The agricultural sector is facing a massive funding shortfall despite being identified as a key driver of inclusive growth under the Bottom-Up Economic Transformation Agenda (BETA).
According to the 2026 Budget Policy Statement (BPS), the Ministry of Agriculture and Livestock Development has been allocated far less than it requires to effectively implement its programmes in the 2026/27 financial year.
The 2026 BPS, the fourth to be prepared under the Kenya Kwanza Administration, outlines the Government’s policy priorities and fiscal strategy for the upcoming financial year and the medium term.
In its report on the consideration of the 2026 BPS, the National Assembly’s Departmental Committee on Agriculture and Livestock observed that the sector remains severely underfunded despite its central role in economic transformation.
The committee noted that the State Department for Agriculture and the State Department for Livestock Development have been provided a combined ceiling of Sh75.491 billion against a total resource requirement of Sh135.355 billion.
This leaves a substantial funding gap of Sh59.864 billion for the 2026/27 financial year.
For the State Department for Agriculture, the 2026 BPS proposes a ceiling of Sh59.99 billion, comprising Sh24.60 billion for recurrent expenditure and Sh35.39 billion for development expenditure.
However, the department’s total resource requirement stands at Sh107.362 billion, creating a funding deficit of Sh47.367 billion.
Similarly, the State Department for Livestock Development requires Sh27.993 billion but has been allocated a ceiling of only Sh15.49 billion, resulting in a shortfall of Sh12.49 billion.
In its observations, the committee pointed to what it termed as a “strategic misalignment” between policy pronouncements and actual fiscal commitments.
“While the 2026 BPS identifies agriculture as a primary pillar of the Bottom-Up Economic Transformation Agenda (BETA) and a driver of inclusive growth, the fiscal provisions allocated remain disproportionately low compared to these stated objectives,” the committee stated in its report.
The lawmakers further raised concerns over chronic underfunding of value chain interventions that are central to transforming prioritized crops and livestock sectors.
“The 2026 BPS outlines various policy interventions aimed at transforming prioritized agricultural value chains; however, these initiatives suffer from chronic underfunding, with several key programs receiving no budgetary allocation at all,” the report reads.
The committee also flagged the growing burden of pending bills that threaten the stability of the two state departments. The State Department for Agriculture owes Sh7.465 billion in historical pending bills, while the State Department for Livestock Development faces a Sh4 billion court award. Neither of these liabilities has been factored into the 2026/27 budget estimates.
Additionally, the Department for Agriculture is grappling with Sh15.7 billion in unsettled arrears owed to farmers, employees and suppliers. The committee warned that addressing these salary and service debts is critical for the stability of public sugar millers and overall sector confidence.
The situation is compounded by the heavy reliance on external financing for development projects within the livestock sub-sector.
The committee noted that 87 percent of the development budget for the State Department for Livestock is funded externally, with only Sh1.386 billion sourced from the Government of Kenya.
The Kenya Veterinary Vaccines Production Institute (KEVEVAPI) was singled out as one of the institutions constrained by inadequate funding. The institute operates on a stagnant budget of Sh723 million with zero net-exchequer allocation for development.
Lawmakers emphasiSed the need for an additional Sh352 million for capital investment in manufacturing technology to transition KEVEVAPI into a self-sustaining entity capable of meeting regional demand and competing commercially.
The Fertiliser Subsidy Programme, a flagship intervention aimed at lowering production costs for farmers, is also significantly underfunded.
The programme requires Sh33.75 billion to meet national demand and clear pending bills, but only Sh9.5 billion has been proposed, leaving a deficit of Sh24.25 billion.
Critical enablers of the BETA agenda such as the Development of Aggregation Centres have also not been adequately supported. The initiative requires Sh950 million in the 2026/27 financial year to promote aggregation, value addition, cold storage, warehousing and technology transfer for prioritized crops.
In the tea sub-sector, the department requires Sh1.359 billion to promote value addition, including the construction and equipping of a common user facility at the Dongo Kundu Special Economic Zone, contract packing initiatives, promotion of value-added teas in emerging markets, and establishment of warehousing hubs abroad.
The committee stressed that the livestock department requires Sh27.993 billion to effectively support key value chains in leather, dairy and meat sectors, which have significant potential for job creation and export growth.
The 2026 BPS acknowledges agriculture as a core pillar for inclusive green growth, noting that more than two-thirds of Kenyans derive their livelihoods directly or indirectly from the sector.
It further recognises that agriculture has the highest employment multiplier effect among all economic sectors and plays a profound role in creating jobs for economically excluded populations.
However, lawmakers warned that without adequate funding, these aspirations may remain unattainable.
In its recommendations, the committee urged the Cabinet Secretary for Agriculture and Livestock Development to engage the Cabinet Secretary for the National Treasury and Economic Planning and the broader Cabinet to secure progressive increases in resource allocation.
“The Cabinet Secretary, Ministry of Agriculture and Livestock Development should engage the Cabinet Secretary for National Treasury and Economic Planning and the Cabinet at large to ensure that there is progressive addition of resources to the agriculture sector to enhance funding of prioritised value chains."
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