The increased chicken meat imports from the neighbouring countries are causing more harm than good to Kenyan poultry farmers. Poultry farmers have in the past two years complained about the lack of protection by the government.
For example, Uganda is exporting chicken meat to Kenya tax-free, while Kenyan farmers’ esports are taxed at 25 per cent — 18% VAT, 6% withholding tax and 1% railway development levy. This means that the Uganda poultry products have free access to the Kenyan market while the Kenyan products are hindered from access to Uganda through Non-Tariff Barriers or the imposition of domestic taxes (VAT, withholding taxes or railway levies).
This is a clear indication of discrimination against goods coming from neighboring EAC countries. Ugandan actions violate the World Trade Organization principle on non-discrimination of like goods from neighbouring countries. It doesn’t mean that because Uganda is the largest trade partner to Kenya, our government should forget about its farmers. The Kenyan poultry industry is a major source of employment, with an estimated three million people deriving their livelihood and income from poultry farming, processing and related activities.
It also employs veterinarians, researchers and extension officers. It is a major source of livelihood for people in rural areas, including thousands of youth and women who are engaged in rearing chicken and other domestic birds.Thousands of Kenyan enterprises, large and small, are involved in poultry production and processing in rural and urban areas. The sector also provides a base for value addition activities.
In addition, many farmers are engaged in contract farming for large processors and supply schools, hospitals, hotels and other institutions. If the poultry value chain is not protected all the gains will be eroded, and the industry will be at it worse or on the verge of collapse. Article 32 of the Common Market Protocol obliges the partner states to undertake progressive harmonisation of their tax policies and laws on domestic taxes with a view to removing tax distortions. This is to facilitate the free movement of goods, services, and capital and the promotion of investments within the EAC.
The current tax regime favours importers and is a great disadvantage to the Kenyan farmers and producers. Ugandan producers currently exports between 25-30 tonnes of chicken weekly into Kenya – this represents at least 10 per cent of the formal processed chicken market. In Africa, lessons have been learned in Ghana, and South Africa, where local poultry industry collapsed due to similar circumstances. Tanzania has also imposed stringent requirements for compliance from the Tanzania Bureau of Standards, which many players in the poultry sector have seen as deliberate efforts to bar them from accessing the market.
Worth noting is the fact that Tanzania banned the importation of poultry and poultry products into the country in 2016. We, therefore, cannot overemphasize the vulnerability of the Kenyan poultry industry from the regional attack. To safeguard the industry gains, the poultry stakeholders are urging the government to close the borders of similar to other EAC countries. Both Uganda and Tanzania have closed their borders, why has Kenya kept borders open for processed chicken? If not, Uganda to drop taxes to Kenyan imports.
Source: The writers are members of Federation of Kenya Poultry Farmers