ABSTRACT
This chapter reviews Kenya’s experiences with policy reforms in the staple food maize market. Escalating fiscal costs associated with intensive government involvement in the grain markets motivated the World Bank and the IMF to promote the ‘liberalization’ of marketing and pricing systems in the food market as a central component of the ‘structural adjustment programmes’ (SAP) implemented throughout Africa in the 1980s. As maize trade and pricing greatly affect Kenya’s food security, this chapter attempts to trace the implications of maize market reforms for the various actors in the maize sector: producers, traders, millers, consumers and the state itself. There are five parts. Section 3.2 discusses the theoretical basis of SAPs and the anticipated consequences for food security. Section 3.3 describes the characteristics of Kenya’s maize market prior to the reforms. Section 3.4 analyses the politics of the reform process and the emerging new setting of the maize market. Decisive reform implementation only commenced in 1994 when the maize trade was fully liberalized and private traders began to participate in the market. This period is analyzed in Section 3.5 and is followed by the conclusions in the final section.
The Kenyan government has long been reluctant to ‘leave the maize market to the workings of the market forces’. The state marketing board, the NCPB, still holds a dominant position continuing to set the annual maize price for producers and to purchase a substantial part of the marketed maize.
From a food security point of view, the major beneficiaries of the reforms have been the urban consumers. Maize flour prices in the urban areas have dropped considerably, largely as the outcome of increased competition in the maize milling industry. Unfortunately, knowledge of the consequences of market reforms for Kenya’s rural consumers and smallholder maize producers is still unsatisfactory. A tentative analysis of recent price developments in rural maize markets in various provinces in Kenya shows, for instance, no signs of diminished (regional or seasonal) price instability.
