The Agriculture Produce (Minimum Guaranteed Returns) Bill, 2024
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County-Level Guaranteed Return Funds Established
Section 3 establishes the Agriculture Produce Minimum Guaranteed Returns Fund in every county. The Fund's objects are to:
- Provide minimum guaranteed returns to secure farmers' incomes.
- Accelerate agricultural growth and maintain consistent production levels.
- Improve food security.
The Fund will consist of monies appropriated by county assemblies, grants, county fees or levies, and investment earnings (Section 4).
Guaranteed Returns Set at 20% Above Production Costs
Under Section 13, the minimum guaranteed return is fixed at twenty percent of the profit above the comprehensive cost of production.
The "comprehensive cost" will be calculated using Kenya National Bureau of Statistics (KNBS) data, factoring in:
- Farm inputs (seeds, fertilizers, pesticides, herbicides).
- Livestock inputs (animal feeds, drugs).
- Labor, fuel, irrigation, machinery, and farm rent.
Direct Bank Transfers to Cushion Registered Farmers
Guaranteed payments will only be triggered under specific conditions outlined in Section 13(5):
- The agricultural produce must be largely consumed locally.
- Market returns obtained by beneficiaries must fall below the recommended minimum guaranteed returns.
- Payments must be made via direct transfers to the beneficiaries' bank accounts.
New County Committees to Manage Funds
Section 6 vests fund management in a Committee in each county. The Committee will comprise:
- The county chief officer in charge of agriculture (Chairperson).
- The county chief officers in charge of finance and trade.
- Two representatives (opposite gender) from registered agricultural producer associations.
- Two representatives (opposite gender) from unregistered agricultural producers.
Bill No.
No. 48 of 2024
Gazette No.
Supplement No. 175 of 2024
Sponsor
Veronica Maina
Background
Agriculture is the backbone of Kenya's economy, contributing over 20% of the Gross Domestic Product (GDP), 60% of total export earnings, and employing over 40% of the population. However, farmers face significant market uncertainties and limited access to agricultural finances, which destabilize their incomes. The Agriculture Produce (Minimum Guaranteed Returns) Bill, 2024, seeks to resolve these challenges by establishing county-level funds designed to cushion farmers when market prices plummet below production costs.
Key Provisions
Establishment and Source of the Funds
Section 3 establishes the Agriculture Produce Minimum Guaranteed Returns Fund in each county. The Fund will be financed through:
- Allocations appropriated by the respective County Assembly.
- Grants, donations, or gifts.
- Monies allocated from county investments, fees, or levies.
- Earnings from the investment of the Fund.
Under Section 5, general administration expenses of the Fund are strictly capped at one percent of the total monies in the Fund in each financial year.
Determining Guaranteed Returns
Section 13 requires the county management committees to calculate and publish minimum guaranteed returns in the Gazette at the start of every financial year. The rate is set at twenty percent of the profit above the comprehensive cost of production, taking into account official statistical data on expenditures like seeds, animal feed, labor, rent, and machinery.
New Obligations
For County Committees
Under Sections 9 and 13, the newly established county committees must:
- Register eligible agricultural beneficiaries.
- Prepare a list of dominant crops and livestock eligible for guaranteed returns within the county.
- Determine minimum and maximum acreage qualifications for beneficiaries.
- Approve disbursements and review the guaranteed return rates from time to time based on changing market prices.
For Fund Managers
Section 11 requires the competitive recruitment of a Fund Manager by the county executive committee member for finance. The Fund Manager is responsible for daily operations, preparing strategic plans, annual budgets, and audited accounts.
For Beneficiaries
Farmers seeking payments must formally apply to the Fund in a prescribed form (Section 14).
Penalties
Conflict of Interest
Under Section 12 and the Schedule, any committee member who fails to disclose a direct or indirect interest in any contract or matter before the Committee must cease to be a member.
Recovery of Excess or Erroneous Payments
Section 15 provides that payments may be suspended or cancelled if they were obtained through fraud, misrepresentation, or approved in error. Any money paid in error is legally recognized as a debt due to the Fund and must be repaid by the recipient or, if deceased, by their estate.
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