The National Assembly has passed a motion calling for the formulation of a dedicated national policy on electricity subsidies for export oriented agricultural production, in a move aimed at reducing the cost of farming, processing and exporting Kenyan agricultural products.
The motion, sponsored by Githunguri MP Gathoni Wamuchomba, seeks to establish preferential electricity tariffs for agricultural producers, cooperative societies, agro processors and exporters dealing in key cash crops, including tea, coffee, avocados, macadamia nuts, cashew nuts, cut flowers and horticultural produce.
Wamuchomba argued that the high cost of electricity was eroding the competitiveness of Kenyan agricultural products in international markets, undermining farmers’ earnings and discouraging investment in value addition.
She urged the government to treat affordable electricity for the agricultural export sector as a strategic economic investment rather than a subsidy burden.
Moving the motion in the House, the legislator said agriculture remained the backbone of Kenya’s economy, contributing more than 22.5 per cent of the country’s Gross Domestic Product, employing over 70 per cent of the rural workforce and accounting for more than 65 per cent of total foreign exchange earnings.
She said millions of small scale farmers across the country depended on export oriented agriculture for their livelihoods, warning that the sector’s potential would remain constrained unless the government addressed the high cost of energy.
” We cannot compete in the 21st century global market while shackling our producers with 20th century energy costs,” she told the House.
The MP pointed to Kenya’s reported access to expanded duty free opportunities in the Chinese market from May 1, 2026, saying the opening presented an opportunity to increase agricultural exports, create employment for young people and narrow the country’s trade deficit.
However, she warned that the opportunity could be undermined by high domestic production costs, particularly electricity tariffs that place Kenyan farmers and processors at a disadvantage against regional competitors.
According to Wamuchomba, commercial and industrial electricity consumers in Kenya pay effective tariffs ranging between Sh22 and Sh28 per kilowatt hour after factoring in fuel energy charges, foreign exchange adjustments, inflation related levies and Value Added Tax.
She contrasted this with electricity costs in Ethiopia and Tanzania, arguing that their relatively lower industrial power tariffs gave producers in those countries a competitive advantage.
The legislator said the high cost of electricity was not confined to individual farms but extended across the entire agricultural value chain, from irrigation and harvesting to processing, refrigeration, storage and transportation.
She cited the horticultural sector, where flowers, avocados and fresh vegetables require uninterrupted cold chain facilities to preserve their quality and meet stringent international food safety and phytosanitary standards.
Similarly, coffee wet-processing factories, tea drying facilities, macadamia cracking plants, oil extraction facilities and milk processing plants depend on substantial amounts of electricity to maintain production.
Smallholder irrigation schemes also rely on electric pumps to supply water to farms, making production increasingly expensive where farmers must meet high power bills.
Wamuchomba warned that the energy burden was ultimately passed down to farmers through reduced profitability and lower returns from agricultural cooperatives.
She said high operating costs continued to eat into cooperative societies’ earnings, affecting farmers’ coffee payments and tea bonuses while discouraging investment in modern processing equipment and energy efficient storage facilities.
The legislator further cautioned that prohibitive electricity costs could undermine the survival of local agro processing enterprises, with some investors potentially shifting operations to neighbouring countries where production costs were lower.
She acknowledged existing government policy frameworks on agriculture and subsidy management but argued that they did not provide a dedicated electricity tariff structure for export-oriented agricultural production.
According to her, the absence of a specialised framework meant agricultural exporters and processors were subjected to general commercial electricity rates, despite their contribution to foreign exchange earnings, rural employment and national economic growth.
The motion calls on the Cabinet Secretary for Energy and Petroleum, in consultation with the Energy and Petroleum Regulatory Authority (EPRA), to formulate a comprehensive national policy providing targeted electricity subsidies for the sector.
Under the proposed framework, Wamuchomba wants a tiered tariff system that would offer preferential electricity rates to registered agricultural producers, small scale cooperatives, processing enterprises and exporters dealing in designated agricultural commodities.
The policy would also introduce discounted off peak and time of use electricity tariffs to encourage factories, cold-storage facilities and irrigation operators to undertake energy intensive activities during periods of lower demand.
She said such an arrangement would enable agricultural enterprises to reduce operating costs while making more efficient use of surplus electricity generation capacity on the national grid.
The third pillar of the proposed policy would establish strict monitoring, traceability and anti leakage safeguards to ensure subsidies benefit genuine agricultural producers, registered cooperatives, licensed processing facilities and verified export oriented businesses.
Wamuchomba said the safeguards would be necessary to prevent abuse of the programme and ensure public resources were directed towards enterprises that contribute directly to agricultural production and exports.
She maintained that lowering electricity costs would have benefits extending beyond individual businesses, including increased agricultural production, expanded processing capacity, improved export earnings and employment opportunities for young people.
“Granting power subsidies to export oriented agriculture is not a government handout or a revenue loss. It is a high return strategic investment,” she told MPs.
She added that affordable energy would strengthen rural economies by enabling farmers to move beyond the production of raw commodities into processing and value addition, allowing them to capture a greater share of the international market.
The passage of the motion places the proposed policy framework before the relevant government institutions for consideration and implementation.
For Kenya’s agricultural sector, the debate now shifts to whether targeted electricity relief can be translated into a practical framework that lowers production costs while safeguarding public resources and the sustainability of the national power sector.
