SUPPLY AND DEMAND

Do not fix prices for macadamia, tomatoes

In Summary

• Kenya is now third-biggest global macadamia producer while Kenya tomato market is worth Sh23 billion

• Macadamia and tomato farmers are demanding price regulation but that might destabilise the market

A display of tomatoes at Kangemi Market
A display of tomatoes at Kangemi Market
Image: MERCY MUMO

Tomato farmers in Kirinyaga want the county government to guarantee minimum prices (see P24). They are complaining about low prices and middlemen.

A proposed tomato processing factory being set up in Kangai by the county government should increase demand and stabilise prices for local farmers.

However, middlemen are a good thing because they smooth out supply and demand and facilitate distribution across the country.

 

In February, there was a shortage of tomatoes in Kenya and those same middlemen bought them from Ethiopia. Local farmers were then getting a great price for their tomatoes. Price fluctuations are unavoidable in agriculture.

Similarly, macadamia farmers have been complaining of low prices from middlemen and demanding more regulation by government.

But both macadamia and tomato production have been growing steadily in Kenya. The value of the Kenya tomato market is now Sh23 billion annually while Kenya is now the third biggest macadamia producer in the world. 

On balance then, farmers have been doing very well with tomatoes and macadamia. They should be careful of what they wish for when they demand government to set prices. They might end up killing the market which gives them a living.

Quote of the day: "Do not fear the enemy, for they can take only your life. Fear the media far more, for they will destroy your honour."

General Nguyên Giáp
The Vietnamese military genius died on November 4, 2013