State Rules Out Extension of Duty Waiver on Maize in Kenyan

The Ministry of Agriculture however has provision for importation of 500,000 bags of maize from regions outside the EAC in the seven months between December and June next year. Purchases outside the common market usually attract a 50 per cent import tax levy. Another 1.2 million bags are expected to be imported in cross border trade with EAC member countries.

The millers said Kenya can no longer depend on its neighbours for tax free maize supplies as Uganda has found more lucrative markets in Southern Sudan, while Tanzania has been placing ad hoc export bans to protect its internal supplies.

"It is imperative that the Government takes immediate action on the duty waiver, considering that suspension of duty earlier not only promotes more timely availability of grain in such times of a domestic shortfall, but also reduces uncertainty and allows for adequate planning by the private sector especially millers and importers" said Diamond Lalji, the chairman of the Cereal Millers Association.

"The introduction of the Warehouse Receipting System has also allowed farmers to speculate on their crop in the hope of getting better returns. This has resulted in farmers asking for exorbitant prices which have caused prices to skyrocket" he added.

The National Cereals Produce Board (NCPB) is currently buying maize from farmers at Sh3,000 per 90 kilogramme bag.

The ministry's position would change if the harvest is not well stored leading to major post-harvest losses, said the official. The ministry has already directed the NCPB to dry maize for the farmers for free to cut on wastage especially due to the current heavy rains.

The ministry, however, warns that wheat prices are likely to remain high, but does not recommend extension of the reduced 10 per cent duty on imports.

"Wheat prices are expected to remain high owing to reduced production from the major production areas."