Staple food prices in Kenya

Abstract

Maize marketing and trade policy in Kenya has been dominated by two major challenges. The first challenge concerns the classic food price dilemma: how to keep farm prices high enough to provide production intensification incentives for farmers while at the same time keeping them low enough to ensure poor consumers’ access to food. The second major challenge has been how to effectively deal with food price instability, which is frequently identified as a major impediment to smallholder productivity growth and food security. Redressing these causes of low farm productivity and food insecurity are major challenges facing Kenyan policy makers. The question of how to reduce food price risks and raise smallholder farm productivity quickly brings us to the appropriate roles of the state and private sector in markets. There is widespread agreement that the state has a crucial role to play in developing strong output markets in Africa. However, there are major controversies as to what exactly these critical government roles are, and how they should be implemented. A good starting point for meaningful discussion about alternative food price policy and investment options would be to review trends in food consumption, production, and price levels, and the forces shaping these trends. These are the objectives of this background paper for Kenya. The remainder of the paper is organized as follows. Section 2 reviews the importance of the main staples in Kenyan food consumption patterns. Section 3 reviews production and trade trends of these major staples. Section 4 describes trends in food prices and instability. Section 5 describes Kenya’s maize marketing and trade policy objectives, the rationale behind these objectives, and a chronology of policy interventions used to achieve these objectives. Section 6 summarizes the main findings and conclusions of the study.