How chama mills profits from maize every season

The plough cut into the soil as the tractor ate away acre after acre of Stephen Rongoei’s farm in Sambut village, some 21km north-west of Eldoret town.

Stephen and three other family members followed the massive machine, one with fertiliser as the others planted the maize and bean seeds.

“I must finish planting today. I did the first ploughing sometime last month, but I could not plant because the rains delayed,” Rongoei said amidst the roar and dust raised by the tractor.

Apart from the delayed rains, the farmer has had an easy time this planting season, and many others before, as he does not have to worry about buying seeds, fertiliser and other inputs.

A group he belongs to takes care of the procurement of inputs and shares it out among members.

Rongoei is a member of Schemers Community Based Organisation that brings together more than 200 farmers mainly in Uasin Gishu County.

The group helps members, right from planting to harvesting and selling their produce at better prices, ensuring they reap big rewards from their agribusinesses.

“We buy all the farm inputs that include seeds and fertiliser in bulk with cash we raise and loans from financial institutions, and distribute among farmers. The farmers pick the inputs from our office and pay for them once they harvest,” Isaac Too, the chairman, chipped in.

This planting season, they bought 2,000 bags of fertiliser at Sh1,800 each and 1,000 10kg bags of maize and 500 bags of bean seeds.

“The fertiliser cost us Sh3.6 million and the seeds Sh1.8 million. We normally receive discounts since we buy in bulk directly from the dealers. Every farmer gets an average 10 to 20 bags of fertiliser,” said Too.

Too said it would have cost the farmers Sh2,400 to buy a bag of fertiliser if they had bought individually from the retail shops.

The group borrows money from lending institutions to boost their farming activities.

“Last year, we borrowed over Sh100 million from K-Rep, Equity Bank and Agricultural Finance Corporation mainly to purchase inputs. In quarter one we borrowed Sh33 million, quarter two Sh18.9 million, quarter three Sh4.2 million and in the last one Sh50 million. We spent the bulk of the money on buying inputs and we also bought a piece of land in Kitale at Sh18 million from the loan.”

SELL TO INSTITUTIONS

During harvesting, the group borrows the money to advance to their members to transport their produce to their warehouse. Additionally, they also buy maize from non-members for sale.

Rongoei said he harvests between 150 and 200 bags. “Regardless of the bags of maize I harvest, I do not worry about the market. We bring our maize together and sell it to institutions, including the Word Food Programmme (WFP).”

The group was formed in 2006 to assist farmers access market for their produce.

“We first named it Schemers Self-help Group, but we upgraded it to a community-based organisation four years later to enable us access the WFP market. Since 2010, we have supplied 1,078 metric tonnes (MT) of maize and 136MT of beans to WFP, millers and schools valued at more than Sh46 million. Last year our maize sales totalled Sh10 million,” said Too, adding that they have Sh8 million savings.

Last season, the 200 members harvested 20,000 90kg bags of maize. They expect to sell a bag at Sh2,600 to schools and individuals.

However, WFP in most cases, buys their maize at between Sh2,800 and Sh3,400 a bag between April and July when there is shortage of the grains.

At this price, they are able to recoup the expenses and still make a good profit.

Once members harvest between September and January, they stock the grain in a warehouse until April when prices start to go up.

“Our members do not bother selling their produce to the government or middlemen when most farmers are harvesting unless the prices are high,” said Too, who holds a master’s degree in project management from the University of Nairobi.

When they receive grains from members, they first check the moisture content, which must not be more than 13 per cent.

This is to ensure that the produce is not infested with aflatoxin.

All the produce is stored in a warehouse constructed on a one-and-half acre farm. The farm also hosts an agrovet, an office and a posho mill, all built from loans.

“The warehouse holds 10,000 bags, with the rest of the produce being kept by farmers. The maize is stored under the Warehouse Receipting System. Some farmers use the receipts to access finances from different institutions.”

The group’s efforts to alleviate farmers’ plight has brought them not only fortune but fame.

“We received Sh600,000 cash prize in Accra, Ghana in 2013 after winning the African Farmers Organisation Award (AGOYA), advocacy category.

PLAN TO DIVERSIFY

Last year, Agriculture Cabinet Secretary Felix Koskei donated a greenhouse to the group. They plan to diversify into tomato farming.

The group received the greenhouse because their warehouse and members’ farms have become learning centres for farmers, the minister said.

Treasurer Silas Biwott said the organisation has helped members access extension services from several organisations like the Agri Chain Development, which offers financial advice, East African Grain Council, the Ministry of Agriculture and WFP.

“Previously, some members would end up buying fake seeds and fertiliser from retail outlets. Now we are able to ascertain quality through collective sourcing.”