Farmers seek Sh12b tax refund amid soaring production costs

Tomatoes in a green house at Gordo District in Puntland State of Somalia. [Nathan Ochunge, Standard]

Horticultural farmers are demanding Sh12 billion as value added tax (VAT) refunds from the government that has accrued in the last three years.

Through the Agricultural Employers Association (AEA), the farmers said the refunds could be used to cushion them against the ongoing drought and harsh economic conditions.

The association also noted that prices of fertiliser and its availability had stabilised in the last two months.

This emerged during the lobby's annual general meeting at a Naivasha hotel where the issue of the high cost of production dominated the meeting.

According to the association's Chief Executive Wesley Siele, the drought had affected the agricultural sector heavily, leading to a drop in production.

He said the VAT refunds owed to the farmers would come in handy in addressing the current challenges.

"The government owes farmers between Sh10 billion and Sh12 billion in tax refund and this can go a long way in expansion and addressing emerging challenges," he said.

Siele noted the issue of fertiliser, which was a major concern for farmers, had been sorted amid rising demand for calcium nitrate by flower farmers.

"We are happy that the sector has not faced industrial action from the workers and we are keen on addressing their wages," he said.

Labour Cabinet Secretary Florence Bore lauded AEA for its role in ensuring there was no industrial action in the sector.

"In reviewing the status of industrial relations in the country in the last four years, the agricultural sector has remained stable and calm as opposed to others," she said.

CS Bore, however, noted that the Agricultural Wages Council and the Floriculture Wages Council had not been operational for years.

"This unfortunate situation has denied the government the necessary advisory on issues of terms and conditions of employment as well as salaries and remuneration," she said.

AEA chairman Stephen Strong identified livestock and poultry farmers as the hardest hit by the high prices of animal feed.

He warned of major job losses in the coming days if the shortage and the high prices of livestock feed were not addressed.