The Government’s move zero-rating maize and allowing importation of duty free grain has fallen into headwinds after farmers and stakeholders opposed the decision.
In what is now the latest intrigue in the politics of ugali, there is a fear that by allowing for tax free importation of maize will open floodgates for the same cartels who have been working hard to keep the prices up to reap from a shortage they created.
Despite the drought being blamed for the current shortfall, the whereabouts of the maize harvested from the North Rift last October is still a mystery. The harvest, which usually brings down the price of maize due to abundance, failed to have an impact last year.
The National Cereals and Produce Board had projected the harvest from the country’s food basket at 32 million bags. “We only have 1.5 million bags in our reserves,” the cereals board Managing Director Newton Terer says. On the receiving end is the poor consumers who depend on maize as their staple food. By yesterday, retailers were yet to lower prices of maize meal with a two kilo packet of Jogoo selling at Sh146 in most supermarkets.
The Millers Association declined to talk to us on what it would take to bring the prices down despite sending messages to its chair Nick Hutchinson.
This is as latest data from the Kenya Bureau of Statistics (KNBS) showed inflation had hit 10.28 percent, a level last seen in 2012 and way above the Government preferred 7 per cent ceiling.
“Between February and March 2017, Food and Non-Alcoholic Drinks’ Index increased by 3.18 per cent. This was mainly attributed to increases in prices of several food items including, spinach, maize flour, milk, potatoes and maize grain,” said the bureau in a statement released Friday evening. “This increase in food prices was partly contributed by prevailing drought conditions. The year on year food inflation stood at 18.56 per cent in March 2017,” it said.
According to KNBS the price of maize has risen by a staggering 27 per cent in just one month, second to irish potatoes which jumped 33 per cent. Even worse, the high price of maize is unlikely to fall until October when farmers in the North rift harvest which is seen as the reason behind the Government’s decision to zero rate the grain.
It is hoped this will go a long way in addressing the worsening state of food security in the country – close to 3.2 million Kenyans in over 20 counties are facing starvation. But while welcoming the zero rating of inputs used in the manufacture of food, farmers say they are afraid that the four-month window might be abused by the importers.
“Efforts by the Government to alleviate the current food crisis is not bad, but if the importers are given too much time to bring in maize it might negatively affect farmers when they harvest their crops later on in the year,” said Kenya Farmers Association Director Kipkorir Arap Menjo told Weekend Business.
“In any way, they should not go beyond the four-month period so as to allow for incoming crops,” said Menjo. It is planting season in most of the food-growing parts of the country.
His sentiments were supported by Kenya National Farmers’ Federation (KENAFF) Secretary General Dr John Mutunga who noted that the Government needs to be careful with the process so as not to distort the market. “If the supplies are not managed, it can mess up the entire equation by flooding the market, bringing the prices down and discouraging local farmers,” he said.
He said it is important for the Government to accurately determine the deficit so that licensed importers do not bring in more than what the market needs at the time.
The Government has been struggling to contain the maize shortage crisis since October last year without achieving any tangible results. In October, it ordered NCPB top release a million bags from the strategic grain reserves in order to lower the price of flour which was then approaching Sh100.
Ban maize export
Millers complained that the maize was not of good quality and instead opted to import form neighbouring countries further pushing the price of unga up. Then in January President Uhuru Kenyatta banned the exportation of maize. It still did not work.
And on Thursday, Treasury Cabinet Secretary Henry Rotich proposed duty free importation of white-maize in what is a move to address the current shortage of the grain in the country.
“In addition to further lower the cost to Wananchi, the importation of maize during the next four months will be duty free. I expect, therefore to see a reduction of prices for these basic commodities which are enjoyed by majority of our people,” added Rotich.
However, maize farmers have read mischief in the proposal, saying that it leaves room for unscrupulous importers to flood the market with cheap maize making it difficult for them to compete.
Willy Bett, Cabinet Secretary for Agriculture, in an interview last month hinted that the country was being left without a choice but to import maize to address the skyrocketing price of unga. “I announced one time that if the situation gets bad we will not shy away, we will have to import so that we don’t have Kenyans to suffer because of lack of maize,” said Bett.