Low prices: The pain of Kenyan maize farmers - Daily Nation

Farmers stare at bleak season in face of maize price drop

Sunday September 9 2018

Maize farmers

Maize farmers protest outside the National Cereals and Produce Board offices in Nakuru on August 22, 2018 over delayed payments. PHOTO | FILE | NATION MEDIA GROUP 

By BARNABAS BII
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By STANLEY KIMUGE
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Maize farmers in Kenya’s bread basket of Rift Valley are staring at huge losses as this year’s harvest season approaches.

Prices of the 90 kilograms bag are expected to drop to rock bottom of Sh1,000.

Most farmers are still holding onto last season’s stocks worth millions of shillings.

And to make matters worse, they have not been paid for deliveries to the National Cereals and Produce Board (NCPB).

The board, which manages the strategic reserves of the staple food, ran out of cash it was allocated because it paid brokers who supplied it with cheap maize from Uganda at the expense of Kenyan farmers.

The disillusioned farmers are still holding on to about 500,000 bags of last season’s crop estimated at Sh1.6 billion, while NCPB owes them Sh3.5 billion for maize it purchased from them for the strategic reserve.

MARKET SATURATION

The farmers are staring at further losses as they prepare to harvest this season’s crop in the next one month.

Prices may plunge to as low as Sh1,000 per 90 kilogrammes due to saturation of the local market with imports from neighbouring countries.

The woes facing the farmers have been worsened by creditors who are after their properties to recover loans they secured to purchase farm inputs over the last two seasons.

Majority of them have been unable to service the loans either due to lack of market for the crop or delayed payment by NCPB.

The board exceeded the Sh6 billion it was allocated for purchases before paying genuine farmers. Most of the money was paid to brokers.

However, consumers in urban centres, dairy and poultry farmers are expected to benefit from the maize farmers’ woes.

Milk producers will access cheaper dairy meal which now retails at Sh1,500 down from Sh2,200 per 50 kilogrammes.

MANAGERS CHARGED

But it is the plight of maize farmers that has had serious consequences even to officials of the Agriculture ministry.

Principal Secretary Richard Lesiyampe, former NCPB boss Newton Terer, Finance GM Cornel Kiprotich Ng'elechey and 15 other senior officials have been arrested and charged over irregular purchase of maize worth Sh11 billion.

Their mismanagement has placed many farmers in financial trouble.

Creditors have issued notices to them to either repay input loans or have their property auctioned to recover the money.

Large scale farmers who delivered the crop to NCPB are owed millions of shillings.

The government has pledged to make payments after the Treasury released Sh1.4 billion out of the Sh3.5 billion for maize delivered last season.

CARTELS

The farmers will however have to undergo a second vetting process in what the government says is a bid to avoid cartels colluding with some NCPB staff and Ministry of Agriculture officials getting the bulk of the money at the expense of farmers.

The cartels pocketed Sh2 billion meant for genuine farmers who are still waiting for their money.

“Although we have started harvesting this season’s crop, we still have a lot of last year’s stock and most buyers, including private millers, are reluctant to buy the produce,” Eglyne Chepchirchir Choge, a large-scale farmer from Moi’s Bridge, Trans-Nzoia County, said.

She cultivates 350 acres of maize and is waiting to be paid for 5,000 bags she delivered to the NCPB.

At Sh3,200 per 90 kg bag, NCPB owes Ms Choge Sh16 million. NCPB only paid 3,000 out of the 8,000 bags she delivered.

She is among farmers who have been forced to sell the crop at throw away prices to avoid post-harvest losses caused by rotting and attacks by pests.

“I sold about 2,000 bags at a price of Sh1,500 per 90 kg to avoid incurring further losses,” Ms Choge, who still has 200 bags from last year’s crop valued at Sh640,000, added.

PRODUCTION COST

It costs the farmer Sh35,000 to cultivate an acre of maize with an estimated return of about Sh96,000 under favourable market conditions.

“The high production cost due to increased fuel prices and taxation on herbicides will make farming more difficult,” she said.

She urged the government to hasten the release of the money owed to farmers by NCPB.

“I am contemplating switching to dairy farming or horticulture since maize has proved unpredictable,” she said.

Mr Kimutai Kollum, another farmer from Soy, Uasin Gishu, is holding 600 bags of maize estimated at Sh1.9 million.

“I delivered 300 bags to the board for which I was paid but I still have 600 bags and there is no market for it,” Mr Kollum said over the phone.

VETTING

Like some farmers in the region, he is opposed to the second vetting process and wants the government to speed up the release of the outstanding Sh3.5 billion.

“Why undergo extra vetting process yet a similar process was carried out before delivering the crop to the board? This is a ploy by the government to delay paying us our money,” he said.

Mr Herman Kiplagat of Moi’s Bridge delivered 300 bags valued at Sh960,000 but is still waiting for payment.

“The government should weed out cartels in the market chain instead of punishing genuine farmers by delaying payments,” he said.

Trans-Nzoia deputy governor Stanley Tarus said the solution to the farmers’ woes lies in diversification and finding a reliable market for their produce.