Economist David Ndii has taken issue with President Uhuru Kenyatta's directive that the price of unprocessed rice (called 'paddy') be increased from Ksh45 to Ksh85 per kilogram following complaints from farmers.
Taking to his social media platforms on Saturday, February 1, Ndii dismissed the directive by President Kenyatta as poorly thought-out.
"These are called roadside declarations. I hope he knows what he is talking about because farmers are paid for paddy, not rice. It takes 1.6kg of paddy to get a kg of rice. Ksh85 would translate to Sh136 per kg of rice," he wrote.
Ndii was of the opinion that the president's directive would disrupt the cost of production of rice in the country in effect making the sector unsustainable.
"I should have pointed out Mwea rice is retailing at Ksh150/kg, meaning paddy at Ksh136 leaves Ksh14 margin for processing transport, distribution. Untenable," he added.
Ndii's sentiments were echoed by other individuals who also offered a bleak forecast of the tenability of the directive by the president.
"Raw paddy when milled yields 45-50% head rice. So in other words, the big guy wants Ksh170 per kg plus processing costs," Moses Njuguna pondered.
A study report by the Jomo Kenyatta University of Agriculture and Technology, titled Analysis of Millers in Kenya’s Rice Value Chain (2019) indicates that the major cost for large scale millers is the cost of paddy (unprocessed rice), which accounts for 69% of production costs.
The president's initiative to increase the cost of paddy to almost double what it is at the moment would lead to the doubling of production costs, in effect leading to the increase in the market price of rice which is widely consumed across the country.
According to data from the International Rice Research center, national rice consumption is estimated at 538,000 metric tonnes compared to an annual production of 112,800 tonnes.
The data indicate that with a projected population growth rate of 2.7% per year, the estimated annual national need can reach up to 570,490 tonnes by 2030.
