The Ministry of Agriculture and Livestock Development has submitted a memorandum to the Departmental Committee on Finance and National Planning, calling for a review of taxes in the Finance Bill 2025.

“The Ministry posits that agriculture contributes 21% of Kenya’s GDP and employs over 40% of the population, underscoring the need for continuous producer incentives,” the Ministry stated in their memorandum, as posted on X by Committees of the National Assembly of Kenya, on Saturday, June 7, 2025.

This highlights agriculture’s vital role in driving economic growth and supporting millions of Kenyans, particularly in rural communities. The Ministry argues that high production costs are holding farmers back. Many struggle with limited funds, making it hard to afford essential inputs like fertilisers and improved seeds.

Paul Kipronoh Ronoh, Principal Secretary for the State Department for Agriculture, explained that these inputs are often too expensive compared to the prices farmers get for their crops.

“The cost of agricultural production is influenced by various factors, including input prices like fertilisers and improved seeds,” he noted.

This gap between costs and earnings discourages farmers from adopting modern techniques that could boost yields. By reviewing taxes on agricultural inputs, the Ministry hopes to make them more affordable.

Boosting small-scale farming

Lower costs could help small-scale farmers, who make up the majority of Kenya’s agricultural workforce, invest in better seeds and fertilisers.

This would not only increase food production but also improve food security and create more jobs in rural areas. The proposed changes aim to address long-standing challenges and make farming more sustainable and profitable.

The Finance Bill 2025 is now under discussion, with the agricultural sector as a key focus. Farmers and stakeholders are optimistic about the Ministry’s push for tax reforms, seeing it as a chance to create a fairer system. If these proposals are adopted, they could reshape Kenyan agriculture, making it more resilient and competitive both locally and globally.

As the Departmental Committee on Finance and National Planning considers the memorandum, the spotlight is on finding a balance between economic growth and supporting farmers. The decisions made in the coming weeks could have a lasting impact, ensuring agriculture remains a cornerstone of Kenya’s prosperity for years to come.