This archive report was first published on 16 October 2019.
Kenyan farmers are facing a bleak future in commercial crop farming, with a recent study showing a drastic decline in returns. According to research by financial services firm ICEA Lion, revenue from commercial agriculture as a proportion of the market value of agriculture sector output fell from 27% in 2013 to 16% in 2018.
ICEA Lion attributes the decline to rising production costs, which increased by 53% between 2013 and 2018, reaching over Sh60 billion. The study found that aggregate fertiliser costs rose by 68%, while the cost of crop chemicals increased by 165% during the same period.
Head of Research at ICEA Lion, Judd Murigi, noted that the increase in annual usage of key inputs between 2013 and 2018 was more than double the increase in yearly commercial agricultural output in the same period, indicating that the law of diminishing returns was taking hold.
While other sub-sectors such as horticulture, coffee, and tea have struggled, livestock farming remains a promising option for farmers, with returns showing potential for growth.
Published on October 16, 2019, in The Standard.
