NAIROBI, Kenya — Government policies in the fertiliser and sugar sectors are suppressing competition and keeping prices high for farmers and consumers, a new report by the World Bank and CAK has warned, calling for urgent reforms to protect livelihoods and strengthen food security.
In the fertiliser sector, the report highlights that the National Fertilizer Subsidy Program grants exclusive distribution rights to selected firms, limiting participation by private distributors.
This restricts access for farmers in remote regions and weakens price competition.
“The subsidy scheme as currently implemented distorts the market and prevents price signals from functioning effectively,” the report notes, recommending competitive allocation of importer contracts and widening retail distribution networks.
The sugar sector faces even more entrenched barriers, including legally mandated catchment areas, farm-gate price controls, and tight import restrictions that protect inefficient domestic millers—several of which are state-owned and reliant on continuous bailouts.
Kenya’s sugar prices have repeatedly spiked during shortages, prompting emergency imports.
Yet millers’ capacity utilisation remains low, and state-owned factories continue to post heavy losses despite periodic government bailouts.
The report urges the abolition of catchment areas, removal of price controls, easing of COMESA import caps, and ending fiscal transfers to commercial state-owned mills.
It argues that liberalising the sector would allow more efficient millers to expand, benefiting farmers through timely payments and higher productivity.
