EXPLAINER: What it means for farmers for NCPB to go into retail market

 

For many years, the National Cereals and Produce Board has been buying maize and selling fertiliser to farmers on behalf of the government.

But following reforms at the NCPB in August 2020, the government stepped away from doing the business of buying maize and selling fertiliser.

This means that NCPB will now operate on a commercial basis and will buy maize from farmers competitively like other traders or millers in the market.

Joesph Kimote, NCPB managing director, says the long queues at the its depots and delayed payment will now be a thing of the past.

He said there will be no more queuing for farmers to deliver maize to the cereals board as they (farmers) will be allocated a date and period to deliver their produce.

“Minimising the long queuing at the depots is a critical deliverable for us. We want to ensure that farmers don’t just bring maize to NCPB stores, but they bring maize with an appointment,” Kimote says.

“We will be offering a personal touch to our farmers. For example, a farmer can come to our office and declare interest to bring a certain number of bags of maize, and is allocated a slot when to bring the produce. This will help minimise all the hustle and bustle, but we will also cater for walk-ins to the stores and we will try to clear them as soon as possible.”  

NCPB is currently offering Sh2,700 per 90kg bag of maize. Kimote says payments are done within 24 hours of delivery.

“Farmers are getting their money immediately, but the caveat is that the maize must be of high quality, which is aligned to the board’s standards. This includes aflatoxin levels of less than 10 ppb, well dried with a moisture content of a maximum of 13.5 percent, should be clean with no impurities or foreign objects,” he says.

The MD explains that the board can now provide an available market for farm produce from an institution that has the historical capacity of grain handling facilities that offer weighing, storage, grading and drying services.

When there was a lot of government intervention, the challenge has always been that the market used to wait for the state to announce maize prices, then people react. This was often a political decision that was not informed by any science

Timothy Njagi, senior researcher at Tegemeo Institute

He says farmers stand to benefit from the reforms because they will be able to store their produce, such as maize, in NCPB stores through the Warehouse Receipt System.

“For example, if a farmer brings to NCPB grain worth Sh1 million and he wants agricultural inputs such as fertiliser, or agrochemicals, which we have in our stores, he can take it against the farm produce we have. The farmer can use their produce as collateral and this is a big benefit that farmers can readily access,” Kimote explains.  

He adds that this also minimises exploitation of farmers. Kimote says the institution is mandated to ensure that the interests of farmers and other value chain players are taken care of.

Timothy Njagi, a senior researcher at Tegemeo Institute, says there will no longer be political interference in NCPB operations.

He says lack of political influence will strengthen NCPB and enable it to carry out its mandate.

“The previous way of doing business for NCPB was not sustainable, hence, the board has had a lot of debts though it has been trying to clear them. This was largely due to interference in the decisions it was supposed to make,” Njagi says.

He explains that if NCPB, for instance, only has money to buy 10,000 bags of maize, then that is the quantity it will buy.

“Those days when the board was given directives to buy for instance 20,000 bags and only received money from the government to buy 10,000 bags are over,” he says.

This also means that farmers will be able to access money in good time, and will not have to wait close to a year to be paid for maize delivered. This is because NCPB will only buy what it is sure it can pay for.

The new move is expected to help farmers improve production. 

“When there was a lot of government intervention, the challenge has always been that the market used to wait for the state to announce maize prices, then people react. This was often a political decision that was not informed by any science,” Njagi says.

He says the move for NCPB to go commercial means there will be predictability of prices so if a farmer can predict that they will not make money from maize farming, they can do something different.