidy a pay bill number that will they use to pay for their farm inputs. Once a payment is made via the pay bill number, KCB will automatically reimburse 60 per cent of the cost to the farmer.

To qualify, farmers must be registered with a recognised cooperative and own at least one to five acres of land. The subsidy will be offered across the value chain, such that the agro dealers will assess the crops the farmer grows and offer the subsidies on the inputs the farmer needs.

Commenting on the new system, Chief Economist at Mentoria Economics, Ken Gichinga noted that the use of an e-voucher system is set to be more impactful than the government’s previous efforts in reaching out to small-scale farmers.

“The e-voucher system is particularly impressive considering many small-scale farmers are deterred from obtaining government funded benefits due to the lack of tools to access them. Now, the government is innovatively using complimentary instruments to solve this problem,” he said.

A further Sh1.5bn has been set aside to assist flower and horticultural producers to access international markets. This is especially critical as the industry is currently facing an alarming Sh8bn loss, meaning close to 1,000 seasonal workers have been sent home during the ongoing pandemic.

Horticulture earnings are the third-largest contributors of foreign exchange in Kenya, after diaspora remittances and income from tourism.

“The efforts made by the government are commendable, however, Sh54 bn is still a drop in the ocean, we need at least 5-7 per cent of GDP in order to cushion the economy from the effects of the pandemic, which amounts to around Sh350bn-worth of stimulus for us to fully bounce back from this set back,” said Gichinga.