TRADE-KENYA: Farmers Ask Germany to Intervene in EPAs

By IPS Correspondents Reprint | | Print |

Joyce Mulama

NAIROBI, Apr 23 2007 (IPS) - Fears are high among Kenyan farmers that a new trade regime following a forthcoming deal between developing countries and the European Union (EU) may drive them deeper into poverty.

The deal, expected to kick in at the beginning of next year, is one of six economic partnership agreements (EPAs) between the EU and the African, Caribbean and Pacific (ACP) countries.

Representatives from several farmers’ organisations from across the country marched on the German embassy in Nairobi, Kenya’s capital, at the end of last week (19 April) calling on the German government to take steps to end the EU’s insistence on unfair trade deals with developing countries. Germany currently chairs the EU.

Farmers and activists also discussed lobbying the government to discourage politicians from signing the EPA. They have described the EPA as unfair and insensitive to the needs of poor nations.

Negotiations on the agreement are currently underway between governments of the ACP countries and the EU. The EPA will replace the Cotonou agreement which ends on December 31 2007.

Signed in Cotonou, Benin, in 2000 the agreement replaced previous deals dating from the 1970s which gave products from ACP countries preferential access to the EU market.

For example, about 97 percent of Kenya’s exports to the EU are entitled to duty free treatment, including horticultural exports which have grown to become the lead foreign exchange earner, according to the ministry of trade and industry.

But under the EPA, these preferences will be removed, and products from ACP countries left to compete with those from nations which have a better competitive and comparative advantage in the production of goods and services.

Kenyan farmers also expressed alarm at the continuing support that the EU gives its own farmers. ‘‘We are concerned that in the event of our country signing the EPA, our products will be faced with increased competition from highly subsidised EU commodities,” according to the Kenya Small-Scale Producers and Allies (KSSPA) organisation.

The farmers added: ‘‘We are also concerned that the free trade concept of the new laws will lead to the flooding of our markets with cheap goods from the EU, and Kenya will not be in a position to apply tariffs to protect its agricultural initiatives as it will have lost the flexibility of doing so (because of the EPA’s conditions).”

In the EU and US farmers receive government support for production which lowers costs. Farmers also benefit from advanced technology. In contrast, farmers from ACP countries receive no subsidies, the cost of production is high and they struggle with poor infrastructure. Archaic technology makes production even more costly.

Farmer Michael Ruchu is a case in point. He decries the state of his farming operations which have deteriorated over the years, following declining prices and world trade rules requiring countries to liberalise their markets.

‘‘The amount of money I use to ensure that my chicken lay quality eggs is much more than what I get from the sale of the eggs. This is because I have to sell my eggs at a throwaway price since I cannot compete with much cheaper eggs from other countries which have flooded the market,” he told IPS.

Ruchu spends about 2,200 US dollars on his 500 chickens every month which is way above the 992 US dollars he gets from the monthly sale of eggs.

KSSPA now wants the government to refuse to sign the EPA unless Kenyans are guaranteed that their market will not be flooded, and that the supply-side constraints (high cost of production) will be addressed to enhance farmers’ competitiveness, among others.

Civil society bodies have thrown their weight behind the farmers and have advised authorities to be cautious about the expected new trade deal. ‘‘We must be guaranteed that the EPA will not wipe us out. The livelihood of farmers and producers must be protected,” remarked Peter Aoga of Econews, a Nairobiûbased organisation dealing with trade issues.

Despite these concerns, the government says signing the EPA is inevitable.

‘‘For Kenya, it is absolutely important that all efforts be made to sign the agreement by the end of 2007. Among the compelling reasons is the fact that the EU remains an important trading partner for Kenyaùboth as a market and as a source of raw material and intermediate products,” according to David Nalo, permanent secretary in the ministry of trade and industry.

Kenya’s exports to the EU market account for 26 percent of the country’s total exports, according to government statistics. Furthermore, over 35 percent of Kenya’s imports from the EU are entering the Kenyan market duty free as raw material, intermediate products or essential finished products, such as medicines.

In addition, the government argues that signing the EPA is crucial to protect massive investments in industries which are producing goods for the EU market. These include cut flowers, pineapple juice and French beans.

Nalo noted that failure to agree to the EPA will put these investments, now estimated at over 700 million US dollars and employing more than one million people, directly and indirectly at risk.

Government revenue will also be jeopardised if the government does not sign the EPA. ‘‘This will have an immediate serious negative implication for government revenue arising from domestic taxes generated from these sectors,” stated Nalo.

But farmers and fair-trade activists in the east African country are not satisfied with the government’s position. They made this clear at the march, which was one of a few which took place across the world.

Fair trade activists and farmers from European and ACP nations marched to German embassies in their respective countries, urging Germany to prevent the EPAs from being adopted as they are unfriendly to developing countries.