Pricing stalemate ends as millers, farmers agree after meeting
Trucks queue to deliver wheat to the National Cereals and Produce Board’s Eldoret depot.
What you need to know:
- The talks saw all the parties agree to retain last year's price of Sh3,200 per 90kg bag of grade one rice.
Wheat harvesting has already begun in Narok, and brokers are buying it at Sh2,200 to 2,500 per 90kg bag.
Wheat is the Kenya's third most important cereal, with demand estimated at 11 million bags, against an estimated annual production of 4.3 million bags.
A two-month pricing stalemate between wheat farmers and millers was resolved on Monday during a three-hour meeting at Kilimo House, Nairobi.
The talks, mediated by the Ministry of Agriculture, saw all the parties agree to retain last year's price of Sh3,200 per 90kg bag of grade one rice.
Grades two and three will cost Sh3,100 and Sh3,000 respectively.
The farmers had wanted the prices increased to Sh3,300 for Grade one, Sh3,200 for grade two and Sh3,000 for grade three while the millers wanted them reduced to Sh3,100, for the highest quality, Sh3,000 for grade two and Sh2,900 for grade three.
MIDDLEMEN
The stalemate had seen farmers sell their rice to middlemen at throwaway prices while the millers opted to import cheap wheat from neighbouring countries.
“We cannot continue with this trend; farmers are losing, and so are the millers. As the minister in charge, my view is that this is a matter we can, and must, resolve. Today, we have to come to an agreement,” Agriculture CS Mwangi Kiunjuri said.
"We need to agree on prices that will be fair to both parties," he added.
The Vice-Chairman of the Cereal Millers Association, Mr Mohamed Ali, and the CEO of the Cereal Growers Association, Mr Anthony Kioko, welcomed the move.
“I must say we are in agreement with the government to retain last year’s prices. However, we want the quantities of wheat being imported from Tanzania controlled and reduced drastically,” Mr Kioko appealed to the government.
IGNORED THE RULE
He claimed that Tanzania produces very little wheat but has ignored the rule of origin and exports to Kenya cheaply.
Mr Ali said the millers' greatest concern is the cheap wheat flour imports, which have made locally processed wheat flour uncompetitive.
“We can purchase all the wheat our farmers produce, but the current massive importation of cheap flour into the country has pushed us to source for cheap wheat,” he said.
Wheat harvesting has already begun in Narok, and brokers are buying it at Sh2,200 to 2,500 per 90kg bag.
Wheat is the Kenya's third most important cereal, with demand estimated at 11 million bags, against an estimated annual production of 4.3 million bags. The deficit is bridged through imports.
According to Dr Johnson Irungu, the director of crop resources in the ministry of Agriculture, Kenya imports 60-70 per cent of the national requirement. Last year the produced 4,062,678 bags.
