Cut fertiliser tax to increase food production

A trader at the Kongowea Market in Mombasa sets mangoes for sale. Farmers cannot be blamed as instigators of high food prices because it is not in their control but rather middlemen. PHOTO | WACHIRA MWANGI | NMG

What you need to know:

  • Of the five basic human wants of an urban dweller including food, rent, education, clothing and medication, it is quite possible to improve individual household disposable incomes by reducing food prices.

  • Kenya can move towards the attainment of United Nations sustainable goal Number One, which is geared towards inclusive growth that provides good jobs, if we can get food cheaply.

  • The fundamental perspective is increasing the propensity to consume by reducing food prices as this will influence the quality of life and investment.

Increase in food prices affects everybody, but always hits the urban poor hard. With this segment of the population struggling to make ends meet, the effects can be crippling.

The poorest households in our urban areas spend 60-80 per cent of their income on food. In essence, it implies that they end up spending less on other necessities like education and medicare.

URBAN DWELLER

In such circumstances, poor households are always faced with tough choices, the most notable being eating poor quality food because it is within their budgets.

And poor quality food means that they will more often than not get ill, necessitating visits to hospital, which further reduces their disposable incomes. With a cut on disposable incomes, they are unable to save for investment.

An average urban dweller is looked upon by the rural folks to chip in once in a while, because it’s the society’s expectation. It implies that every coin counts and we cannot attain economic inclusion as a country if three quarters of our household budgets go towards purchasing food. Of the five basic human wants of an urban dweller including food, rent, education, clothing and medication, it is quite possible to improve individual household disposable incomes by reducing food prices since initiatives towards this cause are certain to yield instant results.

Being poor is not a permanent state but much dependent on personal initiative to thrive in a society that gives opportunity to all. This is debatable in our country but it is a basic facet of countries who have gone ahead to thrive. As much Kenyans have a drive to improve their livelihoods, the government should be at the forefront to ensure a level playing field for all to blossom.

It should subsidise the cost of farm inputs because they hold a significant sway on final farm gate prices. It is laudable that some county governments have initiated tractor leasing programs to help farmers in preparing their farms for planting cost-effectively.

EMPOWERED

The national government, on the other hand, should address the prices of fertiliser and seeds through tax cuts, well aware that low food prices will have a positive ripple effect on disposable incomes, spurring economic growth, which will increase the tax base.

Farmers cannot be blamed as instigators of high food prices because it is not in their control but rather middlemen. Urban food vendors who are relied upon to feed Nairobians are a helpless lot because they cannot reduce these prices even if they had the moral will to assist their clientele. These vendors only add a mark-up that can help them recoup transport costs and a small profit.

An informed consumer and vendor is always empowered to make good purchasing decisions which will help in pilling pressure on the exploitative middlemen to curb unprecedented increases in food prices. For instance, it is hard to understand why the market price of a head of cabbage in an estate like Kangemi in Nairobi is Sh100 yet the same is acquired by a middleman in Kinangop, just 60 kilometers away, at Sh15. The current situation has persisted because the end pricing is shrouded in secrecy yet farmers have always complained about being undercut.

Kenya can move towards the attainment of United Nations sustainable goal Number One, which is geared towards inclusive growth that provides good jobs, if we can get food cheaply. The fundamental perspective is increasing the propensity to consume by reducing food prices as this will influence the quality of life and investment.

Mr Onyango is an agricultural economist. [email protected]