Decline in Maize Production Hurting the Economy

Agriculture is the largest sector in the Kenyan economy, generating a quarter of Kenya’s gross domestic product (GDP) and two-fifths of its export earnings. The agricultural sector provides employment to an estimated percent of the total labor force.

Maize is arguably the most important crop in Kenya, with over 90 percent of farming households growing the crop. Productivity in the maize sector increased steadily from independence until the mid-1980s, but declined between 1985 and 2004. However, maize yields have improved quite impressively over the 1997-2007 period, partly due to increased use of fertilizer. Fertilizer marketing costs declined substantially between mid-1990s and 2007 but the positive trends in fertilizer use were partially reversed in 2008 by the civil disruption as well as the surge in global fertilizer prices.

At the national level, farming contributes approximately 42 percent of Kenya’s total income and half of the farm-income is derived from the maize sector. As expected, there is some variation within the different regions. In Western, Nyanza and Rift Valley Provinces, more than half of the farm income comes from the maize sector, while in Central, Coastal and Eastern Provinces its share is around 14 percent and 19 percent, respectively. Farming is less important in other provinces such as North Eastern and Nairobi. The share of food in total household expenditures varies across provinces. It is significantly lower in Nairobi than in other provinces where food accounts for 60 pecent-75 percent of total expenditures.

Read: 90kg Bag of Dry Maize Retailing at KES 2600 in Eldoret

As in other African countries, own production is important in Kenya, with almost 35 percent of total food consumption being self-produced. It is, however, less than in Mozambique where it accounts for 75 percent of total food consumption. With the exception of Nairobi, Coast and North Eastern Provinces own production accounts for around 40 percent of total food expenditures in.

Maize, both in terms of subsistence and market-purchased crops, is the most important food-crop in Kenya. It dominates food consumption, accounting for 9 percent-18 percent of total household expenditures across the country. In Nairobi the share of maize is significantly lower, around 4 percent of total expenditures. The importance of maize in Kenya implies that price changes could have significant impact, either positive or negative, on welfare.

Currently, maize flour prices have gone up due to shortage of maize in the country, which has forced the National Cereals and Produce Board (NCPB) to release almost 700,000 bags of maize from their strategic grain reserve for millers in a move to lower the high prices of maize flour.

The price of maize has crossed Sh100 mark over the last two weeks with millers attributing the price to increased cost of the raw material resulting from an acute maize shortage.

NCPB is selling a 90kg bag of maize at Sh2,300 for the superior grade two and three, grade 4A (Sh1, 600) and grade 4B for Sh1,400.

Millers are buying maize at between Sh2,800 and Sh3,000 for a 90 kilogramme bag, up from Sh2,000 in January.

The price of a two kilogram packet of Jogoo brand is retailing at Sh101 from Sh95 in the last two weeks while Soko and Pembe are selling at Sh95 in supermarkets. Millers warned the cost would rise.

Article by Vera Shawiza.