KENYA – Dairy farmers in Kenyan Kiambu County have raised concerns over the increasing burden of taxes, urging the government to reconsider its taxation policies to ease the cost of production.  

Led by Jane Ngoiri, farmers emphasized that the current tax regime in the agricultural sector is making farming financially unsustainable. 

The government’s introduction of a withholding agricultural produce tax, set at 5% of the value of produce delivered to the market, has sparked discontent among farmers.  

Ngoiri, speaking at the sidelines of the Githunguri Dairy Cooperative Sacco annual general meeting attended by 33,000 farmers, highlighted how these taxes are contributing to soaring input prices, making farming less profitable. 

The taxes, including excise duty on various supplements used in animal feed production, have significantly inflated input prices,” she said. 

Additionally, the quality of feeds has declined, leading to reduced production and farmers are experiencing financial strain with many struggling to repay loans taken to expand their operations.” 

Echoing Ngoiri, farmers Anthony Maina and Patrick Nyaga stressed the adverse effects of these taxes, particularly on lower-income individuals.  

They called upon the government to introduce measures such as tax reliefs, incentives, and subsidized farm inputs to support farmers and stimulate economic growth. 

Joseph Mburu, chairman of Githunguri Dairy Cooperative Sacco, further emphasized the detrimental impact of taxation on dairy farmers.  

He noted how recent tax measures introduced through the Finance Act of 2023 have escalated the cost of doing business, resulting in diminished profit margins for farmers. 

Mburu also highlighted the compounding effects of high fuel and energy prices on dairy farming, exacerbating the financial strain faced by farmers.  

Despite these challenges, he acknowledged the remarkable growth of the Sacco, with its asset base increasing from Sh4.2 billion in 2022 to Sh5 billion. 

In addition, Mburu announced positive news for Sacco members, revealing an increase in dividends from Sh141 million in 2022 to Sh212 million in 2023.  

The board recommended a 13% dividend on share capital and a 6.5% dividend on member deposits, reflecting the Sacco’s commitment to delivering returns to its members amidst challenging economic conditions. 

As dairy farmers continue to grapple with mounting production costs, their collective plea for tax relief showed the urgent need for policy interventions to support the agricultural sector and safeguard the livelihoods of farmers in Kiambu County and beyond. 

Subscribe to our food and agriculture industry email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE