Published on 30/07/2010
By Jackson Okoth

Stakeholders in the agricultural sector are pushing for the formation of a powerful farmers’ lobby group to break influence of exploitive cartels. Complaints about dominance by a few firms and powerful individuals are getting louder.Protests are also being directed at politicians and powerful merchants controlling the procurement of farm inputs, especially fertilizer, which forms the biggest component of a farmer’s total cost of production. As the 2012 deadline approaches for Kenya to open up its borders to duty free sugar from the Common Market for Eastern and Southern Africa (Comesa) countries, privatisation of State-owned sugar firms has been slow.This is being attributed to influence from sugar barons keen to enter the lucrative sugar import business. It is claimed politicians play the middlemen for these cartels. All the while, the biggest loser is that frustrated and debt-ridden small-scale farmer yet to receive payments for delivery of last year’s produce. Available figures indicate that farmers in the North Rift–– Kenya’s breadbasket –– are owed an estimated Sh1.5 billion. There is a group of influential individuals determined to get into the food import business making local farming a waste of time," says Booker Owuor, Director of Sower Solutions Limited, an agricultural research organisation.

Vulnerable Position

Earlier suggestions to revive the National Milling Corporation to provide a level playing field in the milling business have been dropped. That has left small-scale farmers at the mercies of middlemen. "We are now proposing that small-scale millers be supported so that they can provide affordable flour, especially the unsifted maize meal to the urban poor," says Owuor. The price of a 2kg shifted maize meal has increased from Sh34 to Sh100 plus within a period of eight years. All the while, millers have not disclosed the cost of production to justify the hike in consumer prices. "The Government has shown it is incapable of breaking up this cartel. We have suggested that a milling plant be set up and its shares sold to farmers," he says. He adds that there is no structure in place within the State-owned National Cereals and Produce Board (NCPB) to come up with adequate pricing for farmers’ produce. Although there is a proposal that NCPB negotiates with farmers five months after the planting season, little progress has been made. Contract farming as a way of guaranteeing prices for farmers has been tested especially in parts of the North Rift. But the results have been disastrous when farmers fail to meet the agreed quality standards.

"While contract farming appears to have failed in horticulture, it should work with cereals growing that does not require high quality standards," says Owuor.
Although farmers expect a bumper harvest, especially in the North Rift where rainfall has been adequate, they could be looking at more problems as cash-strapped NCPB and private millers set lower prices than last year’s. "Farmers made the decision to plant this year’s crop based on prices last year. But with NCPB buying at lower prices this year while cost of production has remained high. This calculation does not simply add up," says Kipkorir Menjo, Director of the defunct Kenya Farmers Association (KFA). Most countries in Sub-Saharan Africa, including Kenya, liberalised their agricultural commodity markets in the 1980s and 1990s as a strategy production. " But liberalisation was done poorly as powerful individuals within the Government saw this as an opportunity to make cash and not protect farmers," says Menjo.

Genesis Of Problem

For instance, while KFA network was used to procure fertiliser directly from the manufacturer, the system collapsed due to political interference. Soon after, middle middlemen become fertiliser suppliers. "This is where agricultural production began to stagnate," says Menjo. He has called for the revival of KFA to rid the farm inputs procurement business of middlemen and well-connected merchants. While many discussions have been held on the need for farmers to have their own milling plant, there is no strong organisation to lobby for these interests. "At present, farmers do not mill and this has affected their incomes. All the benefits of value addition goes to private millers," says Menjo.  Parliament recently passed a Bill that intends to cap the prices of essential commodities to protect consumers from’ exploitation’ by traders.

Shortest War

But analysts say price control is not the solution to small scale farmers’ woes."The idea of introducing price controls without dealing with problems facing farmers is definitely not the way to go," says Owuor.Statistics show that approximately 80 per cent of the country’s population of more than 30 million people are rural dwellers and depend wholly on agriculture for survival. According to the ministry of Agriculture’s Strategy for Revitalising Agriculture for 2004 – 2014, 87 per cent of the poor households not only live in the rural areas and depend on agriculture, but over 50 per cent of those households are food insecure. This is partly due to high cost of farm inputs thanks to meddling by middlemen.