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The Pros and Cons of the Ksh 3500 Fertilizer Subsidy


Post date: Fri, Sep 23, 2022
Category: AgricultureEconomic Policy
By: Fiona Okadia,



Introduction

Like Kenyan Presidents before him, the 5th President of Kenya, Willian Ruto has pledged to introduce a fertilizer subsidy. In this, the new price will be Ksh. 3,500 for a 50kg bag of fertilizer, against the market price of Ksh. 6,500 with effect from the 3rd week of September 2022[1]. This means that the government will pay the difference of Ksh.3000 per 50kg bag to cushion farmers from high fertilizer prices in a bid to spur increased production. This subsidy system generally is non-discriminatory as it seeks to confer benefits to farmers growing food crops during this short rainy season.

Robust and efficient policies for food security should be an aspiration of all governments as small-scale farmers who are the majority of farmers are often mired with challenges around access to credit, lack of training on best farming practices, poor output prices and high costs of inputs such as fertilizer and seeds. In the past in a bid to increase food production, raise farmers’ income and achieve food security, the Kenyan government too has introduced different agricultural subsidies e.g., the fertilizer subsidy.

Often subsidies come as tax breaks or cash payments that are given to a particular industry to reduce a part of the financial burden.

The two main ways in which governments implement fertilizer subsidies are either universal subsidy programs or targeted input vouchers. For the latter, farmers who are unable to afford the fertilizers are given coupons by the government which are redeemable at specific vendor shops. The vendor then accrues vouchers and gets compensated by the government for the price difference between the subsidized price and the market price. On the other hand, the universal subsidy program is given to the vendors by the government so that they can sell the fertilizer at an agreed discounted price. Empirical evidence from high-income countries shows that the costs of universal subsidies often outweigh the benefits as input suppliers appropriate a large share of the subsidy with the price discount not fully passed on to farmers[2]. In countries with a private sector fertilizer segment, then some of the subsidized fertilizers find their way into these private shops through diversion.

Kenya’s government has implemented different policies of fertilizer subsidy since 2009. In 2020, Kenya launched an electronic voucher subsidy program that targeted 200,000 farmers across 12 counties in a bid to address low yields[3]. Under this program, the government partnered with different stores that specialize in the sale of agricultural and veterinary products commonly known as Agrovets and Safaricom, Kenya’s leading telecommunications services provider. Farmers who were eligible received e-vouchers through their mobile phones that they would use to purchase different farm inputs. The difference in the amount between the market price and the e-voucher would then be paid by the government to these specific stores. This program covered more value chains such as maize, rice, coffee and Irish potatoes. There have been challenges in assessing the effectiveness and efficacy of this subsidy program.

The cons of the fertilizer subsidy

With this new 2022 subsidy, due to incomplete information, it is not certain how the government intends to implement it and thus posing a challenge in measuring its effectiveness. There are important questions about this subsidy policy and we will attempt to highlight the shortcomings, using these questions. First, would it is not clearly stated whether it is a universal or targeted system. Targeted subsidies are better compared to universal subsidies as they enable the distribution of income and wealth more appropriately among different individuals within the society.

Secondly, is it a temporary or permanent policy? The stated objective is to target food farmers for the short rains due in October, but Kenya’s agricultural sector has a lot of structural issues and climate issues e.g., drought which has been prevalent in the previous years. This is also a worry for the upcoming planting season so even if the subsidy is provided, how sure are we that there will be enough rainfall for the country to increase its yield this time round?  The success of this subsidy program is heavily dependent on rainfall. The question is whether the government is working on solving these issues through for example irrigation. Will these issues be effectively dealt with before the next planting season? If not, then there will be a possibility that this subsidy will be offered again in a bid to assist farmers.

Thirdly, will it cover the entire market eventually or will it remain to target a segment of the farmers? This means will it only be given to specific crop farmers or all crop farmers. This helps to determine how much money the government will spend on this specific subsidy on an annual basis. Also, it helps to answer the question of whether the administration has a specific interest in certain crops. These are imperative questions as many fertilizer subsidy programmes in the continent are constrained by design and implementation failures. In the Kenyan context, the Ksh.2800 subsidized fertilizer bags by the previous administration were not available to farmers as anticipated which then highly impacted production later in year[4].

