Although produce cess, market levies, brokers’ fees and informal levies constitute lower proportions of the total distribution cost of the agricultural products, their effects would not be any different from those of transport cost.

Unlike transport cost, market levies and cess may be open to abuse and evasion, which may make collection expensive. High brokers’ fees and informal levies, on the other hand, could drive traders out of the market.

Transport is the highest cost of distribution and marketing in all products except fish.

Maize being staple food for Kenya, any slight change in cost of production harms consumers, who bear the additional tax burden.

They cannot sustain their operation if the only source of revenue was from their own revenue.

Notably though, Nairobi and Mombasa relied substantially on locally generated revenues, accounting for about 55% and 47% respectively, of total annual revenues, supported mainly by their established industrial and service sectors.

Analysis of some of the counties’ local revenue streams, for FY 2015/16, revealed that agricultural Produce Cess contribution to local revenue streams varied widely across counties, ranging between 2 – 23%, for the sampled counties.

A review of County Finance Acts show wide disparities in the way counties charge produce cess on same agricultural commodities across various counties. For instance in Mombasa, onions cess is charged per ton of truck carrying onions rather than per unit (net or bag) as applies in other counties.

Produce cess and market levies are not the most important revenue sources for most counties so they can be reduced without a significant reduction in revenue.