New Galana plan promises cheap unga soon

Tuesday February 23 2016

Cabinet Secretary for Water and Irrigation Eugene Wamalwa and Israeli Agriculture and Rural Development Minister Uri Yehuda Ariel Hacohen prepare to share Ugali at Galana -Kulalu in Tana River County on September 9,2015 during the official launch of the MMaize harvesting at the Galana Kulalu Food Security Project. PHOTO | EVANS HABIL 

By OTIATO GUGUYU
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The government has moved to give the ambitious Galana-Kulalu food security project a new lease of life in a plan aimed at stemming the rising cost of living.

The initiative was launched last week by Water and Irrigation Cabinet Secretary Eugene Wamalwa with the primary focus of bringing down the price of a two-kilogramme packet of unga to Sh83.

The Galana project was recently moved from the Ministry of Agriculture to the new Water and Irrigation docket apparently to speed up its completion.

With a tight budget and timelines to deliver the model 10,000 acre farm, the next seven months will be crucial to President Uhuru Kenyatta’s pet project on food security.

The project has been re-evaluated, eliminating key components such as a maize milling factory, school, police station, greenhouses, vegetable packing and cold rooms. This revision of the original plans has brought down the cost of the mega project to Sh7.2 billion from the initial Sh14 billion.

Mr Wamalwa said that with huge tracts of the land cleared and fence erected to keep wild animals at bay, the remaining part of setting up irrigation infrastructure will be completed by September.

If the government succeeds in implementing the project, the efforts to bring down the price of unga to Sh83 for a two-kilogramme packet may not remain a pipe dream for long.

According to costings by the National Irrigation Board (NIB), the irrigation project will produce maize at Sh33,000 per acre, and based on the highest yielding variety the cost of production per 90kg bag will be Sh846.

This means the government will be able to produce 35, two-kg packets at Sh2,921 including the cost of milling, packaging and transporting it to a shelf near you.

The project will be scaled up once it is opened up to private investors.

The model farm will help identify highest yielding variety of maize suitable for the arid region. However, the government will first have to overcome cartels in the sector who are already scheming to frustrate the project.

Staple food
“From the market survey conducted in Mombasa city, it emerged that the average cost of milling per kilo of maize was Sh4 for maize delivered at the mill. The millers, however, maintained they were not willing to mill the maize on behalf of the government,” read a brief to Parliament by CS Wamalwa.

The consumer market around Kenya’s staple food is perhaps the most puzzling, defying all market forces and efforts to correct it. Maize meal is currently retailing at Sh110 for a two-kilo packet even during times when farmers are struggling to find buyers for their low-priced produce at the farm gates.

The government has made several efforts to bring down the price of maize to below Sh100 per two-kg bag. This has however failed owing to the chokehold that the cartels have on the sector.

Last year, the Ministry of Agriculture announced a plan to set up a kind of central bank for cereals under the Strategic Food Reserve Oversight Board to influence maize prices through periodic balancing of the market by injecting supply whenever it dips.

Through the National Cereals and Produce Board (NPCB), the government released 800,000, 90kg bags of maize to millers at Sh2,300, undercutting the Sh2,900 market price. However, the price of maize continued to increase.

The latest effort to bring 500,000 acres of the vast Galana/Kulalu ranch under irrigated maize plantation may be a game-changer in ensuring cheap flour on the shelves.

The food security project will have the potential of bridging the maize deficit in the country, eliminating the artificial shortages that cartels use to justify high prices.

Kenya has a deficit of 20 million bags annually and NIB general manager Daniel Barasa believes that putting half of the land intended for irrigation in Galana under maize would be enough to meet the deficit and slash imports from Uganda and Tanzania.

“By cultivating 250,000 acres of Galana-Kulalu complex, we would have met 41 per cent of the country’s annual maize consumption of 48 million bags, hence providing enough maize to bridge the deficit,” he said.

Millers have been blaming the price escalation on massive hoarding of maize by middlemen who buy the produce from farmers and sell it to millers.

Last year there were claims of a looming shortage, prompting traders to hold back their stocks pushing up prices by 27 per cent. This played a key role in pushing the consumer price index beyond the government target of 7.5 per cent. Maize flour prices have a big effect on overall inflation, and being the staple food, it accounts for a significant share of household budgets.

The Galana project suffered a blow after Parliament reviewed original, slashing costs by half. The milling and storage facilities, which have been eliminated, would have enabled the farm to process and package the flour for sale.

Mr Wamalwa said the government will focus on irrigation and let the private sector invest in the other utilities.

Kenya with a population of 44 million and growing, remains a food insecure nation and cannot continue relying solely on rain-fed agriculture. About 70 per cent of local farmers are small-holders and do not enjoy economies of scale both in acquiring inputs and in selling their yield, making them incur high cost of production. This pushes up the cost of maize and other cereals.

Grain basket
According to a report by the Egerton-based Tegemeo Institute, a farmer using irrigation makes a profit of Sh8,495 per acre while a grower dependent on rain-fed agriculture earns Sh5,003 from the same field.

On one acre, Galana farm will produce 40 bags of maize, higher than the national average of 17 bags that farmers in the country’s grain basket of Rift Valley harvest from the same size of land. However, only 20 per cent of the land in Kenya is under irrigation. NIB wants to bring 1 million acres across the country under irrigation.

Galana project will raise the country’s profile to the ranks of China and Sudan who have ventured into large scale irrigation projects. China has two massive irrigation schemes while Sudan’s Gezira irrigation scheme covers 2.5 million acres.

Last year, Egypt embarked on 1.5 million acre Bassam Mortala Irrigation and drainage Project at a cost of Sh360 billion.