Food subsidy scheme for poor homes a blessing for small-scale farmers

The food subsidy scheme announced on Tuesday could help create demand for farm produce and offer a lifeline to smallholder farmers who form a large pool of food suppliers to the poor.

The scheme also means Kenya is now in the league of some of her African peers who have implemented such plans to create social equity and cushion the poorest of the poor against hunger.

In Egypt, a food subsidy system has been the mainstay of the government’s 50-year policy of promoting social equity and political stability.

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In South Africa, support of vulnerable groups through monthly cash is at the core of a government social equity policy.

And in Mozambique, the government funds monthly cash transfers to the poor.

Research by the German Development Institute last year showed that across the world, countries are preferring cash transfers to blanket subsidy offer to a sector.

The advantages are that administrative costs are often lower than subsidy payments and when targeted correctly, transfers help redistribute income to the poor without distorting market prices.

For Kenya, 10 per cent for the Sh600 million that will be used in the pilot programme where households will receive Sh1,500 every month will be taken up by administration, with the rest going directly to beneficiaries.

Food aid

Ms Phillipa Crosland-Taylor, the country director of British aid group Oxfam, said cash transfers were better than actual food aid.

“The best option is to give them money to buy from that market and strengthen it,” she said.

The scheme could create an incentive to smallholder farmers whose principal clients; the poor, will have their purchasing power enhanced by the cash.

The scheme comes in handy at a time when commercialisation of small holder farming has become popular in Kenya.

The idea of food subsidies to the poorest of the poor in Kenya gained prominence earlier this year when several non-profit groups started monthly transfers of Sh2,200 to households in Nairobi slums.

Mr John Akoten of the Institute of Policy Analysis and Research said earlier that while the idea was a good step in taking short term care of vulnerable people, a long term solution was necessary.