Agriculture Sector Budget FY 2025/26
Category: AgricultureBudget
By: Stephen Jairo,
The agriculture sector in Kenya is a vital component which continues to play a crucial role in the rural economy directly, and urban economy indirectly. Additionally, the sector is a key source of raw materials as it provides both forward and backward links with other economic sectors such as manufacturing, and wholesale and retail trade. With the devolved system of governance being implemented, it is one of the sectors to fully devolve, with the aim of ensuring enhanced food security, providing employment opportunities, and helping to sustain livelihoods. For the year 2024, the sector contributed 22.5 percent to Kenya’s Gross Domestic Product (GDP).
The Ministry of Agriculture and Livestock Development as per the statement on their website,
places a high priority on sustainable farming methods, food security, farmer assistance, and advancements in crop and livestock production, all of which contribute to economic growth and the country’s agricultural sector. The table below shows the produced amounts of selected agricultural products over the two years in focus, and the percentage change thereof.
Table 1: Production of Selected Agricultural Products (2023 – 2024)
Source: Economic Survey, 2025.
As a result of the unpredictability brought about by climate change and its effect thereof, farmers have been faced with unprecedented challenges as pertains to productivity from their farms. As per the table above, in the year 2024, tea, rice, sugarcane, and coffee production increased, driven by favourable weather conditions for these items. On the other-hand however, maize output, primarily reliant on rainfall fell due to erratic rains during the year. Other challenges that the sector is faced with, according to the Agriculture Survey Report of January 2025, produced by the Central Bank of Kenya, include high cost of inputs, limited knowledge of inputs, poor quality of inputs, lack of finances – credit facilities in agriculture, and the high cost of mechanization.
Given the importance of agriculture in rural areas of Kenya where overall poverty is more prevalent, at 42.9 percent, the sector’s importance in poverty alleviation cannot be gainsaid. In order to achieve recovery and growth in Kenya following recent occurrences of drought and reduced productivity, it is imperative that the agricultural sector be strengthened and improved, and that the poorest and most vulnerable be allowed to participate in this process. Amongst the proposed ways of improving performance of the agricultural sector, as brought forth from the farmers survey include promoting irrigation by digging more boreholes and construction of dams, enhancing access to affordable, timely and quality farm inputs, promoting farm mechanization, enhancing the provision of extension services, improving feeder roads, and reducing post-harvest losses.
These initiatives will not bear fruit without adequate allocation of funds to first of all, address the challenges faced within the sector as pointed out by the survey, and also ensuring the medium term and long-term objectives of the sector are achieved as per the sector medium-term plan. It is against this backdrop that we take a look at the budgetary allocation to the sector in the coming financial year, 2025/2026, against the approved gross expenditure for the previous year, 2024/2025, as shown in Table 2.
Table 2: Summary of Estimates 2025/2026 (Kshs)
Source: Budget estimates 2025/2026
Firstly, the budget allocation as a percentage of the total budgetary amount shows a decline from 3.5 percent to Ksh 3.2 percent in the two financial years, which indicates that there are sectors that have been prioritised over the ARUD sector. However, the overall budget amount has increased from Ksh. 2.3 Trillion to Ksh. 2.4 Trillion. The total Ksh. 78.08 Billion allocated to the sector is appropriated to the state departments as follows: Agriculture (61.8%), livestock Development (12.8%), Lands and physical planning (11.2%), while the last is Crop Development (0.00%). In addition, the greatest increase in allocation was in Agriculture – Ksh 2.6 Bn, while reduction occurred in Blue Economy and Fisheries – Ksh 4.5 Bn
Secondly, the total allocation in 2025/26 for the ARUD sector which amounted to Ksh 78.08 Bn, which is a decrease of Ksh -2.3 Bn (- 2.9%). The biggest contributors to this decline are the State Department for Blue Economy and Fisheries which has a budget cut of 55 percent, and the State Department for Livestock Development with a reduction of 14 percent. These cuts indicate a significant shift and may affect livestock farmers on the one hand, those in the fisheries and marine sectors, who are key for food security in the country, and could impact negatively on rural livelihoods. However, it is important to note that this shift could have been occasioned by the Kenya Livestock Commercialization Project (KeLCoP) to be carried out in 10 counties, co-funded by International Fund for Agricultural Development (IFAD) and the Government of Kenya to the tune of $93.5 million.
