The government has introduced a minimum price of Sh100 for a kilogramme of macadamia to curb exploitation by brokers and middlemen even as it threatened to revoke licenses of buyers that will violate the price floor.
This makes macadamia the latest commodity on which the government is applying price controls which have yielded mixed results over the years. The other commodities are tea, wheat, electricity and fuel.
The minimum price on macadamia was announced by Agriculture and Livestock Development Cabinet Secretary Andrew Karanja on Tuesday and comes at a time when prices of the crop have fallen dramatically due to a glut in the global market.
“A minimum guaranteed farm gate price of at least Sh100 per kilogramme will be implemented,” said Dr Karanja.
“Agriculture and Food Authority (AFA) is tasked with enforcing strict compliance with this directive, including revoking licenses of violators. The Authority will also increase inspections and surveillance to eliminate unscrupulous dealers” the CS added.
This came just days after the government also banned the harvesting of macadamia for a period of four month starting on November 2, 2024 until March 1, 2025 to curb the export of immature nuts.
Pursuant to the ban, the Ministry also directed macadamia dealers to submit their stocks for inspection, verification and clearance by November 15, 2024.
Kenya is one of the top exporters of macadamia in the world with more than 95 percent of local macadamia exported to the global market. In 2022, Kenya ranked as the third largest producer of macadamia globally, only behind South Africa and Australia.
Macadamia farmers have however been struggling in recent years due to low prices forcing some of them to abandon the crop in favour of more lucrative crops. In 2019, farm gate prices for macadamia nuts in shell (NIS) peaked at an all-time high of Sh180 per kilogramme. However, by early 2023, prices had plummeted to range between Sh30 and Sh40 per kilogramme.
This saw the government lift the ban on the raw exports of macadamia for a one-year period starting November 3, 2023. This, he argued, would help stabilise prices and help farmers manage excess stock impacted by global market conditions.
“A rapid industry assessment shows that many local companies lack quality stocks for processing. It also highlighted the harvesting, processing and export of immature nuts, leading to poor performance of the Kenyan macadamia in the global markets,” said the Ministry.
Local production of macadamia has been haphazard even as the size of land under the crop has been increasing in recent years, rising by 21 percent to 8,746 hectares in 2022 compared to 7,180 hectares in 2021, according to AFA.
This has been attributed to inter-cropping of the crop with other crops by farmers. The annual production of macadamia shrunk to 40,903 tonnes valued at Sh2.513 billion during the period, down from 42,562 tonnes valued at Sh2.786 billion in 2021.