Table 1: Quantities of Principal Imports for Chemical Fertilizer, 2017-2021 in Tonnes

As shown in Table 1 above, the principal imports of chemical fertilizer have been fluctuating from 2017 to 2021. In 2021, the total imports reduced to 758,456.5 tonnes from 836,071.9 tonnes in 2020[5]. The total imports can be taken to be the total demand for fertilizers inferring that this new subsidy will cost the Kenyan government around Ksh. 45.5 billion for the 15,169,130, 50kg bags, if the current demand does not change (which is unlikely) and the government implements a large-scale subsidy program to cover the entire fertilizer demand if it doesn’t solve other issues affecting the crop sector. If it becomes a permanent program that seeks to target the entire market then the government will spend not less than a Ksh. 45.5 billion annually in 2022 shillings.

The incoming government, in the latest press statement by the Ministry of Agriculture, Livestock, Fisheries and Cooperatives, has promised to make available Ksh 3.55 billion to subsidize 71,000 metric tonnes in order to support about 1.4 million acres of land. The Ministry has outlined 6 different types of fertilizers namely DAP, CAN, UREA, NPK, MOP and sulphate of Ammonia that will be sold between Ksh 1775 to Ksh 3500 as shown in table 2 below. It appears that this is one of the factors that may explain why the total amount allocated is less than what was anticipated initially at Ksh 4.26 billion. Alternatively, the Ksh3.55 billion is the first payment of the Ksh 4.26 billion. This is because 71,000 metric tonnes in 50kg bags with a 3,000 subsidy should have initially cost Ksh 4.26 billion. It is vital then that the Ministry of Agriculture is able to break down this figure further for accountability purposes and to inform us, how much each type of fertilizer will be offered at this subsidized price. Further, the subsidized fertilizer will be distributed via National Cereals and Produce Board (NCPD) depots and subdepots all around the country. These warehouses are present at 118 locations across Kenya[6].

Table 2: Applicable Subsidized Fertilizer Prices per Type

  1. Logistics

Taking the assumption that the government implements the targeted system. Currently, at the county level, the distribution was monopolized as only the National Cereals and Produce Board (NCPB) a government facility were allowed to distribute the subsidized fertilizer. Thus, if the Kenya Kwanza administration takes the voucher route, farmers will redeem the vouchers at these 118 distribution points and pay 53% of the full commercial price of the fertilizer while the distributors will then submit the vouchers to the government for the remaining 47% of the total cost for the fertilizer that costs Ksh 6500. The challenge with this is that some counties are too big to have only one or few main distribution points and this locks out several farmers from accessing this facility, especially the poor farmers who are in need of this fertilizer. Only the large-scale farmers with financial capacity will be able to foot their transportation costs easily. Due to NCPBs storage capacity, often the government prefers to use them, however, it is not clear how the government envisions distributing this subsidized fertilizer. For Kenya Tea Development Agency (KTDA), their model of operations helps farmers with transportation so what happens for the food crops farmers who are not as organized as the tea farmers? How does the national government envision the logistics to be handled especially if its target audience is small-scale farmers? Notably, agriculture is a devolved function and it is paramount that the national government partners with the respective counties in identifying the potential farmers for the subsidy.

  1. Targeting Concerns and Corruption

With such a small percentage of the fertilizer market being catered to, it then becomes important to recognize that the distribution will not be done randomly and inclusive of all crops. The government will have to focus on one food crop maybe maize in this case. The question then is which maize farmers will receive these bags of fertilizer? How will the government make sure that the neediest farmers are the ones who benefit from this subsidy? The targeting process should be as specific as possible due to the fact that only 10% of the entire market is being subsidized.

