The government says there is no immediate plan to purchase more maize from farmers after it achieved target for 2017/18 financial year, even as growers grapple with grain from as far back as last season.
This implies farmers will now have to sell produce to millers and brokers at lower prices for lack of competition from the National Cereals and Produce Board (NCPB), which has been paying Sh3,200 per 90 kilogramme bag.
This comes at a time the price of a 90 kg bag of maize has dropped to as low as Sh1,900 in the North Rift, following a glut in the market.
“The government has achieved its target of maize purchase during the 2017/18 financial year and has already exhausted the budget for the same.
"There is therefore, no immediate plan to purchase more stock,” said Agriculture Cabinet Administrative Secretary Andrew Tuimur.
He added that the ministry had requested for additional funds from the National Treasury after it was only allocated Sh1.9 billion in the supplementary budget to cater for debt to farmers. The State Department of Agriculture had sought Sh3.6 billion to clear the dues.
He said the ministry will use proceeds from the sale of 653,496 bags of maize, which will raise Sh1.5 billion, to settle part of the debt while waiting for more money from the Treasury to clear the debt.
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Sh4.15 billion owed
The government owes farmers Sh4.15 billion accruing from maize that farmers delivered to NCPB between October last year and March 2018, according to the Ministry of Agriculture.
As at last March, the government had paid them Sh7.1 billion after purchasing 3.3 million bags of maize from last season’s crop.
The NCPB has been buying maize on behalf of the government under the Strategic Food Reserve (SFR).
The grain acts as a buffer stock and is used to supplement millers in times of shortages to tame high cost of flour.
The price of a two-kilogramme packet hit a high of Sh150 before the government intervened with a Sh6 billion subsidy that saw the cost fall to Sh90 last year.
Dr Tuimur said the government was overwhelmed by high turnout of farmers who supplied maize to the board, making it the largest purchase by NCPB has from a single season.
Last year government bought close to 1.8 million bags.