The impending fuel price increase against the sliding global crude oil prices means cereal farmers in the North Rift will pay more to prepare their farms ahead of the planting season.
Producers Wednesday petitioned the government to cut some taxes on petroleum products to cushion them from the high cost of land preparation and skyrocketing prices of farm inputs to empower them to increase acreage under crop production.
“Introducing Value Added Tax on petroleum prices will push fuel prices high and deny farmers benefits as a result of sliding cost of crude oil caused by over supply,” said Mr Moses Kiptoo, a farmer from Chepkumia in Nandi County.
Treasury has hinted at introducing a 16 per cent VAT on petroleum products following expiry of the VAT Act 2013, which provided for a three-year tax exemption period on petroleum products to September 2016.
Farmers said introduction of the levy would push up the cost of operating farm machinery such as tractors.
The cost of diesel has in the past months dropped by Sh22, selling at Sh78.35 compared to Sh100.04 last year, which maize farmers say will cut down production charges.
“Cultivation of crops such as maize and wheat is a mechanised process and cheap fuel prices will cut down on overall operating costs of farm equipment,” said Mr Isaac Kibogy from Sergoit, Uasin Gishu County.
Reducing fuel prices
Farmers have also asked the authorities to consider reducing fuel prices to reflect the falling global crude oil.
The prices have declined to an average of $32.81 a barrel.
“Diesel is the strength of our crop production and the government needs to lower the prices further to reflect the falling crude oil prices to safeguard us from other operating costs such as maintenance of our tractors and cost of seeds and fertiliser,” said Mrs Miriam Too from Cherang’any, Trans Nzoia County.
Most maize farmers in the region have, at the same time, petitioned the government to increase credit facilities for this planting season.
The farmers get loans from the Agricultural Finance Corporation (AFC) to prepare land and buy fuel and farm inputs.
“What the farmers require is sustained low cost of fuel and subsidised farm inputs to enable them to invest in agriculture as businesses,” said Mr Geoffrey Kwambai from Elgeyo Marakwet County.
The government plans to import subsidised fertiliser from next month to be distributed through the National Cereals and Produce Board stores countrywide at Sh2,000 a bag.
Maize farmers in the region have been discouraged from applying DAP in maize due to increasing soil acidity.
Rift valley produced an average of 16 million bags of maize down from 21 million bags last season due to damage of the crop by drought and repeated outbreaks of the maize lethal necrosis disease.