Understanding the Agriculture Produce (Minimum Guaranteed Returns) Act, 2024

Kenya’s agriculture has long been at the mercy of volatile markets and unpredictable weather. With price crashes leaving harvests unsold and producers struggling to recoup costs, Parliament passed the Agriculture Produce (Minimum Guaranteed Returns) Act, 2024. 

This landmark legislation ensures that every county sets a floor price for key crops, giving farmers a reliable minimum return on their produce. 

By embedding price security into local policy, the Act aims to revive confidence, spur investment, and strengthen livelihoods across rural Kenya.

 

Why the Act Matters

Farmers often face razor-thin margins when market prices dip below production costs. Without a guaranteed floor, many smallholders sell at a loss or abandon planting altogether. The new Act closes this gap by compelling counties to establish legally binding minimum prices for staple commodities. In doing so, it transforms agriculture from a high-risk gamble into a more predictable venture.

How the Act Works

 

1. Each county assembly identifies priority crops based on local agro-ecological zones and market needs. 
2. A Minimum Guaranteed Return (MGR) is calculated by adding a fair profit margin to average production costs. 
3. County agricultural boards publish the MGR schedule ahead of planting seasons. 
4. Registered buyers mills, cooperatives, and exporters are required to purchase at or above the MGR. 

This framework leverages existing county structures while giving farmers and traders clear pricing signals.

Benefits for Farmers

By guaranteeing a price floor, producers can:

1. Recover input costs and earn sustainable livelihoods 
2. Plan crop rotations and investments with more certainty 
3. Access credit more easily, as financiers see reduced default risk 
4. Negotiate better terms with aggregators knowing the MGR protects them 

Over time, stable returns will encourage youth to enter farming and boost overall productivity.

Implementation at the County Level

Counties play a pivotal role in rolling out the Act. Key steps include:

1. Conducting cost-of-production surveys in partnership with extension services 
2. Hosting public hearings to agree on fair margins and priority crops 
3. Setting up monitoring units to enforce compliance among buyers 
4. Establishing grievance mechanisms for farmers to report underpricing. 

Strong coordination between county governments, farmers’ groups, and the national Ministry of Agriculture will be vital.

Challenges and Considerations

While the Act is a breakthrough, practical hurdles remain:

 

1. Ensuring accurate cost data in remote areas can be resource-intensive 
2. Preventing black-market trading below the MGR requires robust enforcement 
3. Aligning county MGRs to national trade policies avoids cross-border distortions 
4. Educating smallholders on their rights and the registration process is essential 
5. Addressing these challenges proactively will determine the Act’s success on the ground.

 The Road Ahead

With the Agriculture Produce (Minimum Guaranteed Returns) Act in force, Kenya has taken a bold step toward transforming its agricultural landscape. As counties roll out schedules and farmers register their produce, the nation will begin to see how price stability revitalizes rural economies. Continuous review of MGR levels, informed by evolving input costs and market dynamics, will keep the system responsive and fair.

Conclusion: Cultivating Stability Together

This Act offers more than just a safety net it lays the foundation for a resilient, investment-driven farming sector. Farmers can plant with confidence, lenders can underwrite operations more readily, and markets can operate on transparent, predictable terms. 

Now, it’s time for every county, cooperative, and agribusiness to embrace this framework. 

How will your community leverage the MGR Act to secure a brighter