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Kenya: VAT on agrochemicals puts growers on edgeqrcode

Sep. 14, 2018

Favorites Print Sep. 14, 2018

By George Mbakaya
 
The Tax Laws (Amendment) Act 2018 is in force. Motorists and commuters are already feeling the heat. Farmers are next on queue. The Act has proposed a 16 per cent VAT on agricultural pest control products. 
 
Now, imagine you’re a farmer, and are using three different chemicals on your farm— one is a herbicide to control weeds in the young crop, then a disease outbreak pops up and you apply a fungicide, then later in the season, you use an insecticide to kill off a pest. That can be expensive especially in the wake of the new charges.
 
Indeed introducing tax on pesticides would increase the costs to agricultural producers. Depending on elasticity of supply and demand, the producers would pass on some of the increase to consumers. As expected, the greatest price increases are for pesticide-intensive crops especially horticultural like vegetables and tomatoes. 
 
As the input price rises and output price remains stagnant, the farmer will have no option but to absorb the cost. Bear in mind that farmers are already reeling under tremendous pressure from many ends and the increased burden of taxes will affect their income. 
 
Should farmers decide to increase output prices then food prices will rise significantly. So what’s the way forward? 
 
The alternatives?
 
The new pesticide legislation scenario presents an opportunity for reduction in conventional pesticide use. To achieve this, farmers are advised to practice Integrated Pest Management (IPM) which gives more crop yield using less pest control products. 
 
Integrated Pest Management Continuum proposes different degrees to which reduction of pesticides is pursued. Rather than applying pesticides at regular intervals, farmers can anticipate pest pressures via early warning systems and measure actual pest pressure using traps in fields, and apply pesticides only when it makes clear economic sense. 
 
Farmers can also systematically employ multiple preventive tactics such as crop rotation and planting resistant varieties.
 
Crop rotation 
 
Further along the continuum are more ‘bio-intensive’ practices, such as releasing beneficial organisms, applying hormones to disrupt pest mating, and using biologically based bacterial pesticides rather than petroleum derived formulas. Pesticide use reduction occurs as growers move along the continuum, even if they don’t move all the way to certified organic production. 
 
Through these practices, farmers can significantly reduce the quantity of pesticides required hence reduction in production costs. 
 
Weed management 
 
Weed management can be achieved by use of mechanical means such as hand pulling, hoeing and mulching. Farmers can conserve insect predators such as spiders and ladybirds and can selectively use insecticides that leave predators unharmed. 
 
Managing vegetation to promote beneficial insects commonly referred to as ‘pest suppressive landscapes’, can support maintenance of insect predators and native fauna.
 
The use of effective pesticide sprayers and nozzles is important to reduce pesticide drifts. Significant amounts of pesticides are often placed in the non-target environment during the application process. Hence, control or minimisation of drift, especially while treating must be considered.
 
That is where precision agriculture, comes in. It is a promising approach to optimise crop yields and reduce the costs of pesticide use. 
 
Precision agriculture refers to site-specific applications of pesticides, automatic guidance of agricultural vehicles, and the identification of plant tissues affected by biotic stresses.
 

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