Duty-free maize is bad for the farmer

In Summary

• Duty-free imports hurt the farmer and give windfall profits to the importer.

• Reduce the tariff from 50 percent to 20 percent to ensure continuous supply

Traders selling maize near the Kipchoge Stadium in Eldoret yesterday, farmers want government to stop maize imports from neighbouring countries.Photo Mathews Ndanyi
Traders selling maize near the Kipchoge Stadium in Eldoret yesterday, farmers want government to stop maize imports from neighbouring countries.Photo Mathews Ndanyi

Governors in the North Rift want the government to suspend the planned importation of 19 million bags of maize until after local farmers harvest a bumper crop in September (see P30).

Definitely, Rift farmers will be better off if there are maize shortages in October. They will get a higher price.

But is that in the national interest? Urban consumers will have to pay more for their unga. 

 
 

Maize imports have a high protective tariff of 50 percent until there is a shortage and then suddenly maize can be imported duty-free. This undercuts the farmer and gives windfall profits to the importer.

Kenya produces less maize than it consumes. It has to import maize every year. Tanzania and Uganda have surpluses of maize that can be imported duty-free but more is still needed from outside to satisfy demand.

The solution is to reduce the protective tariff to 25 percent so that it is affordable for millers to import maize throughout the year from outside the EAC. Then maize prices will stabilise.

Thereafter duty-free imports of maize should be banned because they truly hurt the farmer.

Quote of the day: "God breathes through us so completely... so gently we hardly feel it... yet, it is our everything."

John Coltrane
The American jazz musician died on  July 17, 1967.