State stares at Sh5B loss as it starts to sell maize in NCPB silos

Agriculture CS Mwangi Kiunjuri (L) with his Agricultural Research PS Prof. Hamadi Boga and NCPB MD.Albin Sang when they appeared before the Senate Ad-hoc Committee on Maize. [Boniface Okendo/Standard]

The Government is set to make a Sh5.15 billion loss when in starts selling maize held in State silos.

Agriculture Cabinet Secretary Mwangi Kiunjuri, yesterday told the Senate ad hoc committee on the maize crisis that the Government would, in the next three weeks, start selling 3.6 million bags.

When this was done, he said, the State would start buying freshly harvested maize from farmers.

“We will sell the maize after getting Cabinet approval and also after ascertaining that it is fit for human consumption,” Mr Kiunjuri told the committee.

He also disclosed that the maize would be sold at the prevailing market rate.

Last year, the State spent Sh11.63 billion on 3.62 million bags of maize. This means the National Cereals and Produce Board (NCPB) paid Sh3,200 per 50kg bag of maize. Today, a 50kg bag of maize retails at an average of Sh1,800, and the State is likely to sell the product in its silos across the country at the same price or slightly lower.

If the entire stock is sold at Sh1,800, the Government will make Sh6.48 billion.

Economic sense

“It does not make economic sense at all to buy maize at Sh3,200 and sell it at almost half the buying price. Why should the Government incur losses?” asked committee vice chairman Moses Wetang'ula (Bungoma).

“We have no choice but to dispose of the maize at a loss. Over the years, the ministry always makes losses because we have to sell the maize at prevailing market prices,” Kiunjuri responded.

He said if the maize was not sold urgently, it could start rotting and there would be no space in the NCPB silos to store the freshly harvested grain.

Trans Nzoia Senator Michael Mbito wondered what steps the ministry was taking to protect Kenyans from contaminated maize. A recent report by the Kenya of Bureau of Standards (Kebs) established that some of the maize in NCPB stores may be contaminated.

In the report, Kebs ordered the board to destroy maize stored in Isiolo, Embu, Makueni, Murang’a, Bomet, Busia and Makueni after it was established that it contained aflatoxin.

“I have called for a second opinion on this matter. I have ordered that the maize be inspected again,” Kiunjuri said.

The CS was accompanied by Agriculture Principal Secretary Hamadi Boga and NCPB acting Managing Director Albin Sang.

Last month, the committee heard that a huge amount of cereals imported by millers and other traders during the duty-free window was sold to NCPB at the expense of farmers.