Deputy President Rigathi Gachagua has asked counties to consider removing cess fees for the movement of agricultural products to ease the cost of living and put money in farmers' pockets.
Rigathi said this on Monday when he chaired the 24th Ordinary Session of the Intergovernmental Budget and Economic Council (IBEC) meeting in Nairobi.
The forum is a link between counties and the national government.
''We should not normalise a vegetable farmer in Meru for instance paying six cess fees to Meru, Murang'a, Kiambu, Nairobi, Machakos and Kajiado to take his produce to Kitengela,'' Rigathi said.
Cess is a charged levied by county governments at barrier points mainly found at county exit and entry points.
It is based on the size of the vehicle and cargo and is meant to enable the county government to address the major damage to road infrastructure caused by trucks.
Transporters of extractives such as stone, sand, and ballast must pay cess fees in each county where they pass through in addition to the cess paid in the county of extraction.
He pleaded with governors to pay more attention to agriculture, a devolved function and a key contributor to the country's gross domestic product.
He added that duplicate taxes not only eat into their profits but also increase the cost of doing business.
"The ripple effect is a poorer farmer and a high cost of living for everyone. We need to consider harmonising rates and even be more innovative in resource mobilisation to spur inter-county trade. The power of devolution lies in inter-county trade-stimulating policies."
In Kenya, counties levy cess fees of between Sh40-3, 000.
Although agricultural produce cess is relatively easy to implement, a report by the World Bank says they can adversely affect farmers’ incentives to produce and trade, worsen food insecurity and poverty of households, and cause market distortions, mainly when cess rates vary across country districts and products.
Gachagua said his office is working with counties to ensure farmers have money in their pockets including the fertiliser subsidy.
"The subsidy initiative is crucial in cushioning smallholder farmers from fluctuations in fertiliser prices, enabling them to remain competitive and contributing to reducing the high cost of living. Let me thank counties for their support in the last-mile delivery of the fertiliser," Gachagua said.
Although journalists were blocked from the forum, a source told the Star that county bosses are divided on the government's request, saying that the fees constitute close to three percent of revenue.
"Where else can we get funds to run our counties? He is telling us to go slow on cess yet the government is not releasing county allocations in time,'' a governor from the larger Rift Valley region said.
Kakamega Governor Fernandes Barasa who spoke on behalf of the Council of Governors said the counties are in a financial crisis, with most operations halted.
“About the disbursement of the allocated amount for this financial year, we are in arrears for July and August because of the lack of the Counties Allocation of Revenue Act (CARA) 2024, which has not yet been approved by the Senate,” he said.
County bosses also faulted the government for retaining some agriculture functions, making it hard for counties to revolutionise the sector.
They cited irrigation and purchase of fertiliser and seeds, which are done by the national government as functions they want to be devolved to the counties.
Bungoma Governor Kenneth Lusaka said devolving the agriculture functions fully would allow counties to develop policies on how to promote agriculture in the country.
