Kenya’s agriculture sector, a cornerstone of the nation’s economy, is showing signs of resilience and optimism, according to the Central Bank of Kenya’s (CBK) Agriculture Sector Survey conducted from March 10-14, 2025.
The survey, which sampled 312 farmers, retailers, and wholesalers across key food-producing regions, paints a picture of a sector buoyed by favourable weather forecasts and government interventions, yet grappling with persistent challenges such as high input costs and market volatility.
As the country navigates the March-May long rains season, the findings offer critical insights into the sector’s trajectory and its implications for food security, inflation, and economic growth.
Mixed Bag of Price Trends and Seasonal Influences
The survey reveals a mixed performance in agricultural commodity prices in March 2025 compared to February, largely driven by seasonal factors.
Prices of staples like maize, maize products, and certain vegetables such as spinach and kales (sukuma wiki) rose, while others, including tomatoes, cabbages, and milk, saw declines.
This variability underscores the sector’s sensitivity to seasonal cycles, with April—a non-harvest month for most cereals—expected to see further price increases for grains and related products.
However, the anticipated long rains are likely to boost the supply of fast-growing vegetables, potentially lowering prices for kales, spinach, and cabbages.
Inflation expectations are also easing, with fewer respondents anticipating price pressures over the next one and three months compared to February.
This optimism aligns with the favourable weather outlook, which could ensure adequate food supplies and stabilise food inflation—a critical component of Kenya’s consumer price index (CPI).
The CBK’s Monetary Policy Committee (MPC) closely monitors these trends, as agricultural performance directly influences overall inflation and monetary policy decisions.
Government Subsidies Fuel Output Optimism
One of the survey’s standout findings is the widespread adoption of government-subsidised fertilizer, with 66 per cent of sampled farmers reporting access in March 2025, a slight dip from January’s peak of 69 per cent.
This program, launched in 2022, has significantly alleviated the burden of high input costs, with 82 per cent of farmers citing inorganic fertilizer as a critical production input, followed by pesticides and herbicides (49 per cent).
The initiative has contributed to positive output expectations, with most farmers anticipating increased acreage and yields for crops like maize, beans, sugarcane, and kales, driven by the long rains and continued government support.
The survey also highlights growing interest in smart agriculture practices, though their adoption remains limited.
These methods, combined with the subsidised fertilizer program, have bolstered confidence in the sector’s short-term performance, with 83 per cent of respondents expecting improvement over the next three months—a marked increase from January’s 75 per cent,
Longer-term optimism is equally strong, with farmers citing favourable rainfall patterns in 2023 and 2024 as a foundation for sustained growth.
Persistent Challenges Threaten Progress
Despite the optimism, the sector faces significant hurdles. Pests and diseases remain the top concern, affecting 95 per cent of farmers, followed closely by high input costs (90 per cent).
The rising cost of certified hybrid seeds has forced some farmers to resort to lower-quality alternatives or reduce seed purchases, potentially compromising yields.
While the subsidised fertilizer program has eased some financial pressures, the survey notes increased concerns about input affordability, with 92 per cent of farmers citing high costs as a barrier in March, up from 87 per cent in September 2024.
Marketing and sales also pose challenges, with price fluctuations (cited by over 80 per cent of farmers) and interference by middlemen (69 per cent) driving inefficiencies.
These issues are compounded by poor road infrastructure and competition from cheap imports, particularly for wheat farmers, who reported reduced acreage due to low prices, high input costs, and pest challenges.
Onion farmers, similarly, are shifting to other crops following sharp price declines, highlighting the sector’s vulnerability to market dynamics.
Access to credit, while improved, remains a bottleneck. Only 36 per cent of farmers accessed credit in March, down from 48 per cent in January, with high interest rates (38 per cent) and lack of collateral (22 per cent) cited as primary barriers.
Banks, SACCOs, and digital credit providers are the main sources, but seasonal borrowing patterns suggest farmers may be timing loans earlier in the year. Credit is primarily used for inputs, labor, and equipment leasing, with less focus on farm expansion or diversification.
The agriculture sector’s performance has far-reaching implications for Kenya’s economy, which relies heavily on the sector for employment, GDP growth, and foreign exchange from exports like tea, coffee, and horticulture.
The survey notes a 4.2 per cent growth in the Agriculture, Forestry, and Fishing sector in Q3 2024, down from 5.1 per cent the previous year, driven by favourable weather and government interventions. However, a 12.2 per cent decline in tea production highlights the sector’s uneven performance.
Optimism about the broader economy is also on the rise, with 70 per cent of respondents expecting improved GDP growth in the next three months, up from 59 per cent in January.
This confidence is largely tied to the agriculture sector’s expected rebound, which supports manufacturing, trade, and rural livelihoods. However, sustaining this momentum will require addressing structural challenges, particularly in input access and market stability.
Policy Recommendations: Building on Progress
The survey respondents offered actionable suggestions to strengthen the sector, echoing recommendations from previous surveys.
Key proposals include expanding irrigation to reduce reliance on rain-fed agriculture, stabilizing commodity prices to protect farmers from volatility, and improving infrastructure like feeder roads and maize drying facilities to minimize post-harvest losses.
Mechanisation, through subsidised tractor services, and enhanced extension services were also highlighted as critical for boosting yields.
The CBK’s policy recommendations align with these views, emphasising the need to sustain the subsidised fertilizer program, reduce pesticide costs, and increase fertilizer distribution centers’ accessibility.
Promoting price stability, particularly for cereals, and addressing compliance costs for horticultural exports could further incentivise production and enhance competitiveness.
Kenya’s agriculture sector stands at a pivotal moment. The favourable long rains forecast and government interventions provide a strong foundation for growth, but persistent challenges like input costs, pests, and market inefficiencies demand urgent attention.
As the CBK continues to monitor these trends, policymakers must prioritise targeted investments in irrigation, mechanisation, and market reforms to unlock the sector’s full potential.
For a nation where agriculture is both a livelihood and an economic lifeline, the stakes could not be higher.
