Certification Steps, Requirements and Cost Analysis To Becoming A Direct Exporter Of Hass Avocado
AVOCADO: The recent signing of a trade deal between Kenya and China, which will see the country export more hass avocado to the Asian nation, has generated a lot of interest among farmers, who are keen on selling produce in the lucrative export market.
Horticulture export earnings last year rose 33 per cent to clock Sh153 billion, up from Sh115 billion in 2017.
With new deals that have opened the foreign markets, the exports are expected to rise as more farmers join the trade.
For avocados, the country earned Sh10 billion last year and this is even expected to rise after the pact with China, with current production standing at 186,000 metric tonnes per year.
Kenya also exports avocados and other produce like French beans, baby corn and snow peas to the United Arab Emirates, the United Kingdom, Egypt, the Netherlands, France, Saudi Arabia, Belgium, Spain, Qatar, Bahrain, Kuwait, Germany and Hong Kong, with more emerging markets in Malaysia, Singapore and South Korea.
But what does it take a prospective farmer to become a direct horticulture produce exporter?
Before you get clearance to start exporting your produce, you will go through 56 steps that involve shuttling from one government agency to another.
According to Kenya Trade Network (KenTrade), which facilitates export business, an exporter has to get several licences that include food hygiene certificate and pack house inspection report from the Horticultural Crops Directorate (HCD).
One also needs a phytosanitary certificate from Kenya Plant Health Inspectorate Service (Kephis), which also registers exporters.
Export health certificate is sought from Port Health Services (PHS) and clearance of the consignment with Kenya Revenue Authority (KRA) is needed.
KenTrade’s step-by-step guide released recently shows that the 56 steps involve trips to 11 different offices, some over 10 times, like HCD, which issues 11 licences.
To get started, one needs a food hygiene licence issued by PHS at Jomo Kenyatta International Airport or by public health officers in the counties.
This is required by all facilities that process and package products for human consumption, for example pack houses. The document costs Sh2,000 and takes two or three days to process.
ALL THE REQUIREMENTS
The next stop is premise inspection, also done by PHS to ascertain whether a farmer has all the requirements, including a food hygiene licence, valid medical certificates for the personnel of the premises and protective clothing and equipment. This takes a maximum of three hours.
After that, one requests for pack house inspection by the HCD officials, which takes about two hours.
The owner must give a list of produce handling staff, traceability procedure (copy) — which should contain farm codes, produce collection notes and codes, stock records, protective clothing and equipment for personnel handling the produce and packing facility.
HCD must ensure that the pack house is safe, free of waste materials, has adequate ventilation, temperature control, lighting and designed to prevent entry of animals, pests, insects and dust. Tables should be made of stainless steel and easy to clean.
After obtaining the pack house inspection report, the farmer requests the same agency for a farm inspection, where the farm is assessed to check if it has good security, hygiene, grading facility, storage area, plastic crates and pallets, ventilation and a waste disposal facility.
Once cleared, a farmer fills and submits an application for export licence at HCD, a step that requires nine other documents to be attached; including the already obtained reports, business permit, and tax compliance certificate.
A notification for approval should be given before a farmer pays Sh10,000, half of which is export licence fee and a similar amount for advance cess fee, a form of levy imposed on all horticultural crops for export.
One then registers to become an exporter, which is done at Kephis. The application costs Sh15,000, which comprises a deposit for phytosanitary certificates and farm inspection.
Kephis will subsequently carry out an audit, then training on electronic certification system, which can be done physically or on phone, and later they give the farmer an export authorisation letter via mail.
There is then a compulsory three-day training, done by KenTrade, aimed at acquainting the trader with the industry.
For training in Nairobi and Mombasa, one pays Sh10,000, while those trained in regional offices have to fork out Sh18,000.
A farmer will then register his company with the Kenya National TradeNet System (KESWS), where one can transact online and access trade-related procedures and updates.
Another crucial stage is obtaining a European Union (EU) certificate of origin. This is obtained from KRA after submitting an application and then the taxman has to verify the origin of the product at the premises.
Time taken depends on the size of the premise, the complexity of the production process, and the number of products to be verified.
They will then give a registration letter and payment authorisation slip, which one is required to produce while making payment of Sh300 at the bank for issuance of the EU certificate of origin.
Since the original EU certificate of origin must be typed and not handwritten, an entity known as Typesetting Company is mandated to do the typing. It should then be submitted for signing at KRA Forodha House in Nairobi.
The next stage is obtaining export clearance from HCD, which has to test the export samples and issue the trader with an oil content analysis report, and the laboratory analysis and evaluation sheet.
Only after approval can one get an export clearance, which is sent via mail.
One then heads back to Kephis, this time for a phytosanitary certificate. A request for inspection of consignment is placed and once cleared, an application for a phytosanitary certificate is also done, and Sh500 paid for the licence that comes out after an hour.
While the certificate of conformity is not a mandatory requirement, it may be needed by some markets such as the European Union and is therefore issued upon the request of the applicant.
To obtain an export health certificate, one pays Sh1,500 to KenTrade. Afterwards, another consignment inspection is done by PHS.
This paves the way for the final stage of clearance of the consignment. One has to contract a clearing agent at the Kenya International Freight and Warehousing Association (Kifwa), who will be paid 1 per cent of the total value of the goods.
Customs entry is lodged at KRA before payment for airline concession fee of Sh250 at the bank.
A trader then submits the documents for verification, still at the customs shed, followed by physical verification of the consignment.
A pass entry is obtained and documents submitted for perfection.
Finally, a farmer obtains a certificate of export number, which is a confirmation that the export procedure is complete. The exporter can use it to claim VAT from the government where applicable. The certificate is issued to the applicant upon request at a cost of Sh500, otherwise the department only issues the certificate number.
At the end of it all, one ends up with 11 documents namely food hygiene licence, pack house inspection report, farm inspection report, HVD export licence, export authorisation letter, user credentials, authentication EU certificate of origin, export clearance, phytosanitary certificate, export health certificate and certificate of export number.
At the end of it all, you would have parted with Sh40,000 minus the costs of moving from one place to another.
KenTrade chief executive officer Amos Wangora said the 56 steps were necessitated by the stringent regulations on the quality of produce set by the trading partners.
“By the time of signing agreements, these requirements are already set. We, therefore, undertake these steps to comply,” says Mr Wangora.
According to him, the current export steps take about two weeks to complete, unlike before. However, an exporter can take up to three months depending on the nature of the certificate sought.
“Online documentation brings about efficiency and helps us streamline the process. Already, we are relooking at the big number of steps in exporting. We are working as KenTrade in the department of trade with a view to reduce the cost of doing business in the entire supply chain,” says Wangora.
Credit: ANITA CHEPKOECH
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