Listen to This Article Enhance your reading experience by listening to this article.

Farmers will have minimum-guaranteed returns, which shall be 20 per cent of the profit above the comprehensive cost, if a new bill is passed in Parliament.

The Agriculture Produce (Minimum Guaranteed Returns) Bill, 2024 sponsored by Nominated Senator Veronica Maina seeks to establish the Agriculture Produce Minimum Guaranteed Returns Fund.

In her proposed law, Maina argues that agriculture sector contributes to more than 20 per cent of the gross domestic product (GDP), 60 per cent of the total export earnings and about 45 per cent of government revenue, while providing for most of the country’s food requirements.

If passed, farmers will have minimum-guaranteed returns for agricultural produce to ensure that they have a secure income, accelerate growth and development of agriculture by ensuring that with guaranteed incomes, production levels are consistent and to improve food security.

In the bill, which has been tabled before the Senate, Maina is proposing to have minimum guaranteed returns to be pegged at 20 per cent of the profit above the comprehensive cost.

She argues that the comprehensive cost shall take into account data from the Kenya National Bureau of Statistics on expenditure, farm inputs including seeds, herbicides, pesticides, fertilizers, livestock production inputs including animal feeds, drugs; labour; fuel, irrigation, machinery; farm rent; and any other cost as may be prescribed by the Committee.

According to Maina, the Committee shall review the minimum guaranteed returns at any time taking into account changing market prices.

However, Maina is proposing that the Minimum guaranteed returns shall only be paid where the agricultural produce is largely consumed locally, through direct transfers to the beneficiaries’ bank accounts and in instances where the market returns obtained by beneficiaries fall below the recommended minimum guaranteed returns.

Various challenges

The Nominated Senator pointed out that the agriculture industry faces many challenges that reduce its contribution to the economy and improvement of livelihoods with some of the challenges relating to limited access to agricultural finances and market uncertainties, which affect the incomes of farmers.

Maina said the proposed Agriculture Produce Minimum Guaranteed Returns Fund if passed by the Senate would cushion farmers from the uncertainties in the market to ensure stable returns from their farming activities ensuring food security in the country.

The bill proposes the establishment in each county a fund known as the Agriculture Produce Minimum Guaranteed Returns Fund.
The purposes of the Fund is to provide a minimum guaranteed returns for agricultural produce to ensure that farmers have a secure income, accelerate growth and development of agriculture by ensuring that with guaranteed incomes, production levels are consistent and to improve food security.

Maina in her proposed law, recommends that the management of the Fund to be vested in a committee comprising of the county chief officer in charge of agriculture who shall be the chairperson, the county chief officer in charge of finance and the county chief officer in charge of trade.

The management fund shall also have two persons of opposite gender representing agriculture producer associations registered in the county and two persons of opposite gender representing unregistered agricultural producers.

The bill recommends that the Committee, while having regard to the agricultural activities that are undertaken in the county, should prepare a list of the dominant crops and livestock eligible for minimum guaranteed returns and determine and recommend the minimum guaranteed returns.

“The Committee shall be required to review, from time to time, the minimum guaranteed returns, determine the minimum and maximum acreage under which beneficiaries are eligible for minimum guaranteed returns, carry out registration of beneficiaries and approve disbursement of minimum guaranteed returns from the Fund account,” reads part of the bill.

The bill further proposes that the committee should receive, review and approve reports on the performance of the Fund from the Fund Manager.

In addition, the committee shall invest any surplus funds, with the approval of the County Treasury not immediately required in securities for the purposes of realizing the objects and purpose for which the Fund is established and receive any gifts, donations, grants, endowments made to the Fund.

Minimum guaranteed returns

Maina further proposes that the Committee shall be required to collaborate with such bodies or organizations within or outside Kenya, as it may consider desirable or appropriate and in furtherance of the object and purpose for which the Fund is established and perform any other functions that are ancillary to the objects and purpose for which the Fund is established.

The expenditure should take into account farm inputs including seeds, herbicides, pesticides, fertilisers; livestock production inputs including animal feeds, drugs, labour, fuel, irrigation, machinery, farm rent and any other cost as may be prescribed by the committee.

The Committee shall at the beginning of every financial year publish and publicize the minimum guaranteed returns in the Gazette and review the minimum guaranteed returns in subsection (3) at any time taking into account changing market prices.

The minimum guaranteed returns shall only be paid where the agricultural produce is largely consumed locally through direct transfers to the beneficiaries’ bank accounts and in instances where the market returns obtained by beneficiaries fall below the recommended minimum guaranteed returns.