Eastern Africa Grain Council: Return to a Liberalized Maize Market

The Eastern Africa Grain Council (EAGC) is a regional member-based organization for the grain value chain stakeholders whose members are farmers, traders, millers and service providers such as banks, warehouse operators and input suppliers from the East African Community (EAC), Common Market for Eastern and Southern Africa (COMESA) and Southern Africa Development Cooperation (SADC) regional trading blocs.

The Council promotes structured trading systems and open market grain trade policy. The Council encourages Public-Private Partnerships (PPP) for the sustainable development of the maize sector in the region.

The EAGC welcomes the urgent measures taken by the Government of Kenya to deal with the rising price of maize flour through subsidy and approval of importation of white and yellow maize on duty free basis.

The use of yellow maize for animal feed will go a long way to ease the pressure on white maize for human consumption and mitigate against the projected shortfall for next year as the current harvest is expected to be below the Country's requirement for 2009.

These policy measures need to be temporary and backed up by measures to stimulate the sector. How does Kenya and our regional trading bloc partners meet domestic demand of maize and raise their share in the regional maize market? The answer lies in efficient production of maize.

This in turn depends on willingness of the private sector to invest in the maize value chain - supply of inputs, production, post-harvest handling infrastructure, processing and logistics. Free market policies are a must in eliciting investor response to this opportunity.

The regional trade policy (which Kenya subscribes to through the EAC Customs Union Protocol) encourages an efficient and structured open border trading. By encouraging investments in the maize sector Kenyan farmers and traders could benefit from producing a surplus to meet the regional maize market demand. In 2007, the size of the regional maize market (EAC and COMESA) was estimated at slightly over US$1 billion.

The region's share in this market was a mere 13%. This clearly demonstrates existence of a regional market potential of about 77% which is up for grabs.

Kenya led the way for other regional countries, way back in 1986, in embracing export led trade policies, which gradually led to abolition of commodity and price and market control regimes.

This policy environment has contributed to the success of maize sector, where according to the available statistics Kenya has been able to meet domestic maize demand in most of the years, with production in 2007 having been estimated at 3.1 million tonnes and consumption 3.3million tones, the shortfall was met by importation from the region by the private sector.

This calls for safeguarding the milestones already realized in maize market reform and supporting production in order to meet domestic demand as well as increase Kenya's share in the regional maize market.

Efforts should, therefore be made to enable the vibrant Kenyan maize sector to return to normalcy as soon as possible. A consultative meeting held by EAGC for its Kenyan members made the following recommendations for sustainable structured maize trade:

To address the current maize crisis, the following is recommended: -

1. The MoA should involve EAGC on policy and good governance issues in maize in view of its role as an honest broker by virtue of it being a regional grain Council whose private sector membership includes farmers, traders, millers, input suppliers and other stakeholders.

2. The Ministry of Agriculture (MoA) to immediately establish a Public/Private sector grain consultative forum:

a. To immediately determine the available stock and shortfall.
b. To ensure grain forecasting and preparation of a national balance sheet.
c. This consultative forum will also be an accountability forum on actions agreed.

3. All traders, millers and NCPB to purchase maize from the farmers at market prices.

4. The City Council Cess on maize which is currently KShs40 per bag should be scrapped with immediate effect as this cost is passed on to consumers.

a. Measures to enhance production of maize to address national maize requirements in the future on a sustainable basis.
b. Encourage investments into land consolidation for purposes of large scale maize production
c. Government to provide support to bring down the cost of inputs - diesel, fertilizer.

On fertilizer, the government should allow private sector importation and distribution of the fertilizer under the GoK program on fertilizer. The fertilizer should also be imported and availed to the farmers in time for planting season.

5. The following measures, along with other measures to uphold free market principles should be considered as a matter of priority: -
  • Market information should be available officially to create the basis for production forward contracting.
  • Price discovery mechanism - price, quality, quantity, location of where maize is available.
We should have the support from GoK and other local partners/stakeholders on market information collection, verification, consolidation and dissemination.

6. EAGC Should take lead by working with COMESA and EAC in pursuing the following regional policy options: -
  • Developing a regional mechanism for accurate capture of available regional maize stock - regional maize balance sheet.
  • Establishing a regional crop forecasting system
  • Develop a transparent regional mechanism for management of season export/import restriction - trigger stock based on a threshold pegged to the regional maize stock.
  • Harmonization of the COMESA and EAC maize standards
  • Implementation of the COMESA and EAC Simplified Tariff Regime
EAGC, in pursuit of its objective of promoting structured trading systems and open market grain trade policy in EAC, COMESA and SADC will be available to facilitate continued engagement between all stakeholders in search for a lasting solution to the current challenge.


EAGC executive;
Constantine Kandie Hevea Park, Block
P.O Box 218-00606 Nairobi, KENYA
Tel: +254 20 3745840
Fax: +254 20 3745841

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