KADCO Set to Take Over KALRO Lending

The Agricultural sector and Regional Development authorities are staring at the implementation of sweeping changes should a raft of Bills currently before Parliament get the nod.

The Bills which are at the public participation stage are aimed at instituting reforms that could have far reaching consequences on farmers and even employees working at regional development authorities. Key among the Bills are the Crop Laws (Amendment) Bill, 2026 and the Regional Development Authorities laws(Repeal) Bill, 2026 both sponsored by the leader of Majority Kimani Ichung’wah.

The public is invited to give their views on these Bills by Tuesday July 21 at 5.p.m.

“In compliance with the provisions of the Constitution and National Assembly Standing order 127(3), the clerk of the National Assembly hereby invites the public and shareholders to submit memoranda and on the Bills to the respective Departmental Committees...the memoranda may be forwarded to the clerk of the National Assembly at main Parliament buildings or emailed to [e-mail],” reads an advert in the dailies by Parliament yesterday.

The Crop Laws (Amendment) Bill, 2026 seeks to strip Agricultural parastatals of their lending power and consolidate the funds under one institution presumably to mitigate misuse of public funds.

To achieve this, it proposes to amend the Kenya Agricultural and Livestock Research Act (Cap. 319), the Tea Act (Cap. 343), and the Sugar Act (No. 11 of 2024) to remove lending functions from sector-specific agricultural bodies and to direct the relevant funds to the Kenya Agribusiness Development Corporation Limited (KADCO) for the purpose of agricultural lending.

If the Bill is implemented, it means that bodies such as the Kenya Agricultural and Livestock Research Organization (KALRO), the Tea Board of Kenya, and the Sugar Board will no longer perform the lending functions. These will be taken up by KADCO.

“Kenya's agricultural lending has historically been carried out by the Agricultural Finance Corporation and the Commodities Fund. The Government Owned Entities Act, 2025 dissolved both entities and provided for the incorporation of KADCO under the Companies Act to take over and consolidate their agricultural lending functions. However, the three Acts amended by this Bill continue to assign lending mandates to sector-specific bodies - namely the Kenya Agricultural and Livestock Research Organization, the Tea Board of Kenya, and the Sugar Board-that will no longer perform those functions,” reads the Bill in part.

“... This Bill removes those mandates and ensures that the relevant funds under the Sugar Act are channeled to KADCO for lending, completing the alignment of existing agricultural laws with the new institutional framework, “it adds.

Should the Bill sponsored by leader of Majority party Kimani Ichung’wah get the nod, KARLO, Tea Board and the Kenya Sugar Board will no longer be involved with Agricultural credit. They will however maintain their regulatory and development roles in their respective sectors.

Other than their lending functions, KALRO’s functions include agricultural research and development of new crop and livestock technologies, while the Tea Board oversees regulation and promotion of the tea sector. The Kenya Sugar Board manages the sugar sub-sector, including licensing, policy implementation and industry development.

Upon implementation, KADCO will be responsible for providing loans to farmers, cooperatives, agribusinesses and processors across various value chains while strengthening oversight of public lending programmes.

Then there is the Regional Development Authorities laws(Repeal) Bill, 2026 which seeks to scrap Regional Development Authorities (RDAs) across the country and have their functions, assets and liabilities transferred to the State Department for the National Treasury as designated by the Cabinet Secretary for Finance.

They include the The Kerio Valley Development Authority, The Lake Basin Development Authority, Athi Rivers Development Authority Act, Ewaso Ng'iro North River Basin Development Authority, Ewaso Ng'iro South River Basin Development Authority, and The Coast Development Authority.

“The Bill seeks to dissolve the regional development authorities as they have carried out the mandate for which they were created,” the Bill reads in part.

RDAs are state corporations mandated to plan, coordinate, and implement multipurpose development projects within specific river basins and surrounding regions. Their core functions include sustainable natural resource management, promoting integrated regional socio-economic growth, and reducing regional development imbalances.

“The Bill further seeks to align the National and County Governments functions in tandem with schedule four of the Constitution of Kenya 2010, reduce pressure for budgetary allocations, enhance efficiency, accountability, and service delivery,” adds the Bill.

If approved, all rights, obligations, assets, and liabilities of the Authority existing immediately before the commencement of this Act shall be transferred to and vest to the State Department for the National Treasury designated by the Cabinet Secretary to succeed the Authority. On the commencement day, all rights, powers and liabilities, whether arising under any written law or otherwise which immediately before such day were vested in, imposed on or enforceable against the former authority shall be deemed to be vested, imposed or enforceable against the State Department for the National Treasury.

The Bill further stipulates that all loans, credit facilities, financial obligations, loan collaterals and securities administered by the authority shall continue to be valid and shall be administered by the State Department for National Treasury. All contracts, agreements, and instruments subsisting immediately before the Transition Date and to which the authority is a party shall remain in force and shall be enforceable by or against the State Department for the National Treasury.

“The CS Finance and National Treasury is expected to within thirty days of the commencement of this Act issue directives prescribing the manner of transfer of the assets, liabilities, rights, and obligations of the authority as stipulated in Law,” it adds.

To safeguard the employees, the Bill stipulates that all persons who, immediately before the transition Date, were employees of the authority shall become employees of the Public Service Commission (PSC) on terms and conditions not less favorable than those enjoyed by them immediately before the transition date.

 “The service of all employees transferred under shall be deemed to have been continuous for the purposes of pension, gratuity, and other retirement benefits,” the Bill highlights.