The National Treasury Cabinet Secretary Njuguna Ndung'u has proposed an allocation of Sh10 billion for the fertiliser subsidy programme in the next financial year.
The amount is a drastic reduction of 38.2 per cent from the Sh16.2 billion that the Treasury allocated for the project in the 2023/24 Financial Year.
The amount was initially Sh12.2 billion when the budget was passed in June 2023 but the amount was increased through a subsequently supplementary budget that added sh4 billion.
Through the subsidy, registered farmers pay Sh2,500 for a 50-kilogramme bag of fertiliser, which is a sharp drop from market prices as high as Sh6,500.
Fertiliser plays a major role in increasing local food production.
The budget cuts come at a time when the progamme has been a hot potato after it emerged that farmers were sold substandard fertilizer leading to potential loss of billions of taxpayers’ money.
Giving highlights of government spending for the 2024/25 financial year, Ndung’u said the government had allocated a total of Sh54.6 billion on Agriculture transformation and inclusive growth.
The CS said the money will go towards various programmes under the giant agriculture sector in the spending period from July 1.
The government allocated Sh 6.1 billion for the national agricultural value chain development programme.
At the same time, Sh2.5 billion has been allocated to the Enable Youth Programme under the agriculture sector and Sh2.4 billion for the Enable Youth and Women in Agriculture project.
The government also allocated Sh747 million for the small-scale irrigation value chain and Sh645 million for the food security and crop diversification project.
To improve livestock production, the CS proposed that Sh2.4 billion for de-risking inclusive of the pastoral economies programme and Sh1.1 billion for the livestock value chain project.
Sh1.5 billion has been allocated to the livestock commercialisation programme, Sh195 million for the embryo transfer project and Sh300 million for the development of industrial parks.
“The government’s focus will be on agriculture transformation and inclusive growth through the value chain support,’’ the CS said.
“This aims at supporting farmers through cooperatives societies which we consider aggregators and deploy modern risk management instruments that ensure farming is profitable and prices are predictable.’’
The CS said the allocations aim at transferring farmers from food deficit to surplus producers through input financing, subsidies and intensive Agriculture extension services.
The 2024/2025 budget is estimated to cost Sh3.91 trillion.
Of the amount, Sh1.58 trillion is meant for recurrent expenditure, Sh727.9 billion for development expenditure, Sh1.21 trillion for consolidated fund services and Sh400 billion for county equitable share.
To foot this budget, the government targets to collect Sh2.91 trillion from ordinary revenue and Sh441 billion from ministerial appropriation in aid.