Fertile land, rising imports: Kenya’s costly food paradox

The planting season in the high-producing North Rift counties is at its peak, even as farmers continue to line up at National Cereals and Produce Board depots in last-minute efforts to secure subsidised fertiliser.

Unlike previous years, there has been an acute shortage of fertiliser at the depots, particularly the OCP, which is preferred by most farmers in the region. OCP is manufactured in Morocco, where it is blended to suit specific soils and crops. It is linked to the high maize yields achieved last year.

Kenya’s agricultural story is increasingly characterised by contradiction. In a country blessed with vast arable land, favourable climate, and a workforce deeply rooted in farming, the reality is stark: the nation is gradually becoming a net importer of food.

From wheat and rice to edible oils and sugar, Kenya’s import bill continues to swell, surpassing Sh200 billion annually, according to the Kenya National Bureau of Statistics.

Recent data estimates the country’s food import bill for 2025 at Sh288.1 billion, with some figures suggesting it could be as high as Sh500 billion. Imports mainly consist of wheat, maize, oil, and rice, accounting for nearly 19 per cent of Kenya’s total merchandise imports.

This is happening as farmers grapple with limited access to inputs, rising costs, and systemic inefficiencies that threaten the sustainability of food production.

At the centre of this paradox is a farming sector under immense pressure. In Uasin Gishu, Trans Nzoia, and parts of Elgeyo Marakwet—where the planting season is at its height—many farmers are still scrambling for subsidised fertiliser instead of tending to their fields.

Agriculture Principal Secretary Kiprono Rono admits there have been delays, citing importation and logistical bottlenecks. The government had targeted over 12 million bags of subsidised fertiliser, but only about half have so far reached farmers.

“There have been delays, but we are working to ensure fertiliser reaches all areas because many farmers are still planting,” he said.

However, for farmers, timing is everything. David Kiberenge, a smallholder farmers’ representative in North Rift, warns that late fertiliser delivery could severely impact yields. “Farmers rely on subsidised fertiliser at around Sh2,500 per bag. In the open market, prices are almost double. Many have now turned to alternatives like DAP and Mavuno, which may not deliver the same results,” he said.

Jane Rotich, a farmer in Trans Nzoia, is blunt: “We should not be struggling like this every season. There must be proper planning.”

Beyond fertiliser shortages, a deeper issue looms—the rising cost of food production in Kenya. Farmers estimate that cultivating an acre of maize costs about Sh55,000, including seeds, fertiliser, labour, and land preparation. With average yields of 20 to 25 bags per acre and prices fluctuating around Sh4,000 per 90kg bag, profit margins are thin and unpredictable.

“In a good season, you might make about Sh45,000 profit per acre, but it’s not guaranteed,” says Kipkorir Menjo, a director at the Kenya Farmers Association. “If the rains fail, you lose everything.”

Cost pressures are driven by multiple factors. Fertiliser remains expensive despite subsidies, while certified seeds—available but costly—sell at around Sh3,000 for a 10kg pack.

A 2kg pack of maize seed is currently going for Sh600. “Just like fertiliser, there is a need to subsidise maize seed prices, which are high and unaffordable for many farmers,” Menjo adds.

Labour costs have risen, fuel prices remain volatile, and mechanisation remains out of reach for many smallholders. For a sector supporting over 70 per cent of rural livelihoods, these economic pressures raise serious questions about sustainability.

While farmers may not always face direct taxation, the tax regime significantly influences their costs. Value-added tax (VAT) on fuel increases transportation costs for inputs and produce. Levies embedded in logistics, packaging, and processing also inflate the final cost of production.

Even where tax relief exists—such as proposed VAT reductions for export-oriented agriculture—small-scale farmers producing for the domestic market often see little benefit. Agriculture Cabinet Secretary Mutahi Kagwe acknowledges this ripple effect. “If farmers spend too much on inputs or servicing loans, the cost of food rises. That affects every Kenyan,” he said.

High interest rates on loans further compound the issue. Many financial products are not tailored to agriculture, especially for crops with long gestation periods like coffee. “If a farmer plants coffee, which takes three to four years to mature, you cannot expect repayment in a month,” Kagwe noted, calling for more flexible financing models.

Institutions such as the Agricultural Finance Corporation, which offers loans at around 10 per cent interest, provide some relief, but access remains limited. Adding to the crisis is the steady fragmentation of agricultural land.

Large tracts formerly managed for commercial farming, such as those under the Agricultural Development Corporation, are increasingly being subdivided into smaller plots or lost to encroachment and speculative development.

In areas like Galana Kulalu, and parts of the Rift Valley and Coast, reports of illegal invasions and land sales have raised alarms over the loss of productive farmland. Galana Kulalu, designed for large-scale maize production under irrigation to bolster food security, has continued to sink billions without meeting its targets.

Experts warn that land subdivision reduces economies of scale, hampers mechanisation, and raises per-unit production costs. Smaller plots also limit farmers’ ability to produce surplus for the market.

