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Pakistan rice imports frustrate farmers

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Pakistan rice imports frustrate farmers

Pakistan rice imports frustrate farmers
April 28
08:12 2015

IN Kilombero District, hundreds of kilometres from East African Community headquarters in Arusha, smallholder rice farmers are still struggling to sell their rice from 2012/13 season.

“Prices are still very low but have slightly appreciated from 600/- to 750/- a kilogramme on average,” said Ms Christina Magwila.

The mother of four said prices plummeted by more than 50 per cent last year when Kilombero Plantation Limited, the single largest client of her rice, failed to buy the commodity from over 5,000 smallholder farmers due to saturated local market.

“I sold my rice at a loss because I needed school fees for my two secondary school girls and their primary school sibling,” said Ms Magwila who like many other smallholder rice farmers in the country, is struggling to absorb the huge loss caused.

KPL Chief Executive Officer, Mr Carter Coleman said his company posted a whopping 4bn/- loss as a result of the Pakistan rice imports in 2013 and a similar amount due to a 25 per cent price fall caused by a bumper harvest in 2013/14 season.

“Some 40,000 tonnes of cheap Pakistani rice that was exempt from the Common External Tariff of the East African Community was imported, dropping the wholesale price by 54 per cent and impoverishing hundreds of thousands of rice smallholders,” Mr Coleman said while responding in an interview.

The government had initially issued permits for the importation of 120,000 tonnes of rice to offset an alleged shortage in the local market but suspended the imports in March last year after an outcry by commercial and smallholder rice farmers.

KPL still had 1,000 tonnes of rice from the 2012 season and another 5,000 tonnes from 2013 season which could not be sold at a profitable price due to the cheap imports by mid last year.

Local rice producers further faced problems to export the grain to Rwanda and Uganda because crooked traders blended local rice with Pakistan imports forcing governments of the two countries to slap a 75 per cent import duty. Coleman is angry with Ugandan authorities for continuing to impose the 75 per cent duty on Tanzanian rice exports contrary to EAC’s Customs Union Protocol.

“There is no substantial Pakistani rice in Tanzania, please get your government to lift the tariff on our rice as you are bankrupting Tanzanian farmers,” said Coleman in an emotional message directed at former Ugandan Ambassador to China, Philip Idro.

In his response, Ambassador Idro argued that so long as local rice was blended with Pakistan rice, it will continue attracting hiked duty because it violates the rules of origin as per EAC Customs Protocol. “This means that we have to do our part and that is why Uganda is going ahead to hold onto the 75 per cent tax, even if alone,” Ambassador Idro stressed.

He warned that local rice producers who create jobs and add value to the economy should regularly update policy makers on the disaster which imported rice is causing on the EAC region’s economies.

But the jinx of Pakistan rice imports does not only seem to haunt local farmers, but also their peers in Kenya where the government has a bilateral agreement with Pakistan to swap tea and rice trading.

Last week, a delegation of East African Farmers Federation led by its President Philip Kiriro, visited East Africa Cooperation Minister, Dr Harrison Mwakyembe and raised the issue of Pakistan rice imports frustrating regional trade. EAFF Chief Executive Officer, Stephen Muchiri said Kenyan rice farmers are failing to exploit the EAC Customs Union Protocol because their commodity to Rwanda and Uganda is slapped with a 75 percent duty.

“You know Kenya has a trade agreement with Pakistan whereby they buy tea while we import their rice. Unscrupulous businessmen are mixing the Pakistan rice with local rice in Kenya which has attracted a 75 per cent import duty in Uganda and Rwanda,” Mr Muchiri said.

“I understand this problem has also affected rice farmers here, I hope that you as Chairman of the Council of Ministers can help us address this,” he pointed out saying EAFF is working with United States Agency for International Development in assisting farmers acquire skills, identify markets and observe quality and standards.

Currently after investing heavily in rice production, local farmers produce over 1.2 million metric tons of the commodity against annual demand of less than one million tonnes.

Responding to the EAFF delegation’s request, Dr Mwakyembe said he will raise the matter with his peers during the next Council of Ministers meeting scheduled for Thursday, April 3. “Much of this rice is smuggled into our region, we should find a solution against this,” said Dr Mwakyembe.

He pointed out that EAC’s biggest trading prowess lies in agriculture produce which involves the majority of people in the region hence the need to protect the market for such commodities. Dr Mwakyembe invited EAFF officials to make their presentation before an EAC Council of Ministers which will thereafter deliberate on the matter.

Earlier this year, EAC Finance Ministers agreed a 35 per cent Common External Tariff (CET) on imported rice for the region, a move which has strongly been opposed by rice farmers and former Minister for Agriculture, Food Security and Cooperatives Minister, Christopher Chiza.

“I was not consulted on this issue which is detrimental to our farmers,” Engineer Chiza said promising to strongly oppose the attempt. He said Kenya which includes Pakistan rice on its list of sensitive products, imposes a 35 per cent duty hence wants the whole block to adopt the rate.

“My fear is that Kenyan rice imports with a lower rate will continue be smuggled into Tanzania,” Eng Chiza who has since been shifted to Prime Minister’s Office, warned. Finance Minister, Saada Mkuya Salum said the CET is negotiable and can be hiked by individual countries if need arises to curb cheap imports.

Report as published on the Daily News Tuesday, 28 April 2015 01:15Written by FINNIGAN WA SIMBEYE

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Levis Paul

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