NAIROBI, KENYA — Kenya has extended the implementation of regulations that allow the country, and others in East Africa, to continue importing duty-free raw materials for feed manufacturing from within the region as the government attempts to address the high feed prices and stabilize the nearly $230 million industry.

Treasury Cabinet Secretary Prof. Njuguna Ndung’u said in June that the Kenyan government will extend the importation of inputs for feed manufacturing under the East Africa Community (EAC) Customs Management (Duty Remission) Regulations, agreed upon by the seven-member regional intergovernmental organization, the East Africa Community.

Kenya has been granted the permission by the EAC Council of Ministers, which is the policy-making arm of the Community, comprising of ministers responsible for EAC Affairs in Kenya, Tanzania, Uganda, Rwanda, Burundi, Democratic Republic of Congo and South Sudan.

The regulations cover the importation of inputs that are used in the manufacture of goods for export and those approved goods for home consumption as the Council of Ministers may determine.

“In order to reduce the production cost of animal feeds, Kenya was allowed to extend importation of inputs for manufacturers of animal feeds duty-free under the EAC Duty Remission Scheme,” Ndung’u said.

Furthermore, the Association of Kenya Feed Manufacturers (Akefema) recently said that to effectively tame the skyrocketing price of animal feed, which is fueled by the prolonged shortage of ingredients used as raw materials, the government should allow the importation of quality genetically modified (GM) and non-GM duty-free raw materials, including yellow maize and soy meals, among others. 

The GM raw materials “are more available and cheaper than conventional materials,” Akefema said. However, Akefema sees it as only a stop-gap measure to ensure continuous feed production cost-effectively. The long-term solution is for government “to promote the production of raw materials in the country, to avoid reliance on imported materials.” 

“Imports have been impaired by both the taxation regime and technical reasons such as restriction on GMOs into Kenya, therefore meaning that feed millers are restricted in the areas they can source raw materials from even when there are competitive advantages in say, GMO versus Non-GMO material, often with a significant cost difference between them,” said Akefema National Chairman Joseph Karuri in a 2023 report.

Inconsistent short-term measures

Currently, there is no firm policy on the importation of feedstock, particularly yellow maize in Kenya, with the government opening short periods for importation of necessary feedstock.

For instance, in early 2023, the government published a notice allowing animal feed manufacturers to import 500,000 tonnes of duty-free yellow maize before August 2023, which helped to stabilize feed prices. But these short-term solutions have not been consistent as evidenced by previous knee-jerk measures by the government.

In another previous initiative, the government formed a presidential taskforce to explore ways to reduce feed costs, although the recommendations of the team have yet to be fully published or scheduled for implementation except for a measure enacted in 2023 that allowed an import duty exemption on raw materials for animal feed manufacturing.

A similar short-term import window was announced in December 2021, when the government exempted an import duty for yellow maize, soybeans, soybean meal, cottonseed cake, sunflower seed cake, white sorghum and fish meal through the end of October 2022. These exempted imports were to be non-GM. 

Importation of raw materials for feed manufacturing is not sustainable, according to a recent report by the Tegemeo Institute of Agricultural Policy and Development, a policy research institute under the division of Research and Extension of Kenya’s Egerton University. The Institute argues, “allowing importation of yellow maize or soya may not necessarily translate to cheaper feed costs because of the expected costs of logistics such as transport and port charges that are likely to wipe out any benefits from accessing raw materials from these sources, even with an exemption of import duty.”

“Even without the duty, the high transportation costs and port charges significantly reduce the advantages for cheaper raw materials sourced in the global market,” it said.

In recent years, Kenya has relied on other African markets such as Uganda, Zambia, Malawi, and Tanzania for animal feed production raw materials due to these countries’ low tariffs.

Meanwhile, Kenyan feed manufacturers have been pushing for more local solutions to the problem of unaffordable feeds that have constrained livestock production. These include fast-tracking the proposed establishment of cottage industries at the Nasewa Industrial Park in western Kenya to promote animal feed production.

There is also pressure on the government to implement approved but pending industry regulations to help address the high cost of feed and help stabilize the feed industry.

“The high cost of inputs of animal feeds coupled with other factors like unfavorable weather conditions make the locally manufactured animal feeds expensive, thus contributing to food inflation,” Ndung’u said.

According to Karuri, “animal feed prices have gone up by about 60% in the past two years, leading to many farmers being unable to sustain their farming enterprises and therefore leading to loss of livelihoods in the regions that have heavy commercial livestock activities.”

The spike in feed prices has been attributed to Kenya being “a net importer of almost all the raw materials used locally for the manufacture of animal feeds.”

Karuri said Kenya’s feed industry “has a very limited range of raw materials to choose from for both energy and protein sources, hence there is a heavy dependence on maize and milling byproducts such as maize bran, wheat bran, and wheat pollard.”

This lack of cost-effective raw materials and reduced demand from farmers due to closure of several dairy and poultry farms has been blamed for the shuttering of up to 37 feed milling companies in Kenya during the past two years, according to Akefema, leading to at least 1,000 job losses.

Elsewhere, the feed manufacturers in Kenya are concerned about the “the mushrooming of the unregulated millers (also known as mill and mix) that are scattered across the country since the barrier of entry into the feed milling business is very low.”

A push for increased regulation

Akefema is calling for regulation of feed raw material suppliers and monitoring of the raw material that they supply “to ensure that they conform to the set standards.” 

“Most of these materials end up in the on-farm mixes and the backyard mixes, which are unregulated, (hence) the regulators should set up a system to closely monitor the quality of feeds in the value chain,” the association said.

For instance, Akefema suggests enhancing regulation capacity through “outsourcing such services using selected and accredited providers from the private sector.”

Akefema also is seeking the intervention of the Kenya Bureau of Standards, a government agency responsible for governing and maintaining the standards and practices of metrology in Kenya, to ensure that all feed manufacturers have valid standardization marks.

Meanwhile, Akefema is urging the government to consider passing regulations to support “short-term support research, development and policy for local production of raw materials for the feed industry.”

Moreover, it is urging the government to undertake a deliberate move to integrate a value chain development program that aims to increase local production of oilseeds, especially sunflower and cotton by at least 100,000 tonnes per year. Akefema said the government should also make the feed manufacturing sector competitive within the East African region by removing all duties and value-added taxes on feed additives and premix ingredients as other countries in the region have done.

But according to the US Department of Agriculture (USDA), Kenya is part of the Eastern Africa region that experiences “extreme droughts, and high fertilizer prices,” therefore there is a need to look for alternative sources of animal feed manufacturing feedstocks such as cereals, soybeans and soybean meal.

The USDA said although there is a demand for low-cost feed ingredients in Kenya, the country’s domestic meat and poultry sector is likely to be under strain due to constraints in feed production due to pressures from climate change and increasing fertilizer prices.