TUG OF WAR

Maize farmers must let market forces set prices

Free market way to go for maize farming

In Summary

• Currently, the cost of production far outweighs the returns. 

• A commodity exchange market will  transfer the risk burden from farmers.

It's maize harvest time in Trans Nzoia and Uasin Gishu and as in the past, farmers are placing demands on government.

Year in, year out, maize purchase takes a political turn almost bordering on blackmail.

Cherangany MP Joshua Kutuny says farmers will accept nothing less than Sh3,600 per 90kg bag (see page 11). 

 

Commodity prices are determined by factors including market proximity, perishability, supply and demand.

Maize is Kenya's staple food, so farmers resort to arm-twisting the state into a price of their choice.

Tea, dairy, coffee and sugarcane farmers never set farm gate prices, leaving it to the market.

To ease the production burden on farmers and ensure they profit, the state must reduce taxation on farm inputs like fertiliser, pesticides, machinery and seeds.

In this way farmers, more so maize farmers, will not endlessly engage government in a tug of war.

Currently, the cost of production far outweighs the return.

The setting up of a commodities exchange market by the Nairobi Securities Exchange should be fast-tracked.

It will enable farmers to transfer risks to other market participants. Futures contracts will enable farmers to set the price they are willing to receive.

This will help ease the dissatisfaction of farmers and in turn boost productivity.

 

Quote of the Day: “Private property was the original source of freedom. It still is its main ballpark.”

Walter Lippmann

The American writer was born on September 23, 1889.