There is need for policies that will support cross-border trade in grains and cereals and also eradicate barriers affecting the sector, the regional grain council has said.
Gerald Makau Masila, the Eastern African Grain Council (EAGC) executive director, said a supportive legal regime will spur cross-border trade of commodities like rice and help reduce food imports into the Eastern Africa region.
“Governments in the region should recognise the need to protect rice producers and strengthen efforts aimed at making the region self-reliant in rice production and consumption. This will also promote intra- regional trade in the commodity,” he said.
“Rice should be classified as a ‘sensitive’ product whose imports from outside the region should attract an ad-valomen common external tariff (CET) rate of 75 per cent,” Masila said.
Ad-valomen is a levy that should be in proportion to the value of products or concerned transaction.
He was speaking during the regional grain trade business-to-business (B2B) forum in Kigali on Tuesday. The meeting brought together over 100 grain traders and farmers from Eastern Africa and Zambia to discuss policies affecting the region’s grain sector.
The forum was organised by the EAGC in partnership with the East Africa Exchange and the USAID private sector driven agricultural growth project.
Meanwhile, Masila said that cross-border trade in grains and cereals continues to face a number of tariff and non-tariff barriers, saying they contravene the spirit of the regional integration. Other challenges include informal trade, poor quality, high rate imports from mainly Asian countries where over 500,000 tonnes are imported annually, and low output and insufficient trade volumes resulting from small-scale and informal farming practices.
Masila also said the commodity is mainly traded at national level, noting that minimal volumes of rice are traded between EAC and other regional countries.
Speaking at the event, Melanie Bittle, the chief of party of the USAID private sector driven agricultural growth project, called for adoption of improved and modern rice growing methods by smallholder farmers to boost output.
She also said promotion of large-scale farming and increased access to quality inputs by farmers are critical to ensure high production. This will help reduce rice imports and spur exports within the region and meet the growing rice demand, the official said. Africa is expected to account for 40 per cent of the additional 112 million tonnes of the global rice needs by 2040.
Rice processors speak out
Venuste Bakundukize, the executive director of Kinazi Rice Mill in Southern Province, called on government to scrap value added tax (VAT) on milled rice, saying other EAC countries have already removed the levy. He added that the low production capacity in the province was affecting the miller.
“We have the capacity to process 5,000 tonnes annually, but due to low supply we are producing 2,000 tonnes.
“Therefore, there is a need to support farmers and to promote large scale rice growing to increase production to meet market needs,” he said.
He added that the firm is most time forced to source for rice from outside the province due to low supply from area farmers.