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Economy

NCPB price offers targeted in push for new sale system

dry maize
Farmers dry maize near Eldoret town. The grain-growers want the State to buy maize at Sh3,200 per sack. FILE PHOTO | NMG 

Farmers may soon have to compete on offers such as price, quality and volumes if Parliament gives nod to proposed changes in the way the State stocks maize for emergency.

Grain sector players want the State to scrap the reserve price as one of the preconditions for setting up a functioning warehouse receipt systems (WRSs).

National Cereals and Produce Board (NCPB) has traditionally set high reserve prices at harvest times to farmers into releasing their stock as part of the national strategic food reserve.

“The Government should procure strategic grain reserve through an open tender system but not through setting reserve prices that NCPB should pay for the grain,” Mr Gerald Masila, executive director of the East African Grain Council told MPs in Nairobi last week.

Parliament’s agriculture committee members have been collating views ahead of the third reading of the WRS Bill.

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“Reserve price has disrupted open market system, undermining food security and propagating rural poverty,” he said and called for review the fertiliser subsidy programme, scrapping of taxes on agricultural inputs and curbing land subdivisions.

The comments come as farmers in the Rift Valley feud over the Sh2,300 per sack that the State has offered as it tries to restock the national granaries. Farmers are demanding Sh3,200 per sack of maize even though the harvest time dynamics are thought to have depressed prices.

Under the WRS, transferable paper or electronic documents detailing volumes, quality grade, location and ownership of the commodity are issued to farmers in exchange for grains deposited with a certified handler.

The receipts, can be exchanged in transactions between buyers and sellers even as the physical grain remains in the certified stores until the postharvest market prices recover to some predetermined level.

“The committee is keen to see the Bill signed and we will provide input to guide the process to its fruition," said agriculture committee chairman Ali Adan Haji.

Experts fear that retention of the NCPB reserve price will act as a disincentive as farmers who are guaranteed super-high prices at harvest time shun a system that restrict them to waiting until grain supply stabilises.

According to Mr Masila, some 48 million bags of maize from last season are still held by farmers for lack of market even as current harvesting period gets underway.

The WRS has been touted as the solution to post-harvest losses.

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