Kenya’s wheat farmers remain an crucial cog in the country’s food security system chain. They deserve support, protection and a clear strategy that helps them become more productive, efficient and sustainable.
For over two decades, the Cereal Millers Association (CMA) has been part of that support system. Through home-made structures, millers have consistently purchased locally produced wheat at premium prices in order to support and incentivise growers.
This programme was established to give farmers a guaranteed market and to encourage continued wheat production in Kenya.
CMA’s records show that the industry has supported this system for over 20 years, with millers buying local wheat at competitive prices even where the floor price is above import parity.
The issue is not whether farmers should be supported. They should. The real question is whether the current model of support is delivering the productivity, efficiency and output that Kenya needs.
Despite millers paying premium prices, local production has remained far below national demand. Kenya still depends heavily on imports to bridge wheat deficit and ensure that consumers have access to bread, chapati, mandazi, biscuits and other wheat-based foods.
Imports are, therefore, not a choice against farmers. They are necessary to meet the country’s requirements.
Today, local wheat production is less than a million bags, while imports are estimated at about 26.67 million bags. This means that local wheat still accounts for only a small share of what is required by the country. This is despite years of premium prices being paid to farmers.
The data points to one clear conclusion: premium pricing alone has not increased productivity, efficiency or output.
If Kenya wants to grow local wheat production in a meaningful way, the support model must now shift from simply paying higher prices at the end of the season to reducing the cost of production at the farm level.
Farmers need better access to quality seed, affordable fertiliser, mechanisation, cheaper land leases, extension services, aggregation, storage, accurate production data and affordable financing. These are the interventions that will improve yields, reduce the cost per bag and make local wheat more competitive.
This is also where use of Agriculture and Food Authority (AFA) levies must be examined. Millers pay AFA levies of 1.5 percent on imported wheat. Assuming imports of 2.4 million metric tons millers pay close to Sh1.8 billion in AFA levies paid by the milling sector on imported wheat alone every year.
In addition, they also pay an average premium of between Sh700-1000 per 90 kilogramme bag above the imported prices. This amounts to between Sh700 million to Sh1 billion every year.
Together, this represents an estimated Sh2.5 billion in annual contribution from millers through AFA levies and premium local wheat purchases. This contribution must be recognised. But more importantly, it must be made more effective.
If the objective of AFA levies is to support agriculture, then a significant portion of these funds should be directed towards improving productivity. The levy should help cut production costs, improve seed systems, support mechanisation, strengthen extension services, improve data collection, and help farmers produce more better yields.
Supporting farmers should not only mean increasing the price paid for wheat. That approach places pressure on millers, increases costs across the value chain and eventually affects consumers, while doing little to solve the structural challenges that farmers face. True farmer support must help them produce more, earn more and compete better.
Kenyan millers have consistently supported local wheat farmers and purchased available local wheat at premium prices. CMA has also publicly stated that imports are necessary only because the country does not produce enough wheat to meet national demand, and that millers remain committed to working with farmers and government to strengthen local production.
However, the current system must become more sustainable.
A model that requires millers to pay premium prices for local wheat, pay levies on imported wheat, absorb rising costs and still maintain affordable wheat products for consumers cannot work indefinitely unless the support given to farmers results in increased productivity and output.
CMA remains committed to working with farmers, government, AFA and all stakeholders to build a stronger local wheat sector. The way forward is partnership. The private sector has already demonstrated its support.
Now the country must ensure that every shilling collected and every intervention made helps the farmer become more productive, the miller remain competitive, and the consumer continue to access affordable food.
The writer is the Chairman, Cereal Millers Association (CMA)
