How State set maize price at Sh2,300

By LYNET IGADWAH

Details of a research that prompted the government to cut the prices of buying maize from farmers by a third to Sh2,300 were made public in Parliament on Tuesday.

Strategic Food Reserve Oversight Board (SFROB) told MPs it relied heavily on research from think tank Tegemeo Institute of Egerton University to lower the cost at which the state would buy the grains from last year’s Sh3,200.

The research from Tegemeo and the State crops development department indicated that the cost of producing a bag of maize this year stood at Sh1,539.

This informed the board to add a profit margin of 30 per cent on the production costs, value added tax of eight per cent and Sh176 a bag for unforeseen factors.

“In consideration of the above, the Strategic Food Reserve Oversight Board set a price of Sh2,300,” the board said in a statement to Parliament. It also quoted the excess purchase of grains last year by the National Cereals and Produce Board and this year’s bumper harvest as factors behind the cut price.

On Tuesday, MPs were not satisfied with the said factors, forcing lawmakers to send back SFROB members, saying they failed to file a comprehensive report on how it reached the price of Sh2,300.

Led by chairman Noah Wekesa, the board members came face to face with angry lawmakers who told them that farmers will not accept anything less than Sh3,200 for a 90kg bag of maize.

The MPs accused the board of frustrating farmers through setting a price that does not resonate with the cost of production and prevailing market rates.

“Even as you go back to furnish us with a detailed report, let it be known to you that the price we are expecting is nothing less than Sh3,200,” added Kwanza MP Ferdinand Wanyonyi.

Source: Business Daily