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Poultry farmers in Kiambu have urged the government to reduce the prices of poultry rearing equipment and feeds.
Kiambu Poultry Farmers Cooperative Society said VAT on the rearing equipment and feeds is making the business a loss making venture.
“The 16 per cent value added tax on farm implements has affected most farmers in this region, keeping in mind that we are the largest chicken growing area in Kenya,” Zachary Munyambu, an official of the society said.
“Farmers face a difficult time because they are paying VAT on feeds, machineries and equipment.”
Several farm equipment such as poultry incubators, brooders, dryers, ploughs, disc harrows, combine harvester-threshers, and milking machines that were previously zero-rated, now attract VAT, making it hard for farmers to make profits.
“Machinery such as manure spreaders, fertiliser distributors, hay balers, combine harvesters, machines for sorting eggs, machines for preparing animal feed, tractors and poultry incubators should be imported duty and VAT-free, so that farmers can improve their yield and we become food secure,” Munyambu said.
The sector has faced a number of challenges from failed weather to high cost of inputs such as fertiliser and diesel, used to drive farm machinery.
The cost of petroleum products and their by-products have been rising in recent month due to the Russia-Ukraine war, as well as inflation.
Humphrey Mbugua, a poultry farmer expert said the introduction of taxation on input has only worsened the food production problem, denying the country an opportunity to post robust growth.
“The government should look for alternative and creative sources of revenue. Punishing farmers through hefty taxes will be felt in the entire economy,” Mbugua said.
The agricultural sector is estimated to have contracted by 1.2 per cent in 2021, due to adverse weather conditions.
Despite the expected poor weather outlook, uncertainty linked to the general election and global supply chain disruptions due to the Russia-Ukraine war, agriculture is expected to grow by 4.6 per cent in 2022.
This is attributed to government subsidies on fertilisers and strengthening external demand.
The government has allocated Sh46.7 billion to the sector, a decrease from Sh69.7 billion in the 2021-2022 period. The allocation is meant to cater for the various ongoing projects and programmes.
To boost agricultural produce, experts say it will be key for the government to increase investment in key programmes and projects that will lead to higher yields.
The programmes are notably provision of subsidised fertlisers, quality and certified seeds and mechanisation. BY THE STAR