Tea Sector Interventions
Some of the interventions the Ministry introduced over the past few years include the introduction of reserve pricing in Mombasa and determining the cut brokers are allowed to take so farmers can be compensated fairly for what they invest. To make this possible, the Ministry audited factories and recommended technology deployment. In the meantime, plans were on the way to reduce transport costs by using the existing SGR infrastructure.
Finally, great strides were made to digitise subsidies, which brought about significant gains in efficiency and a more targeted impact.
Broader Technology-Driven Interventions
The Ministry is a big proponent of technology and always on the look-out for good solutions to replace outdated ways of working.
One example is the electronic voucher (e-Voucher) system, which aims to reach over one million farmers and at least 2,000 agro-dealers by 2023. This technology allowed to turnaround a contentious and highly ineffective system of subsidies distribution into a successful and well-targeted program.
Before the introduction of the e-Voucher system in 2019, the Ministry was effectively a monopoly in the fertilizer sub-sector and was unintentionally squeezing out private players.
Fertilizer developers had no incentive to offer products customised for a particular region or soil type, as there was no competitive advantage to be gained. Worst of all, small-scale farmers often ended up getting very little from the subsidy which was mostly absorbed by the distribution network.
Impact of the e-Voucher Intervention on the Subsidies Program
Instead of trying to tackle separately each subsidy-programme problem, as outlined earlier, the Ministry disrupted the entire value chain of subsidized-fertilizer distribution by giving the power back to the small farmer.
With the e-Voucher, the farmer can choose what kind of fertilizer they need and let the suppliers compete for his coin.
As a result, the value of the subsidy hits its target – the small-scale farmer – and many of the leaks close automatically by virtue of the added transparency.
Already we see direct impacts on the supply side as well, where the Fertilizer Association of Kenya has since then committed that they will invest in local blending capacity.
The e-Voucher is a project Kenya can be proud of.
(This statement has been redacted down from the original.)