Report reveals exploitation of farmers and consumers in unfair food prices

A report by Consumers International organization has revealed unfair charging of prices in Kenya at the expense of consumers, farmers, and other businesses.

The report was released in a  Nairobi hotel  by  the organization which is the membership organization for consumer groups around the world, it detailed that market concentration and insufficient competition in Kenya has led to powerful actors to charge unfair prices.

Davine Minayo who works as a specialist at Consumers International said rising food prices are causing serious consumer harm. The impact is especially severe in Africa, as more than 90% of the population cannot afford a healthy diet.

The Fair Food Prices report indicates prices are rising unfairly – that is, as a result of anti-competitive practices and excessive profiteering, not just supply and demand.

In the report carried out between January 2022 and September 2023, milk prices rose dramatically faster than wholesale price in the year 2022, this suggested that rising costs were not shared.

In milk prices September 2023 ksh 131/L in retail and wholesale ksh 113 per liter .Middlemen were benefiting from the crisis, the margin still remain higher than before it has not turned to normal.

In maize prices rose proportionately in 2022, but as wholesale prices have leveled off and even decreased, these savings have not been passed back to consumers.

In the period under review fruits and vegetables are less affected by global trade, yet still we see that retail prices have steadily increased, despite the fact that wholesale prices are largely unchanged.

“This divergence between retail and wholesale prices is not necessarily indicative of unfair pricing practices, but it a serious cause for concern, that warrants further investigation,” Minayo said.

Retail prices were rising dramatically faster than wholesale prices.

Data on farmgate prices is insufficient for similar analysis; annual data shows that farmers are not benefitting either. Between 2022 and 2023 in Kenya (according to data from FAO and WFP):

Farmer prices for maize decreased by 30.4%, while consumer prices increased by 3.8% while farmer prices for rice decreased by 6%, while consumer prices increased by 18.8%.

The report also indicated that farmers prices for tomatoes decreased by 7.8%, while consumer prices increased by 27.2%.

Farmer prices for beans decreased by 16.7%, while consumer prices increased by 38.6%. For milk farmer prices decreased by 9.2%, while consumer prices increased by 2.8%.

Alice Nyaberi director Consumer Grassroots Association which is a member of Consumers International said the government must enforce regulations to protect farmers by ensuring there are fair prices.

The Consumers International now recommends stronger enforcement from government authorities to tackle anti-competitive practices that have the potential to unfairly drive-up food prices.

Government departments including competition, agriculture, trade, and more, need to harmonize policies and actions related to food trade, to improve efficiencies in the value chain, supporting farmers and consumers.

Consumers International is the membership organization for more than 200 consumer groups in over 100 countries, including more than 30 countries across Africa.

By Obegi Malack

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