Tax hikes and new rules to push agriculture to the brink

Nyamai Muithya, a ndengu farmer, in Maliku village, Kitui county. [File, Standard]

Agricultural experts have now cautioned that proposed taxes and new regulations could impose a heavy burden on smallholder farmers, threatening their viability and Kenya’s food security. 

As the National Assembly reconvened Tuesday for the second reading of the Mung Beans Bill, 2022, concerns about rising costs and increased regulatory compliance for smallholder farmers emerged.  

Farmers, however, obtained temporary relief after the National Assembly, by a majority, rejected the Bill at the second reading. 

The proposed law, which seeks to regulate the production, processing, and marketing of mung beans will now proceed to mediation. 

Under the proposed law, individuals must obtain a license from the relevant county government to market, process, or engage in large-scale trading of mung beans and related products.  

Non-compliance can lead to penalties, including fines of up to Sh1 million or imprisonment for up to two years.  At the same time, the Livestock Bill 2024, introduced by Kikuyu legislator and National Assembly Majority Leader, Kimani Ichungwah aims to establish a new authority to regulate inputs and products for various livestock, including cattle, pigs, and poultry.  Agriculture is the backbone of Kenya’s economy, with smallholder farmers playing a vital role in job creation and food security. 

But experts cautioned that as farmers face increasing regulatory burden, the potential impact on food security and rural economies is significant. 

“It’s a tough time to be a farmer in Kenya,” said independent economist Njoroge Nyoro.  

He noted the burdens of needing licences to plant ndengu (green grams), rice, fruits, vegetables, and flowers as well as to keep livestock. 

“Failure to comply can lead to hefty fines or even jail time. On top of that, farmers now face a five per cent tax on their earnings from produce.”  Another proposed legislation, backed by MP Sabina Joy Chege, requires farmers to obtain a license to grow and sell fruits and vegetables.  The Horticultural Crops Authority Bill, 2024 is currently under debate in the National Assembly, aiming to establish an authority with the power to inspect imported produce to ensure compliance with national and international food safety standards.