Agriculture and livestock development Cabinet Secretary Mithika Linturi appearing before the National Assembly Committee on Agriculture and livestock to respond to queries on the maize flour subsidy programme and the strategic food reserve trust fund at Parliament Buildings on March 22, 2023. PHOTO | LUCY WANJIRU | NMG
Kenya plans a new food reserve to cover three months of the nation’s maize consumption expected to cost Sh79.6 billion annually.
This is after Agriculture Cabinet secretary Mithika Linturi unveiled regulations for a new National Strategic Reserve that will require it to have a minimum of 90,000 tonnes worth of food, or the financial equivalent of at least three months of maize consumption.
This reserve — which replaces one that was scraped by former Agriculture minister Peter Munya in 2019 — will operate like foreign exchange reserves which cover at least four months of Kenya’s import needs.
Read: MPs push State to allocate Sh10bn for food reserves
“The quantity of the three-month national food price stabilisation of stock requirement of scheduled agricultural produce in regulation shall be…calculated based on maize consumption equivalent, and determined by the conduct of price stabilisation,” reads part of the National Cereals and Citation Produce Board (National Strategic Reserve) Regulations, 2023.
Agriculture ministry data shows that close to 50 million Kenyans consume 12,750,000 bags of maize.
This means that with the whole price of the cereal averaging Sh6,247, the government will need to stock up on food valued at Sh79.6 billion, an uphill task for a government that does not have the fiscal space.
The base stock, the regulations say, will be held in form of a warehouse receipt.
A crippling drought has driven close to four million Kenyans into starvation, with the emergency stocks at Strategic Food Reserve having been depleted nearly four years ago.
President Uhuru Kenyatta’s government announced that it would no longer be buying stocks for relief but would instead embrace cash transfers to the affected households.
The quantities of food to be stocked at the Strategic Reserve will be determined by a 10-member Food Balance Sheet Committee, which will also advise the board on the supply, utilisation, distribution and intervention measures to improve the availability and affordability of maize.
The committee will also manage the digital food balance sheet, collect data and undertake market intelligence and price monitoring of scheduled agricultural produce, which is maize.
They will also advise the board on the price stabilisation of maize.
On advising on price stabilization the committee will rely on consumer purchasing power, cost of production, international price fluctuations, seasonal price movements, changes in the exchange rates and market forces.
Apart from a chairperson who shall possess a degree from a University recognized in Kenya and at least ten years of experience in matters related to food security, other members of the committee will also include the Principal Secretaries responsible for crop development, livestock production, fisheries, Kenya Meteorological Department.
Other members of the committee will include the chairperson of the Board of Directors of the Kenya National Bureau of Statistics (KNBS), the chairperson of the Board of Directors of the Agriculture Sector Network and the Managing Director of the Board who shall be the secretary of the Committee.
Read: NCPB requests Sh10 billion for strategic maize reserves
National Cereals and Produce Board has not been buying maize since 2020 on behalf of the government for SFR. It has, however, been purchasing commercial maize for trading using internally generated funds.
Mr Munya disbanded the Strategic Food Reserve Trust Fund in 2019, with the government preferring direct cash transfers to families who are food insecure.
Last month, the National Assembly’s Agriculture Committee asked the Budget and Appropriations Committee to allocate Sh10 billion for buying food stocks for reserves.
“It is important for the country to have a stock of food reserves to cushion against food shortage, provide a ready market for key food staples, as well as act as a price stabiliser,” the committee said.
SFR had at least Sh10 billion in its account arising from the sales of maize to millers and other institutions from their stores before its dissolution.
NCPB has been buying maize under its commercial wing for trading but it had difficulties in getting enough stocks this year from farmers as most have been hoarding in anticipation of higher prices in the coming days.
→ dakure@ke.nationmedia.com
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