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June 19, 2008

Kenya introduces price controls on agro-inputs

Kenya has introduced price controls for agricultural inputs to ensure farmers can afford them, a senior government official announced.

Agriculture Permanent Secretary Dr. Romano Kiome said the government would hence forth control a large proportion of seeds at about 70 per cent and fertilisers, 40 per cent, through state corporations, to ensure farmers purchase the commodities at affordable prices. Kiome said, after chairing a session of the 25th Food Agricultural Organisation (FAO) regional conference the government was committed to reducing the cost of agricultural inputs to increase foo d production and ease food shortage.

"When we talk of controlling prices, we do not really mean we are subsidising, because we do not have the capacity to do that. We are only after managing the market for the benefit of the farmers, as we realise the cost of fertilisers has continued to skyrocket, affecting their performance," he said. He observed that most farmers could not meet the cost of Di-Ammonium Phosphate (DAP), which currently sells at Kenya shillings 3,400 and the Calcium Ammonium Nitrate (CAN) that costs 1,600 shillings per bag. (US$ 1 = 62Kshs)

The government, he added, was keen on pushing the prices down, particularly that of DAP, to about shillings 2,600.The official said government had already stepped up measures such as increased importation of maize and removal of taxes on importation of food stuff as ways of addressing looming starvation with current maize stock expected to last the country till August.

"We will be running out of food between 10 and 15 August. As government, we are prepared to import enough bags of maize, about eight million bags, for consumption, that will last us between two to two and half months," Ruto said. The country, he declared, had no option but to import, to meet the weekly consumption requirements of between 100,000 to 150,000 bags of maize for the survival of the vulnerable population, while maintaining a management balance to ensure local farmers do not suffer losses.

Kiome also called on small-holder farmers to focus on agri-business rather than farming for subsistence purposes, saying this would also boost the country's food security."We must remove the mentality that farming is for subsistence. Time has come when small-holder farmers must do farming for progress and commercial gains. Research has proved that 1-2 hectares of land can produce yields with a margin of shs 1 0,000 per year," he added.

Meanwhile, FAO Deputy Director Dr. Madibo Traore has urged African governments to urgently come up with solutions to curb the skyrocketing food prices through in creased production. Traore said the governments had failed to appreciate the role of agriculture as only six, out of the 53 nations in the continent, offered the sector over 10 per cent budgetary allocations."Most of our countries have ended up importing over 50 per cent of their food requirements. Commodities like rice, milk and wheat come from outside and if nothing is done these trends could accelerate in coming years," he said.

Traore reminded the delegates there was potential in the continent, but that onl y countries were not exploiting their existing resources, adding that a concerted regional approach was required for all the member nations to achieve a sustaina b le permanent solution."We cannot base everything on smallholder farms. We need to modernise them to pr oduce more. Governments need to offer support to a certain level of intensification, particularly in research, in the context of climatic changes and increasing food prices," he said.


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