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Increase import duty – ZNFU

ZAMBIA National Farmers Union (ZNFU) has submitted that Government should increase import duty from five percent to 25 percent on milk to protect the dairy sector from unfair competition and subsidised dairy products.
ZNFU has also proposed that Government should increase resource allocation towards agriculture training, extension and research services if the agriculture sector is to make meaningful contribution to the country’s economy.
In its tax and non-tax proposals for the 2017 budget, ZNFU stated that unfair competition from subsidised products is a threat to the local production and growth of the dairy sector.
“Increasing import duty to 25 percent will offer protection to the sector and create jobs as well as contribute to nutritional security. The measure will increase milk production and collection from Zambian farmers.
“Currently, only 15 percent of milk is collected from local farmers and the rest [more than 385 million litres annually] goes to waste due to lack of milk collection facilities. Government will gain revenue [K14 million] through this proposed tax measure,” it stated.
ZNFU has further submitted that Government zero-rates value added tax (VAT) on 90 horse power tractors and other agricultural machinery to improve the competitiveness and productivity of the sector.
“Initial loss of US$120,000 in VAT will be more than compensated by a revenue gain of US$83.9 million in sales due to increased productivity,” it stated.
It stated that current funding for the Food Reserve Agency and the Farmer Input Support Programme distorts the agricultural budget because the two get over 60 percent of the entire Ministry of Agriculture’s budget.
“There will be no revenue loss as this measure will help improve productivity as well as revamping of agriculture training centres,” it stated.