RIU Tanzania welcomes changes to support the poultry sector
21 June 2010

The current session of the Tanzania parliament has just passed a ruling to ensure that poultry feeds will in future be exempt from VAT and also waiving the import taxes on incubators and hatchery equipment.

RIU Tanzania coordinator Vera Mugittu said:

"We have been working with the Ministry of Livestock to help them to appreciate the potential impact of these tax changes for poultry producers.

This is a huge success and is a big win for the poultry sector which RIU Tanzania is working hard to support. We would like to thank the Tanzanian Government for making this change possible."

Vera continued:

"The biggest challenge now is for the government to follow up and make sure that prices of feeds actually go down. This is important because if this does not happen the waiving of VAT will only benefit the feed suppliers and not farmers and consumers."

The RIU Tanzania team had a brief though intense period of activity to provide the information and advice required by the ministry. However, there was a fear that the government required more time to look into the financial implications of the proposed changes. This would have meant that the timetable would have slipped back at least a year. Fortunately this did not prove to be the case.

A short film on RIUtv shows the way that RIU Tanzania is working to develop indigenous poultry businesses in the Coastal Region and a section of the website is dedicated to the poultry innovation platform.

The following quotes show the reaction along the value chain in this important RIU Tanzania pilot programme:

Hatchery owner Noah Kavishe said:

"Waving import taxes for incubators and feeds will lower production costs at hatchery level.

Modern hatching technologies will now be more affordable by local hatchery owners and entrepreneurs encouraging more investment in the poultry sector.

Costs of operating breeder farms (parent stock) will significantly go down because the major input - feeds - will now be available at cheaper prices. This will also benefit smallholder farmers as the cost of a day-old chick will remain steady or possibly go down."

Hatchery owner and entrepreneur Mtaita Mchome said:

"More local entrepreneurs with limited capital can now enter into feed production. This will increase availability of feeds at the local level (district and ward), creating more competition and lowering prices."

Farmer Ms Maimuna Mkongea said:

"Our main challenge in poultry rearing is availability of feeds at affordable prices. The recent VAT exemption will result into lower prices for feeds, making it more affordable by smallholder farmers, therefore reducing our production costs."