Blog Post

19 Mar
By: Ferdinand Musungu 0

AGRICULTURE SECTOR LEADERS SEEK GOVERNMENT INTERVENTION ON HORTICULTURE SECTOR CRUNCH

On 16th and 18th March 2020, Agriculture Sector Network (ASNET) led other industry leaders in two consecutive meetings with government Ministries (EAC & Regional Development and Industrialization, Trade and Enterprise Development) on the developing concerns in the horticulture sector following COVID-19 outbreak.

The first meeting was with the Principal Secretary, State Department of East African Community, Dr. Kevit Desai and the latter with Cabinet Secretary, Ministry of Industrialization, Trade and Enterprise Development, Ms. Betty Maina at their respective offices.

The leaders discussed government efforts in dealing with the coronavirus pandemic, with calls for increased surveillance, testing and preventive measures to avoid further spread hence negative effects on human health and the national economy. Over the last one week, following travel bans to many destinations in Europe and Asia, the fresh produce subsector had been severely hit with flower exports dropping by 50% due to cancellation of orders for direct sales and collapse of the Amsterdam auction. This means huge losses for flower firms in both the short and long run.

Other subsectors of agriculture affected were the farm inputs and cereals. With the sowing season fast approaching, most seed companies had recorded delays in the delivery of various planting seeds either due to the virus outbreak or bureaucracies associated with the PVoC requirements.

Leaders agreed that agriculture’s role in the national economy was central and in the wake of this crisis, there is a need to stabilize the sector both in the short-run and long-term. Some of the proposed short-term mitigation strategies include;

  • Removal of PVOC requirement for seeds, animal health products and live plants,
  • Fast-tracking payment of VAT refunds owed to agribusiness firms,
  • Zero-rating of VAT on farm inputs,
  • Government facilitation of free movement of food items and products for both local and export markets in the event of a lockdown

In the log-term, leaders agreed that there was a need to consider the following mitigation measures.

  • Expedite the conclusion of Economic Partnership Agreement (EPA) with the European Union (EU) and formalize Kenya- United Kingdom (UK) trade agreements
  • Set-up an agriculture and food security recovery fund alongside a recovery strategy
  • Lobby at EAC to zero-rate farm inputs in the long run to promote sector recovery
  • Policy reforms on manufacturing, imports, exports and value addition to diversify markets and de-risk the sector post the COVID-19 crisis

In conclusion, leaders agreed to collaborate, share information as it arises and collectively partner to find appropriate solutions to keep the sector afloat.

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