Trade and Industrilisation Cabinet Secretary (CS) Peter Munya was put to task by Members of Parliament to explain why farm products from Uganda continue to flood the Kenyan market.
Appearing before the Trade and Industry Parliamentary departmental committee during a retreat at a Mombasa hotel on Friday, Munya was accused of failing to protect Kenyan farmers and traders by allowing the influx of the cheap imports.
Members of the committee pointed out that milk and eggs from Uganda have continued to surprisingly flood the market in huge quantities and retail in local markets at cheaper prices something they said was putting the local industry of the two products in jeopardy.
Led by committee chairperson and Kieni MP Kanini Kega and his vice and Aldai MP Cornelly Serem, the legislators were concerned that if the trajectory continues, the milk and egg industries in the country will collapse.
“There has been continued inflow of milk from Uganda in large quantities .Every day dozens of liters of milk enter the country from Uganda…Our market is no longer safe with crates of eggs crossing from Uganda at very cheap price. If we are not careful the industry will collapse,” said Serem.
The committee demanded to know what the Cabinet Secretary was doing to avoid the collapse.
But Munya argued that it is impossible to block influx of products from Uganda given that the policy of the East African common market allows the free trade within the partner states for healthy competition.
The CS observed that cost of production in Uganda is cheaper compared to Kenya because of high cost of electricity locally hence Uganda was likely to pose stiff competition to Kenya.
“Uganda is part of East Africa common market. So long as the products are produced within the precincts of the partner states, we can do nothing about it. That’s the policy and we can’t stop it. We have a lot of investments in Uganda too and we cannot risk,” Munya told the committee.
By the same token, the MPs sought answers as to why Kenya has not enjoyed the same comfort of doing business in Tanzania as Uganda enjoys in Kenya, but has instead been on seemingly frosty trade ties with Tanzania where several products from Kenya have been banned by President John Pombe Magufuli’s regime.
In response, Munya said the government of Kenya has been in constant talks with Tanzania to allow free trade in accordance with EAC policy.
The concerns come at a time when the process of modernising the Kenya Cooperative Creameries (KCC) has started in a bid to stabilise the country’s milk market.
KCC Chief Executive Officer Nixon Sigei said plans are ongoing to modernise processing equipment in various parts of the country, a project he said has stabilised milk market in the country.
“Since 2017 there has been stability in terms of what we payout to farmers. We have been able to put up competitive prices for farmers; at the same time in January alone we were able to receive five million liters of milk which is a situation that has never been experienced. If we were not prepared we would experience a milk glut like what has been happening in Europe recently where we have seen dozens of liters being poured,” said the CEO.
While the committee acknowledged the step as positive, the legislators were concerned that the stability could be a temporary situation as the industry was under threat from Ugandan competition.
“If we are not careful we could be building factories only to set up a stage for Ugandans to come and shine in our own market and reduce us to a market of just consumers. This is what has happened in the sugar industry, and we have seen it die, the coffee is also another moribund industry and now eggs and milk is headed there,” warned Kega.
By Hussein Abdullahi
