Kenya’s agricultural sector is undergoing a significant shift as farmers, landowners and investors increasingly abandon traditional tenancy arrangements in favour of more structured and commercially viable farming agreements.
For decades, ordinary tenancies, simple, short-term and often undocumented, were the backbone of agricultural land use. But as agriculture becomes more capital-intensive, technology-driven and integrated into global value chains, these informal arrangements no longer meet the needs of a modern agribusiness economy.
Across the country, four models are gaining traction: crop-share agreements, long-term agricultural leases, joint venture (JV) farming arrangements, and profit-sharing partnerships. These structures are unlocking new value, attracting technical expertise, and offering landowners and operators a fairer, more balanced framework for collaboration.
Crop-share agreements are particularly popular in high-value sectors such as floriculture, horticulture, macadamia, avocado, and sugarcane. Rather than paying fixed rent, the operator shares an agreed percentage of the produce or revenue with the landowner, often a 70/30 or 60/40 split depending on contributions.
This model creates a win-win arrangement. Both parties share biological and market risk, including weather fluctuations, pests and shifting export prices. Because outcomes depend on productivity, incentives become aligned. Landowners benefit when yields improve, while operators avoid the cash-flow pressure of paying rent during periods of low production.
These agreements have also proven effective in farming systems where transparency, traceability and Environmental, Social, and Governance compliance matter, especially in export-driven horticulture.
On the other hand, long-term agricultural leases have emerged as the most bankable option for investors making significant capital commitments.
Modern agriculture requires substantial investment —specifically, irrigation systems, cold chain facilities, mechanisation, greenhouses and processing infrastructure. Investors cannot commit millions in equipment and inputs under short-term or informal tenancy arrangements.
A properly structured lease agreement provides predictable land tenure, protects investment and ensures a fair compensation regime for biological assets such as perennial crops, immature plantations and livestock. This legal clarity not only reduces disputes but also makes it easier for commercial lenders and private equity funds to support agricultural projects.
One of Kenya’s most notable examples is the leasing of State-owned sugar factories to private operators. These factories, many previously under receivership, have revived under long-term leases that align private capital with the sugarcane growth cycle. This demonstrates how leases can be used as a powerful tool to rehabilitate distressed agricultural assets while ensuring long-term sustainability.
And then there are the JV models that are increasingly favoured where both landowners and technical operators want to share in the upside of a commercial farming enterprise. Under a JV, parties pool land, capital, skills and technology in a structured arrangement with clear governance provisions.
This model is growing rapidly in floriculture, large-scale grain farming, dairy production, and integrated horticultural estates. It allows landowners to retain ownership while benefiting from modern agronomy and management systems. For operators, it provides security of tenure and the governance discipline needed for investment.
Furthermore, JVs also appeal to financiers and development partners because they deliver transparency, accountability and legally enforceable rights.
Lastly, perhaps the most transformative model is the profit-sharing arrangement. Here, landowners contribute land and sometimes capital, while operators bring technical expertise, labour systems and agronomic knowledge. Profits are then shared using an agreed ratio or formula.
This model has become popular because it rewards skill and ensures equity/fairness. It attracts young agripreneurs and experienced horticultural specialists who may lack land but have the expertise to drive productivity.
It also offers landowners an opportunity to earn more than fixed rent, especially where high-value crops or greenhouse technology is involved. Profit-sharing arrangements are especially effective in climate-smart farming, irrigated horticulture and orchard development, where expertise directly influences yield and profitability.
What these models share is a shift from transactional landlord–tenant relationships to strategic, long-term partnerships built on transparency, risk-sharing and mutual benefit. They reflect the realities of a modern agricultural economy where biological assets, climate pressures, global market demands, and investment needs require more sophisticated legal frameworks.
Kenya’s agricultural future will depend on partnerships that effectively balance land, capital and expertise in a fair and commercially sound manner.
The rise of structured farming agreements is a signal that the sector is maturing, embracing governance, sustainability, and investor readiness.
Cyrus Maina is an Advocate of High Court of Kenya and Managing Partner at CM Advocates LLP specializing in Agriculture, Farms and Estates (AFE)
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