A recent survey released on Tuesday, April 9, highlights the increasing reliance of farmers on government subsidies and alternative funding sources like banks, Savings and Credit Cooperative Societies (SACCOs), and the newly introduced Hustler Fund to procure fertilisers, essential for bolstering agricultural production amidst financial constraints.
The Central Bank of Kenya's Agriculture Sector Survey from March 2024 showed that, in contrast to January 2024, farmers had taken out more loans in March. This trend was anticipated as farmers geared up for the March-May 2024 long rains, necessitating preparations such as land tilling, and purchase of seeds, fertilisers, and farm equipment.
The survey indicated that farmers predominantly sought financial assistance from banks, SACCOs, and digital loans, with an increasing number turning to the recently introduced Hustler Fund for support.
In terms of fund utilisation, a significant portion of loans was allocated towards purchasing inputs, followed by labour payments. This trend mirrored observations from previous surveys, indicating the consistent financial challenges faced by farmers, exacerbated by rising input costs.
High-interest rates emerged as a prominent barrier to accessing finance, compounded by concerns among farmers about potential auctioning in case of default. Additionally, the unpredictable nature of rain-fed agriculture dissuaded many farmers from seeking credit, fearing crop failure due to weather fluctuations.
Despite initiatives such as government-subsidised fertiliser programmes and discounted tractor services at the county level aimed at alleviating financial burdens, high input costs, particularly for fertilisers, seeds, and pesticides, continue to impede agricultural progress.
The survey noted a substantial increase in the proportion of farmers accessing government-subsidised fertilisers, reaching 67 per cent in March 2024 from 53 per cent in January 2024.
The report stated, “The proportion of respondents who reported to have accessed the subsidized fertilizer in March 2024 was noted to be close to that recorded in the September 2023 survey, which stood at 69 per cent, as farmers prepared to take advantage of the October-December 2023 rain season.”
However, challenges such as lack of information, logistical constraints, and supply-demand imbalances persisted, hindering access for some farmers.
Addressing these challenges, the Government has intensified efforts to provide subsidised fertilisers and tractor-hire services at the county level.
According to the report, despite being a relatively new initiative, the Hustler Fund has shown promising results, enabling up to 10 per cent of sampled farmers to access credit by November 2023, a figure that has seen a slight increase in the March 2024 survey.
The Agriculture Sector Survey of March 2024 collected data on wholesale and retail prices of various food items, price change expectations, and factors influencing agricultural production.
The survey drew respondents from select wholesale and retail markets, and farms in major towns. These included the Nairobi Metropolitan area, and neighbouring counties including Kiambu, Kajiado and Machakos.
Others are Naivasha, Gilgil, Nakuru, Narok, Bomet, Kericho, Kisumu, Mombasa, Kisii, Eldoret, Kitale, Nyandarua, Nyahururu, Mwea, Isebania, Meru, Nyeri, Isiolo, Oloitoktok, Namanga, Makueni and Molo.
