PS Ronoh calls for Agriculture funding policy ahead of Nairobi summit

Principal Secretary for Agriculture Kipronoh Ronoh has called for a policy framework to guide the funding of the agriculture sector.

The PS said that doing so will enhance productivity and ensure sustainable ways of supporting farmers.

“As you are aware, the government’s plan for agriculture is on course, and under the Bottom-Up Economic Transformation Agenda (BETA), it has prioritised agriculture. However, the main challenge we have been facing is how to finance agriculture,” said Ronoh.

He added: “We feel that there should be a structured legal policy framework to provide a sustainable way of financing agriculture.”

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The PS said agriculture is a critical sector in transforming the economy and creating employment.

He said the sector employs 70% of the rural population and contributes over 22% to Gross Domestic Product (GDP).

“But this sector has long been neglected in terms of attention, and all necessary initiatives should be put in place to enhance productivity and establish a sustainable way of supporting our farmers,” he said.

The PS spoke on Tuesday after attending the launch of the second Financing Agri-food Systems Sustainably (FINAS) 2025 Summit.

The summit will be held in Nairobi from 20 to 21 May at the Kenyatta International Convention Centre (KICC).

It is sponsored by the Ministry of Agriculture and Livestock, Rootooba, Aceli Africa, FSD Kenya, the Alliance for a Green Revolution in Africa (AGRA), among others.

The meeting will be attended by African Ministers of Agriculture, international partners, and other stakeholders in the sector.

The PS, however, said a draft policy on sustainable agricultural financing has been developed and will be launched during the summit to ensure its operationalisation.

He said the sustainable financing and funding of agriculture stemmed from the FINAS 2024 dialogue.

The framework aims to optimise the consolidation and use of public finances to support food systems development in Kenya.

It is expected to provide a framework against which financial resources for initiatives that enhance agricultural productivity, improve food security, and promote sustainable practices are embedded.

Among other topics for discussion at the summit will be strategies to increase farmer satisfaction, mechanisation, the role of cooperatives, commercialising agriculture, and making it more attractive.

Others include how to engage youth in farming, marketing of produce, value addition, and recognising excellence in agricultural financing.

The PS said the total allocation for the agriculture sector in the 2025-2026 fiscal year is Sh77.7 billion, up from Sh73.9 billion in the previous fiscal year.

“This 2025-2026 allocation represents 3% of the ministerial share. We expect these investments to further strengthen the entire agricultural value chain, from production to market access, improve food security, and boost job creation,” he said.

The Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods, signed in June 2014, required countries to allocate 10% of their budget to agriculture by 2025.

However, according to the Fourth Comprehensive Africa Agriculture Development Programme (CAADP) Biennial Review (BR) Report, released at the three-day CAADP Extra-Ordinary Summit 2025 held in Kampala, Uganda, these commitments may not be achieved.

“While 12 African Union (AU) Member States have consistently improved their performance over four CAADP Biennial Review cycles, as of 2023, the BR report showed none is on track to meet the Malabo Declaration targets by 2025,” said the report.

The Kampala Declaration was adopted, committing African Union member states to allocate at least 10% of their annual public expenditure to agri-food systems.

According to Freddy Bob-Jones, Managing Director at Aceli Africa, agriculture accounts for one-third (33%) of all jobs and economic activity despite the lack of finance.

"However, despite its importance, the agricultural sector faces a persistent challenge: lack of access to finance. This is mainly due to the high risks and costs of lending to the sector,” said Jones.

He added: “From this perspective, the average yield on a 10-year government bond is about 14%, whereas, according to research and data collected by Aceli, the average return on agricultural loans for a commercial bank is around 3%.”

Jones said that as a result, the sector has historically received only 4-5% of commercial bank capital.

Agricultural Finance Corporation Managing Director George Kubai called for the removal of collateral requirements for funding, especially for the youth.

He challenged agricultural fintech companies to come up with a way of checking the eligibility of an applicant using big data.

Agriculture and Rural Development Partners Group (ARDPG) Chairman Andrew McCown said the global landscape of development funding is shifting dramatically, leaving significant resource gaps.

“These changes compel us to rethink and recalibrate our approach towards financing for agri-food systems,” he said in a speech read on his behalf.

The UN Food Systems Summit has called for an ambitious financing agenda to meet the challenge of food systems transformation, proposing a new Food Finance Architecture with two key objectives:

Mobilising USD 300-350 billion of additional investment per year for food systems transformation to make increasing food insecurity a thing of the past (in Africa, the estimate is between USD 13-78 billion).

Curbing the USD 12 trillion lost annually in environmental, social, and economic costs due to the way food systems operate by optimising resource allocation.

“Bringing this home means that Kenya needs to rethink how to reduce food waste and loss annually. The value of per capita food loss and waste annually is nearly USD 0.6 billion (Sh72 billion), as per UNEP (2021), yet the total cost of the National Nutrition Action Plan (NNAP) over five years is Sh70 billion (an average of Sh14 billion per year),” said McCown.