Farmers in Kenya have sold 2 million 50 Kg bags of maize worth KSh2.6b to the National Cereals and Produce Board (NCPB). The country is estimated to have produced 40m bags of maize by September 2015, of which NCPB has bought about 5 per cent.
Each 90Kg bag was sold at KSh2,300, although millers and other traders were buying a similar bag at KSh2,600. However, a 90Kg bag of maize came with a rebate of KSh500, which will be paid to the farmers later.
So far, farmers from Uasin Gishu County have supplied 386,266 bags, worth KSh887m to NCPB.
The Board has been buying 70,000 bags of maize every day and has exhausted the Sh2.3billion allocation it had received for the purpose.
The recent purchases have increased the amount of maize in the strategic grain reserve from 2.7m to 3.7m 90Kg bags, although the target is 5m.
But farmers are worried that once the NCPB monies run out, middlemen and other crafty traders will ride on the opportunity to drive the prices down.
Last year, prices in the free market dropped to as low as Sh1,200 for a 90Kg bag.
Option B
But instead of selling their produce at throw-away prices, the East African Grain Council, has built 10 warehouses across the country, in which it allows farmers to store their maize safely.
“The prices will adversely be affected if all farmers rush to the market with their produce. We advice farmers to take advantage of available storage facilities,” EAGC’s chief executive, Gerald Masila told Farmbiz Africa.
EAGC's system allows farmers, traders and grain processors to deposit their produce in EAGC-certified warehouses upon that they are issued with official receipts, which they can either offer for sale to buyers or use as collateral to secure bank loans.
The system, dubbed G-Soko, also links smallholder farmers to grain buyers across East Africa through a networked and structured market mechanism that utilises innovative technology to provide information on market opportunities, track goods, and connect buyers and sellers.