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Nairobi's millionaire brokers that leave farmers with loose change

NEWS
By Peter Theuri | July 11th 2021
Ken Kamau sorts onions at his stall at Wakulima Market in Nairobi on September 26, 2019. [Denish Ochieng, Standard]

The other name for Nairobi’s Wakulima Market could be ‘chaos’.

Every day, thousands of traders, customers, loaders, pickpockets and idlers interact in East Africa’s largest fresh produce market amid noise and endless movement.

It is busiest on Saturday when many office workers have an off day.

And in this downtown haven for farm produce, brokers mint millions with dumbfounding ease.

On this particular Saturday morning, the stench of rotting cabbage, acrid smell of sweat and shrill calls by traders fill the air.

Men with sacks of produce on their shoulders shove customers out of the way, trucks block the market’s entry as they reverse for unloading and handcart pullers hurl expletives at each other. 

This is where brokers - a price determination cartel that runs roughshod over farmers - thrive.

“It is actually not as busy as it used to be on Saturdays. People do not have money,” says Catherine Wangui, a trader who has been operating in the market for over two decades.

But a check on retail prices at the market tells a different story. People have money, at least the sellers who will make deals before the gates swing shut.

It is the farmers back in the countryside, whose produce is changing hands here, who do not have money.

Other costs

Onion, which has elicited heated debate after reports indicated that a bulk of the product is imported even as local farmers struggle to attract good prices, is retailing at Sh80 a kilo. 

“At the farm, we buy it at Sh25 and Sh30. We incur a lot of costs in bringing it to the market and that is why there is a significant difference between the price at the farm and here,” says Christopher, an onion and garlic trader.

He says if he had his own means of transporting the produce to the market, he would give the customer a lower price and the farmers a higher one.

Timothy Mburu, a tomato, cabbages and garlic farmer from Naro Moru says he once tried to bring his farm produce to Wakulima Market and his lorry was almost set ablaze.

“I had brought potatoes. These brokers do not like newcomers into Wakulima, they almost burnt the truck,” he says.

Inside the market, farmers’ sweat is traded away with abandon. Prices are thrown at consumers in a take-it-or-leave-it manner - and most of them take it due to lack of alternatives.

Timothy Mururi, an onion farmer from Endarasha, Nyeri, does not love the word broker. Every harvesting season is painful for him.

He feels perennially shortchanged by brokers, but there is little he can do about it.

“You see, many years ago, the buyers used to come to the farms for price negotiation. Nowadays, they meet and agree on the price they should offer the farmer,” the farmer says.

“If you look at the price that the crop fetches in Marikiti (Wakulima Market) and compare with what we are offered here at the farm, you will realise we suffer, a lot.”

A recent report showed that rice farmers were abandoning huge tracts of land in the Lower-Kuja irrigation scheme near Lake Victoria, threatening the survival of the Sh5.4 billion national government project that was commissioned in May 2019.

One of the reasons the farmers were disenchanted was that brokers were buying a kilo of rice for as low as Sh30. This was peanuts compared to the Sh130 a kilo paid when the paddy was delivered to millers.

At Wakulima, Christopher, who insists that the only thing they have imported from China is garlic, defends the prices. He says without brokers, farmers would not access markets.

The price of a kilo of garlic is Sh250 while the farmer earns Sh150 for the crop. In good times, farmers can sell their garlic to the traders at Sh200 or Sh250.

The traders will in turn sell the produce at Sh300, or Sh350 at the market. Levi Ngunjiri recently sold 500 kilos of onion in Juja, having bought it from farms in Nyeri.

He bought at Sh25 per kilo and sold it at Sh40.

“The transport and storage costs amounted to about Sh5 per kilo, and so my profit was around Sh10,” he says.

He was trying his luck and although he says that with a bigger consignment of onions one can make good money, he knows the farmer (he has been one) gets the shorter end of the stick.

“It is not fair to the farmer. I made Sh10 profit per kilo while the farmer made around Sh5, which he has waited to make a whole season,” Mr Ngunjiri says.

Peter Gateri grows and sells strawberries in Thika. He also buys from fellow farmers when he cannot satisfy the demand.

He currently grows 2,000 stems in greenhouses but is thinking of expanding.

Mr Gateri thinks brokers have a good role to play in the market.

“Brokerage is not illegal. As most farmers are not able to access the market, brokers are important for this linkage.”

But he admits that some brokers look for ways to cheat farmers of their money.

“The brokers will simply say that they did not find market and will not pay. There are a lot of con games and I would advise one not to go for brokers they are not familiar with,” says Gateri.

Naro Moru farmer Mburu concurs, saying that although brokers are important as they bridge the gap between the producer and the consumer, they tend to be exploitative in an environment where even the government seems unwilling to interfere.

“The brokers have all the connections and are wily. They tell the producers that there is an excess in the market and tell the buyer that there is a shortage so they can influence prices,” he says.

Julius Kamau sells tomatoes at Wakulima. He is now selling a kilo at Sh80 but at the farm he pays half that.

Is he making too much money?

“No. We have a lot of payments to make. Apart from transportation, we still have fees to pay for operating here,” he says.

Tomato seasons are impossible to predict, says Mr Kamau. Prices could shoot up or slump.

Kenyan farmers make a lot of effort to feed the country and sustain themselves and their families.

Market entry

That it is almost impossible for new people to be allocated space at Wakulima Market makes the traders in Wakulima Market very powerful.

Economist X N Iraki says the cartelism that defines Marikiti is very possibly a national thing. Kenya is crippling its farmers, whose activities pump as much as a third to the gross domestic product.

“It (the cartelism) probably happens in the other markets outside Nairobi. The liberalisation so much taunted by economists is a myth,” he says.

“Monopoly reigns. The cartels and middlemen are a power to themselves, with political connections that are apparent during the polls time.

“By restricting the supply they raise the prices and make a kill while enslaving the farmers.”

Prof Iraki says cracking the whip on the cartels could be the panacea to farmers’ woes.

“In other countries, regular farmers’ markets ensure you sell your produce at market rate based on demand and supply. Why can’t we do that here?

“Regulators must demand evidence that you own something to sell to get to the market. Because food is so critical, government could buy the surplus and maintain prices to encourage farmers to continue producing.”

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