The Nation (Nairobi)

Kenya: Flour Pricing is Too Critical to Be Left to Private Millers

opinion

Nairobi — Kenya consumes more than three million bags of maize per month, which translates to 40 million bags a year. This figure is increasing as the population grows. The country depends on its farmers to produce about 24 to 32 million bags each year, the large variation being due to that fact that farming is rain-fed rather than based on irrigation, leading to large variations in yield per acre.

The deficit is mitigated by imports and that deficit is predicted to worsen as production remains static. Maize being the staple food, needs to be de-politicised. Kenya has witnessed a series of events surrounding maize production, imports, milling and even consumption. In my study, High commodity prices -- who gets the money? it became clear that the smallholder farmer gets a raw deal, as does the consumer.

THE STUDY SHOWED THAT PRICE INcreases took place at the level of traders and millers, leaving the farmer with poor returns and the consumer with a high price to pay for maize flour in the shops. Take wheat. The milling industry is closely woven.

Whereas in the past, three milling giants used to command 67 per cent of the industry while the small millers took the rest (33 per cent), the scenario is slowly changing for the worse as these giants are buying out the small millers and are now commanding 90 per cent of the wheat milling business.

Initially, Kenya had 120 millers but as at now this number has dwindled to near 50. It's a well known phenomenon that a vibrant sector with many players triggers healthy competition. This economic sense is what the big millers are out to eradicate. In the long run, this scenario presents Kenya with a dangerous future in terms of pricing and eventual food security because the fewer the players, the higher possibility of colluding.

It is not easy to find out the cost of producing a two-kilogramme packet of shifted maizemeal because those in the industry do not divulge such information. There must be a reason why these milling giants chase away any researchers from their gates.

If all other players in the value chain accept interviews on the commodity, don't you think it is also their right to know who is getting what at which stage? Research needs to be done properly in this industry to ascertain how much the millers are taking so that remedial measures can be taken.

If the millers are left to run away with our maize, then the only messiah of the downtrodden will be Ephraim Maina's Bill on food price control which already has been approved by Parliament. The government seems to have little control on the price of vital commodities like maize flour and therefore needs to pass this Bill into law for the poor to get relief.

When a poor family in Mfangano Island wants some maize flour, they'll certainly move to the nearest kiosk and ask for half a kilo of the flour to be weighed. We all know flour millers have no such packets and are therefore inclined to serve the middle and upper class.

The government must ensure food security to its people. If many of the researchers have pointed fingers at the millers and their exploitative behaviour, it must be emphasised to the government the need to reign in and streamline the sector. The government must have inventories on the millers and must constantly ask itself why the numbers are shrinking.

It also needs to enforce the 77-page report that was tabled in Parliament in April last year by the committee on Agriculture, Lands and Natural Resources. The report recommends that no single miller or conglomerate of millers should be allowed to monopolise maize milling. The report further stated that millers should only be allowed a maximum of 18 per cent profit. My fears are that the millers could be getting much more.

Indeed, the government should own the large percentage of the milling industry. The revival of National Milling Corporation should be top agenda for the Parliamentary Committee on Agriculture. Such a milling giant can be directly owned by the public through National Social Security Fund or their savings and credit schemes.

Mr Owuor is director and principal researcher at Sower Solutions, an agriculture research consultancy firm.


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