This archive report was first published on 8 June 2020.
Published on June 8, 2020, Treasury has proposed reducing excise duty remission on sorghum from 80 per cent to 60 per cent, a move that could have far-reaching consequences for farmers.
At least 17,000 farmers contracted by East African Breweries Ltd (EABL) to supply sorghum could lose their livelihoods if the new tax measures are passed.
According to KBL, EABL's subsidiary, the new regulations will lead to an increase in the price of keg beer by Sh10 for every 300ml pint, resulting in a sharp drop in demand for sorghum used as the primary raw material in the brewing of keg.
A group of farmers in Siaya County has petitioned the government to rethink the tax proposals, citing the potential loss of jobs and income for thousands of farmers.
"We are aware that this will lead to a significant increase in the price of keg which will result to low-income consumers moving to illicit liquor in the villages," reads the petition.
"As a direct consequence, the breweries will reduce their demand for sorghum grain required for the production of Senator keg," the petition adds.
The farmers emphasized that youth, who were previously idle, now stare at unemployment and poverty if the tax proposals are implemented.
"Many young people previously without a steady source of income have moved to adapt sorghum farming as an economic activity which has helped them in terms of food security, meeting healthcare costs, cash for basic needs and schooling," the petition asserts.
Linnet Otieno, a farmer who collects grain from over 30 farmer groups and takes it to the brewery, said her job too is at risk.
"When demand drops, people like me will be rendered jobless," she said.
KBL has challenged the proposals, claiming that the tax measures will put over 150,000 jobs at stake.
