When Agriculture Cabinet Secretary Mutahi Kagwe issued a directive doubling miraa prices a week ago, residents of Igembe, the main growing area in Meru, celebrated. They expected a boom witnessed five years ago before exports to Somalia were banned.
However, the party was short lived.
Farmers are yet to reap the benefits of new prices declared by Mr Kagwe as traders dig in to sabotage the directive. They are telling farmers the CS engaged in “jaba” stories, saying the dynamics and realities of the market were different.
Agriculture Cabinet Secretary Mutahi Kagwe.
Photo credit: File | Nation Media Group
In the order, the ministry doubled the price of three export varieties after lengthy negotiations with traders and farmers. Farmers were expected to sell Grade 1 miraa at Sh1,300, Grade 2 at Sh700 and Allele (the miraa mostly sold in North Eastern Kenya and Somalia) at Sh1,000 per kilogramme but close to two weeks later, prices have plunged further.
According to Miraa Farmers and Pluckers Association chairman, Mr Japhet Mutuma, traders have been buying Grade 1 at Sh600, Grade 2 at Sh250 and Allele Sh350.
“Despite the directive by the CS, the buyers are taking advantage of the glut caused by the recent boycott to suppress prices. They are also leveraging on the upcoming Holy month of Ramadhan when the demand goes down,” Mr Mutuma said.
He added: "Some traders are telling farmers who insist on the new price to go sell miraa to the CS.”
A bundle of miraa on display at Argyle Grand Hotel Nairobi during the forum on the Narcotic Drugs and Psychotropic Substance Control Amendments Bill, 2024 on May 24, 2024.
Photo credit: DENNIS ONSONGO| NATION
“There is no way a CS can issue a directive doubling prices without considering the costs involved. We were not consulted before the prices were hiked and I think that was a political statement,” the buyer said.
The Agriculture Food Authority (AFA) Miraa Pricing Formula Committee chairman, Mr James Mithika, confirmed that buyers have defied prices set by government.
He said market surveillance by the committee had established that the best price buyers had offered since the new directive was Sh900 for Grade 1 and Sh500 for Allele.
“We have since sent letters to the buyers urging them to adhere to the prices announced by the CS. The prices were a result of lengthy consultations involving all players. We agreed on the prices after taking into consideration the cost of producing a unit of miraa,” Mr Mithika said.
“We have singled out the issue of the cartel operating at the Jomo Kenyatta International Airport (JKIA), the existence of one importer in Mogadishu and restrictions in accessing other markets in Somalia. We are also looking into the reopening of the border for trade,” Mr Mithika said.
The collection of a miraa ‘commission’ at the Jomo Kenyatta International Airport (JKIA) has been ongoing since July 2022.
Photo credit: Nation Media Group
Nyambene Miraa Trade Association (Nyamita) chairman Kimathi Munjuri said enforcement of the new prices has been made difficult by the JKIA-based cartel.
“The cartel has a stranglehold on buyers and are warning them against complying with the prices announced by the CS. Shippers give orders to agents who in turn buy at their own terms. The cartel has the say on who can export from Nairobi,” Mr Munjuri said.
He said the farmers were getting far much less because traders were also eating into the farm-gate prices.
“We have a lot of miraa in the farms because of the recent boycott. We estimate losses running into Sh1billion due to the recent boycott,” he said.
The chairman added that until the group controlling the trade is eliminated, miraa farmers will not get the fruits of the government effort.
Mr Munjuri noted that decision to define the farm-gate price was guided by the reality in Mogadishu where the miraa market is highly controlled.
“There is only one importer in Somalia who decides the volumes per day. They have also capped the export volume, meaning the forces of demand and supply are not operational. This is why we say the prices agreed should be in force throughout the year,” he said.
