Relief for avocado farmers as committee sits to review e-TIMS requirement

John Ndegwa, a farmer and Chair of the Bungoma Avocado Farmers Association (BAFA) in his farm located Bilibili area in Bungoma County. [Nanjinia Wamuswa, Standard]

A stakeholders committee will sit today to seek a 'temporary solution' to remove the Electronic Tax Invoice Management System (e-TIMS) requirement on avocado farmers.

This was announced yesterday after Deputy President Rigathi Gachagua directed that a meeting involving Cabinet Secretaries for Finance, Cooperatives, Agriculture and Trade meet today to come up with a framework that will exempt primary farmers from the e-TIMS requirement as contained in Section 23 of the Finance Act 2023. 

"It is true that we have challenges in the Finance Act and tomorrow's (Wednesday) meeting will establish a first aid strategy even as our MPs embark on the long process of amending the Finance Act which has a due process to be followed," Gachagua said. 

Speaking at his official residence in Karen, Nairobi, where he met over 100 stakeholders in the avocado value chain including farmers, aggregators and exporters, the DP announced that a taskforce will be established in a week's time to address other hiccups that were espoused during the consultative forum.

The farmers told Gachagua that the requirement has adversely affected the sub sector forcing exporters to relocate to Tanzania where they said has an enabling environment for farmers and the exporters.

"Farmers are not familiar with the electronic invoicing systems and are also required to have KRA pins and smartphones of which most do not have," said Avocado Farmers Association chairperson Munyui Wa Njohi. 

The farmers decried that the law would discourage many from venturing into avocado farming.

The MPs who attended the forum found it rough after their defense fell on deaf ears with farmers urging them to seek for more time before passing punitive laws.

The MPs Mary Waithira (Maragua) Chege Njuguna (Kandara) Edward Muriu (Gatanga) and Joseph Munyoro (Kigumo) claimed that Finance Bill was in a big booklet which was too much for them to go through in such a short period of time. 

"The issue is not MPs passing the Bill and then complain. The Finance bill was a big document and you can't expect MPs to go through it and find the nitty gritty. It's just like the pastor who does not know all the Bible verses," Wamaua said. 

Njuguna said: "We can't take hustlers down because we are a hustlers government and we can't expect that our farmers will compete with foreign avocado farmers if we are not levelling the playing field."

However, farmers demanded that the MPs involve stakeholders in the policy making and seek more time before passing the laws saying were it not for the intervention of the DP the sector would go down and leave them exposed. 

Gachagua said the task force will complete its work in 30 days and will address issues such as the duplication of duties between Horticultural Crops Directorate (HCD) and Kenya Plant Health Inspectorate Service (Kephis)

According to Samson Mureithi of Avocado Exporters Association of Kenya, the two government agencies have duplication of duties such as synchronisation and double inspection which he said caused delays in response and dispensation of service within the industry. 

"Both institutions lack enough inspectors and infrastructure such as vehicles and dry matter test machines for inspection which is again mandatory in both regulatory bodies," said Mureithi. 

He complained that Kephis has continued to charge facilitation fees and mileage fees which is 5.85 per kilometer from Jomo Kenyatta International Airport (JKIA) yet the service should be free. 

"We propose that inspection points be established where exporters can deliver samples for testing or when the HCD confirms produce has attained threshold, an express phytosanitary certificate is issued," said the exporter. 

Among other issues that will be addressed by the taskforce include the bureaucracies in the Kenya Revenue Authority (KRA) and the Kenya Ports Authority (KPA) which the stakeholders said was brought about by regulations by the HCD and Kephis. 

"Customs clearance procedures have become long, tedious and punitive. Recently a long list of documents have been mandatory in order to allow containers into the port. The documents include HCDA clearance, export certificate, phyoto certificate, port certificate, customs entry, that discourage stakeholders," Gachagua was told. 

The move, farmers said, saw many containers missing the vessel cut off times affecting quality, the shelf life and the country's credibility in the international market. 

They further said despite the taxation, avocado farmers were not receiving agricultural subsidy from the government and intention to levy them was tantamount to wanting to milk a cow one never fed.

HCD acting director Christine Chesaro noted that the avocado sub sub sector was grappling with inadequate research to develop better varieties and mitigation of pests and disease prevalence.

"Expensive air transport especially due to the current situation in the Red Sea necessitating shipment to Europe through South Africa is a major set back in the sub sector," Chesaro said. 

She noted that India charges 30 per cent custom duty on Kenyan avocado exports while least developed countries are not being charged the same a move she said made Kenyan produce less competitive in the Indian market. 

Despite the challenges in the sector, Kenya remained the number one exporter of Avocado in Africa, it was position six in the world after Mexico, Colombia, Peru, Indonesia and Dominican Republic with avocado's foreign currency earnings standing at Sh19 billion in 2023 an increase with Sh4 billion in 2022. 

According to HCD, 32 counties in Kenya produce avocados with the country's production in 2023 standing at 518,500 metric tonnes over an area of 29150 hectares that are under avocado farming. 

Muranga led in avocado production accounting for 23.2 per cent by value followed by Nakuru (12 per cent) Kisii (11 per cent) Kiambu (9 per cent) Nyamira (5 per cent) Meru 4 per cent) and Bomet which stood at 3 per cent. 

The Netherlands is the leading importer of Avocado from Kenya, followed by UAE, Spain, France and Germany.