Let NCPB sell cheap maize to poor consumers, not millers
- Under the current market conditions — and if deliveries to the NCPB are to pick up — the government will have to adjust producer prices to reflect the prevailing high prices.
- But the greatest challenge and dilemma for the government will be how to deal with some 1.7 million bags of maize that are lying in the NCPB’s stores.
It’s laughable, indeed, that Agriculture Cabinet Secretary Mwangi Kiunjuri is still talking about vetting maize farmers who deliver produce to the National Cereals and Produce Board.
Last week, he announced that he had directed the NCPB to accept maize deliveries from vetted farmers with more than 400 bags of maize.
He also said he had directed the NCPB to lift limits for delivery of maize to counties that have exhausted their government allocations.
Clearly, the minister is out of touch with the reality on the ground in the maize market.
Market prices have soared rapidly, outpacing the politically directed producer price of Sh2,300 per 90kg bag announced by President Uhuru Kenyatta in January.
Indeed, prices have been rising unpredictably. There are parts of the country where the 2kg unit — popularly known as gorogoro — has hit Sh120, from Sh80 only months ago.
Maize farmers are not fools. They have looked at the poor weather conditions in the country and calculated that prices are bound to trend upwards in coming months.
If you put a farmer in a situation where he has to choose between believing what a CS is telling him and what market conditions are signalling to him, the farmer will choose the latter.
Like in any other business, the farmer is rational enough to appreciate that the forces of supply and demand are more efficient at setting and predicting prices of produce than Mr Kiunjuri.
Is it not the height of irony that Mr Kiunjuri still talks about vetting farmers and tinkering with allocations for counties that have exhausted their limits — when the truth is that maize deliveries to the NCPB have fallen to a level not witnessed in many years?
The truth of the matter is that government meddling in the NCPB’s buying operations, this year, through opaque vetting of farmers and by arbitrarily setting county allocation formulas and limits for deliveries have been a contributory factor to the level of deliveries of maize to the NCPB.
And that is partly responsible for the unpredictable maize market conditions we are in.
We must not forget that when President Kenyatta was announcing the buying price of Sh2,500 per bag in January, the expectation was that farmers would deliver two million bags of maize to the NCPB. But as it turned out, the NCPB has only managed to buy 418,000 bags from farmers.
Under the current market conditions — and if deliveries to the NCPB are to pick up — the government will have to adjust producer prices to reflect the prevailing high prices.
The vetting that was started ostensibly to determine genuine farmers and at the same ensure that only maize from such vetted farmers was accepted by the NCPB only served to introduce inordinate and bureaucratic delays in the process.
Farmers found themselves facing two choices, namely, whether to go through lengthy and time-wasting vetting by the NCPB or sell directly to middlemen and traders, who were not only offering better prices than the government agency, but were also paying cash on delivery.
Whichever way you look at it, all indications are that maize prices are headed north and, consequently, higher maize meal prices are inevitable.
The government should allow farmers and middlemen to sell their maize to whomever they choose on a willing buyer, willing seller basis — and at the best prices they can get. The NCPB must compete with middlemen for maize.
But the greatest challenge and dilemma for the government will be how to deal with some 1.7 million bags of maize that are lying in the NCPB’s stores. The maize was imported in 2017.
President Kenyatta had initially announced that the maize would be released to the market at a price of Sh1,600 per bag.
If the cheap maize is to be released, let the government announce a method that is not only transparent but also capable of delivering good prices to consumers of maize meal.
In the past, maize subsidy programmes have been implemented by releasing the product to the millers to process the product and sell it to consumers at government-set prices.
That has never worked. I suggest that instead of selling most of the subsidised maize to millers, and if the intention is to target the poor, we should just let the NCPB use its extensive network of some 110 outlets spread across the country to sell the maize directly to poor consumers.
Most consumers in Kenya do not consume processed and packed maize meal; especially in rural areas and modest urban settlements, they grind their maize at posho mills.
Let the NCPB, which has the capacity to sell the cheap maize directly to small-scale consumers, do just that. It used to happen in the ’90s.