Maize prices put Kenya in a spot over East African Community protocol

Agriculture Cabinet Secretary Felix Koskei chats with Principal Secretary Sicely Kariuki Monday during the Kenya National Farmers Federation annual general meeting in Thogoto, Kikuyu sub county. [Photo: John Karume/Standard]

The Government has been pushed into a tight corner over demands by maize farmers that prices be increased to more than Sh3,500. This puts the implementation of the East African Community (EAC) common market harmonisation strategy in jeopardy.

According to the protocol signed by regional governments, States are discouraged from setting maize prices, but rather allowing market forces to determine the price to enhance competitiveness.

Recently, Agriculture, Livestock and Fisheries Cabinet Secretary Felix Koskei announced the new maize price of Sh2,300 per 90kg bag plus a rebate of Sh500 before Deputy President William Ruto added his voice on the matter.

The announcement has seen the National Cereals and Produce Board open doors to farmers selling the maize. But a section of farmers have protested the move, saying the prices are too low, based on the cost incurred.

Defending the State over accusations of setting prices rather than allowing the market forces to determine them, Koskei said the Government’s role is to protect small-scale farmers from exploitation by middlemen.

He said the announced prices are based on the current market forces and will equally benefit the farmers as they are above the current costs of production. The East African Grain Council  (EAGC) says the protocol demands that states cease setting the prices for commodities but supports initiatives towards enhancing competitiveness in the market.

EAGC Executive Director Gerald Masila in a phone interview said the State ought to communicate to the farmers about the new dynamics in the region. “For the last two years, the issue has been implementation and is aimed at encouraging competitiveness in the region. Governments have been advised to ensure regulation is undertaken well,” said Mr Masila.

New dynamics

He told farmers to know that they no longer produce for Kenya only, but for the entire region and prices ought to be determined by demand and supply. Recently, during a meeting in Eldoret, Deputy President William Ruto told farmers top recognise new dynamics in the region which conform to the spirit of regional integration. Masila advised farmers to use the Warehouse Receipt System and the newly introduced storage technologies, adding that the 10 certified warehouses can store farmers’ produce awaiting high prices in the region market.

Other 10 stores are in the pipeline with a capacity of over 100,000 tonnes each. Koskei said maize production in the country is facing challenges, such as high cost of production and price fluctuation. “As a government, we have duty to protect local farmers against market manipulations by some value players. This is part of the Government’s agenda to stimulate more growth in the agriculture sector,” he added. The Government had announced a price of Sh2,200 but later adjusted it upward by Sh100.

Koskei said the new prices factor in costs in transport, loading and offloading and drying costs. A director with Kenya Farmers Association Kipkorir Menjo accused the State of doing little to lower the costs of production.