Political Economy of Repurposing Agricultural Subsidies in Kenya

When African governments committed to the Maputo and Malabo Declarations of the African Union’s Comprehensive African Agriculture Development Program (CAADP) to allocate at least 10% of their national budgets to agriculture, many subsequently met that target by disproportionately investing in agricultural subsidies, especially for inorganic fertilizer. Such subsidies often are critical for helping farmers improve productivity on lands that are depleted of essential nutrients. At the same time, their overuse can lead to contamination of groundwater resources, biodiversity loss, and an increase in ni-trous oxide emissions. In recent years, there has been increased advocacy by global development organizations for African and other governments to “repurpose” money for subsidies towards more eco-logically-sensitive practices, including longer-term investments in research and development for more sustainable farming. While the economic and environmental rationales for doing so are convincing, the political economy barriers for repurposing are sizeable and underexplored. This is particularly true in the wake of recent geopolitical conflicts that have encouraged governments to increase food self-sufficiency, such as by handing out subsidies. Using the case of Kenya, this paper looks at the political economy of subsidy reform, focusing on the country’s National Fertilizer Subsidy Program (NFSP). Based on semi-structured interviews with dozens of decisionmakers and farmers’ associations, the paper examines the degree to which evidence on needed reforms to the NFSP has or has not been taken up by the current government and the ways in which elite interests, donor pressures, and ideological biases have intersected to shape the enabling environment for subsidy reform.