KENYA – Farmers are fretting over the middlemen who have flocked to the Rift Valley to buy maize at rock bottom prices in the absence of the National Cereals and Produce Board (NCPB).
The growers want the Treasury to allocate the board funds for maize purchase that will offer the agency the muscle to regulate the prices of the grain, which has dropped to Sh2,000 down from Sh3,800 in May on increased supply. Rift Valley – Kenya’s grain basket – has started harvesting maize and millers expect the prices to fall further on increased supply.
The NCPB is yet to receive funds from the Treasury and the directors of the board, which includes permanent secretaries in four ministries, have also not announced prices at which the State would buy the produce this year.
This is opening the way for the middlemen to influence the maize market prices at a time when increased imports from the East African region are putting pressure on prices.
“The NCPB sets market bench marks by offering competitive prices and the delay in allocating it funds is exposing us to exploitation by middlemen,” said Willy Lagat, a farmer from Chepkumia, Nandi.
The government allocated Sh3.4 billion last season to NCPB to buy maize and the board has for the past two years set a price of Sh3,000 for a 90-kilogramme bag of the grain.
“We are currently waiting for the instructions from the trustees of the Strategic Grain Reserve before we start buying maize,” said the NCPB managing director Newton Terer, adding that the board is yet to receive cash from Treasury.
The government reckons that it will arrive at a price after an assessment of demand and supply. “The ministry will have a meeting to look at the market dynamics before coming up with the price that we shall pay farmers for a bag of maize,” said Agriculture secretary Felix Koskei.
Harvesting of the short-rains crop started last month in Bomet and Narok and it is expected to add three million bags to the granary between now and November while long-rain harvest has started in the North Rift, Kenya’s bread basket.
But while the lower prices look set to hurt farmers, they will be a boon to consumers who are currently faced with record inflation levels.
Inflation hit a 25-month high of 8.36 per cent in August from 7.67 per cent in July on rising food, electricity and transport prices, breaching the Treasury target of between 3.5 and 7.5 per cent.
Maize prices have a big effect on inflation given that it accounts for a significant share of poor households’ budget. Flour prices stood at Sh118 in May the two-kilogramme packet and is currently retailing at Sh110.