We shall not allow in cheap milk - Kenya

Kenya has said it will not allow cheap milk imports to flood its market.

This was said by the country’s Agriculture Cabinet Secretary, Peter Munya, who also noted they had come up with a raft of reforms to protect local farmers as well as revive Kenya’s dairy sector.

Kenya has since December had run-ins with milk exporters, particularly from Uganda, locking out dairy products from its market.

At least, Ugandan milk exporters including Pearl Dairy, which produces Lato Milk and Lakeside Dairy, which manufactures Top Dairy milk, have been locked out of the Kenyan market.

No official explanation has been provided and a February protest note, which had given Kenya an ultimatum of 15 days within which it had to explain its hostility specifically against Lato Milk is yet to be responded to.

At the close of last week, Mr Munya told Daily Nation that importation of cheap milk had disadvantaged Kenyan farmers thus the government would implement a raft of measures to stop its entry as well as punish those found importing it.

“We will not allow the importation of cheap milk to inflict pain on our dairy sector. I have directed the dairy board to ensure that our farmers are protected. Anyone who will be found to have gone against the order, necessary action will be taken,” he said.

In November, Mr Munya had told journalists that Cabinet had passed a resolution that sought to impose a 16 percent levy on milk imports.

However, the levy was quashed by President Uhuru Kenyatta, who said it would only apply to milk imports from outside East Africa.

“We are committed to protect our dairy farmers and we will have to relook at supermarket prices as a way of promoting the culture of milk consumption in this country so that our people can buy from farmers to get something from their products,” Mr Munya is quoted to have said by Daily Nation.

Initially, Kenyan farmers had urged government to impose extra Value Added Tax (VAT) on Uganda milk imports, noting that the cheap products had flooded the country’s market to the disadvantage of local farmers and dairy products manufacturers.

Kenya has also challenged Uganda’s capacity to produce enough milk for both local and export markets.

A Kenyan delegation led by Mr Munya was recently in Uganda to ascertain whether the milk Uganda was exporting to Kenya was produced here. Ugandan milk exporters that had found a market in Kenya, given that consumption is low here, have since suffered immeasurable losses.

Recently, an official from Pearl Dairy, who requested anonymity because of the sensitivity of the matter, told Daily Monitor that they had in the initial days of the ban, lost close to Shs1.1b and had since shut down some of their production lines, which had left the company operating at below 20 percent.

Lakeside Dairies, whose milk exports were also blocked by Kenya recently, according to an official at the company, closed its UHT production line. The company is currently only operating the yoghurt production line, which is mainly sold in Uganda.

30 trucks returned

At least, according to details from Uganda Revenue Authority, more than 30 truck-loads of milk have been forced to return and some have been diverted before the contents are seized by Kenyan Authorities.

Kenya has largely remained silent on the matter with claims from unofficial circles only questioning how Uganda would be able to export large quantities of cheap milk, albeit with low local consumption.

A protest note issued by government last month and delivered to the Kenya High Commission in Kampala by Trade Minister Amelia Kyambadde and State Minister for Foreign Affairs Okello Oryem has not been responded to, days after a 15-day ultimatum and an intergovernmental agencies plot to retaliate by blocking certain Kenyan goods from entering Uganda has since gone cold.

An intergovernmental agencies memo that Daily Monitor had seen last month had proposed to retaliate on a number of Kenyan goods, key among them assorted household items and roofing material.