Market efficiencies key to better farm outcomes

Small-scale coconut traders in Malindi prepare the produce bought from farmers for the upcountry market. PHOTO | FILE

With the government now eyeing a share of proceeds from the sale of farm produce, ensuring the existence of efficient markets is crucial to ensure better outcomes for farmers and the State coffers.

Ensuring ready markets for farm produce and eliminating intermediaries will, for instance, likely result in higher prices.

In the bigger picture, higher prices for farmers’ goods would result in greater nettings for the taxman as the government raids the sector for its much-needed revenues.

Such market efficiencies would, for instance, ease concerns of farmers ditching formal channels of sale, making the tax counterproductive.

The government could also bring farm produce sold outside cooperatives under the ambits of the tax, including direct-to-consumer sales.

Beyond raking in billions in new revenues, fostering market efficiency could serve as the much-needed catalyst to improving agriculture output, whose contribution to the gross domestic product has slacked over recent years, losing its edge to sectors such as services.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.