Government signals Sh4000 maize with Sh4Bn allocation
The Cabinet approved Kes4 billion to purchase maize from farmers to mitigate price fluctuation which indicates the Kenya Kwanza government is projecting to set prices at Kes4,000. The government says it will set the price on maize this week as one of the country’s top buyers as its seeks to shore up strategic reserves.
Agriculture minister Mithika Linturi had indicated government would buy a million bags of maize which would put the estimated price per bag at Kes4000.
This is despite farmers stating that to break even, the government should set the price of maize at not less than Kes5,500 per 90kg bag. Kenya maize farmers are under pressure to sell their maize at a loss on a market glut caused by duty free imports, and an increase in acreage under the crop in response to the country’s worst period of drought.
Barley months since the country faced a huge shortage that forced authorities to import nearly a million tonnes of maize, Kenya is facing a glut on farmers bumper harvest. Kenya planned to import about 900,000 tonnes of white maize and by the end of June, the ministry reported importation of 259,470 tonnes of maize.
Maize farmers have expressed fears that the entry of cheap maize under the East African Community (EAC) Common Market Protocol ahead of this season’s harvest will destabilise prices and expose them to losses.
Read Also: Cabinet approves duty free yellow maize imports
Brokers in farms
According to the government farmers are projected to record a yield of 44 million bags of maize, each of 90kg, with President William Ruto’s North Rift alone producing 23 million, further aggravating the glut.
Immediate former Principal Secretary, Crops Kello Harsama said the government was aware brokers and middlemen are flocking to farms offering as low as Kes3,500 per 90kg bag of maize.
The situation could get desperate with the state only agreeing to take up a tiny fraction of maize in the market at Kes500 above the brokers rates, on a first come first served basis which is likely to see farmers and importers rush to sell to the National Produce and Cereals Board (NCPB).
With El Nino coming, famers will also be desperate to get their produce to market or risk post-harvest losses further depressing market prices. Despite the governments confidence Kenya will produce more food this year, the trend is likely to take a hit in the next cycle of production if farmers cannot sell above costs.
Farmers are complaining that high fuel prices has pushed up the cost of production and despite state fertilizer subsidies, they are still unable to break even at the current prices.