On the contrary, we take cognisance of the increased allocation to the National Land Commission by a 32 percent (from Ksh. 1.95 billion to Ksh.2.86 billion). This could be as a result of undertaking land reforms through the ongoing digitization program, and the need to streamline the entire lands registry, to the county level. In the same vein, the State Department for Agriculture also has an increment of 5 percentage points, getting an additional Ksh. 2.6 Billion in the coming financial year. Notably, however, the State Department for Crop Development has zero allocation. It is worth noting that the increment to Agriculture could indicate a restructuring to inculcate that for Crop development within its armpit.
It is also important to note that the absorption rates for the sector as a whole for the previous financial year, 2023/2024 was 93 percent. The development expenditure had an absorption rate of 90 percent, while recurrent expenditure absorbed 97 percent of its total allocation. This means that the sector spending is prudent even though some of the initiatives proposed as per the agriculture survey are yet to be achieved.
Conclusion
The budget allocation to the sector for the current financial year, relative to the other 9 sectors has not only reduced in relative terms but also in absolute terms by 3 percentage points. With the challenges brought forth, it remains to be seen if the mitigation measures proposed in the medium-term plans will be met.
Whereas the journey to digitization in the land sector has been given a major boost, initiatives in mechanization, provision of farm inputs, and enhancement of extension services are issues that must be tackled deliberately if the country and the ministry is to achieve its objective of ensuring food security. Noting the importance of this sector to lives and livelihoods on the one hand, and to economic growth on the other, it becomes important to highlight issues thereof as has been brought to the fore in this blog.
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Agriculture Sector Budget FY 2025/26
| Post date: Wed, Oct 15, 2025 |
| Category: AgricultureBudget |
| By: Stephen Jairo, |
The agriculture sector in Kenya is a vital component which continues to play a crucial role in the rural economy directly, and urban economy indirectly. Additionally, the sector is a key source of raw materials as it provides both forward and backward links with other economic sectors such as manufacturing, and wholesale and retail trade. With the devolved system of governance being implemented, it is one of the sectors to fully devolve, with the aim of ensuring enhanced food security, providing employment opportunities, and helping to sustain livelihoods. For the year 2024, the sector contributed 22.5 percent to Kenya’s Gross Domestic Product (GDP).
The Ministry of Agriculture and Livestock Development as per the statement on their website,
places a high priority on sustainable farming methods, food security, farmer assistance, and advancements in crop and livestock production, all of which contribute to economic growth and the country’s agricultural sector. The table below shows the produced amounts of selected agricultural products over the two years in focus, and the percentage change thereof.
Table 1: Production of Selected Agricultural Products (2023 – 2024)
Source: Economic Survey, 2025.
As a result of the unpredictability brought about by climate change and its effect thereof, farmers have been faced with unprecedented challenges as pertains to productivity from their farms. As per the table above, in the year 2024, tea, rice, sugarcane, and coffee production increased, driven by favourable weather conditions for these items. On the other-hand however, maize output, primarily reliant on rainfall fell due to erratic rains during the year. Other challenges that the sector is faced with, according to the Agriculture Survey Report of January 2025, produced by the Central Bank of Kenya, include high cost of inputs, limited knowledge of inputs, poor quality of inputs, lack of finances – credit facilities in agriculture, and the high cost of mechanization.
Given the importance of agriculture in rural areas of Kenya where overall poverty is more prevalent, at 42.9 percent, the sector’s importance in poverty alleviation cannot be gainsaid. In order to achieve recovery and growth in Kenya following recent occurrences of drought and reduced productivity, it is imperative that the agricultural sector be strengthened and improved, and that the poorest and most vulnerable be allowed to participate in this process. Amongst the proposed ways of improving performance of the agricultural sector, as brought forth from the farmers survey include promoting irrigation by digging more boreholes and construction of dams, enhancing access to affordable, timely and quality farm inputs, promoting farm mechanization, enhancing the provision of extension services, improving feeder roads, and reducing post-harvest losses.
These initiatives will not bear fruit without adequate allocation of funds to first of all, address the challenges faced within the sector as pointed out by the survey, and also ensuring the medium term and long-term objectives of the sector are achieved as per the sector medium-term plan. It is against this backdrop that we take a look at the budgetary allocation to the sector in the coming financial year, 2025/2026, against the approved gross expenditure for the previous year, 2024/2025, as shown in Table 2.