Looking at the Malawian model, the general suitability was to determine which farmers cannot afford the fertilizer at the market price and award them the vouchers or allocate them based on acreage under cultivation[7]. It focused on smallholder farmers who have fewer hectares of land. In Kenya, the fertilizer subsidy has been known to provide an opportunity for rent extraction and this creates an incentive for corruption. Therefore, there is a high and near-certain probability that allocation may be based on bribery in addition to the risk that the subsidies may be appropriated by undeserving traders. This is assuming that some form of administration will be used in the verification and identification process of the eligible farmers. If the voucher is acquired by farmers who have the financial capability, then this means that a farmer who needed it loses the benefit.

If the aim of the policy is to target small-scale farmers, this 100-unit upper limit for the 50kg bag cap should be lowered to ensure that the benefit is distributed more evenly to reduce the chance that a larger subsidy amount will be appropriated by large-scale farmers who are able to afford volume purchases of the fertilizers. A farmer who requires about 100bags is certainly not a small-scale farmer as this is about 5000kgs of fertilizer in total which will be used on about 100 acres.

  1. Market distortion

At the very least, this program seeks to target not less than 14,200 farmers noting that individual farmers will be entitled to a maximum of 100 units of 50kg bags of fertilizers. Regardless of all this, this fertilizer will not be enough for all food crop farmers as it will only end up only catering to 10% of the annual demand for fertilizers leaving the other 90% to service their demand at the normal market prices. The market for fertilizers will then be characterized by both subsidized and unsubsidized bags. Imagine a scenario where a farmer buys 100 bags at Ksh. 3500 spending only Ksh. 350,000 and sells it in the market at 6,500 acquiring a profit of Ksh. 300,000 for all the bags sold. This challenge has existed before in the Kenyan market as subsidized fertilizer was sold by those in the private sector-driven fertilizer subsector.

  1. Benefit Incidence (Large Scale Farmers)

In Malawi, the fertilizer subsidy programme from 2005-2006 led to households with higher assets and more land accessing greater subsidies of this subsidized fertilizer despite there being targeted guidelines. This shows that the level of social and political connections has a role to play in how subsidized goods are distributed. The same benefit incidence will befall the Kenyan market as a subsidy raises the incentive to appropriate the value being subsidised and especially where financial capacity and political affiliations would work to provide access to fertilizers from the monopoly distributor.

This model also leads to the crowding out of the private sector in the fertilizer industry as it completely distorts the prices in the market, especially for the rich farmers that were able to afford the fertilizer [8].  There were farmers that were able to afford the fertilizer at market prices. In the event that they ended up having the vouchers then it meant that they do not purchase fertilizers from the specific private retailers and this then ended up shifting the composition of retailers’ profits from commercial fertilizer to subsidy program fertilizer with uncertain effects on the total quantity of fertilizer applied to the farmer’s field [9].

Conclusion

Albeit fertiliser subsidy policy being aimed at combating food insecurity, many economists have argued that agricultural input subsidies are an ineffective and inefficient policy instrument[10]. The disadvantages of this subsidy as explained above can be summarized into the benefit incidence issue where the large-scale farmers appropriate most of the value, a logistics problem, corruption, market distortion and redistribution of income to the producers from taxes paid by all income groups. These types of subsidies have contributed to government overspending, leading to fiscal problems depicting an inefficient use of public funds. The lowering of fertilizer prices is an additional burden to the taxpayers as part of their taxes is used to fund this subsidy instead of being applied in other parts of the economy.

In conclusion, there remain concerns about whether this type of subsidy is more likely to meet the national policy objective of ensuring food security than other public investments in agriculture or if they are implemented for the political support they have been known to fetch. This is because it is a producer subsidy that seeks to increase the farmers’ income and there is no guarantee that it will lead to lower food prices.

Bibliography

Africa Research Institute. (December 2007). Making Fertilizer Subsidies Work in Malawi. Africa Research Institute.

