Key issues at play as the great national maize debate rages on

Agriculture Cabinet Secretary Willy Bett (centre) and Kisii County Commissioner Samuel Njora (in spectacles) at Tuskys Supermarket, Kisii, during an impromptu visit to ensure the chain store sells maize flour at the government recommended price on May 27, 2017. PHOTO | BENSON MOMANYI | NATION MEDIA GROUP

What you need to know:

  • That shortfall has deepened with the recent poor rains and we will need to import sizeable quantities of maize for the rest of this year, at least.
  • The shortage is often cushioned by both formal and informal imports from Uganda and Tanzania when they have surpluses.

It is important to stand back from the increasingly acrimonious ugali battles and take a more seasoned overview of the country’s maize troubles and challenges.

It is also essential to look at the short and long-term options and ways forward.

It is necessary because Kenya has a structural deficit in maize production and only in a very good harvest year will it be self-sufficient.

This is often cushioned by both formal and informal imports from Uganda and Tanzania when they have surpluses.

Secondly, it was inevitable that the country was in for a major shortfall and this was clear even at the beginning of the year.

SHORTFALL DEEPENED

The November rains had been deficient. On top of that a significant amount of Uganda’s and Tanzania’s surplus maize went to South Sudan and South Africa, respectively.

That shortfall has deepened with the recent poor rains and we will need to import sizeable quantities of maize for the rest of this year, at least.

The shortfall has been exacerbated by crop diseases and armyworms.

This has hit the surplus producing areas as well such as the North Rift, especially Trans Nzoia. Arguably, the government reaction was too little too late.

Although in consideration it is buffeted by farmers lobbying against imports and financial considerations that arise in the case of imports.

WAIVES DUTY

Concerning the latter, the government often waives duties for a specified period as it is doing at the moment.

In this particular case, it is also financing a subsidy on certain quantities of maize meal, which might well be extended.

There is an argument that it should have widened the duty free import platform for a longer period and even considered allowing the importation of GM maize, especially for animal feed.

KNEE-JERK REACTION

And then there is the knee jerk reaction with a subsidy on a limited amount of maize which was brought in without sufficient modalities in place.

Complaints about how many retailers have been missed out are plenty.

There is also the issue that the millers are funding the subsidy on an undertaking by the government that it will reimburse them.

Such a promise by a cash- strapped government in the latter days of its financial year is optimistic, to say the least.

The other related issue is that such an undertaking on so few bags of maize begs the question as to what will happen when that comes to an end.

It also invites the risk of two markets: one for the subsidised maize as and when it is available and another for the rest of the maize at the market retail price.

POLITICAL OPPORTUNISM

It is understandable that many smell political opportunism in this move.

The irony is that the subsidised maize could well run out before the election.

Then there is the question as to whether the imports truly comply with all the modalities of transparency.

Why, for example, did major international commodity traders not take direct part in the importation, especially since they have arguably the quickest access to maize surpluses around the world?

Another question is whether the duty waiver period will be extended.

This should be seen in tandem with the uncertainty created among importers.

CLEAR POLICY

What is needed is a coherent and clear policy that involves all the players: the government, millers, importers and traders, all working together.

Instead, what we see is a government reacting rather than proacting.

There is, therefore, an urgent need for a properly structured import tariff policy, which kicks in like the one in South Africa.

This waiting on the government to decide when and how much just increases the uncertainty.

It also distorts supply and demand and creates pressure on prices.

The current maize shortfalls will be with us for at least the rest of the year.

A more proactive and inclusive import regime is required. We must put in place an import levy programme that automatically kicks in when required.

Mr Shaw is a public policy and economic analyst. [email protected]