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Maize is the single most important crop in Kenya, as even the communities that had traditional staple foods previously continually adopt it as the staple food. Needless to say, there is expanding demand for maize amidst shrinking arable land due to fragmentation and construction of other infrastructure leading to scarcity. However, this situation has not translated to increased income for farmers who labour to meet the high market demand in Kenya.
According to a maize value chain validation survey conducted by Farm Concern International with support from USAID- Kenya Agricultural Value Chain Enterprises Project, the retail margin was found to be relatively high at about Kshs 1,170 followed by farmer margin of Kshs 856.60. Wholesale trader margin is relatively lower than that of farmers and retailers in terms of unit value attributable to the fact that the wholesaler deals in bulk while the retail is per unit in kilograms over a relatively longer period of time. It was also noted that brokers collect maize from the farmers on behalf of wholesalers at a fee of Kshs 355 per bag.
There was also a notable variance between the farm-gate price and wholesale trader buying price per bag of maize of about Kshs.355 on average across the sampled counties and markets. This scenario is mainly attributable to sourcing fees paid to local brokers who source the commodity on behalf of the wholesale traders.
It has been deducted that the average margin between the farm gate price and the retail price is relatively high. On the other hand from the production data it is noted that the producer margin is on average about 52.07%. While one may be tempted to conclude that the producer has a huge margin, it must be noted that the margin is spread over a longer period that covers the entire production cycle while the trader could be covering periods of less than two months.
FCI VISION : Commercialized smallholder communities with increased incomes for improved, stabilized & sustainable livelihoods in Africa and beyond