Business

State to hand over loss-making agricultural bodies to the private sector

Tuesday, August 25th, 2020 00:00 | By
Peter Munya
Agriculture Cabinet Secretary Peter Munya. PHOTO/Courtesy

Loss making state bodies related to agriculture are set to be handed over to the private sector, which will be mandated to take over the role of turning around their fortunes.

This is as the government plans to disengage from its traditional role of pumping tax payers money to make the institutions remain afloat. 

To facilitate the entry of the private sector, two bodies have been formed to drive the process, backed by a reviewed agriculture policy and guidelines.

“Agriculture will only be transformed if government pulls out from trading and hand over the task to the private sector,” said Agriculture, Livestock, Fisheries and Crops Cabinet Secretary,  Peter Munya.

Munya told delegates assembled at Safari Park Hotel for the first Nation Agriculture Summit that brought state officials, the private sector  and  development partners that the anticipated agricultural transformation  reforms to turn around the sector are anchored around  the need to reduce the cost of food, alleviation of poverty and delivery on the goal of 100 per cent food and nutrition security.

The cost 

The Government has formulated the Agricultural Sector Transformation and Growth Strategy (ASTGS): 2019-2029, to transform the country’s agricultural sector and make it a regional powerhouse.

According to Munya, The ASTGS is expected to cost up to Sh440 billion over five years -  Sh230 billion in agriculture-specific costs, Sh210 billion in agriculture-supportive spend including power, roads and price stability within the National Treasury.

“With the right approach, up to 80 per cent  of costs can be financed through public private partnerships, particularly in the afro-processing and arable land flagships,” he said.

“To meet this obligation,  the government needs to raise an additional Sh8 billion to Sh10 billion per year to cover their financing obligations to the strategy (30 per cent increase in current disbursed budgets),” he added.

The strategy has shifted the burden of action to the county governments, the private sector, industry players, entrepreneurs, development partners and civil society to help us in driving this agenda.

This revelation is seen as one of the major steps  in the pipeline that will result in the Kenya Meat Commission ( KMC) and Sugar Millers being handed over to the private sector.

The Kenyan livestock market also suffers production inefficiencies that result in lower yields. The inadequacies also make Kenyan meat and milk more expensive.

Livestock PS Harry Kimtai  was optimistic that privatisation of the firm will make it economical viable and boost export of animal products from Kenya to other countries.

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