By Winnie Kamau
Kenyan farmers set to cough over 50% on Pest control products after the Members of Agrochemicals Association of Kenya (AAK) deliberated on the Tax Laws Act 2018.
The Members agreed they would pass the 16% VAT on the farmers as prescribed by the law to avoid trouble with the Tax Authorities this is despite a legal battle pending in court and set to be heard on 30th October this year.
The members noted with a lot of concern that the 16% VAT will be passed on to the farmers. Speaking to the press the Association of Agrochemicals CEO, Evelyn Lusenaka explained how they reached their decision saying “The members have agreed to start charging 16% VAT while they address the issue with the government. However, the industry notes that it is unfortunate that this bill was passed into law”.
The supply chain of Agrochemicals does not lie with the farmers only but goes through the manufacturers, distributors, dealers and the retailers before reaching the farmer.
However, the Association through their Chairman Patrick Amuyunzu is asking the government and the legislators to repeal the law to zero-rated products saying “Something that will cost me as a distributor 100 shillings by the time it reaches to the farmer under ordinary situation is supposed to cost a farmer 120 sh. But now with the imposition of 16% VAT ti will come to around 190sh a big gap and increase of above 50% over what the farmer has been buying at”.
The concerns were raised amidst President Uhuru Kenyatta’s BIG 4 Agenda legacy which key among them is food security.
Key in achieving food security in the country is not only subsidized farm inputs but also the concern on mitigation on Climate change effects and Pest control.
In 2015 the Fall Armyworm was detected in South Africa and spread all over Africa like bush fire. A major emerging concern now is the South Armyworm said to be more lethal than the Fall worm coming from Weste Afric in Nigeria is posing a major threat and concerns amongst Agricultural experts.
The Budget read in July saw the Treasury allocate the Agricultural Ministry USD 32 Million as an emergency fund to fight the Fall Armyworm which experts have dismissed as little compared to the problem at hand.
Agriculture in Kenya contributes 35% to the GDP of the country and the signing of the lethal law on Tax Laws (Amendment) Act, 2018 by President Uhuru Kenyatta in 18th July while the laws were published on 25th July is contentious.
Currently, Largescale farmers are crying foul in Kenya with the high cost of production and the little subsidy of 3% on farmers by the Kenyan Government measures too little compared to other countries in Africa.
The Maputo Declaration in Agriculture required all African countries to set aside 10% of the budget to agriculture with Kenya’s current standing is below the budget less than 5%.
