Agriculture Cabinet Secretary Mutahi Kagwe has said Kenya continues to lose billions of shillings in potential revenue by exporting raw agricultural produce instead of value-added products, leaving foreign countries to earn the highest returns through processing, packaging, and branding.
Speaking on Wednesday, July 1, during the World Food Prize Foundation Dialogue Next Forum, Kagwe criticised global trade policies that encourage African countries to export raw commodities while imposing higher tariffs on processed products.
He argued that this trade arrangement has, for decades, limited Africa’s industrialisation and prevented countries from fully benefiting from the value of their agricultural exports.
“It is difficult to explain to an African farmer why it is acceptable to export raw coffee but prohibitively expensive to export roasted coffee,”
the CS stated on his social media.
According to Kagwe, Kenya continues to earn far less from its coffee and tea exports despite producing some of the world’s highest-quality crops, as many importing countries process the raw produce and sell it at much higher prices in global markets.
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The CS noted that exporting agricultural products in their raw form also deprives African countries of thousands of jobs that could be generated through local processing, manufacturing, packaging, logistics, and agricultural technology industries.
He called on African nations to prioritise value addition before exporting agricultural produce, arguing that increased local processing would strengthen rural economies, raise farmers’ incomes, create employment opportunities, and enhance national revenues.
Kagwe pointed to Kenya’s ban on the export of raw in-shell macadamia as a policy that has successfully encouraged local value addition. He urged the adoption of similar measures in the coffee and tea sectors to increase domestic processing, packaging, and branding, thereby maximizing the value of Kenya’s agricultural produce.
The CS also faulted policies that tax agro-processing machinery while governments at the same time champion agricultural transformation, arguing that such contradictions undermine investment in local manufacturing and value addition.
To accelerate agricultural growth, Kagwe called for financing solutions that reflect the realities of farming. He advocated for affordable long-term credit, flexible repayment arrangements aligned with production cycles, and weather-indexed insurance to protect farmers from climate-related risks.
He maintained that reforming global trade rules, expanding local processing, and improving access to agricultural financing are critical to making farming more profitable and attractive to younger generations.
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He emphasized that reforming global trade policies, expanding local value addition, and increasing access to agricultural financing are essential to making farming more profitable and appealing to young people.
“If we truly believe in equitable global development, international trade rules must reward value addition, not punish it,” said the CS.
The forum brought together agriculture ministers, policymakers, scientists, development partners, private-sector stakeholders, and farmer organisations from across Africa and beyond to deliberate on the future of food systems and strategies for accelerating agricultural transformation.
By Frank Mugwe
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