Andae, G. (2020, August 25th). E-Voucher Farm Input Subsidy Rollout Starts. Retrieved from Business Daily: https://www.businessdailyafrica.com/bd/markets/market-news/e-voucher-farm-input-subsidy-rollout-starts-2299454#:~:text=Kenya%20will%20launch%20an%20electronic,out%20this%20Friday%20in%20Kisumu.

Dick, J. M. (September 2011). Analysis of fertilizer subsidy programs and ecosystem services in Malawi. Cambridge University Press, 200-207.

Jacob Ricker-Gilbert, T. S. (January 2011). Subsidies and Crowding Out. Oxford Journals, 26-42.

Kenya National Bureau of Statistics. (2022). Economic Survey 2022. Nairobi: Kenya National Bureau of Statistics.

Muia, J. (2022, September 14th). Fertilizer Prices To Drop From Ksh 6500 to Ksh 3500. Retrieved from Soko Directory: https://sokodirectory.com/2022/09/fertilizer-prices-to-drop-from-ksh-6500-to-ksh-3500/

Owili, R. (2022, September 14). Kenya Broadcasting Corporation. Retrieved from Kenya Broadcasting Corporation: https://www.kbc.co.ke/president-ruto-promises-reduced-fertilizer-prices-from-next-week/

 

[1] (Owili, 2022)

[2] (Jacob Ricker-Gilbert, January 2011)

[3] (Andae, 2020)

[4] (Muia, 2022)

[5] (Kenya National Bureau of Statistics, 2022)

[6] (Kenya Storage Assessment, 2022)

[7] (Africa Research Institute, December 2007)

[8] (Jacob Ricker-Gilbert, January 2011)

[9] (Jacob Ricker-Gilbert, January 2011)

[10] (Dick, September 2011)


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The Pros and Cons of the Ksh 3500 Fertilizer Subsidy

Post date: Fri, Sep 23, 2022
Category: AgricultureEconomic Policy
By: Fiona Okadia,



Introduction

Like Kenyan Presidents before him, the 5th President of Kenya, Willian Ruto has pledged to introduce a fertilizer subsidy. In this, the new price will be Ksh. 3,500 for a 50kg bag of fertilizer, against the market price of Ksh. 6,500 with effect from the 3rd week of September 2022[1]. This means that the government will pay the difference of Ksh.3000 per 50kg bag to cushion farmers from high fertilizer prices in a bid to spur increased production. This subsidy system generally is non-discriminatory as it seeks to confer benefits to farmers growing food crops during this short rainy season.

Robust and efficient policies for food security should be an aspiration of all governments as small-scale farmers who are the majority of farmers are often mired with challenges around access to credit, lack of training on best farming practices, poor output prices and high costs of inputs such as fertilizer and seeds. In the past in a bid to increase food production, raise farmers’ income and achieve food security, the Kenyan government too has introduced different agricultural subsidies e.g., the fertilizer subsidy.

Often subsidies come as tax breaks or cash payments that are given to a particular industry to reduce a part of the financial burden.

The two main ways in which governments implement fertilizer subsidies are either universal subsidy programs or targeted input vouchers. For the latter, farmers who are unable to afford the fertilizers are given coupons by the government which are redeemable at specific vendor shops. The vendor then accrues vouchers and gets compensated by the government for the price difference between the subsidized price and the market price. On the other hand, the universal subsidy program is given to the vendors by the government so that they can sell the fertilizer at an agreed discounted price. Empirical evidence from high-income countries shows that the costs of universal subsidies often outweigh the benefits as input suppliers appropriate a large share of the subsidy with the price discount not fully passed on to farmers[2]. In countries with a private sector fertilizer segment, then some of the subsidized fertilizers find their way into these private shops through diversion.

Kenya’s government has implemented different policies of fertilizer subsidy since 2009. In 2020, Kenya launched an electronic voucher subsidy program that targeted 200,000 farmers across 12 counties in a bid to address low yields[3]. Under this program, the government partnered with different stores that specialize in the sale of agricultural and veterinary products commonly known as Agrovets and Safaricom, Kenya’s leading telecommunications services provider. Farmers who were eligible received e-vouchers through their mobile phones that they would use to purchase different farm inputs. The difference in the amount between the market price and the e-voucher would then be paid by the government to these specific stores. This program covered more value chains such as maize, rice, coffee and Irish potatoes. There have been challenges in assessing the effectiveness and efficacy of this subsidy program.

