The Kenya National Chamber of Commerce and Industry (KNCCI) has recently raised significant concerns regarding proposed increases in phytosanitary service fees by the Kenya Plant Health Inspectorate Service (KEPHIS), scheduled to come into effect on July 15th. KNCCI represents a diverse array of businesses, particularly in agriculture, highlighting KEPHIS’s crucial role in facilitating Kenyan exports and ensuring biodiversity protection through stringent quality control measures.
The chamber has voiced strong objections to the steep fee hikes, particularly citing a staggering 337% increase in charges for phytosanitary inspection and certification of fresh produce. This would escalate costs from the current 15 cents per kilogram plus a fixed fee of Ksh 500 for certification to 50 cents per kilogram plus the same certification fee. KNCCI argues that such a substantial rise will pose a severe financial burden on businesses, potentially undermining Kenya’s competitiveness in international markets.
Moreover, KNCCI underscores the detrimental impact of these increases on micro, small, and medium enterprises (MSMEs), which form the backbone of Kenya’s agricultural sector, contributing significantly to the national GDP and employment. Smallholder farmers, who produce a substantial majority of Kenya’s agricultural output, are particularly vulnerable to these heightened costs, which could jeopardize their livelihoods and the sustainability of their operations.
The chamber has also questioned the rationale behind the fee escalation, pointing out a lack of transparency regarding how the additional revenue will be utilized to enhance phytosanitary services. KNCCI advocates for a more inclusive approach, urging for the suspension of the new fees pending comprehensive stakeholder consultations. They propose reinstating and refining a tiered fee structure that considers the volume of trade, which they believe would provide a fairer framework aligned with business realities.
In response to these developments, industry leaders such as Clement Tulezi of the Kenya Flower Council (KFC) and Hosea Machuki of the Fresh Produce Exporters Association of Kenya (FPEAK) have expressed solidarity with KNCCI’s concerns. They emphasize the need for a conducive business environment that supports growth and competitiveness in Kenya’s horticultural and agricultural sectors.
In summary, KNCCI advocates for a collaborative approach between stakeholders to find a balanced solution that upholds regulatory standards while safeguarding the economic interests of businesses and farmers across Kenya.