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NEWS & CURRENT AFFAIRS

The Nairobian

Poultry players protest US import deal plan

Financial Standard

By Brian Ngugi | Apr 30, 2024

**Chicken handling and processing must always be done professionally and hygienically.** [File, Standard]

Kenyan poultry businesses say the country could lose Sh172 billion a year if the United States starts exporting finished chicken products to Kenya under a proposed new trade deal.

The poultry sector fears a 75 per cent drop in demand for local chicken if US imports flood the market under the deal.

This could wipe out Sh172 billion annually, hurting not just farmers but also the entire poultry value chain – feed suppliers, hatcheries, processors, transporters, and veterinary services, they claim.

The united front of Kenyan poultry interests, including cereal growers, feed millers, breeders, farmers, distributors, suppliers, and experts, is consequently opposing the US push to import finished poultry products, in a statement seen by Financial Standard.

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Kenya expects to conclude talks for a trade and investment deal with the Joe Biden administration and sign the agreement this year.

Nairobi has long sought a full free trade agreement with Washington, and negotiations for such a deal to lower bilateral tariffs were launched by the Trump administration with Nairobi in 2020. But the Biden administration, which has shunned traditional trade deals, did not resume those talks.

President Biden plans to welcome his Kenyan Counterpart President William Ruto to the White House next month for a State visit.

The visit set for May 23 will mark the 60th anniversary of US-Kenya diplomatic relations.

The discussions on the trade deal will be advanced towards conclusion during the visit said White House and Kenyan officials earlier.

But the poultry sector stakeholders are calling for the exclusion of finished poultry and poultry products from the coverage of the Kenya US trade agreement.

They say allowing unrestricted US imports could cripple Kenya’s growing poultry industry. They cite the vast difference in poultry production between the US and Kenya as a major concern.

The US is a global leader, they point out, raising a staggering 9.46 billion chickens in 2022 compared to Kenya’s modest 72 million, representing less than one per cent of US output.

“Allowing the import of finished poultry products from the US will lead to the collapse of Kenya’s poultry industry,” they say.

“This will impact the livelihoods of nearly 400,000 households, equivalent to 1.5 million individuals. This includes small and medium-sized farmers, mostly in rural communities, who account for 66 per cent of broiler production and 70 per cent of egg production.”

They further say they will be unable to compete with their US counterparts who enjoy economies of scale, better technology and lower cost of production.

“Through the US Farm Bill programme, which has been in place for over 90 years, the poultry producers are indirectly supported through grain production subsidies. Feed costs constitute more than 70 per cent of total production costs in the poultry sector,” they say.

“The cost of maize, which is the major ingredient in poultry feed is $190 (Sh25,270) per tonne in the US compared to $380 (Sh50,40) per tonne in Kenya (Kenya’s feed cost is double that of US farmers). This makes the cost of producing chicken in the US approximately 50 per cent lower than the cost of producing chicken in Kenya.”

They also say technological difference between poultry production in the US and Kenya is significant and multifaceted, influenced by factors such as economic development, infrastructure, access to resources, and agricultural policies such as GMO, which have not yet been adopted in Kenya.

“In Kenya, over 70 per cent of poultry production comes from smallholder and backyard producers who may have limited access to advanced technologies and inputs. The smallholder farmers in Kenya mainly constitute women and youth,” they say.

“Based on the factors mentioned above, there exist significant differences between Kenya and the USA, thus not a level playing field.”

The association has challenged Kenya to learn from the experience of African countries including South Africa, Ghana, and Senegal “whose poultry sectors were decimated by imports from developed countries.”