The State has mandated millers to pay a minimum of KSh5,200 per 90-kilogramme bag of wheat, addressing the longstanding concerns of farmers regarding inadequate pricing.

The Agriculture and Food Authority (AFA) disclosed that this new rate represents a compromise following the farmers’ request for a price higher than the initially quoted amount.

“We have agreed that millers will have to purchase local wheat at Ksh5,200 before being allowed to import,” said a senior official at AFA.

This decision aims to support wheat farmers in Kenya who seek higher prices to offset the increasing costs of production, including more expensive energy and labour.

Market data indicates that the production cost ranges between Sh3,000 and Sh3,500 per bag, by selling their produce at Ksh5,200, farmers not only cover their costs but also generate a profit.

Over the years, Kenya’s wheat production has declined, leading to the country importing over 80 percent of its grain to meet domestic demand.

Millers have argued that elevated prices in the local market make their produce less competitive in the region.

Currently, Kenya imposes a 10 percent duty on all imported wheat, which, despite this tariff, remains more cost-effective than locally produced wheat.

The government introduced a quota system for wheat purchases a few years ago, requiring millers to exhaust the local crop before importing.

Quotas are allocated based on a miller’s installed milling capacity, and import permits are issued only after the local crop has been fully purchased.

Kenya, being a net importer of wheat, sources two-thirds of its annual consumption of 900,000 tonnes from imports, as local production stands at 350,000 tonnes annually.

gandae@businessdayafrica.org