Challenges Facing Export of Horticultural Products in Kenya

Risk in changing policies as it relates to the importing of tax and duty free agricultural products

An important part of managing the economic status of a nation is to manage the methods in which goods and services are imported and exported into and out of the country. Because of differing resources, labor costs, and government support of industry, fiscal policy sometimes includes placing a tariff on imported goods in an attempt to level the economic playing field.

One form of protectionism is to place limit on the amount of an incoming product. This is called

As a result, of rising opportunity costs, domestic production may stop short of complete specialization. However, if a large group of people and nations are benefiting from specialization and in international exchange, the government has the power to restrict the free flow of imports or encourage exports. Government can interfere with free trade by protective tariffs, import quotas, nontariff barriers, and export subsidies. Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry. Import tariffs limits on the quantities or total value of specific items that may be imported. Nontariff barriers is a form of restrictive trade where barriers to trade are set up and take a form other than a tariff. While export subsidies is a government policy to encourage export of goods and discourage sale of goods on the domestic market through direct payments, low-cost loans, tax relief for exporters, or government-financed international advertising. In executing barriers against imports, the nations whose exports suffer may retaliate with trade barriers of their own, creating a trade

➢ Tariffs–Tariff is a government tax that is use to protect the domestic companies by inflict on goods and services with the intention of being imported or exported from a country

“the prohibition on quantitative restrictions covers measures which amount to a total or partial restraint of, according to the circumstances, imports, exports, or goods in transit”

Understanding the purpose and framework of taxes, assist with the understanding of the Tariff and quotas. Tariff is a tax placed on import goods by the government. Nevertheless, when one thinks about additional dollars added to the retail price of a good or service, it may be discouraging. Especially, since there is an abundance of services and goods desired by consumers- with so many wants, our resources are scarce. Meanwhile, there is a constant debate concerning the effects of tariff that are placed on imports and exports. Economist and scholars believe high taxes on imports and exports can hurt the economy. Indeed, there are advantages and disadvantages concerning the Tariff .

The policies that were developed in Western Europe took different forms. For example, domestically, governments would provide capital to new industries, exempt new industries from rules and taxes, establish monopolies over local and colonial markets, and grant titles and pensions to successful producers (LaHaye, n.d.). Then, the government would assist local industry by imposing tariffs, quotas, and prohibitions on imports of goods that competed with local manufacturers (LaHaye, n.d.). A tariff is a tax on imports, while a quota is a legal restriction on the amount of a good coming into the country (Guell, p. 204).

Another tool that can be implemented to control foreign trade is the quota. This simply means setting a hard limit on the amount of a certain good allowed into the country. However, a quota is usually seen as inferior to a tariff because of the potential government revenue that can be obtained through taxation. Quotas also force the government to make decisions about what products consumers will be able to obtain. This can lead to corruption – which of the goods in question will get import licenses, and why? Quotas also encourage smuggling and, if used recklessly in a specialized economy, can result in a shortage of a certain good. [4] Despite this, import quotas are still a valuable economic policy that is used today for much the same reason as tariffs. Tariffs simply can't

One problem that trade barriers have caused is that they increase the cost of enterprises, affecting the international competitiveness of enterprises. For a long time, due to the low technological content of Chinese export products, mainly to win international markets at low prices, the developed countries have adopted some ways, such as the green subsidy system, the green packaging system, the green fortress and so on. By imposing import surcharges, increasing the cost of

Managing the how goods and services enter or leave this country (import/export) is an important process that allows for us to control the economic status of our nation. Sometimes imposing tariffs on the goods imported balances our labor cost, resources and government supported industry. A tariff by definition is a tax or duty to be paid on a particular class of imports or exports.

Its antithesis is the protectionism policy, used by governments to protect domestic products, limiting the entry of foreign products causing them to be more expensive through custom duties.

The industry in which Zespri functions in within New Zealand can be broken up into three broad value generating activities. The first activity is growing of kiwifruit which pertains to the orchards and includes pest and disease control and harvesting. The second includes the post harvesting activities including grading, packing and storing. The final stage and perhaps the most intrinsic stage includes the exporting.This includes the selling and distribution of the kiwifruit to overseas markets. Zespri International group is responsible for marketing almost all the export quality fruit from New Zeland. The only exclusion being the Austrailian Market.

Governments intervene in international trade through use of tariffs that are levied on both imports and exports. The government may either impose fixed tariffs that are calculated per unit of the import commodity or the ad valorem tariff that is calculated as a fixed percentage of the monetary value of the imported commodity. The government imposes high import tariffs in order to control the rate of imports by making the imports more expensive in comparison to the domestically produced substitutes. The tariffs increase the prices of goods and services thus reducing the quantity demanded (Misra and Yadav 2009). The use of tariffs is detrimental to international trade since it lowers competition and results in high prices of commodities in the markets. The tariffs discourage imports and domestic producers benefit from the higher prices and reduction in competition. The EU uses variable

(i)Tax penalties or legal punishments to limit the production or consumption of a good. e.g. outlawing pollution