Kieni MP Kanini Kega also the chair of Parliamentary Committee on Trade and Industry has called on the removal of trade barriers introduced on Kenya milk products by Tanzanian authority
The New KCC has been losing more than Sh15 million monthly due to new trade barriers and taxes introduced by Tanzania.
Kega was reacting after New KCC managing director Nixon Sigei told the Committee that the company was facing major challenges operating in the neighboring nation.
“They have increased what they call veterinary taxes by more than Sh100 and goods cleared by KEBS are being forced to undergo fresh clearance in Tanzania yet all this should be harmonized through the EAC,” said Sigei.
Sigei said the company was working hard to retain Tanzanian market with hopes that trade barriers would be eliminated.
Kega said such barriers should be non-existent seeing as both states are members of the East African Community.
He spoke when the committee visited New KCC factory in Eldoret to assess how Sh1 billion government funding had been used to modernize the firm’s operations.
“We are all brothers and sisters and we hope the barriers will be sorted out at the highest level through intervention by our president”, said Kega.
Trade balance data between Tanzania and Kenya for the period ending July 2018 shows Arusha exported goods valued at Sh17.25 billion to Kenya while only importing goods valued at Sh10.224 billion.
Over the last 12 months, lack of commitment on the part of the six EAC member states has seen intra-regional regional trade decline significantly, raising questions about the integration agenda.
Its import value from Kenya between July 2017 and July 2018 dropped by Sh989 million.
Sigei said the company now needs more funding for extra expansion including increasing capacity to store powder milk.
Dairy farmers across the country have protested the influx of cheap milk from neighbouring countries like Uganda which has led to decline in prices.
The committee toured New KCC Eldoret and Rivatex East Africa to assess the modernisation programme of the two firms.
The cost of producing milk is lower in Uganda hence prices of milk are lower.
Dairy farmers are also opposed to the proposed milk regulations aimed at streamlining the sector.
The laws prohibit farmers selling raw milk even to their neighbors before they pasteurize. They add milk will only be sold based on quality and a farmer will only sell milk to one processor who he has a contract with, among others.
Any farmer found flouting the rules will be liable to a fine of Sh500,000.
Kega said parliament will not support any law which will hurt local farmers.
“We have not received the Bill yet but we will look at it and I want to assure everyone that we will reject it if it will hurt local farmers at expense of few individuals,” added the MP.
Kenya Dairy Board managing director Margaret Kibogy, spearheading the regulations, defended them saying the industry stakeholders realized the need to review the Dairy Policy and Regulations way back in the 90s and the process is ongoing.
“The main factors that necessitated the review include need to update the policy and regulations in line with the liberalized nature of the industry, the rapidly changing technological innovations; response to consumer demands for quality and safe products and to respond to increasing incidences of malpractices in the milk trade,” she said.