The flow of low-cost chicken imports from Uganda is posing a serious threat to Kenya’s poultry industry, as local farmers voice increasing concerns. Calls for government action to safeguard the domestic market are growing as a result of the increase in imports endangering the livelihoods of Kenyan poultry producers.
In August 2022, the Kenya Poultry Breeders Association (KPBA) highlighted a troubling incident where the Ugandan company HNH Rainbow imported 72,000 kilograms of chicken meat into Kenya at a price of Sh345 ($1.9) per kilogram. This was notably lower than the prevailing prices of Sh450 per kilogram in Kenya and Sh460 in Uganda. KPBA labeled this act as predatory trade, suggesting that surplus meat unsellable in Uganda was being offloaded in Kenya at prices undercutting local farmers. Zachary Munyambu, Secretary General of the Federation of Poultry Farmers in Kenya, warned that such practices jeopardize the country’s food security and adversely affect job creation and economic growth. He emphasized that if this trend continues, it could put approximately 1,000 jobs at risk in regions like Thika, Wangige, Kitengela, Murang’a, and Nyeri, thereby reversing recent gains made by the poultry industry.
The issue of cheap poultry imports is not new. In April 2022, poultry farmers expressed disappointment over the lack of provisional anti-dumping duties on chicken imports from neighboring countries during the budget reading. They argued that the high cost of production in Kenya, exacerbated by a 16% value-added tax on feed supplements, made it challenging to compete with imports sold at significantly lower prices. This situation led to the closure of over 4,000 chicken farms in Kenya, as companies that previously contracted local farmers opted to import meat instead. Farmers called on the government to suspend chicken meat imports until local farmers were empowered and feed prices stabilized.
The disparity in trade practices between East African countries has further complicated matters. Uganda Revenue Authority has, in the past, imposed a cumulative 25% tax on Kenyan chicken meat exports, including an 18% value-added tax, 1% railway development levy, and 6% withholding tax. Conversely, Ugandan poultry products have free access to the Kenyan market, creating an uneven playing field. Tanzania has also imposed stringent requirements, including a ban on poultry imports from Kenya since 2016, further limiting market access for Kenyan farmers.
The egg market has not been spared either. In November 2020, poultry farmers in Kiambu County called on the government to ban egg imports to save their ventures from collapsing. They reported selling eggs at Sh8 each, below the production cost of Sh9, due to the market being flooded with cheap imports from Uganda, South Africa, and China. The Kiambu Poultry Farmers’ Cooperative Society emphasized the need for government intervention to create an enabling environment for local investment and to protect farmers from unfair competition.
Many poultry producers have been compelled to reduce their operations as a result of the combined impact of these difficulties. More than 540,000 broiler farmers have scaled back operations by September 2020 as a result of Uganda’s increased supply of processed chicken. Local producers suffered severe market losses as a result of the COVID-19 epidemic, which made matters worse by reducing restaurant and fast-food establishment sales through lockdown measures.
In response to these challenges, poultry farmers have been advocating for the imposition of anti-dumping duties on imported chicken. They argue that the zero-tax regime on poultry meat imports makes it lucrative for traders, while local farmers face higher production costs and taxes. The Kenya Poultry Farmers Association has urged the government to eliminate unfair trade practices to stimulate local production, create jobs, and bolster economic growth.
The persistent issue of cheap poultry imports underscores the need for comprehensive policy interventions to protect Kenya’s poultry industry. Addressing unfair trade practices, harmonizing taxation policies within the East African Community, and supporting local farmers through subsidies or tax relief on production inputs could help level the playing field. Without such measures, the livelihoods of thousands of Kenyan poultry farmers remain at risk, threatening the sustainability of the local poultry industry.
