The booming illicit regional trade in farm produce is hurting Kenyan farmers, who cannot get a decent return on their investment. The towns on the Kenya-Tanzania and Kenya-Uganda borders have become havens for crafty traders, who profit from the genuine efforts to boost trade between the East African Community. Farm produce from EAC states is not taxed but the increasing collusion between the sly traders, corrupt police officers and wayward Customs officials to avoid the necessary checks is worrying.
On the brighter side, however, there is huge potential in the region. According to available statistics, between January and February last year alone, Kenyan traders imported 77,500 tonnes of maize from the region. Data from the Regional Agricultural Trade Intelligence Network (Ratin) indicates that Ugandan and Tanzanian farmers earned some Sh3.1 billion.
Traders are supposed to fill in a certificate of origin to ensure that only produce from the EAC benefits from import duty exemption. But as the crooked traders avoid this vital control, one cannot rule out the possibility of some of the imported maize having actually come from elsewhere. Farm produce is spirited across the borders into Kenya. Poultry farmers in western Kenya are reeling under competition from cheap Ugandan eggs.
Of course, low production due to poor soils, high costs of inputs and cartels also impoverish farmers. Taxation of inputs and farm machinery, as well as failed irrigation initiatives, make Kenya’s agriculture less profitable. The reintroduction of the 16 per cent VAT on fertiliser and crop and animal protection products is going to further dampen Kenyan farmers’ fortunes.
With Ugandan grain flooding the Kenyan market, local farmers have been turned away from depots with their produce. It will take political goodwill to fix the country’s agriculture.