The cons of the fertilizer subsidy

With this new 2022 subsidy, due to incomplete information, it is not certain how the government intends to implement it and thus posing a challenge in measuring its effectiveness. There are important questions about this subsidy policy and we will attempt to highlight the shortcomings, using these questions. First, would it is not clearly stated whether it is a universal or targeted system. Targeted subsidies are better compared to universal subsidies as they enable the distribution of income and wealth more appropriately among different individuals within the society.

Secondly, is it a temporary or permanent policy? The stated objective is to target food farmers for the short rains due in October, but Kenya’s agricultural sector has a lot of structural issues and climate issues e.g., drought which has been prevalent in the previous years. This is also a worry for the upcoming planting season so even if the subsidy is provided, how sure are we that there will be enough rainfall for the country to increase its yield this time round?  The success of this subsidy program is heavily dependent on rainfall. The question is whether the government is working on solving these issues through for example irrigation. Will these issues be effectively dealt with before the next planting season? If not, then there will be a possibility that this subsidy will be offered again in a bid to assist farmers.

Thirdly, will it cover the entire market eventually or will it remain to target a segment of the farmers? This means will it only be given to specific crop farmers or all crop farmers. This helps to determine how much money the government will spend on this specific subsidy on an annual basis. Also, it helps to answer the question of whether the administration has a specific interest in certain crops. These are imperative questions as many fertilizer subsidy programmes in the continent are constrained by design and implementation failures. In the Kenyan context, the Ksh.2800 subsidized fertilizer bags by the previous administration were not available to farmers as anticipated which then highly impacted production later in year[4].

Table 1: Quantities of Principal Imports for Chemical Fertilizer, 2017-2021 in Tonnes

As shown in Table 1 above, the principal imports of chemical fertilizer have been fluctuating from 2017 to 2021. In 2021, the total imports reduced to 758,456.5 tonnes from 836,071.9 tonnes in 2020[5]. The total imports can be taken to be the total demand for fertilizers inferring that this new subsidy will cost the Kenyan government around Ksh. 45.5 billion for the 15,169,130, 50kg bags, if the current demand does not change (which is unlikely) and the government implements a large-scale subsidy program to cover the entire fertilizer demand if it doesn’t solve other issues affecting the crop sector. If it becomes a permanent program that seeks to target the entire market then the government will spend not less than a Ksh. 45.5 billion annually in 2022 shillings.

The incoming government, in the latest press statement by the Ministry of Agriculture, Livestock, Fisheries and Cooperatives, has promised to make available Ksh 3.55 billion to subsidize 71,000 metric tonnes in order to support about 1.4 million acres of land. The Ministry has outlined 6 different types of fertilizers namely DAP, CAN, UREA, NPK, MOP and sulphate of Ammonia that will be sold between Ksh 1775 to Ksh 3500 as shown in table 2 below. It appears that this is one of the factors that may explain why the total amount allocated is less than what was anticipated initially at Ksh 4.26 billion. Alternatively, the Ksh3.55 billion is the first payment of the Ksh 4.26 billion. This is because 71,000 metric tonnes in 50kg bags with a 3,000 subsidy should have initially cost Ksh 4.26 billion. It is vital then that the Ministry of Agriculture is able to break down this figure further for accountability purposes and to inform us, how much each type of fertilizer will be offered at this subsidized price. Further, the subsidized fertilizer will be distributed via National Cereals and Produce Board (NCPD) depots and subdepots all around the country. These warehouses are present at 118 locations across Kenya[6].

