For a farmer, a good harvest
should mean a better income. Yet producing more does not always bring that
reward. Without reliable buyers, fair prices, storage and affordable finance,
farmers can work hard throughout a season and still struggle to meet their
costs. Changing this reality must be central to Kenya’s agricultural
transformation.
We need an economic model that treats farmers as entrepreneurs and their farms as businesses. A resilient farm must withstand difficult seasons, respond to changing markets, remain profitable and grow. Strong cooperatives can help make that possible by connecting individual effort to larger commercial opportunities.
Kenya has about 7.5 million farmers registered in the Kenya
Integrated Agriculture Management Information System and a domestic market of
more than 50 million people. Yet we remain a net importer of agricultural products.
This gap presents an opportunity for local farmers and enterprises to supply
more of what Kenyans consume.
Last year, Kenya imported wheat worth aboutSh42 billion, rice Sh55 billion, maize Sh13 billion, sugar Sh47 billion and animal and
vegetable fats and oils worth Sh159
billion. Together, these five categories accounted for about Sh316 billion. Capturing a greater share of
this market would support local production, jobs and incomes.
The starting point is to organise production around demand. Before planting, farmers need to know who will buy their produce, the quantities required, the quality expected and the likely price. This information allows them to weigh production costs against expected returns and make informed investment decisions.
Our recent cooperative landscape assessment, whose report will be released soon, found that producer cooperatives have limited access to current prices, demand trends and buyer requirements. Strengthening market information systems is therefore a priority. Farmers should be able to plan production using reliable information rather than guesswork.
Cooperatives must also become stronger commercial enterprises. Beyond collecting produce, they should help farmers access technology, finance and information, meet quality standards and deliver consistent volumes. Processing, packaging and branding can enable members to earn more from their produce and reach markets that individual small producers may struggle to serve.
The State Department for Cooperatives is adapting the cooperative model to emerging value chains. Working with county governments, we are at an advanced stage of rolling out pastoral livestock cooperatives. This approach will enable mobile livestock farmers, particularly in arid and semi arid areas, to participate more effectively in the red meat business. Professional management and private sector partnerships will be essential.
Affordable finance must support this transformation. Lenders should assess whether an agricultural business has a defined market, credible cash flow and the capacity to deliver. Financing arrangements should include group guarantees, lending based on expected earnings and repayments aligned with production cycles and buyer payments. Cooperatives must strengthen governance, financial management, digital records and business planning to attract investment. These measures give lenders a clearer picture of the business while helping farmers access financing suited to the time it takes to produce, sell and receive payment.
Government has a clear responsibility to reduce the costs and risks that farmers cannot manage alone. Roads, irrigation, storage, aggregation centres, shared processing facilities and digital infrastructure need sustained attention. Research, extension services, standards and risk management systems are equally important. Donor support can help establish these foundations, but lasting agricultural businesses must generate returns and attract private capital beyond the life of individual projects.
Farmers themselves are already finding practical solutions to rising costs, climate pressures and changing markets. They are trying technologies, crops and production methods and discovering new ways to reach consumers. Cooperatives can help test, finance and spread successful innovations so that thousands of members benefit from ideas that might otherwise remain with one farmer.
This commercial approach also offers a credible answer to youth unemployment. Young people will see a future in agriculture when they can identify customers, access technology and finance and earn a reasonable return. Opportunities extend into transport, cold storage, processing, packaging, digital services, marketing and exports. A successful farm supports businesses and livelihoods well beyond its boundaries.
Kenya already has more than 25,000 cooperatives and 14 million members, with the sector contributing about 10 per cent of GDP. Our reform agenda focuses on commercialisation, stronger connections across value chains, digitalisation, investment and good governance. The Cooperative Transformation Strategy will provide a long term framework for modernising these institutions and connecting producers to markets.
Those markets extend beyond Kenya. Opportunities include dairy products in the East African Community, horticulture in Europe and coffee and tea globally. Cotton, beef, leather, pyrethrum, fisheries, aquaculture and other coastal and marine resources offer further potential for processing, manufacturing and jobs.
The task is to organise farmers to serve these markets consistently, meeting requirements for quality, volume, traceability and reliable delivery. When farmers can capture more value from their work, food security, stronger enterprises and better incomes become mutually reinforcing outcomes.
Principal Secretary, State Department for Co-operatives
