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"content": "business altogether and to support farmers, we had to start a finance corporation that would understand farmers. That is why their interest rates were deliberately lower. In fact, at that time, there was insurance that was taken over by the Government. If you lost your crop through adversity, the loan would be written off. In fact, this was called the Guaranteed Minimum Returns (GMR). There was a minimum return that if you did not get from your farm, you were not asked to pay. That comforted the farmer and made him to go to the farm the following year. However, if they behave like any other bank - I suspect that the AFC has started behaving like any other bank - their interest rates will also be high. The penalties are also prohibitive. In fact, there are penalties on top of penalties and before you know it, somebody runs away from his farm and comes to Mathare Valley to hide there. Agricultural production suffers because somebody has run away from auctioneers and villagers are left behind to protect the farm. They are the ones who chase away prospective buyers like Sen. Khalwale who may go there with a loan from Parliament to buy the land. This has made farmers to run away from their farms and yet we should be encouraging them since they are the ones who know what they are doing. They love doing what they are doing and we need to support them. Farming is not very profitable. In most countries, whether it is in America, Germany or Britain, farmers are subsidized. In fact, the biggest war in the World Trade Organisation (WTO) right now, we are thankful that our own son, my former roommate in Makerere, is the Secretary General, hon. Dr. Kituyi. The biggest problem is subsidy to cotton farmers in America and to beetroot farmers in Germany and to any other farmer in developed countries. In fact, the towns that hon. Khalwale has referred to are largely subsidized. The food is not taxed. I learnt, the other day, that chicken feed is now being taxed. If you do your arithmetic well, you will see that you will not make any money. Therefore, farmers in Kenya need to be subsidized and you can do that by providing a loan with low interest rates. Look at what we are doing with Uwezo Funds and other youth funds. We are giving it at almost 1 per cent because we want to subsidize those youths so that they can come up. If you allowed them to go to any other bank where they will be charged 17 per cent or 21 per cent, they would not even start. So, a country which is conscious of the sector that it wants to develop, for example, improvement, modernization and mechanization of agriculture, then loans have to be subsidized. So, when we talk of loans of 3 per cent interest, we are saying that the Government will provide the subsidy so that farmers can continue doing what they do best and the country can benefit. In any event, if we do not support our farmers through subsidies, we will buy maize from other countries like South Africa who have subsidized their farmers. Madam Temporary Speaker, when we did not have enough maize in this country, I remember running around to South Africa to see if we could get some maize. They told us that their maize is not good for us because it is genetically modified. So, we looked for maize until we decided to take the South African maize despite the fact that it was genetically modified. So, if you do not support your own people, you will support other people and you will borrow the money with which to support them. Imagine we borrow The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate"
}