Farmers on leased land feel pinch of low maize prices

Eric Kiprono keeps vigil at his maize plantation in Kapsiekwa village, Elgeyo Marakwet. [Kevin Tunoi, Standard]

Smallholder farmers who planted maize on rented land suffered the steepest losses as the price of the grain plummeted.

A study by agricultural policy and development think tank Tegemeo Institute shows that farmers might have had to sell a 90-kilogramme bag of maize at the prevailing price of Sh1,250 after sinking Sh1,866 per bag on rent, labour, fertiliser, seeds and machinery.

“Often, those who rent land to plant maize sell it as soon as they harvest since they do not have a place to store,” said Timothy Njagi, a research fellow at Tegemeo.

The institute based at Egerton University assessed the cost of Irish potatoes, rice and maize between March and August 2018. Four counties - Nyandarua, Nakuru, Uasin Gishu and Trans Nzoia - were assessed in the study.

The market price of Sh1,250 was for the month of September.

Although renting of land is not as popular with majority of smallholder farmers, Mr Njagi said there were those who still rent land of small acreage.

“There are a few people who rent land of less than five acres,” said Njagi.

It was worse for those who rented land in Trans Nzoia where, besides rent fee, farmers spent on average Sh2,161 for seeds, fertiliser, herbicides, labour and machinery.

The maize market is currently experiencing a glut, with the grain rotting in silos as farmers have nowhere to sell it.

Besides the availability of cheaper and better quality maize from the domestic market, there is a huge stock of grain that was imported from Mexico, South Africa and Uganda.

Overall, production per bag for a smallholder farmer was Sh1,366.

A smallholder farmer in Nakuru spent the least per bag of maize at Sh1,219. Production cost in Trans Nzoia was Sh1,572 while their counterpart in Uasin Gishu spent Sh1,527.

Even large-scale farmers who enjoy economies of scale would have lost out had they sold to the market in September at the prevailing price.

On average, commercial farmers’ production cost per bag was Sh1,360.