Farmers’ agony as government floods market with 650,000 bags of maize

Farmers’ bargaining power is set be dealt a big blow following the Government’s decision to sell the maize in its depots at a discounted price.

National Cereals and Produce Board (NCPB) is planning to offload 653,496 bags of maize, part of the stock in 39 depots across the country, in a move that farmers fear will upset the market.

“NCPB is in the process of selling Government of Kenya Strategic Food Reserves (SFR) as part of the grain refreshing exercise,” said NCPB in an advertisement yesterday.

The agency has asked all registered millers to come forward and buy the maize, which has been priced at Sh2,300 per 90kg bag. This means the Government will realise about Sh1.5 billion from the sale. Some of the depots where NCPB will be offloading the maize are in Bomet, Bungoma, Kericho, Meru, Sotik, Thika, Yala, Sagana and Machakos.

Last year, NCPB bought from farmers more than 500,000 bags estimated to cost Sh2 billion in a move to replenish the strategic grain reserve. Farmers were then selling the maize for Sh3,200.

NCPB Chief Executive Officer Newton Terer told The Standard the exercise is targeting maize that has been in the depots for long, since as a policy maize has to be sold within 24 months. However, Mr Terer said he was not in a position to explain the reason behind the pricing. “They (SFR) are the ones who decide when to sell and also come up with the price plus decide the reasons why. I am only an agent,” he said.

The Agriculture PS Richard Lesiyampe had not responded to our calls and text message by last evening. Director of Crops in the Ministry of Agriculture Johnson Irungu also declined to comment on the matter. In an email, Cereal Millers Association Chief Executive Officer Paloma Fernandez described the Government’s price as “fair in today’s market”.

According to farmers’ representatives who spoke to The Standard, the releasing of the NCPB stock will dent their bargaining power, as it will give millers another avenue to increase stock.

Treasurer of Kenya National Federation of Agricultural Producers Ruth Kemboi said the move had confused farmers, even as they await to be paid for maize they supplied to NCPB last year. “Farmers are now totally confused. How is NCPB going to pay farmers who are still waiting for money for last year?” she posed, adding: “You cannot buy an item at a higher price and sell at a lower price, unless there is another subsidy that is not known to us”.

In a phone interview, Director of Kenya Farmers Association Kipkorir Menjo said the entry of the more than 650,000 bags into the market would leave farmers in a tricky situation.

Another offer

“Millers have been crowding at NCPB. So if Government is making another offer, they will take advantage and offer us even lower prices, knowing there is an alternative,” said Mr Menjo.

He said farmers were agonising over delayed payment by the Government even as millers now offer between Sh1,900 and Sh2,000 for 90kg maize.

Last week, NCPB gave farmers letters of undertaking asking them to commit that they would wait until the next financial year to be paid their dues.