Kenya food glut can be corrected

February 18, 2010

, NAIROBI, Kenya, Feb 18 – The ongoing food glut in the country could be solved by having efficient agricultural market information systems, analysts have said.

Fostina Mani an advisory board member of the Alliance for Common Trade in Eastern and Southern Africa said on Thursday that having in place such systems would help make information on the grains in the market and the prices on offer available to help farmers, traders and consumers to make informed decisions.

“With this, you are able to transfer the supply to where the demand is and therefore you’d be able to get a better price. Farmers can make informed decisions while as consumers we would be able to hold the government accountable on what it is doing to address an overproduction,” she said.

Mrs Mani, who’s also the Eastern Africa Grain Council vice chairperson said such improvements would also reduce the abuse and price instabilities brought about by having middlemen in the value chain who sometimes collude to fix prices.

“If traders knew that specific grains are at a specific location, this is the grade and they have been dried to this moisture content, then they would go and pick that grain,” she added.

It has however been impossible to do that due to a myriad of challenges such as inadequate storage facilities and limited knowledge on post harvest handling which has created room for brokers to thrive.

She spoke during an ongoing two-day regional workshop on market information systems in the COMESA region which seeks to identify the gaps experienced in these countries and come up with ways to address them.

Her remarks came as Equity bank disclosed that it was in negotiations with the National Cereals and Produce Board (NCPB) on how the two parties can set up a commodity exchange in the country.

Equity Bank Chief Executive Officer James Mwangi said such an exchange would complement the existing warehouse receipting system which would go a long way in stabilising grain prices.

It would also ensure transparency in trading activities and that market prices prevail and food security is achieved through market forces.

“Discussions are at an advanced stage to form a commodity market such that people can be trading both with the available commodity and they can even enter even into the future market trading,” he added.
Once agreements have been reached, the CEO said they would utilise NCPB depots and silos which have a combined storage capacity of 1.89Metric Tonnes to ensure the effective running of the exchange.

There have been a lot of developments on this front aimed at having an effective legislative framework to govern the certification of warehouses.

The NCPB has proposed regulations that would convert warehouse receipts into tradable documents that can be exchanged for money.

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