Table 2: Summary of Estimates 2025/2026 (Kshs)
Source: Budget estimates 2025/2026
Firstly, the budget allocation as a percentage of the total budgetary amount shows a decline from 3.5 percent to Ksh 3.2 percent in the two financial years, which indicates that there are sectors that have been prioritised over the ARUD sector. However, the overall budget amount has increased from Ksh. 2.3 Trillion to Ksh. 2.4 Trillion. The total Ksh. 78.08 Billion allocated to the sector is appropriated to the state departments as follows: Agriculture (61.8%), livestock Development (12.8%), Lands and physical planning (11.2%), while the last is Crop Development (0.00%). In addition, the greatest increase in allocation was in Agriculture – Ksh 2.6 Bn, while reduction occurred in Blue Economy and Fisheries – Ksh 4.5 Bn
Secondly, the total allocation in 2025/26 for the ARUD sector which amounted to Ksh 78.08 Bn, which is a decrease of Ksh -2.3 Bn (- 2.9%). The biggest contributors to this decline are the State Department for Blue Economy and Fisheries which has a budget cut of 55 percent, and the State Department for Livestock Development with a reduction of 14 percent. These cuts indicate a significant shift and may affect livestock farmers on the one hand, those in the fisheries and marine sectors, who are key for food security in the country, and could impact negatively on rural livelihoods. However, it is important to note that this shift could have been occasioned by the Kenya Livestock Commercialization Project (KeLCoP) to be carried out in 10 counties, co-funded by International Fund for Agricultural Development (IFAD) and the Government of Kenya to the tune of $93.5 million.
On the contrary, we take cognisance of the increased allocation to the National Land Commission by a 32 percent (from Ksh. 1.95 billion to Ksh.2.86 billion). This could be as a result of undertaking land reforms through the ongoing digitization program, and the need to streamline the entire lands registry, to the county level. In the same vein, the State Department for Agriculture also has an increment of 5 percentage points, getting an additional Ksh. 2.6 Billion in the coming financial year. Notably, however, the State Department for Crop Development has zero allocation. It is worth noting that the increment to Agriculture could indicate a restructuring to inculcate that for Crop development within its armpit.
It is also important to note that the absorption rates for the sector as a whole for the previous financial year, 2023/2024 was 93 percent. The development expenditure had an absorption rate of 90 percent, while recurrent expenditure absorbed 97 percent of its total allocation. This means that the sector spending is prudent even though some of the initiatives proposed as per the agriculture survey are yet to be achieved.
Conclusion
The budget allocation to the sector for the current financial year, relative to the other 9 sectors has not only reduced in relative terms but also in absolute terms by 3 percentage points. With the challenges brought forth, it remains to be seen if the mitigation measures proposed in the medium-term plans will be met.
Whereas the journey to digitization in the land sector has been given a major boost, initiatives in mechanization, provision of farm inputs, and enhancement of extension services are issues that must be tackled deliberately if the country and the ministry is to achieve its objective of ensuring food security. Noting the importance of this sector to lives and livelihoods on the one hand, and to economic growth on the other, it becomes important to highlight issues thereof as has been brought to the fore in this blog.
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Kenya’s National Budget: A Matatu Ride Reflecting Fiscal Volatility and Structural Inefficiencies
Introduction The matatu metaphor can be used to analytically frame Kenya’s budget as a system that is subject to binding constraints, evolving expectations, and continuous adjustment to shocks. Like the matatu sector, fiscal policy reflects a balancing act between efficiency and quick action seeking to respond to public service delivery while constrained by competing sector […]
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Introduction Imagine paying the same fare to travel at 6 a.m. as you would at 6 p.m., even though the matatu is half-empty in the morning and packed in the evening. At 6 a.m., there may be more seats available than passengers willing to pay for them. By 6 p.m., the situation is reversed. Hundreds […]
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Absurd hypotheticals are useful precisely because they stress-test a system until its constraints become visible. This note asks what would break first if SpaceX, now a public company following its record-breaking Nasdaq debut in June 2026, with a post-IPO market value of approximately US$ 2.5 trillion, sought a secondary cross-listing on the Nairobi Securities Exchange. […]
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Kenya’s proposed post-2030 Vision commits the country to high-income status “within a generation.” One positive issue that should be emulated is that the document seeks to solve the most important policy decision and the foundational problem in economics, which is to expand output and labour. Skeptics ask the most important question, why would this plan […]
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