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A Bill that seeks to establish Minimum Guaranteed Returns Fund to support agriculture production in the counties is currently before the Senate.
The Bill sponsored by Nominated Senator Veronica Maina said the proposed Agriculture Produce Minimum Guaranteed Returns Fund if passed by the Senate is intended to cushion farmers from the uncertainties in the market to ensure stable returns from their farming activities ensuring food security in the country.
The fund to be established in each county seeks 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.
“The Fund shall consist of monies appropriated by the county assembly for purposes of the Fund, grants, donations or gifts to the fund, monies allocated for that purpose from investments, fees or levies administered by the county, monies earned or arising from investment of the Fund and any money that may be payable or vested in the Fund,” said Maina.
Maina said this is in recognition of the fact that the agriculture industry has, for many years, formed the backbone of Kenya’s economy with the sector contributing to more than 20% of Kenya’s gross domestic product (GDP), 60% of the total export earnings and about 45% of government revenue, while providing for most of Kenya’s food requirements.
“The Agriculture sector is estimated to have a further indirect contribution of nearly 27% of GDP through linkages with manufacturing, distribution, and other service related sectors, the agriculture sector employs over 40% of Kenya’s population and more than 70 percent of the rural population,” said Maina.
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.
The bill recommends that the management of the Fund 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, the county chief officer in charge of trade, two persons of opposite gender representing agriculture producer associations registered in the county and two persons of opposite gender representing unregistered agriculture producers.
The bill recommends that the Committee while having regard to the agricultural activities that are undertaken in the county should prepare a list the dominant crops and livestock eligible for minimum guaranteed returns and determine and recommend the minimum guaranteed returns in the manner specified in section 13 of this Act.
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 under this Act; carry out registration of beneficiaries under this Act and approve disbursement of minimum guaranteed returns from the Fund account.
“The bill recommends that the committee should receive, review and approve reports on the performance of the Fund from the Fund Manager, cause to be kept all proper books and record of account of the income, expenditure, assets and liabilities of the Fund,” said Maina.
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.
The Committee shall be required to collaborate with such bodies or organisations 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 bill recommends that the minimum guaranteed returns shall be twenty percent of the profit above the comprehensive cost with the comprehensive cost taking into account data from the Kenya National Bureau of Statistics.
The expenditure should take into account 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.
The Committee shall at the beginning of every financial year publish and publicise 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.
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