Farmers in Rift Valley want government to increase the purchase price for a bag of maize from Sh4,000 to Sh5,000. But government just provides a base price below which farmers do not have to sell. Farmers should definitely look for a higher price from commercial middlemen.
The farmers also argue that it costs them Sh3,5000 to produce one bag which still gives them a healthy profit margin of Sh500 per bag at the official NCPB price.
Nevertheless the farmers’ request should be respected as it is not always possible to get a higher price from a middleman.
Right now, the government issues duty-free maize import licences to a few lucky individuals when there is a maize shortage between seasons. You can basically double your money if you get one of these licences.
The best way to help farmers and simultaneously eliminate these windfall gains is to allow all-year-round maize importation with a high protective tariff of, say, 100 percent.
This will give farmers a regular high price for their maize while eliminating nepotism in the issue of duty-free import licences.
Quote of the day: “You should never be ashamed to admit you have been wrong. It only proves you are wiser today than yesterday”.
Jonathan Swift
The Irish author published the novel Gulliver's Travels on October 28, 1726