The introduction of the Horticultural Crops Authority Bill, 2024 (the HCA Bill) in Kenya sets up a new regime for stakeholders in the horticultural industry. The HCA Bill, however, is yet to be introduced in Parliament. The HCA Bill is a targeted legal framework that would have a great impact on the entire chain of the industry – from production to the end user, aimed at accelerating the growth and development of the horticulture industry. The HCA Bill, if passed, will apply to any horticultural produce or product grown, processed or marketed in Kenya and imported to or exported from Kenya and any farm (whether communally or privately held).
The horticulture sector in Kenya is regulated by several laws such as the Crops Act; the Crops (Horticultural Crops) Regulations; the Kenya Plant Health Inspectorate Service Act; the Food, Drugs and Chemical Substances Act; the Agriculture and Food Authority Act; the Standards Act and the Seed and Plant Varieties Act. The Agriculture and Food Authority–Horticultural Crops Directorate (AFA-HCD) is responsible for regulating the production, processing, and marketing of horticultural crops. There also exists the non-binding National Horticulture Code of Practice established by the Kenya Bureau of Standards (KEBS) to set standards that should be adhered to. As such, the horticultural sector is a hybrid of both self-regulation and government regulation systems. The question that arises from the introduction of the HCA Bill is whether the new law will incentivise the market or create bottlenecks for all stakeholders.
We highlight below some of the key provisions of the HCA Bill:Â
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Key Provisions
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Description
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Establishment of the Horticultural Crops Authority
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The HCA Bill proposes the establishment of the Horticultural Crops Authority (the Authority) which will have a Board of Directors responsible for various regulatory functions.
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Functions of the Board
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- Issuance of export licenses, import licenses and processor licenses;
- Regulation of growers, dealers and horticultural produce;
- Establishment and enforcement of standards for traceability, labelling, packaging, grading, transportation and storage of horticultural produce; and
- Advise on levies, fees and import or export duties related to the horticultural industry.
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Roles of county governments
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The HCA Bill proposes to empower county governments:
- To formulate policies relating to horticulture;
- Map and align horticulture projects and programmes to existing government policies;
- Enforce national standards on food safety, production, handling and marketing of horticultural products;
- Build the capacity of stakeholders such as growers, grower associations and other value chain actors on matters relating to horticulture.
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National Horticulture Standards
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KEBS, in consultation with the Authority, will formulate and register National Horticulture Standards to ensure food safety and consistency.
It is unclear what the standards will be and the implication of the same on the current stakeholders, such as growers or breeders, in the sector.
Every flower grower and dealer in flowers shall be expected to adhere to sustainable environmental, and water conservation practices and to safeguard the social welfare of workers.
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Quality control inspectors
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Inspectors will be introduced for quality control purposes, inspecting horticultural produce before it reaches the market.
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Use of pesticides and fertilizers
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Use will be regulated by standards established under the National Horticulture Standards.
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Licensing and registration
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The HCA Bill provides for the licensing and registration of stakeholders, including export, import, and processor licenses for export.Â
The Authority is responsible for issuing licenses for the export, import, and processing of horticultural produce.Â
A person must be licensed by the Authority to process, import, or export horticultural produce. Licenses will be valid from 1 July to 30 June of the following year.
County governments are responsible for licensing the processing of horticultural produce for local trade.Â
Dealers must be registered by the Authority or county governments, and commercial growers must be registered (free of charge) by the respective county government.Â
Packing, processing, and storage facilities will also need to be registered and licensed by the Authority or county government.Â
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Penalty for Non-compliance
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Non-compliance with licensing requirements may result in a fine of up to two million Kenya Shillings, three years imprisonment, or both.
The HCA Bill also proposes a general penalty of a fine not exceeding two hundred thousand shillings, imprisonment for a term not exceeding six months, or both; for any offence within the Act where a penalty is not prescribed.
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Production licensing
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Local trade production of horticultural produce will require a license from the respective county governments.
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Registration and licensing of premises
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Premises for packaging, processing, and storage of horticultural produce must be registered.
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Compliance with food safety and standards
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The Bill emphasises the importance of food safety and quality assurance. Dealers must ensure that horticultural produce conforms to quality standards, and the Authority or county government will issue compliance certificates. Â
The Authority will monitor compliance with food safety standards for exports and imports. Dealers and growers must handle, grade, package, transport, and store produce in a manner that prevents contamination.Â
The Authority may conduct inspections, surveillance, and sampling to ensure compliance with quality and food safety standards.
The use of pesticides and fertilizers must comply with National Horticulture Standards, and organic production must adhere to regional and international standards.Â
The Authority will certify organic produce and ensure traceability of produce through a national horticulture traceability system.Â
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Use of inputs in horticultural farming
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All inputs must come from registered sources.
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Imposition of levies and cess
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The Cabinet Secretary in charge of Agriculture may impose a levy to be known as the horticultural crops levy on horticultural exports and imports. The levies will be charged as follows:
- The export levy shall be charged at one-half per centum on the free-on-board value of any horticultural produce or product other than the canned, bottled, preserved, dehydrated, or delivered to operators for canning and processing factories;
- The import levy shall be charged at the rate of four per cent of the free-on-board value of a horticultural product imported as a finished product; and
- Import levy charged at the rate of two per cent of the free-on-board value of a horticultural product imported as fresh produce.
A county government may impose cess for:
- the development of horticultural crops within the county; and
- the development and regulation of horticultural market infrastructure.
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While the objectives of the HCA Bill are outlined as the enhancement of productivity, the acceleration of growth and the development of the horticultural industry, some may find this law as an addition to an existing framework of laws that may inhibit growth and investment in an already difficult operating economy.
On the other hand, the HCA Bill is also emphatic on key aspects of food safety and quality assurance.
We will monitor the progress of the HCA Bill and assess the potential impact of its provisions and proposals.
