Kenya seed companies have blamed the influx of vegetables from Tanzania on the cheap cost of production in the neighbouring country as it does not charge the 16 per cent duty on tomatoes and onion seeds, having a negative impact on the KSh 15 billion industry.
Seed Trade Association of Kenya-an umbrella body bringing together all the seed processors in the country, says the VAT levied on vegetable seeds locally has made Kenya’s produce uncompetitive in the market.
STAK chairman Humphrey Kiruaye says onions, tomatoes and other vegetables from Tanzania that have become common in Kenya are way cheaper when compared with what is produced locally.
“There are a lot of vegetables coming here in Kenya from Tanzania and that is because our product is uncompetitive in the market owing to the 16 per cent duty levied on seed,” said Mr Kiruaye.
For instance, a kilogramme of tomato in Kenya is selling at Sh40 while the one procured from Tanzania will trade at Sh30. Locally produced onions sell at Sh63 while those imported from neighbours are going for Sh55.
Tanzania does not charge Vat on vegetable seeds and most of the farm inputs such as chemicals, make the cost of production in the country much cheaper.
Tanzania, under the East African Community protocol, is allowed to export goods to Kenya duty-free.
Mr Kiruaye said the cost of producing vegetables in the country is 40 per cent high and this has a negative impact on the price of the commodity at the market.
Speaking during the STAK Congress, Expo and Mazao forum yesterday, Mr Kiruaye said they are in the process of engaging the government in order to reconsider abolishment of duty to ensure Kenyan farmers are able to compete with cheap imports not only locally but also within the region.
“We are in the process of negotiating with the government on a waiver of duty on vegetable seeds,” said the official.
He said the vegetable seed processors have started developing the seed locally to cut overreliance on imports.
For many years, Kenya has been relying on imported seed to meet the local demand from farmers, a move that increased the cost of production.
SOURCE: BUSINESS DAILY