Food Systems Ep40: Maize; Who Profits in the Agri-Food Chain?
In Kenya’s maize sector, one question looms large every harvest season: “Who truly reaps from all this hard work?” As a farmer, you toil in the fields to ensure a bountiful harvest, yet when it comes to selling your produce, you often find yourself at the losing end. While consumers pay high prices for food and middlemen thrive, your earnings may barely cover production costs.
This year, the cycle threatens to repeat itself as peak harvest season in major maize-growing zones like the North Rift drives maize prices to an alarming low. According to Agriculture and Livestock Development Cabinet Secretary Andrew Karanja, currently, the government intends to buy at Sh3,500 per bag per 90-kilogram bag, far below the KSh 4,000 many of you anticipated. The flooding in the market leaves you with a tough choice: sell now at a loss or store your maize in anticipation of better prices later.
Trans Nzoia County is expected to produce an estimated 5.3 million bags of maize, while it consumes about 2 million bags. Uasin Gishu County, another maize-producing zone, is projected to harvest about 4.5 million bags of maize this season out of which more than 2.5 million bags will be released to the market.
This season farmers faced issues with the supply of substandard inputs like fertilizers which indicated the likelihood of low harvest coupled with weather shocks. Incidences of heavy rains frustrated the drying process of the maize which can lead to food safety concerns exacerbated by high moisture content. This also hurts the buying price.
Due to the harsh economic times, you can be forced to sell your maize at throwaway prices. When you are a small-scale farmer, the chances of being locked out of benefiting from your sweat are high.
When the buying price from farmers goes down, hoarding kicks and the consumers now have to dig deeper into their pockets to afford the staple food for most households due to this imbalance in demand and supply curve.
The National Cereal and Produce Board of Kenya(NCPB) targets to purchase up to one million bags, amounting to Sh3.5 billion for the National Strategic Food Reserve, which aims to bolster the value supply during scarcity.
However, as a farmer, there are dynamics of the agri-food chain, exposing why profits seem to bypass you. Gaining strategies to help you stay ahead, especially through digital solutions you are positioned to have practical ways to protect your investment, optimize your earnings, and claim your rightful share in the value chain.
Should You Rush to Sell or Hold onto Your Maize?
The temptation to sell quickly to meet urgent financial needs is understandable. However, holding onto your maize and waiting for prices to stabilize after the harvest glut could be a more profitable strategy. Post-harvest, maize prices typically increase as the supply grows smaller.
Investing in proper storage facilities, such as hermetic bags or silos, can preserve your maize quality and prevent pest damage, enabling you to wait for better market prices that can earn profit.
But how can you make informed decisions about when to sell? This is where technology and market intelligence come in to guide you on the best time for market peaks and access to alternative market avenues.
How Can You Maximize Profits with Digital Tools and Market Trends?
FSPN Africa is stepping in to empower farmers like you with innovative solutions that can keep you on tabs with information flows and a means to your end in the marketplace. Here's how:
Leveraging digital tools you can be connected directly to potential buyers. Using the Shamba Calendar app and platforms that match farmers with reliable markets, you can avoid middlemen who often exploit low prices during peak harvests. This has been a stumbling block in the food supply chain that impacts food prices while diminishing your zeal to produce more. Technology can melt this block if it gets much-needed support and adoption.
Through timely updates and trend analysis using our digital tools, you will be able to predict price fluctuations. This knowledge allows you to strategically decide when and where to sell your maize for maximum profit.
FSPN Africa continues to provide training on using modern storage technologies, reducing post-harvest losses by up to 30%. Preserved maize maintains its value, allowing you to sell it later at better prices.
Additionally, through our work and digital tools, we enhance accurate record-keeping ensuring you have clear insights into your production costs and return on investment to improve your livelihood. With this data, you can tag better prices for your produce and even access financing to improve your operation and productivity.
What Is the Future of Kenyan Maize Farmers?
As you navigate the challenges of the agri-food chain, remember that long-term success lies in making informed decisions, leveraging modern tools, and collaborating with industry stakeholders. By staying proactive and embracing innovations like The Shamba Calendar, you can break free from the cycle of losses and thrive in Kenya’s maize farming sector.
I strongly believe strengthening systems can safeguard and foster contribution as a farmer to meet food security, and nutrition, and to manage the risks and blocks you face while you get your hard-earned returns. Now in the future, the same way it is happening in FinTech, it is the digitalization of agriculture and minimizing human contact that is a gamechanger.
However, dire funding shortfalls are straining FSPN Africa from scaling reach to farmers who need information on the market landscape as well as linkages and production advisory the most. With the persistent face of constraints hampering support, some of the most vulnerable smallholder farmers are being left behind.
Unless resources are made available and sustained market access is provided, losses of hard-earned yields will be the price to pay. Ultimately, the question, “Who profits in the agri-food chain?” doesn’t have to leave no one on the losing end. I am persuaded, the deserves to own the profits.
For more information, contact info@fspnafrica.org.