• A licence to import maize is an instant windfall profit
• Farmers must be protected
This year the long rains might fail altogether.
Kenya consumes seven million tonnes of cereals annually. It produces 3.6 million tonnes of cereals, of which 80 percent is maize.
Even if Kenya gets half its expected maize crop, which might be over-optimistic, it will still need to import an extra 1.5 million tonnes of maize this year.
Maize prices are already shooting up. There is concern that farmers are hoarding and cartels profiteering. But it is legitimate to make a profit if you have the opportunity.
The root problem is that the government only issues import licences when there is a maize shortage. So if you get a licence, you make an instant windfall profit.
The solution is for government to allow maize to be freely imported all year around. Importers can then anticipate the local harvest and at what price imported maize can be profitably imported. This will stabilise market prices.
But farmers must be protected. So Kenya should maintain the 50 percent duty on imported maize, or even raise it, but allow the private sector to import maize throughout the year.
Quote of the day: "I have been a conspirator for so long that I mistrust all around me."
Gamal Abdel Nasser
The Egyptian general seized power on April 18, 1954