Calls have been made for the government to empower farmers in managing commercial parastatals within the agriculture sector, repotrted The Star.
Timothy Njagi, a senior researcher at the Tegemeo Institute, emphasized that continuous bailouts of state parastatals, particularly sugar companies, are not sustainable solutions. Instead, he proposed that the government consider selling these enterprises to farmers for more efficient management. Njagi highlighted the farmers’ demonstrated willingness to raise equity, presenting an opportunity for the government to negotiate with them.
The government had previously indicated its intention to privatize semi-autonomous government agencies, including those in the agriculture sector, as part of efforts to divest from loss-making institutions. Despite a High Court order halting the plan, President William Ruto has reaffirmed the government’s commitment to privatizing state-owned parastatals, emphasizing that private sector management would yield returns on investment.
In November of the previous year, the National Treasury unveiled plans to sell 11 parastatals to release funds invested in their operations. The list includes entities such as the Kenyatta International Convention Centre (KICC), Kenya Literature Bureau, National Oil Corporation, and others. However, the move faced opposition, with the ODM challenging it in court, arguing that a referendum should be conducted due to the strategic importance of these state firms.
In response to the proposed taxation of smallholders in the Budget Policy Statement, Njagi urged the government to abandon such measures to support farmers further. He expressed concerns over the lack of understanding of the agriculture sector reflected in the proposal and called for a comprehensive study commissioned by the treasury to assess the tax burden on farmers. Njagi emphasized that farmers already bear significant indirect taxes, and imposing direct taxes contradicts the government’s objectives in fostering the agriculture sector.
