Commodities

Agency stuck with Sh300m rice amid farmers protest

rice

Bags of rice ready for the market at Mwea Rice Growers Multipurpose Cooperative Society stores at Wang'uru in Kirinyaga County on June 24, 2021. PHOTO | JOSEPH KANYI | NMG

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Summary

  • Kenya National Trading Corporation (KNTC) is stuck with unsold rice worth Sh300 million, amid protest from farmers over delayed payments.
  • In a response to the farmers protest, KNTC managing director Pamela Mutua said the payment delay has been caused by the higher stocks of unsold rice in their warehouses.
  • Ms Mutua also noted that there are some government institutions that have not paid for their rice purchases from the corporation, resulting in delayed onward payments to farmers.

Kenya National Trading Corporation (KNTC) is stuck with unsold rice worth Sh300 million, amid protest from farmers over delayed payments.

In a response to the farmers protest, KNTC managing director Pamela Mutua said the payment delay has been caused by the higher stocks of unsold rice in their warehouses.

Ms Mutua also noted that there are some government institutions that have not paid for their rice purchases from the corporation, resulting in delayed onward payments to farmers.

“KNTC sells rice procured from farmers to government agencies with which it has credit agreements allowing up to 45 days after delivery. KNTC warehouses are currently holding stock worth Sh300 million which is yet to be sold,” said Ms Mutua.

Farmers in Mwea in Kirinyaga County have protested over the payment delays, pointing out that it has affected not only farming activities but also their pockets as the crop is their mainstay.

The government this year allocated Sh700 million to buy more than 100,000 bags of rice from the expansive Mwea Irrigation Scheme.

KNTC is buying the rice for onward selling to public schools and disciplined forces as per the directive issued by President Uhuru Kenyatta last year through an executive order.

The corporation has used the fund to buy rice from farmers at prices above what the market is offering. For instance, for Mwea rice, the agency says it has been buying a kilo of Paddy at Sh85 against a market price of Sh78 while for Sindano Rice, it buys at Sh45 against a market price of Sh37.

However, the higher prices may not last for long after the Ministry of Agriculture announced last year that it will no longer buy unprocessed rice at that price starting 2022.

The government has been buying the rice from local farmers through their cooperatives and supplying it to government institutions and other clients.