Kenya shields dairy farmers with import levy
Saturday April 04 2020
Kenya has introduced a 10 per cent import levy on dairy products to protect the industry from unfair competition.
The Ministry of Agriculture published dairy industry regulations that introduce stringent conditions for the importation of dairy products to stop dumping, particularly from Uganda.
Recently, milk imports from Uganda have been impounded at the border.
The regulations are a departure from the controversial draft published last year, which was shelved after farmers termed it punitive and draconian.
In the revised regulations, milk processors in Kenya will no longer set and adjust farm gate prices at will, which they apply when there is either a shortage or a glut.
The new regulations are meant to cushion dairy farmers whose fortunes have been on a decline in recent years, raising fears of a collapse of the once thriving sub-sector.
The government also plans to introduce price controls to protect farmers from exploitation by processors.
“We have been pushing for predictable pricing for raw milk and farmers will not complain if the prices are set fairly,” Gideon Birgen, Kenya Dairy Farmers Association chief executive told The EastAfrican.
Last week, Brookside Dairy adjusted raw milk prices upward by one shilling per litre to Ksh36 ($0.34) from Ksh35 ($0.33) to cushion farmers from the effects of the Covid-19 pandemic.
“We decided to increase farm-gate prices of milk, which will not only boost dairy farming businesses but also help minimise the negative financial impact of the coronavirus outbreak,” said John Gethi, Brookside Milk Procurement and Manufacturing director.
According to the new regulations, the Agriculture cabinet secretary in consultation with the Kenya Dairy Board will determine the minimum farm-gate prices based on factors such as cost of production, transport and statutory deductions.
Even though Kenya has about 40 milk processors, the top three—Brookside, New KCC and Githunguri Dairy—control about 80 per cent of the formal milk industry.