Relief as State prepares to buy three million bags of maize from farmers

Rael Khamala a casual workers selects good maize from those that were affected by Maize Lethal Necrosis Disease (MLND) at Moi's Bridge area in Uasin Gishu County. [PHOTOS BY: KEVIN TUNO/STANDARD]

Kenya: The Government is preparing to start buying maize from farmers to boost the national Strategic Grain Reserve (SGR).

The Ministry of Agriculture, Livestock and Fisheries said National Cereals and Produce Board (NCPB) has been mandated to release maize stocks from traditional intake depots in North Rift and Western to stores in areas facing a deficit.

Agriculture Principal Secretary Sicily Kariuki said 939,450 bags are being transferred to create storage space and the drying equipment is also ready at Moi’s Bridge and Eldoret. She said in a statement to the media yesterday that SGR maize stocks as at November 28 this year stood at 2.68 million 90-kilogrammes bags.

At any given time the national grain reserves are supposed to have at least 4 million bags to cushion against food storage. “Government allocated Sh2.7 billion in the current financial year to finance maize procurement from the farmers currently harvesting in North Rift in order to boost the national grain reserve,” said Ms Kariuki.

The Government is yet to release the prices of this year’s crop though based on last year prices of Sh3,000 per bag, the budgetary allocation could be enough to procure about three million bags.

The Government’s decision to release more maize into the local market follows claims by a section of industry stakeholders that Government had closed down the NCPB depots and was allowing private millers to control the market through imports at the expense of small-scale farmers. 

“NCPB should continue with the transfer of maize to decongest depots in the North Rift in order to create room for fresh purchases. SGR maize prices shall be determined by the SGR Trustees and the announcement made immediately. Moving forward, a policy shall be put in place for determining seasonal maize prices based on cost of production plus an agreed mark-up,” she explained.

Buying centres

Kariuki added that the national government has advised counties to establish buying centres near the farmers to minimise transportation costs for them and also lock out the brokers. Kariuki confirmed that last month the Government held meetings with governors of the major maize-producing areas. A top official of the National Cereals and Produce Board said last month the agency was waiting for a Government order before it starts buying maize.

Kariuki dismissed media reports that Government has been importing maize from the neighbouring countries at the expense of local farmers.

However, she defended the imports into the local market saying the regional market operates under the Free Trade Area (FTA) framework.  Under the arrangement, Kariuki said, Kenya has no control over movement of trading commodities, including important food staples like maize. This, she added, resulted in an influx of maize across the border, largely from Tanzania and Uganda.

 

“Traders, millers and brokers have taken advantage of this and have purchased large quantities of maize, highly boosting their stocks in anticipation that prices will increase once the Government through NCPB starts purchasing stocks for the Strategic Grain Reserve,” she added.

Between June 2014 and end of October 2014, a total of 4,166,637 were imported into the country by traders from Tanzania and Uganda through the  EAC Common market protocol. Kariuki observed that owing to low maize supply in the market between May and August 2014, maize prices skyrocketed to a high of Sh3,400 per 90 kg bag, resulting in high food prices, especially maize flour, whose price had increased to Sh120 per 2 kg packet.

Balance sheet

The projection and three months’ maize balance sheet (June, July and August) by end of August 2014, was a meagre surplus of 81,989 bags.  This was not adequate considering the country’s per capita consumption of about 3.3 million bags per month.

Maize meal is a staple in Kenya, which produces 25,000 tonnes of maize seed annually against a demand of 35,000 tonnes.