Kenyan farmers get $50m boost
2008-05-06 21:51
Nairobi - A multi-million-dollar project to finance Kenyan farmers was launched on Tuesday, to assist the country recover from a political crisis that ruined its economy, officials said.
According to a deal signed here, Kenya's Equity Bank will lend $50m while the Alliance for a Green Revolution in Africa and the International Fund for Agricultural Development will provide a $5m "cash guarantee fund".
Some 2.5 million farmers and 15 000 workers from the agricultural sector will benefit from the loan, offered at a 10% interest rate.
"It will help boost food security and create badly needed jobs in rural areas. AGRA will work with banks across African countries to scale up similar models," AGRA chief Kofi Annan said in a statement.
Boost agricultural production
The project is designed to boost agricultural production and household incomes and offer targeted subsidies and insurance programmes to the beneficiaries.
In addition, loans will be given to agro-dealers, agro-processors, importers and input manufacturers to finance their businesses, the statement added.
The Kenyan government will contribute millions of dollars in subsidies to vulnerable farmers who were affected by post election violence that choked the country's mainstay agricultural sector.
The violence, which erupted when opposition candidate Raila Odinga accused President Mwai Kibaki of fraud in December elections, claimed at least 1 500 people and displaced hundreds of thousands, mainly small scale farmers.
"If Kenya is to overcome its maize shortfall and the rising prices of food, farmers and other key players in the sector need to be mobilised. They badly need financial support so seeds and fertilisers can flow into our rural areas, to trigger a production response," said Agriculture Minister William Ruto.
The new project comes as the world grapples with soaring food prices, which have threatened the livelihood of hundreds of millions.