NAIROBI, Kenya- In a bold move to alleviate the financial strain on Kenyan farmers, Deputy President Rigathi Gachagua has called on county governments to consider scrapping cess fees for the transportation of agricultural products.
Gachagua’s proposal aims to reduce the cost of living and ensure that more money lands in farmers’ pockets—a necessity in a country where agriculture plays a pivotal role in the economy.
Speaking at the 24th Ordinary Session of the Intergovernmental Budget and Economic Council (IBEC) meeting in Nairobi, Gachagua highlighted the plight of farmers who face multiple cess fees when transporting their produce across counties.
The Deputy President emphasized the need to harmonize these fees, citing a common scenario where a vegetable farmer in Meru might have to pay up to six different cess fees just to get his produce to Kitengela.
This situation, Gachagua argued, not only diminishes farmers’ profits but also inflates the cost of agricultural goods for consumers.
Cess, a fee levied by county governments based on vehicle size and cargo, is intended to fund road infrastructure maintenance.
However, it has become a significant burden for farmers and transporters, especially those moving extractives like stone, sand, and ballast, who must pay cess in every county they pass through.
The World Bank has reported that such fees can disincentivize production, exacerbate food insecurity, and create market distortions, particularly when rates vary across counties and products.
Gachagua also urged governors to focus more on agriculture, a devolved function that remains a key contributor to Kenya’s GDP.
He argued that duplicate taxes, such as the current cess structure, are counterproductive.
“The ripple effect is a poorer farmer and a higher cost of living for everyone,” he stated, calling for more innovative resource mobilization strategies that could spur inter-county trade and economic growth.
The Deputy President’s comments echo the broader conversation on the power of devolution in fostering economic development through local governance.
In addition to advocating for the removal of cess fees, Gachagua noted his office’s ongoing efforts to support farmers through initiatives like the fertilizer subsidy program.
“The subsidy initiative is crucial in cushioning smallholder farmers from fluctuations in fertilizer prices, enabling them to remain competitive and contributing to reducing the high cost of living,” he added, thanking counties for their role in the last-mile delivery of the subsidized fertilizer.
However, the Deputy President’s request was met with mixed reactions from county leaders. Many governors expressed concern over the financial implications of removing cess fees, which account for nearly three percent of their revenue.
A governor from the Rift Valley region pointed out the challenges of running counties without these funds, especially given the delayed disbursement of national allocations.
The counties are currently facing a financial crisis, with many operations at a standstill due to the lack of the Counties Allocation of Revenue Act (CARA) 2024, which has yet to be approved by the Senate.
Kakamega Governor Fernandes Barasa voiced the collective frustration of the Council of Governors, emphasizing that counties are in arrears for July and August.
Adding to their woes, county leaders faulted the national government for retaining control over certain agricultural functions, such as irrigation and the procurement of fertilizer and seeds. Bungoma Governor Kenneth Lusaka argued that fully devolving these functions would empower counties to create more effective agricultural policies tailored to local needs.
As the debate over cess fees continues, one thing is clear: a collaborative approach between the national and county governments is essential to address the financial challenges facing farmers and counties alike.
