The European Union has contributed Ksh5.26 billion to support small scale farmers into commercialisung agriculture through productive and market integrated programmes. Dubbed Agri-Fi Kenya, the programme will promote integration of smallholder farmers in their value chains to enhance their food security, create jobs, raise incomes and provide market access.
The primary target of the programme is small holder farmers and pastoralists who are occasional market players with the potential to become full players in specific value chains. Speaking Friday during the launch of AgriFI, Agriculture Cabinet Secretary Mwangi Kiunjuri said the programme is a multi-year initiative that will be implemented over the next seven (7) years.
“In focusing on SMES and value chains of choice, the programme goals resonates with Kenya’s own Big 4 Agenda and the Ministry’s forthcoming Agriculture Sector Transformation and Growth Strategy (ASTGS) that expect to achieve 100 percent food and nutrition security,” the CS said.
Mr Kiunjuri noted that besides financial services, maximizing small holder production requires farmers to have the means and capacity to adopt the best production practices.
This means utilizing high quality inputs such as seeds and livestock breeds, getting well organized in order to aggregate their produce and maintaining high quality and sanitary standards to achieve maximum income. “Access to funding support such as this one that will be provided in this programme has therefore immense potential to transform the important drivers of our economy and reduce the national food deficit as well as improve agriculture sector competitiveness in the country,” he said.
This programme, for example, will take care of post-harvest losses and a small holder will have ready markets since the produce that has been going to waste will now be sold.
EU Ambassador to Kenya Stefano Dejak said the success of the programme will increase Kenya agriculture export share in the EU market, while smallholder farmers will benefit from enhanced capability to produce quality commodities and also set up processing facilities that meet the conditions of the global market.
“Once the programme flourishes more than 87% of Kenya agriculture exports will access the EU market thus enhancing income to the local small scale farmers,” Dejak added.
Head of Regional Representation for East Africa, European Investment Bank Catherine Collin confirmed that the contribution will be enhanced by a credit facility from the bank of Ksh5.8 billion. “This credit line will be extended to selected commercial banks in Kenya so that they can facilitate access to finance by agricultural enterprises promoting integration of small holder farmers into their value chains,” said Dejak.
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The SME programme will provide funding targeting at least 50 investment plans, with a mix of grants and loans and targeted technical assistance. Some 100,000 smallholder farmers will receive better services and access to inputs and markets, and one or two commercial banks will receive specialized technical assistance to better relate to agribusiness sector.
A Survey by the Kenya National Bureau of Statistics (KNBS) on Micro and Small Enterprises a couple of years ago, showed that SMEs contribution to Kenya’s GDP is about 30%. However, the same survey noted that a majority of SMEs remain trapped in poverty due to lack of affordable financing and limited access to formal markets.
EU’s contribution of Ksh5.26 billion will be supplemented by funds from Self Help Africa (Ksh280.3 million) and Ksh175.2 million from Kenya Agricultural and Livestock Research Organization (KALRO).