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Why duty-free maize imports hit farmers

By Dominic Omondi | Published Fri, August 31st 2018 at 00:00, Updated August 30th 2018 at 22:45 GMT +3
Maize flour on display at Naivas Supermarket along Moi Avenue. [Wilberforce Okwiri/Standard]

The Kenya National Bureau of Statistics Economic Survey released in 2017 showed production of maize decreased in 2016 due to lower volume of rainfall, high costs of farm inputs and disease.

Maize production reduced from 42.5 million bags in 2015 to 37.1 million bags in 2016. The value of marketed maize declined by 7.2 per cent, to Sh7.9 billion.

While the value of marketed rice and wheat also went down, their poor performances were quickly compensated with imports.

But maize imports declined from 480,100 tonnes in 2015 to 148,600 tonnes in 2016.

There was no maize in Tanzania and Uganda, from where Kenya plugs its deficit, also due to drought.

Kenya’s remaining option was to import, particularly from Mexico, the largest producer of white maize.

The maize was subjected to a 50 per cent duty to protect local farmers. However, as the crisis worsened the Government exempted the commodity from tax.

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Millers had asked former Agriculture CS Willy Bett to allow importation of duty-free yellow maize to be used as animal feeds, thereby easing pressure on white maize.

Initially, Mr Bett declined the request, but on March 30, 2017, Treasury CS Henry Rotich removed the 50 per cent duty on imported white maize.

He also zero-rated inputs used in the manufacture of maize and wheat flour.

Bett released a million bags from the Strategic Grain Reserve to be sold to millers at Sh3,000 instead of Sh4,500 a bag. Millers were also allowed to import maize from Mexico.

Until then, millers would get about one million bags from the grain reserve and another stock from Ethiopia.

Rotich and Bett said all these actions would see the price of a two-kilogramme packet of maize flour go down to Sh115 from Sh155. Weeks later, the price fell to Sh90.

The Opposition had started to rally around the politics of unga, with claims that some Kenyans were sleeping with their stock, a panga within reach to protect the flour. The Government was under pressure to ease the shortage.

Farmers were the biggest losers. The Government said it had temporarily lifted import duty to protect farmers. It took the decision to alleviate the suffering of consumers.

Another concern was that duty-free imports were allowed without determining the extent of the deficit.

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