Alarm over shortage and cost of maize flour

Daily Nation
By  LUCAS BARASA and OLIVER MATHENGE Posted Sunday, November 23 2008 at 22:39
In Summary
* Price of staple meal has shot up in the last one week and is too high for the poor
An acute shortage of maize flour is looming in the country after its cost doubled in the past one week and shops started rationing the commodity.

On Sunday, shortage of the staple, retailing at Sh120 per packet, started to bite across the country.

In December last year, a two-kilogramme packet of maize flour cost Sh48. Last week, the packet was being sold for between Sh80 and Sh85.

Prime Minister Raila Odinga on Sunday blamed the shortage on poor harvests and high food prices in the international market.

The minister for Agriculture, Mr William Ruto, said the shortage was artificial and blamed millers whom he accused of refusing to buy maize directly from farmers.

However, Kenya Association of Manufacturers chairman Vimal Shah said there was no maize in the market. He asked the Government to allow millers to import maize to reduce the shortage.

Even as the Government and millers differed over who was to blame for the shortage, a consumer organisation has called for the introduction of price controls to ensure that the flour, which is used to make the staple ugali meal, remains affordable to the poor.

About 46 per cent of Kenyans live on less than Sh140 a day, which means they can barely afford to buy a packet of maize flour.

“We know it is a free market economy, but there should be a mechanism to ensure consumers do not continue to be exploited,” said Ms Dorcas Kamunya of Consumer Information Network.

In Nairobi, some supermarkets were rationing the number of packets that their customers could buy. In one supermarket, customers were not allowed to buy more than five packets.

In other parts of the country, consumers rushed to buy and stock the staple in anticipation of a further shortage.

Major outlets in the city told the Nation that there has been a low supply of the product over the last few days.

A spot-check at Nakumatt Supermarket branches in Nairobi revealed that the largest chain-store in the country had no maize flour.

Nakumatt Holdings operations director Thiagarajan Ramamurthy said millers who supply the chain had no maize to produce flour. He, however, said some of the millers had promised to make some deliveries on Monday.

At Woolmart Supermarkets, customers were asked not to pick more than five packets of the product.

In Kakamega, shoppers at Walias Supermarket were restricted to buying a maximum of three packets.

And in Nyeri South District, officials at Aberdares Flour Millers said they were shopping for maize in Kitale because most farmers in the region experienced low harvests this season.

In Busia, Mr Harrison Kibuye, a manager at Jamii Supermarket, said wholesale traders were hoarding flour in anticipation of much higher prices.

The shortage has also spilled to neighbouring Uganda where a packet is now being sold for Sh140, forcing some residents to cross the border and buy the commodity in Kenya.

Meanwhile, the permanent secretary in the Special Programmes ministry, Mr Ali Mohammed, said he had called an urgent meeting for the National Cereals and Produce Board trustees to find a way to end the shortage. The meeting is to be held Monday afternoon.

“I have convened an urgent meeting to review the situation and see what is causing the scarcity… I have told my colleagues that this is not acceptable and we must be able to intervene,” said the PS, who arrived in the country on Sunday after a trip abroad.

It has also emerged that three ministries had stopped the cereals board from selling maize to private millers. The board ratified the decision two weeks ago, and this is believed to be one of the reasons for the shortage.

Besides stocking up supplies for national strategic reserves, the board is authorised to sell maize commercially, but Agriculture, Special Programmes and Finance ministries stopped them from doing so.

To buy maize from the board, one needs a special letter from the Government. But it was not clear what criterion is used to decides who gets the letter.

According to some millers, the decision had led to the formation of a cartel linked to a senior government official.

Without sweat
“They usually buy the commodity at about Sh1,900 per 90-kg bag and sell the same at Sh2,600 without a sweat,” said one miller who asked not to be named. He said the cartel was earning millions of shillings by creating artificial shortage.

But, Mr Odinga who spoke at Wilson Airport on arrival from Mombasa, said the Government could not stop the cereals board from selling maize to millers, saying, NCPB was supposed to sell maize and use the cash to re-stock.

“I am not aware of any decision to bar it from selling. We will never do that as a Government. We want to ease the suffering of the people,” he said.

And Mr Ruto said the cereals board had decided not to sell maize to millers.

In an interview with NTV, he said the decision was made by the NCPB board, and had nothing to do with him.

However, Mr Mohamed and NCPB managing director Gideon Misoi said that three ministries — Agriculture, Finance and Special Programmes — had stopped the board from selling maize to private millers.

Millers, too, told the Nation that for weeks now, they have been unable to buy maize from the board, which is the country’s biggest buyer of the grain.

“We hope the price will come down soon. Millers should not use the shortage to make a kill on the poor. Maize flour should be affordable to each and every Kenyan,” the PM said.

Mr Odinga said the Ministry of Agriculture and that of Special Programmes were working on recommendations on how to lower the cost of maize flour and that the matter will be discussed when the Cabinet meets.

Vice-President Kalonzo Musyoka described the food crisis as serious, especially when coupled with inflation and unemployment. He said the shortage would put a strain on the budgets of many households as majority of poor families could not afford the Sh120 charged for a packet of maize flour.

He said the Government was working on a mechanism to address the shortage in a “realistic way” without importing too much that would affect producer prices.

Ongoing harvesting of maize in major growing areas of the North Rift is expected to increase maize stocks nationally although earlier in the year, some farmers failed to plant saying the price of fertiliser and fuel was too high.

Mr Shah said the price of maize was reducing globally and maize flour prices could also go down in the country by January.

“We agree farmers should get income, but we also need to have enough food,” Mr Shah said.

According to him, increased hijacking of ships by Somali pirates had also made many shipping firms to stop bringing food products to the region, leading to high prices.

Additional reporting by John Ngirachu