Private sector wants State to stop controlling agribusiness
Nicholas Waitathu and Milliam Murigi
Private sector players want the government to stop doing business in the agriculture sector as the same contradicts the dynamics of a free market and contributes to low productivity and investments.
Kenya Private Sector Alliance (Kepsa) yesterday claimed the government has for some time now been exhibiting rigidity in the management of the sector that contribute a third of the gross domestic product (GDP).
Yesterday, during the launch of a two- day National Agriculture Summit at a Nairobi hotel, the industry chiefs complained meaningful results have been hard to achieve in the sector owing to the government’s huge presence and interference of the sector’s marketing system.
Kepsa agriculture sector board chairman Chris Wilson said the government, through stiff reforms and piece meal interventions like the subsidy programme, has continued to deny private sector an opportunity to offer new concepts and sound leadership.
Value chain players
“We recognise the government as one of the value chain players. But the aspect of calling shots at the trading platform, for example and buying of fertiliser and maize, has contributed to the challenges facing the sector.
For competitiveness to be achieved in the agriculture sector, the government needs to reduce its business role and concentrate on its regulatory role,” said Wilson.
East African Grain Council (EAGC) chief executive Gerald Masila yesterday said that too much interference of the marketing system by the government has contributed to hoarding and price increases of commodities by traders.
“Traders, mainly in the maize sub-sector, are forced to close shop or keep away because they cannot compete with the government,” said Masila during the summit.
Kepsa chief executive Carole Kariuki said when sponsored reforms fails Government embark on short term strategies like financial bailouts, for example, in the sugar and coffee sub-sector which still do not yield much results.
“We have witnessed government interventions in the sugar and coffee industry, for instance, through debts waivers, but the remedies do not yield much and instead have escalated the anguish felt by small- scale farmers,” said Kariuki.
Desired growth
Agriculture Cabinet Secretary Peter Munya admitted that huge government presence in the agriculture sector has denied real desired growth, much to the detriment of small-scale farmers.
“We have resolved as a government to reduce our presence in the agriculture sector.
But we will maintain and enhance our regulatory role with a view to shield small- scale farmers against massive exploitation by unscrupulous traders,” said Munya.
He said in the future, the government would stop obstructing marketing of commodities, adding that it would stop fixing prices for some staple foods such as maize.
Meanwhile, farmers will soon start enjoying low priced fertiliser following the government interventions.
Munya said talks with fertiliser manufacturers are underway to lower the price of DAP fertiliser, which is commonly used during planting from the current Sh3,000 to Sh2,600 and eventually to Sh2,300 .
“As government, we want to remove all bottlenecks in the input sector which drives up the cost of farming inputs,”said Munya.
He revealed that the government will deal with infrastructural issues to cut manufacturers’ cost of doing business.
“This will enable Kenya compete with its neighbours, where fertilisers prices have been lowered after China abolished a seasonal export duty on DAP fertiliser in 2015 thus flooding the international market with additional volumes.
As of last year across the border in Tanzania, DAP was retailing at Sh2,400, a price set by the Tanzania Fertiliser Regulatory Authority (TFRA) for 2018/19 financial year; while in Ethiopia, the country had ordered DAP from a Moroccan factory for resale at Sh2,000.