Table 2: Applicable Subsidized Fertilizer Prices per Type

  1. Logistics

Taking the assumption that the government implements the targeted system. Currently, at the county level, the distribution was monopolized as only the National Cereals and Produce Board (NCPB) a government facility were allowed to distribute the subsidized fertilizer. Thus, if the Kenya Kwanza administration takes the voucher route, farmers will redeem the vouchers at these 118 distribution points and pay 53% of the full commercial price of the fertilizer while the distributors will then submit the vouchers to the government for the remaining 47% of the total cost for the fertilizer that costs Ksh 6500. The challenge with this is that some counties are too big to have only one or few main distribution points and this locks out several farmers from accessing this facility, especially the poor farmers who are in need of this fertilizer. Only the large-scale farmers with financial capacity will be able to foot their transportation costs easily. Due to NCPBs storage capacity, often the government prefers to use them, however, it is not clear how the government envisions distributing this subsidized fertilizer. For Kenya Tea Development Agency (KTDA), their model of operations helps farmers with transportation so what happens for the food crops farmers who are not as organized as the tea farmers? How does the national government envision the logistics to be handled especially if its target audience is small-scale farmers? Notably, agriculture is a devolved function and it is paramount that the national government partners with the respective counties in identifying the potential farmers for the subsidy.

  1. Targeting Concerns and Corruption

With such a small percentage of the fertilizer market being catered to, it then becomes important to recognize that the distribution will not be done randomly and inclusive of all crops. The government will have to focus on one food crop maybe maize in this case. The question then is which maize farmers will receive these bags of fertilizer? How will the government make sure that the neediest farmers are the ones who benefit from this subsidy? The targeting process should be as specific as possible due to the fact that only 10% of the entire market is being subsidized.

Looking at the Malawian model, the general suitability was to determine which farmers cannot afford the fertilizer at the market price and award them the vouchers or allocate them based on acreage under cultivation[7]. It focused on smallholder farmers who have fewer hectares of land. In Kenya, the fertilizer subsidy has been known to provide an opportunity for rent extraction and this creates an incentive for corruption. Therefore, there is a high and near-certain probability that allocation may be based on bribery in addition to the risk that the subsidies may be appropriated by undeserving traders. This is assuming that some form of administration will be used in the verification and identification process of the eligible farmers. If the voucher is acquired by farmers who have the financial capability, then this means that a farmer who needed it loses the benefit.

If the aim of the policy is to target small-scale farmers, this 100-unit upper limit for the 50kg bag cap should be lowered to ensure that the benefit is distributed more evenly to reduce the chance that a larger subsidy amount will be appropriated by large-scale farmers who are able to afford volume purchases of the fertilizers. A farmer who requires about 100bags is certainly not a small-scale farmer as this is about 5000kgs of fertilizer in total which will be used on about 100 acres.

  1. Market distortion

At the very least, this program seeks to target not less than 14,200 farmers noting that individual farmers will be entitled to a maximum of 100 units of 50kg bags of fertilizers. Regardless of all this, this fertilizer will not be enough for all food crop farmers as it will only end up only catering to 10% of the annual demand for fertilizers leaving the other 90% to service their demand at the normal market prices. The market for fertilizers will then be characterized by both subsidized and unsubsidized bags. Imagine a scenario where a farmer buys 100 bags at Ksh. 3500 spending only Ksh. 350,000 and sells it in the market at 6,500 acquiring a profit of Ksh. 300,000 for all the bags sold. This challenge has existed before in the Kenyan market as subsidized fertilizer was sold by those in the private sector-driven fertilizer subsector.

  1. Benefit Incidence (Large Scale Farmers)

In Malawi, the fertilizer subsidy programme from 2005-2006 led to households with higher assets and more land accessing greater subsidies of this subsidized fertilizer despite there being targeted guidelines. This shows that the level of social and political connections has a role to play in how subsidized goods are distributed. The same benefit incidence will befall the Kenyan market as a subsidy raises the incentive to appropriate the value being subsidised and especially where financial capacity and political affiliations would work to provide access to fertilizers from the monopoly distributor.

