In its most recent Agriculture Sector Survey, the Central Bank of Kenya (CBK) noted a general decrease in the cost of staple foods in March 2024 as compared to February 2024.
The study, which was carried out from March 11 to March 15, 2024, was designed to get illustrative data on current patterns and market expectations concerning the costs and yields of important agricultural products.
As to the study results, people perceive the price reduction of essential food items in March 2024 as a favorable development, which could potentially lead to increased food affordability in the upcoming months.
“The decrease in prices of cereals and cereal products was mainly supported by the bumper harvest following favourable October-December 2023 rain season, with rainfall continuing into January 2024,” reads the report in part.
Most respondents expressed optimism regarding food prices, expecting them to continue declining in April 2024 and over the next three months.
“This view has been influenced by the continued good performance of agriculture following favourable weather; reduction in pump prices even though still elevated relative to the same period last year; and the continued strengthening of the Kenya shilling,” the report further notes.
Furthermore, the majority of respondents believe that inflation will remain stable or fall in the next one to three months, providing a healthy picture for the overall economy.
However, the poll also identified persisting issues in the agriculture industry. Weather conditions, transportation costs, and input expenses all continue to have an impact on important food item output and prices.
Despite this, the proportion of farmers expressing these issues has declined compared to past surveys, indicating that the general situation has improved.
A noteworthy finding from the survey is that about 70% of sampled farmers reported receiving subsidized fertilizer, which is an important component in crop production.
“The proportion of respondents who reported to have accessed government subsidized fertilizer increased substantially to 67 percent in March 2024, from 53 percent in January 2024 survey.”
“As in the previous surveys, the reasons given for not being able to get the subsidised fertiliser were similar in the March 2024 survey. These included lack of information on availability of the subsidized fertilizer, challenges around the logistics of access, and demand outstripping supply,” the report highlights.
The study also found that optimism about the economy’s predicted performance remained high, owing to reasons such as the recent appreciation of the Kenyan shilling against the US dollar, strong agricultural performance, and a drop in fuel prices.
Farmers, on the other hand, expressed concerns about the long-term viability of Kenya’s recent shilling appreciation, the adequacy of the March-May 2024 long rains, and high interest rates, which impede agricultural financing.
In light of these findings, Kenya’s Central Bank has restated critical recommendations to boost agriculture. These include tackling high fuel prices, maintaining input subsidies, increasing agricultural extension services, water infrastructure, and expanding access to cheap finance.
