Unlike in the past, maize farmers emerged the biggest winners last season as prices of the commodity averaged Sh2,300 per 90kg bag despite bumper harvest, which normally pushes down the cost. GERALD MASILA, the Executive Director of Eastern Africa Grain Council (EAGC), spoke to FRANCIS MUREITHI on what happened and why farmers need to pay attention to new technologies in the sector.
Despite a bumper harvest last season, the cost of maize did not go down as it normally does. What happened that has not been happening in the past?
The government used to set very high prices of up to Sh3,200 per 90kg to buy grains for strategic reserves. Such prices brought a lot of distortion in the market leading to an influx of cheap imports from neighbouring countries as traders cashed in. In the end, farmers especially those whose produce the cereals’ board could not buy turned out to be the biggest losers.
Tegemeo Institute did a study that showed that the cost of production per bag was Sh800. Farmers who harvest 40 bags an acre and sell at Sh3,200 would make hefty profits. This time round, the government set the price at Sh2,300 per bag, which did not distort the market.
If this practice continues, then farmers should expect good times.
So the Sh2,300 per bag was fair?
The price was better because it was informed by research and it was the first time the government set such a price. It was a market price that didn’t create confusion. Government should be buying strategic grain reserves at market price through offers where traders can compete.
Imports from Uganda have dropped drastically due to low harvest in the country. Are we likely to experience maize shortage in Kenya this year because imports help to stabilise our supplies.
I don’t expect a crisis because Uganda has two harvesting seasons and most of the grains harvested there is for our market because maize is not a staple food for Ugandans as they eat more matoke. Secondly, the harvest from Tanzania will also come in and with good flow of cross-border trade, prices are going to stabilise.
EAGC has been training farmers on how to store their cereals to beat aflatoxin and post-harvest losses. Have the two dropped?
We have had a major drop in post-harvest loss as farmers are taught how to handle and dry maize. We have increased the number of certified warehouses and village aggregation centres. New agronomic practices and latest innovation such as Aflo-safe manufactured by Kenya Agricultural Research and Livestock Organisation have significantly reduced incidences of aflatoxin. We are exploring a technology from Mexico, which is called Nixtamalisation that is a process of treating maize with alkaline. This technologies are now being introduced to farmers, and they should pay great attention.
Have farmers embraced the warehouse receipting system?
A good number have, but we are limited in terms of our resources to reach more farmers. The problem is low awareness but for those who have embraced it, there is a lot of uptake and things are changing.
You have a system which informs farmers of where prices are better, how has it helped them?
It has helped in understanding the market and how market movements work. Farmers have also been educated when it comes to negotiating as they are now informed and can ask for realistic prices.
Are you satisfied with the current trading environment in the local and regional grain industry?
Most of the trade is informal, posing several challenges because grains are not checked for quality from the trader to the miller. Safety is not guaranteed and public health interest is at risk. The infrastructure to handle grain in the region is still a problem because most of the storage is in the hands of the government and is used for strategic reserves and is not available for trade.