Dairy Company Brookside Petitions Gov’t Over Denial of Milk Export Permits to the Kenyan Market

In a petition dated 5^th April 2023 addressed to Hon. Francis Mwebesa, the Uganda’s Minister of Trade, industry and Co-operatives, Mr Benson Mwangi the Brookside Limited Uganda manager who thanked Ugandan government for the support that they have been receiving from Ministry of trade through the facilitation of the local and export trade which has led to a significant growth in the Ugandan Livestock and Dairy Sector, noted that despite Kenya rescinding  the suspension of a ban on Uganda dairy products, Brookside Limited Uganda continues to face a denial of permits from Kenya Dairy Board.

‘’We however wish to bring your attention to a particular challenge that we are currently facing through non-tariff barriers that have been imposed in Kenya by the Kenyan regulator, namely Kenya Dairy Board. Effective 9th March 2023, the Kenyan government, through Kenya Dairy Board, stopped issuing permits for our Dairy products in their Kentrade system, affecting our factory output significantly’’, reads the petition in part.

This is after a notice banning dairy imports, issued by the same regulator (Kenya Dairy Board) was rescinded by the Principal Secretary, State Department for Livestock Development, Ministry of Agriculture and Livestock Development vide his letter dated 14th March 2023 (REF. MLD/IMPORT 1/VOL. 8).

In the petition, also copied to the Dairy Development Authority, Ministry of Finance, Planning & Economic development and Ministry of Agriculture, Animal industry and fisheries ,Mwangi added that despite the 5 consecutive years of drought experienced in the region as reported by IGAD, Uganda milk supplies have played a critical role in the stabilization of the region’s dairy requirements and the enhancement of the region’s food security without having to import dairy products from the rest of the World (Mainly from Europe and New Zealand) as has historically been the case in the period of extended drought in the region.

Mwangi adds that despite rescinding of the suspension by the Principal Secretary, it is apparent that this has been ignored and the permits are still being denied by the same regulator (Kenya Dairy Board). As at the date of this letter, there are 36 permits awaiting approval by the Regulator.

‘’It is on the basis of these sales as well as the potential for growth in local and other markets that this Company has been planning for a UGX 38 Billion investment to finance the refurbishment, upgrade and expansion of our factory facilities in Kampala. This investment is in addition to UGX 226 Billion which the Company has so far invested in the Dairy sector. We believe that this is aligned to your Ministry’s mission of “developing and promoting a competitive and export-led Private Sector through industrial development for economic growth”.

Mwangi revealed that as a Company, they continue working on the expansion of domestic consumption and diversification of their export markets.

‘’We also appreciate the initiative that you have been providing in this area including sourcing for alternative export markets such as Algeria. We are however aware that these are long initiatives which may not replace the Kenyan market in the short term term. in this context and in view of the current uncertainties with the Kenyan regulator, we will have no choice but to put on hold the planned investments in the factory until the situation improves. It is also worth noting that the current situation is likely to result in a significant reduction in our raw milk purchases, depressed raw. Milk prices to the farmers and job losses in addition to other adverse long term effects on the Dairy sector as some of the stakeholders divest from the industry. We are therefore seeking your urgent intervention in unlocking the current blockade from the Kenyan government so that we can restore the normal flow of the Region’s dairy trade’’, said Mwangi.

According to the Dairy Development Authority (DDA) of Uganda, Dairy exports in the country reached a record high of shillings 358.6 billion in the last four years and nearly doubled compared to last FY 2019/20 with dairy equipment valued at shillings 18.9 billion being imported in the country to support the growing trade.

The livelihood of dairy farmers in Uganda depends on both local consumption and export of milk and milk products. According to the National Agricultural Advisory Services (NAADS), dairy farming is a strategic enterprise in Uganda that provides household food security and daily incomes to the large population.

Uganda being a member of the East African Community, there is need for Government intervention in lobbying the Kenyan government to lift the ban on exports from Uganda. This is in line with one of the objectives of the EAC that seeks to progressively transform into a single market that allows for free movement of goods, persons, services, labour and capital.