Mr President, agriculture needs its rescue plan now
After President Uhuru Kenyatta announced a raft of tax reforms to blunt the pain of the Covid-19 pandemic, an imaginative Ugandan on social media implored on the Kenyan leader to fight to take, not just the disputed Migingo Island on Lake Victoria, but the whole of Uganda.
The remark was one of many salutary messages that greeted the President’s speech that sought to calm an anxious nation.
The attempt to ease the burden on citizens, who on a good day are some of the most highly taxed in the world, while not yielding to calls for a total lockdown that would have hurt millions, was indeed welcome.
But lost amid all this is the fact that not one of the measures touched directly on agriculture, the mainstay of the economy, which is ailing.
Other countries have put their money where their mouth is. China, for instance, where the disease started in November, rushed to reduce reliance on food imports by cushioning farmers and other players in agriculture.
The country put in place subsidies for machinery and rent reduction on public land and low-interest loans.
All this pushed up investment in agriculture with the use of drones rising to stand in the gap of labour shortage.
Already, restricted movement across the world has seen panic grip such countries as the UK where a deficit of 80,000 workers could leave crops rotting in farms.
In response, there have been calls there for workers who have been temporarily rendered jobless in other sectors to take up jobs in farms to “build a resilient, diverse, local food system”.
In contrast, there hasn’t been any deliberate and coherent move to keep Kenya’s agriculture afloat.
The closest President Kenyatta’s address went was when he ordered the payment of valued added tax refunds, which stand at Sh10 billion.
RESCUE THE INDUSTRY
Of this, players in agriculture reckon that more than Sh6 billion is owed to flower firms, the arrears having accumulated since 2013. One company was owed Sh800 million in VAT reimbursements by the close of the year.
When it rains, it pours. Even before the coronavirus cataclysm, Kenya’s flower sector was sagging under all manner of taxes that make its otherwise excellent produce one of the most uncompetitive in the world.
Kenya Flower Council chief executive Clement Tulezi places the number of levies in the sector at 42 after county and national government governments imposed multiple regulations, taxes and fees.
At a distress meeting held on Tuesday under the auspices of the Agriculture Sector Network, a lobby, floriculture and horticulture players spoke of a dire situation following the near total collapse of demand in the EU and UK.
Most farms have sent the bulk of their workforce home on leave and the projection is that if the crisis lasts for more than three months, few farms will survive.
The message couldn’t have been clearer: The government needs to rescue an industry that earns the country billions of shillings annually in taxes and foreign exchange.
The pandemic has also come at the planting season for maize, the country’s staple. Farmers need seed and fertiliser subsidies to produce food for the nation. Even the imports that usually line the pockets of well-connected people are no longer assured. Countries are going to be paranoid at protecting local produce.
Desperate times are eye-openers. Just like the Covid-19 crisis has opened President Kenyatta’s eyes to a counterproductive tax regime, time is ripe for the government to reform the agriculture sector, the engine of the country’s economy.
Mr Sigei is agriculture editor, Nation Media Group.