This model also leads to the crowding out of the private sector in the fertilizer industry as it completely distorts the prices in the market, especially for the rich farmers that were able to afford the fertilizer [8].  There were farmers that were able to afford the fertilizer at market prices. In the event that they ended up having the vouchers then it meant that they do not purchase fertilizers from the specific private retailers and this then ended up shifting the composition of retailers’ profits from commercial fertilizer to subsidy program fertilizer with uncertain effects on the total quantity of fertilizer applied to the farmer’s field [9].

Conclusion

Albeit fertiliser subsidy policy being aimed at combating food insecurity, many economists have argued that agricultural input subsidies are an ineffective and inefficient policy instrument[10]. The disadvantages of this subsidy as explained above can be summarized into the benefit incidence issue where the large-scale farmers appropriate most of the value, a logistics problem, corruption, market distortion and redistribution of income to the producers from taxes paid by all income groups. These types of subsidies have contributed to government overspending, leading to fiscal problems depicting an inefficient use of public funds. The lowering of fertilizer prices is an additional burden to the taxpayers as part of their taxes is used to fund this subsidy instead of being applied in other parts of the economy.

In conclusion, there remain concerns about whether this type of subsidy is more likely to meet the national policy objective of ensuring food security than other public investments in agriculture or if they are implemented for the political support they have been known to fetch. This is because it is a producer subsidy that seeks to increase the farmers’ income and there is no guarantee that it will lead to lower food prices.

Bibliography

Africa Research Institute. (December 2007). Making Fertilizer Subsidies Work in Malawi. Africa Research Institute.

Andae, G. (2020, August 25th). E-Voucher Farm Input Subsidy Rollout Starts. Retrieved from Business Daily: https://www.businessdailyafrica.com/bd/markets/market-news/e-voucher-farm-input-subsidy-rollout-starts-2299454#:~:text=Kenya%20will%20launch%20an%20electronic,out%20this%20Friday%20in%20Kisumu.

Dick, J. M. (September 2011). Analysis of fertilizer subsidy programs and ecosystem services in Malawi. Cambridge University Press, 200-207.

Jacob Ricker-Gilbert, T. S. (January 2011). Subsidies and Crowding Out. Oxford Journals, 26-42.

Kenya National Bureau of Statistics. (2022). Economic Survey 2022. Nairobi: Kenya National Bureau of Statistics.

Muia, J. (2022, September 14th). Fertilizer Prices To Drop From Ksh 6500 to Ksh 3500. Retrieved from Soko Directory: https://sokodirectory.com/2022/09/fertilizer-prices-to-drop-from-ksh-6500-to-ksh-3500/

Owili, R. (2022, September 14). Kenya Broadcasting Corporation. Retrieved from Kenya Broadcasting Corporation: https://www.kbc.co.ke/president-ruto-promises-reduced-fertilizer-prices-from-next-week/

 

[1] (Owili, 2022)

[2] (Jacob Ricker-Gilbert, January 2011)

[3] (Andae, 2020)

[4] (Muia, 2022)

[5] (Kenya National Bureau of Statistics, 2022)

[6] (Kenya Storage Assessment, 2022)

[7] (Africa Research Institute, December 2007)

[8] (Jacob Ricker-Gilbert, January 2011)

[9] (Jacob Ricker-Gilbert, January 2011)

[10] (Dick, September 2011)




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The Arithmetic of Ambition: What Kenya’s First-World Dream Really Requires?

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 […]


Kenya’s Debt: Borrow Today, Pay Tomorrow

According to the Annual Debt Report 2024/25, as shown in Chart 1 below, Kenya today is such that for every one hundred shillings the Kenyan government raises in tax revenue, approximately ksh71 goes directly into servicing existing debt before a single hospital is staffed, a classroom is built, or a kilometre of road is constructed. […]








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The Institute of Economic Affairs (IEA Kenya) is a think-tank that provides a platform for informed discussions in order to influence public policy in Kenya. We seek to promote pluralism of ideas through open, active and informed debate on public policy issues. We undertake research and conduct public education on key economic and topical issues in public affairs in Kenya and the region, and utilize the outcomes of the research for policy dialogue and to influence policy making.

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