Govt to Buy Maize from Farmers at KSh 3,200 this month
By Vera Shawiza / October 13, 2017
The government will start buying maize from farmers at Ksh3,200 per 90-kilogram bag from next week.
Agriculture Cabinet Secretary Willy Bett on Thursday disclosed that the government has set aside a total of Ksh 7.1 million for buying 2.4 million bags of maize to replenish the strategic Food Reserve (SFR).
The set price of Ksh 3,200 will be six percent more than last year’s when NCPB paid Ksh3,000 for a similar quantity of maize.
“Based on the cost of production and in consideration of the farmers’ markup of 35 percent (Ksh 790 per bag), the SFR Board had recommended that the producer price for a 90-kilogram bag of maize be Ksh 3,200,” said Willy Bett.
The cabinet Secretary noted that of the 3,200 shillings that the government will pay, Ksh 200 is the rebate to the growers for the extra cost incurred during planting.
“Owing to the adverse weather conditions coupled with other numerous challenges such as the outbreak of Fall Armyworm during the period, the government has provided a rebate of Ksh 200 per 90-kilogram bag of maize offered to NCPB,” added Bett.
Egerton University-based think tank-Tegemeo Institute, however, faulted the price the ministry had announced a week after it released the findings of a study indicating that the cost of producing a 90-kilogramme bag of maize stood at KSh2,200 this year, meaning that farmers will make KSh1,000 for every bag sold to NCPB.
As a reaction to the announced price by the government, Tegemeo Institute faulted the price saying that it was high with very negative impact on consumer prices when the subsidy programme comes to an end this month.
“The new price is extremely high. The ideal cost of a 90-kilogramme bag of maize should be KSh2,700,” said Milton Ayieko, a director at the institute.
Farmers on the other hand, through their lobby, the Cereal Growers Association (CGA), said that they had expected Ksh 3,500 for a 90-kilogram bag.
“We had many challenges this year and were forced to incur extra cost in controlling Fall Armyworms. We find the price of KSh3,200 to be low,” said Anthony Kioko, the chief executive officer CGA.
Kenya continues to face a serious shortage of grain this year that pushed up the cost of maize flour to a record high of KSh153 per 2-kilo packet and forced the government to intervene through a subsidy programme that lowered the price to KSh90 per 2-kilogramme packet.
In May the Government introduced the KSh6 billion subsidy programme to stabilise the food market after a 2kg maize flour packet sold for up to KSh150.
Read: Maize Subsidy Expected to End in October, says Ministry of Agriculture