When the NCPB started running a Warehouse Receipt System (WRS), farmers were hopeful that it will herald the end of their challenges.
Under the WRS, producers or dealers deposit their commodities in certified warehouses and are issued with a warehouse receipt as proof of ownership.
When the National Cereals and Produce Board (NCPB) started running a Warehouse Receipt System (WRS), farmers were hopeful that it will herald the end of their challenges.
However, only a few months into its implementation, the Kenya Farmers Association (KFA) is sceptical, fearing that the system may end up turning small-scale farmers into paupers and millionaire large-scale growers into billionaires.
“The reforms have been hijacked by a few individuals. The policies favour them while exploiting farmers,” says KFA managing director Kipkorir Menjo.
According to Mr Menjo, the WRS is set to benefit large-scale farmers who are capable of marshalling bulk maize for storage until prices set by forces of demand and supply are attractive enough.
Under the WRS, producers or dealers deposit their commodities in certified warehouses and are issued with a warehouse receipt as proof of ownership.
The system is touted as a key intervention to improve commodity storage, reduce post-harvest losses, curb value chain inefficiencies, increase earnings for farmers, traders and service providers in the agricultural value chain.
“WRS may not directly benefit small-scale farmers because it requires some bulking. Aggregator who collect maize from small scale farmers will do a lot of work so that they can be able to meet the required criteria,” explains Mr Menjo.
He adds: “If farmers want to offload since the majority in this country are small-scale, they will not have time to wait. They {small-scale farmers} always want to dispose of produce and get their money while this system is advocating for storage for some time so that you release it to the market gradually so that you do not flood the market and bring prices down.”
Renegotiate some protocols
Instead of relying on the WRS system, Mr Menjo advises that the best way to protect local farmers is by renegotiating some of the protocols under the East Africa Community and Common Market for Eastern and Southern Africa that allow foreigners to flood the local market.
“With cross-border trade, if local farmers are told to store their maize for the prices to appreciate and there is an influx from the neighbouring countries which are cheaper, how will local farmers store and attract storage charges?” Poses Mr Menjo.
Jackson Kosgey, an agronomist in Eldoret, Uasin Gishu County, favours Mr Menjo’s proposal arguing that small-scale farmers need to be protected from cheaply imported produce and that letting market forces to dictate the prices will ultimately knock them out of grain production.
“As much as the reforms will work for large-scale farmers who have driers and can store the crop to await attractive prices, it is disadvantageous to small-scale cereal growers who need urgent cash for personal needs and capital to invest in the next production,” says Mr Kosgey adding that the reforms should be introduced in phases to cushion farmers from any negative effect.
Market abuse
According to the farmers, traders who collude with influential government officials often abuse open markets to flood the country with cheap imports, knocking them out of business.
“The government needs to implement clear policies to ensure that the reforms do not hurt the sector and result in recurrent food insecurity,” appeals Ms Sally Chesang, a farmer from Elgeyo Marakwet.
Mr Menjo urges the government to strengthen agricultural bodies like KFA, Agricultural Finance Corporation and Kenya Agriculture and Livestock Research Organisation to enable farmers access cheap credit facilities and attain high crop production to compete effectively in the liberalised market.
“KFA is required to acquire farm inputs on behalf of farmers. It can get them directly from manufacturers but all these institutions were run down. It is important that they are helped,” he says.
While refuting that the system will only benefit large-scale farmers, NCPB says it is working to facilitated producers and traders to access agricultural credit against the deposit certificate.
It has also set up a business hub Model-One Stop Shop where farmers can access farm inputs and information on credit facilities to improve crop productivity and generate more revenue.
The concept, according to Mr Joseph Kimote, NCPB managing director, is at piloting stage in Eldoret and Nakuru depots and will be expanded to cover other parts of the country.
Aflatoxin hurdle
The WRS has stringent grain quality standards that farmers have to meet, including aflatoxin levels, before their produce is accepted.
Farmers argue that Kenya’s aflatoxin levels are too high and should be lowered to the global standard to enable more growers benefit from the WRS.
The aflatoxin level in most maize, they say, stands at 14 parts per billion and want the limit relaxed to match globally acceptable standards.
"Mexico has a limit of 20, China 40, Egypt 30 and South Korea 25. Lowering ours to 20 enables us to compete effectively in the liberalised market," urges Mr Kipng’etich Mutai, Grain Belt Millers Association chairman.
The association, which brings together more than 35 small scale millers, has petitioned the government to review acceptable aflatoxin levels from 10 to 20 parts per billion.
He says that the move is important since maize from lower Eastern-parts and Western Kenya region except parts of Uasin Gishu and Tans Nzoia counties have high level of aflatoxin contamination, making it unfit for human consumption.
