17 December 2012

Kenya: Board Stops Maize Purchase, Prices Drop

The National Cereals and Produce Board (NCPB) has stopped buying maize from farmers due to lack of money causing the market prices of the commodity to drop drastically from sh 3,000 to Sh 2,300 in parts of Rift Valley.

Farmers will today (Monday) hold a crisis meeting at the NCPB depot in Eldoret over the matter. NCPB has run out of cash to buy the maize after exhausting the Sh800 million released by the government. The board has paid out all the money and now owes farmers an additional sh 500 million for maize delivered.

"We are waiting for more cash to pay the farmers who have already delivered their maize", said NCPB Managing Director Gideon Misoi.

Misoi however said the board was only receiving maize from farmers who were willing to store their harvest under the Warehouse Receipting System (WRS) for sale later.

"We are hoping that the government will give us extra cash so that we continue buying the maize," said Misoi. Misoi asked farmers to continue delivering the maize to the NCPB depots countrywide under WRS saying they will be paid as soon as the government releases the money.

He said the board is encouraging farmers to store their crop instead of selling it out to middle men at low prices. "The prices are likely to go up and farmers are advised to either store their produce with NCPB or at their own stores", said Misoi.

Kenya Farmers Association (KFA) Director Kipkorir Menjo and Wareng County Council Chairman Paul Kiprop met with the MD yesterday and said they wanted the government to release more cash to the board in order to stop farmers being exploited by millers and middlemen who reduced the maize prices in the last three days after NCPB ran out of cash.

Kiprop said the millers and middlemen were frustrating farmers by cutting prices anyhow. Farmers have argued that the Sh1.6 billion allocated to buy maize is inadequate because it can only buy a maximum of 600,000 bags of maize out the 40 million bags produced.

NCPB has already purchased 450,000 bags of maize worthy more than Sh 1.3 Billion from farmers mostly in the Rift Valley region. The board has been buying the maize at Sh3,000 per bag, the highest price in the market currently.

The deliveries are high in Eldoret, Kitale, Mois Bride and parts of the South Rift region. Misoi however said farmers should unite and seek a long term solution to the maize pricing problem instead of relying on the government which does not have adequate funding.

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