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Kenya again blocks milk from Uganda

The Ugandan government risks losing Sh10 billion a year if the standoff with neighbouring Kenya over milk exports is not resolved, a senior official at Brookside Dairy Limited has warned.

“Since March last year, we have applied for export permits 114 times and they are not granted, suspended or delayed,” said Benson Mwangi, managing director of the dairy processing company’s Kampala branch. Sunday monitor.

He added: “I cannot imagine the impact on the milk and dairy value chain as a result of us being denied export permits. People who supply packaging materials, our regular transporters and even farmers are suffering losses, if not shortages of income, due to this situation.”

The dairy sector, according to President Museveni, has the potential to supply 5.3 billion liters annually.

The company that processes and packages milk powder, long-life milk, cream, butter, yogurt and ghee for a primarily export market, has not only been operating below 50 percent of its production capacity, but has also left more than 200 employees without jobs. Brookside Dairy Limited has been forced to concentrate on a domestic Ugandan market that achieves a daily consumption of no more than 300,000 liters.

“Our production is at a minimum level if this matter is not resolved, milk production could be affected, permanently disenfranchising a fairly well-established milk value chain,” Mwangi said.

The issue arose during a recent bilateral meeting between President Museveni of Uganda and his Kenyan counterpart, William Ruto.

President Museveni meets with his Kenyan counterpart William Ruto (center) and Kenyan opposition figure Raila Odinga during his visit to the Kisozi farm in Uganda on February 26, 2024. PHOTO/PPU

The milk sector, according to President Museveni, has the potential to supply 5.3 billion liters annually.

While a joint statement issued after the mid-May meeting made clear efforts to fully respect and implement the East African Community’s (EAC) customs union and common market protocols, Brookside said nothing tangible has been felt for his part.

However, the statement ordered that there should be no more quotas for goods originating from EAC member states, such as poultry and poultry products, dairy and milk products, cereals, sugar, juices, pishori rice and furniture.

“The Kenya Dairy Board has still denied us export permits for our milk powder and long life/UHT milk,” Mr Mwangi revealed.

Kenya has been the largest buyer of Ugandan dairy products, although trade relations have not been consistent due to several barriers. This led Uganda to seek new markets for its milk and dairy products.

On March 6 last year, the Kenya Dairy Board stated that the Kenyan government had stopped the import of milk powder to protect the industry from surplus production and low producer prices. This announcement directly reinstated the 2021 ban on the import of Ugandan dairy products into Kenya, which went against Kenyan President Ruto’s directive to lift the ban on Ugandan agricultural products such as milk, eggs and chicken.

The Uganda Dairy Development Authority (DDA), following complaints from some exporters and producers, said Kenyan authorities were limiting the number of milk powder export permits from the country.

In March, Kenya imposed a ban on milk powder from Uganda, claiming it was to protect local producers, but lifted the ban a couple of weeks later.

When contacted last week, Dr Julius Byaruhanga, director of policy and advocacy at the Private Sector Foundation of Uganda (PSFU), said: “This issue is not new. This disturbance has been going on for some time. Last time I checked, Brookside had been denied over 80 export permits, something we don’t think is normal.”

And he added: “However, the commitment at the level of the presidency continues and we need this matter to be resolved once and for all. For our part, we will continue to collaborate because we oppose any form of non-tariff barriers.”

Although the EAC Common Market guarantees the free movement of goods and services, Kenya, according to the Uganda Manufacturers Association (UMA), has completely ignored the commitments of the EAC Common Market and has often unreasonably banned entry of Ugandan products to the neighboring country.

According to the UMA, Kenya always questions the origin of Ugandan products, even those with valid certificates of origin, making it difficult to access the lucrative Kenyan market.

This adds to what the UMA called “baseless claims” that Ugandan products are counterfeit. The products, the UMA added, have certified Q marks issued by the Uganda National Bureau of Standards, which must be respected throughout the region.

Furthermore, claims are rife that goods from Uganda are smuggled into Kenya and thereby evading taxes. The application of arbitrary permits that dilute the very essence of the EAC Common Market through unilateral restrictions against goods originating in Uganda and structured and institutionalized harassment of Kenyan traders and trade in goods originating in Uganda, according to the UMA, does not It has helped nothing. The association further denounces that this has been done in order to discourage trade in products manufactured in Uganda, especially poultry, milk and sugar products, among others.

According to Samson Akankiza Mpiira, CEO of DDA, the dairy value chain is one of the most dynamic sectors in Uganda. It is, he added, fundamental for the development of the rural economy and the transformation of households.

“This is due to its role in people’s nutrition, income and job security. It is a priority sector in the Agroindustrialization and “real economy” agenda and in Vision 2040,” he stated.

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