February 13, 2012

Corn prices in Kenya's North Rift region have dropped from KES 3,000 (US$36.28) to KES2,000 (US$24.18) and farmers have been warned by the National Cereals and Produce Board (NCPB) to stop selling corn at a throw-away price.

A fortnight ago, the government stopped funding NCPB to buy corn from farmers. Managing director Gideon Misoi said the low prices may lead to corn shortages. Farmers want the government to give NCPB more money to buy corn.

However, Misoi said the farmers should store the corn and wait for better prices in the next few months. The government has already re-introduced duty on corn imports into the country causing millers to stop the importation. The millers and middlemen are now offering lower prices to farmers following the withdrawal of NCPB. "We know farmers have other needs like school fees but that does not mean they should sell corn they have at through-away prices," said Misoi.

He said the prices of corn are likely to go up and that farmers should store their corn at the NCPB warehouses under the Warehouse Receipting System. "The WRS system is the best for the farmers because they will keep the corn in good condition and sell it when the prices appreciate," said Misoi. Some farmers in Uasin Gishu, Nandi and Trans Nzoia said middlemen were offering a buying price of KES1,800 (US$21.77) per bag. The price has dropped drastically in the last two weeks after NCPB announced that it will no longer buy corn from farmers due to lack of funds.

The board said it had exhausted KES2 billion (US$24.2 million) which was provided by the government for the purchase of corn. The board has so far purchased 650,000 bags. NCPB was paying farmers KES3,000 (US$36.28) per bag which helped stabilise prices in the market. Misoi said the board may purchase corn on commercial basis but that will depend on the availability of funds. "We are looking for some money but we are yet to make headway. We are at the same time looking for money to buy fertiliser for use by farmers this year," said Misoi.