Rising food prices heap pain on poor households

Food prices in April continued to rise pushing up the cost of living beyond the reach of most Kenyans. Prices of sukumawiki (kales) and cabbages, which are consumed in most most households, more than doubled as inflation hit a five-year high of 11.48 per cent in the month, according to the latest figures by the Kenya National Bureau of Statistics (KNBS).

Last month, inflation, or the general rise in prices of goods and services, stood at 10.28 per cent. Compared to April, 2016, the cost of sukumawiki and cabbages increased by 63 and 55 per cent respectively as the country grappled with the effects of a debilitating drought that has plunged close to four million Kenyans into near-starvation.

A kilogramme of sukumawiki is now going for Sh62.49 up from Sh38.27 in the same period last year. The same quantity of cabbage has gone up to Sh85.39 up from Sh55.15.

A kilogramme of maize flour (loose), a critical ingredient in Kenya’s staple dish also went up by 35 per cent to retail at Sh56 from Sh41, in a period that consumers received little reprieve. Only onions went down by five per cent with a kilogramme retailing at an average of Sh119 down from Sh132 in the same period last year.

“Between March and April 2017, Food and Non-Alcoholic Drinks’ Index increased by 3.55 per cent. This was mainly attributed to increase in prices of several food items including; Sukuma wiki, spinach, maize flour, milk, potatoes, cabbages, onions and maize grain,” said KNBS in its Consumer Price Indices and Inflation Rates for April 2017.

“The increase in food prices was partly contributed by prevailing drought conditions. The year on year food inflation stood at 20.98 per cent in April 2017,” added the report.

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A kilogramme of sugar went up by 21.61 per cent trading at Sh136, Irish potatoes by 30.93 per cent (Sh100), and Rice Grade 2 by 12.54 per cent to retail at Sh115. Food takes up a huge chunk of poor household’s earnings, with the KNBS giving Food and Non-Alcoholic Beverages a weighted average of 36 per cent after the general prices of food (or food inflation) went up by 3.55 per cent in the period under review.

The rise in prices of foodstuff has in recent times occupied the minds of policymakers with the Cabinet Secretary for National Treasury Henry Rotich in his 2017/2018 budget speech proposing measures to bring down the cost of maize and wheat flour.

“Mr Speaker, ordinary bread and maize flour are VAT exempt, which means they do not benefit from deduction of input tax. Therefore, the input tax is built into their selling price. In order to make these commodities affordable for the common mwananchi, I propose to zero-rate bread and maize flour to remove VAT altogether,” said Mr Rotich warning that should traders fail to comply, the Government would withdraw the incentive.

These regulations have since been gazetted with the price of a two-kilogram maize flour tumbling down from Sh153 to Sh125 in most supermarkets.

Last year, agriculture registered a decelerated growth of 4.4 per cent from a revised growth of 7.2 per cent in 2015. Maize production declined from 42.5 million bags in 2015 to 37.1 million bags in 2016 as both the October/November short rains and March/April long rains failed to impress.

Economists expect things to improve with the upcoming long rains, but there have been fears that even these rains will not be adequate.