Feed manufacturers rake in millions as farmers count losses from falling maize prices
Animal feed manufacturers are cashing in on low maize prices that have dropped below Sh2,000 per 90kg to produce feed as farmers face heavy losses months before harvesting this season's crop.
Animal feed manufacturers are cashing in on low maize prices that have dropped below Sh2,000 per 90kg to produce feed as farmers face heavy losses months before harvesting this season's crop.
The companies are raking in millions as maize farmers in the North Rift region – the country's food basket – grapple with market challenges for last season's crop worth millions of shillings.
The disillusioned farmers, who have over 600,000 bags of last season's produce worth an estimated Sh2 billion are selling the produce at throwaway prices.
“The drastic decline in maize prices has forced most farmers to sell the produce at throwaway to avert further losses following harvest of alternative food crops and harvest of this season crop in some parts of the region,” said James Kemboi, from Moiben, Uasin Gishu County.
He is holding 300 bags of maize after the National Cereals and Produce Board (NCPB) finished buying the crop almost a month ago.
The NCPB offered Sh4,000 per 90kg bag, but most large-scale farmers were reluctant to supply the Board when it opened its doors late last year due to stringent conditions and expectations that prices would rise above Sh7,200 per 90kg bag.
The government's target was to purchase one million bags of maize at Sh4,000 per 90kg bag through the NCPB for the National Strategic Food Reserve.
The country harvested 44 million bags of maize, up from 41 million bags last season, due in part to favourable climatic conditions and the distribution of subsidised fertiliser.
Maize farmers are facing heavy losses as the price of the commodity has plummeted to below Sh2,000 per 90kg bag, down from Sh6,400 three months ago.
Waste due to pests
The farmers consider this a fair price to pay for 90kg of maize rather than having the crop go to waste due to pests and mould due to lack of proper storage facilities.
“We are struggling to make ends meet due to lack of market for produce while this season's crop is almost ready,” said Wesley Kosgei from Cheptiret, Uasin Gishu County, who has 200 bags of maize.
Dairy farmers in the North Rift region said they had access to cheap feed after maize prices dropped to Sh1,800 per 90-kilogram bag and prices are likely to fall further due to the availability of cheap food crops.
Feed manufacturers are offering between Sh1,650 and Sh1,800 per tonne.
“We can now mill our animal feeds from the low-cost maize produce that has cut down milk production costs,” said Joshua Melly from Cheboite, Nandi County.
Raw materials
Some of the traders in animal products have reduced the cost of feed, with 10kg of milk powder selling for Sh250 compared to Sh400 a few months ago due to an increase in raw materials.
Farmers interviewed said creditors had issued notices threatening to auction their property to recover money advanced to them to invest in last season's crop.
Kenya Kwanza has pledged to transform the agricultural sector and transform two million poor farmers from food deficit to surplus producers through input financing and intensive agricultural extension support, with a minimum productivity target of Sh50,000 in terms of income per acre.
The country produces an average of 30-40 million bags per year, with a deficit of about 10 million bags sourced from the regional market – EAC and COMESA countries.
The Kenya Kwanza administration has pledged to put in place measures that will ensure the country does not import maize by 2025.
Increase their productivity
According to President Ruto, the provision of certified seeds and fertiliser will enable farmers to increase their productivity and thus take the country out of deficit.
“Agriculture offers the quickest payback period for investments. This is because, in many cases, there is no new capital investment required.
Increasing production only requires addressing the cost, quality, and access of inputs – animal feeds, seeds, fertilisers, pesticides among others – and providing farmers with the working capital to buy an adequate supply of the inputs,” said President Ruto in the Kenya Kwanza Manifesto.
“Food accounts for 54 per cent of household expenditure and poor households spend 60 per cent and more. Agriculture has the highest employment multiplier, meaning that agricultural growth creates more jobs in other sectors than any other sector due to its strong forward and backward linkages with other sectors of the economy,” he added.
President Ruto has pledged to reduce the cost of living by increasing food production while cushioning farmers against the high cost of inputs and assuring them of a market for their produce.
“The high cost of living in Kenya can only be resolved by raising agricultural productivity. This will increase farmers’ earnings per acre and an excess product in the market will lead to an immediate impact on the pricing to the consumer,” he said.
