Kenya: Governors Push for Tax Reduction On Animal Feeds

Kiambu governor Ferdinand Waititu wants key raw materials used in the manufacture of animal feeds zero- rated to boost local livestock sector earnings and a competitive edge in the market.

Mr Waititu told Business Daily local livestock breeders, especially those in the dairy, beef, pork and poultry sectors are finding it rough in the market since competition has broadened to include East African bloc.

Kiambu is one of the largest milk producers in the country.

"We have ascertained that our neighbours have heavily subsidised the agribusiness sectors while our farmers are weighed down by high costs of production and duplicated taxations. We cannot compete evenly in a market where our neighbours have wider playing space in costing products," he said.

The Council of Governors has taken a common position that the Treasury be prevailed upon to announce zero-rating of animal feed raw materials as well as create a kitty to subsidise agribusiness sector during the annual budget speech.

Mr Waititu said goodsfrom Uganda and Tanzania are finding their way into the market to compete with locally produced ones albeit with lower margins.

"We have cases where eggs are priced at half the price of our local farmers' rates. This is despite the fact that the East African neighbours have incurred production, transport and taxation costs all the way from their nations. The problem is in our fiscal policies on agriculture sector," he said.

Deputy chair in the Council of Governors Mwangi wa Iria concurs, saying there needs to be a national commitment to reducing costs of production to spur agribusiness in the country. "We have to relook at how we support our agribusiness sector. We are disadvantaged by lack of consistent budgetary allocation in the sector, solid subsidy and market policies as well as a litany of taxations that end up draining the farmers in the competitive market," he said. Mr wa Iria said currently the agriculture sector does not offer any evidence that it can be the vehicle towards realisation of the Vision 2030 goals of becoming a middle-income economy.

"This is an agricultural economy yes, but it has many policy flaws. We need to put our heads together and come up with real policies for real rejuvenation of our agricultural sector. It is only by so doing that we can inspire our farmer to produce for the market," he said.

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