Meanwhile, urban expansion continues to encroach on prime agricultural land, especially around major towns. The result is a gradual erosion of the country’s productive capacity, even as demand for food rises with population growth.

Smallholder farmers, who produce the majority of Kenya’s food, face constraints including limited access to quality inputs, credit, and extension services. According to One Acre Fund, an agricultural service provider supporting smallholders across the country, many Kenyan smallholders live from hand to mouth, often trapped in poverty.

This is due to low productivity, high input costs, and dependence on rain-fed agriculture. “With about 70-80 per cent of rural Kenyans relying on agriculture, the majority struggle with limited access to loans and high post-harvest losses, leading to food insecurity,” the organisation says.

Smallholders often use outdated seeds and farming techniques, producing significantly less maize per acre than the global average. The rising costs of inputs—fertiliser, seeds—combined with escalating food prices, leave little to no profit, with 51 per cent of Kenyans living hand-to-mouth, according to a 2019 report, a figure worsened by economic shocks.

Poor weather conditions have also caused frequent crop failures, forcing households to spend more on food and reducing their capacity to invest in better farming methods. Kenya’s agricultural sector has long suffered from underinvestment, resulting in pockets of chronic hunger, especially in rural areas.

Many smallholders are unable to invest in improved seeds, irrigation, or modern farming techniques. The World Bank warns that Kenyan farmers, particularly smallholders, are highly vulnerable to poverty due to climate change, reliance on rain-fed agriculture, and market volatility.

Recent studies show that 44 per cent of Kenya’s economy depends on nature, making climate-related shocks a primary driver of food insecurity and income loss in rural households.

As local production struggles, imports have stepped in to fill the gap. Kenya imports over 80 per cent of its wheat and about 75 per cent of its rice. The country also imports more than 90 per cent of its edible oil, costing over Sh140 billion annually, according to the Agriculture and Food Authority.

These imports expose Kenya to global price fluctuations and place a strain on foreign exchange reserves. Agriculture CS Kagwe has indicated a shift, with plans to reduce the import bill by boosting local production. “We must identify areas where we import food and substitute with local production. But that requires investment,” he said.

However, experts caution that without tackling structural barriers, such ambitions may remain out of reach. There is a growing consensus that Kenya needs to invest more in agriculture to reverse this trend.

Stakeholders have long called for the country to allocate at least 10 per cent of its national budget to agriculture, in line with the Maputo Declaration of 2003. Such investment could support expanded irrigation, reduce reliance on rain-fed farming, improve extension services, and increase access to credit.

The government has also proposed reforms under the Finance Bill 2026, aimed at reducing input VAT for exporters and improving cash flow through faster tax refunds. The bill lowers input VAT from 16 per cent to eight per cent for exporters, alongside other measures to cut costs and speed up cash flow.

It also seeks to ease production costs for farmers and processors in export chains. This includes granting tax treatment similar to Export Processing Zones and Special Economic Zones, exempting VAT on local purchases like seeds, fertilisers, and machinery.

Additional relief measures include scrapping excise duties and export levies on essential packaging materials such as kraft paper and boxes critical for horticultural exports. Faster VAT refunds via an “offsetting” system will enable exporters to apply credits against future liabilities, ending chronic delays that tie up billions in working capital.

CS Kagwe highlighted these measures during the recent launch of Flamingo Group Investments’ expansion in Naivasha. To address freight bottlenecks, the bill proposes increasing air cargo capacity through Kenya Airways and partners like Turkish Airlines.

This aims to handle rising demand for high-value perishables, ensuring quicker delivery to Europe, the Middle East, and beyond. If enacted, the Finance Bill 2026 could give fresh impetus to Kenya’s agriculture, which contributes 25 per cent to GDP and employs 40 per cent of the population.

While these measures could benefit export-oriented agriculture, concerns remain that smallholder farmers may not see tangible gains unless policies are deliberately targeted. Experts emphasise that improving the timing and distribution of subsidies—particularly fertiliser—would have an immediate impact on production. Enhancing market access, reducing post-harvest losses, and protecting farmland from fragmentation are equally vital.

Back in the North Rift, the planting window is narrowing. Farmers are racing to complete planting, hoping that rains will hold and that fertiliser supplies will be sufficient to salvage the season.

The war in the Middle East has contributed heavily to fertiliser shortages, threatening price increases during this critical planting period and risking lower yields and higher food prices.

The blockage of the Strait of Hormuz has forced vessels to reroute via the Cape of Good Hope, avoiding the Suez Canal, which has led to higher shipping costs—costs that are passed on at the Port of Mombasa—disrupting Kenya’s fertiliser supply chain.

The crisis has also affected petroleum imports and other goods, while Kenyan exports face similar disruptions. Meanwhile, the paradox of fertile land and rising imports is not merely an economic issue, according to experts—it’s a warning signal.

They warn that unless urgent reforms are implemented to lower production costs, safeguard farmland, and support farmers, Kenya risks increasing its dependence on imports, even as its agricultural potential remains largely untapped.