The farm gate price of maize has increased by 25 per cent defying the government’s set minimal price as buyers rush to build stocks fearing a looming shortage.
But the disparity between farm gate price of maize and what middlemen are earning confirms fears that the Rwandan maize farmer is not getting value for money as production costs remain high.
On average, agronomists say producing a kilogramme of maize in Rwanda requires an investment of Rwf125 for buying seeds, farm inputs, hiring labour and transport.
At Rwf160 per kilogramme—minimal price, the farmer’s return on investment is only Rwf45 per kilogramme as a middleman pockets an extra Rwf85 when he trades the maize through the commodity exchange on the same day.
As of February 24, a tonne of grade one white maize was quoted at Rwf245,000 on East African Commodity Exchange (EAX). And analysts expect the maize prices to increase by more than 75 per cent after April with both growing demand from the local buyers and the regional—Democratic Republic of Congo, Uganda and South Sudan mounts on the little produced.
From Uganda, buyers say the maize finds its way to Kenya which World Food Programme says faces a growing structural deficit in maize production.
Last year, Dr Alfha Kadri, manager EAX said the maize prices appreciated by over 81 per cent.
“The maize price per kilo shot up from Rwf150 to Rwf280 per kilo on the EAX,” said Mr Kadri.
He suggests that what policy makers in Rwanda should do is to help the farmers store their maize during this time of harvest and sell later when prices appreciate.
But the country faces an acute shortage of maize with conservative figures from industrial players projecting that only 270,000 tonnes of maize are likely to reach the market.
Information from the ministry of agriculture and animal resources indicate that reduced food production in the country was expected as Kayonza, Nyagatare and Kirehe districts— the leading maize growing areas—experienced bad weather including prolonged drought and when the rains set in, the low lying areas were flooded.
For instance, at least 285,203 hectares of maize were planted and 908,722 tonnes is set to be harvested. “Half of the maize produced will be consumed by the maize growers. A good percentage is expected to get spoilt due to poor post harvest handling. Some will be sold on the informal market while some is expected to be sold across borders,” said Dr Kadri.