National Cereals and Produce Board (NCPB) has almost exhausted the Sh2.3 billion offered for maize buying, leaving the majority of farmers at the mercy of middlemen who pay much less than the State.
NCPB managing director Newton Terer said the board had spent close to Sh2 billion by last Monday after buying two million 50kg bags meant for the strategic grain reserve.
“At the rate of 70,000 bags of maize that we are buying from farmers daily, we project to have exhausted all the funds by next week (this week),” said Mr Terer in an interview.
This will increase the amount of maize in the strategic grain reserve to 3.7 million 90kg bags, up from the previous 2.7 million. This is still short of the targeted five million bags.
Kenya’s production for the harvest year started September was set at between 35 million and 40 million bags.
Kenya Farmers Association director Kipkorir Menjo says the absence of NCPB will once again expose farmers who pulled down prices to a low of Sh1,200 for a 90 kilogramme bag in November from Sh3,800 in May.
The presence of NCPB in the market helps to regulate prices and reduces the influence of brokers.
The middlemen recently raised the price to Sh2, 000 per bag following the entry of the board in the market late last month.
“Farmers are now going to be exploited by the middlemen unless the government moves in to pump more money for the purchases,” said Mr Menjo.
The board has been paying farmers Sh2,300 and a Sh500 rebate per 90kg bag of maize and Sh1,275 and Sh278 rebate for a 50kg bag respectively. The rebate will be paid later.
Stakeholders in the grain industry say prices are likely to drop once the board exhausts allocated funds, exposing farmers to middlemen who offer low prices.
But the East African Grain Council (EAGC) has urged farmers to embrace the warehouse receipting system instead of hurriedly selling their crop to brokers at throw away prices.
EAGC has 10 certified warehouses in the country that are currently in operation, offering storage services to willing farmers.
“If all farmers rush to the market to sell their commodity, they will be flooding the market, hence cutting down on the price, which may not be in their good interest,” said Gerald Masila, the council’s chief executive.
This comes at a time when growers have written to the Clerk of the National Assembly asking for an urgent recall of the House to deliberate on a petition the farmers delivered to the House Agriculture Committee on December 4.
The farmers want the committee to formulate and approve a supplementary budget to increase funds for the cereals board so it can continue buying maize.