E-Malt.com News article: 975

Kenya Maltings Limited (KML) says it is unable to buy more barley from contracted farmers due to an over-supply of the crop in the last two seasons, according to East Africa’s Financial Standards. Kenya Maltings Managing Director Andrew Joyce said the firm has been hit by an over-supply of the crop, forcing it to reduce the number of farmers contracted to plant barley this coming season. He said contrary to a story published in the East African Standard recently, KML was not shunning small-scale farmers.

"Kenya Maltings is not contracting only large-scale farmers because approximately 45 per cent of farmers planting barley this coming season will be small-scale," he added. The firm spends an average of over Sh1.2 billion annually in the barley scheme through direct payments to farmers and transporters. The decision to reduce the acreage under the crop is expected to hit farmers hard.

The company has also decided to scale down its payment rates from 50 per cent to 30 per cent to allow for risks of changing weather patterns and encourage farmers to plough back the barley earnings into their own improvement of farms. For the past two years, more than 65,000 tonnes of barley was harvested annually, indicating a 20 per cent increase per year.

As a result, Joyce said, KML has enough barley to satisfy production needs for Kenya Breweries and Uganda Breweries up to the end of 2004. "After much deliberations, KML resolved to shoulder part of the burden on behalf of the private farmers, and purchased barley but at lower costs, to reflect some of the additional costs that we had to carry in terms of storage charges, bank charges and so on," he said.

"We have explained all the issues of the over-supply of barley and confirmed that we will no longer purchase the crop from uncontracted or private farmers," he said in a press statement. The criteria for contracted farmers for the coming season was made on the basis of suitable barley growing areas, crop management and financial stability.


25 April, 2003