National Cereals & Produce Board – In Charge of National Food Reserves
The National Cereals and Produce Board, a key player in securing Kenya’s National food reserves, is being reformed to further enhance its services.
The National Cereals and Produce Board (NCPB) plays an important role in the country, as an agent of the government in the procurement, management, and distribution and sale of Strategic Food Reserves (SFR) and Famine Relief Stocks. The Board also handles subsidised fertiliser on behalf of the government, and trades commercially in grains, provides grain post-harvest services, deals in farm inputs like seeds, and offers clearing and forwarding services.
The history of the NCPB can be traced back to 1939. The colonial government wanted an agency that would be in charge of all foods and marketing of produce and established the Maize and Produce Control. The MPC continued with this mandate but under different names until Kenya’s independence.
“The predecessor of today’s Board was established immediately after Kenya received its independence in 1964, with the task of ensuring that the country’s grains are marketed appropriately and the farmers get value for money,” says Managing Director Joseph Kimote.
He explained that the institution was amalgamated with the Wheat Board and the Maize and Produce Board in 1979 to form the National Cereals and Produce Board. The merger got legal backing through an Act of Parliament (Cap 338) in 1985, making the institution a Statutory Board under the Ministry of Agriculture, Livestock, Fisheries, and Cooperatives. Since then, the Board has further developed to make sure that it reflects Kenya’s needs in terms of food reserves.
Reformed to serve
The Board is now undergoing changes to better meet the country’s current requirements. Under the new reforms, the Strategic Food Reserves (SFR) function will be placed under the NCPB as a new division called National Food Reserves. This division will be in charge of food security and the National Food Balance Sheet Committee (FBS).
“Apart from the functional changes, the reforms aim to ensure that the institution is commercially competitive – although we are a state corporation, we operate on commercial terms,” says Joseph Kimote.
The NCPB Trading division will run all the Board’s commercial functions such as leasing of storage space and warehousing, buying and selling farm inputs and grain, and operating the NCPB’s stores under the Warehouse Receipt System (WRS).
It will also operate a commercial agricultural hub that will be a one-stop-shop to coordinate information and a network of value chains to strengthen input and services delivery and enhance market access. It will achieve this by clustering registered small-medium holder farmers and agro-dealers around aggregation centres (cooperatives or warehouses) for storage, bulk inputs sourcing, marketing and extension support. In addition, the NCPB will provide the secretariat to the Food Balance Sheet Committee, a body that will advise the government on food security matters.
Mr Kimote affirms that rather than being in competition with the private sector, NCPB is looking at partnerships. “As an institution, we have been around for many decades and we pride ourselves on helping to develop the country’s infrastructure, including silos, warehouses and grain facilities. As we do not have funding from the Exchequer, we need to operate with a private-sector mentality.”
“Therefore, we strive to partner with the private sector to create synergies and pursue win-win strategies. Such scenarios would include public-private partnerships (PPP) whereby private entities can lease our spaces and silos at competitive rates to conduct their commercial activities. In some cases, we can also go for a revenue-sharing formula, where we invite the private sector to provide capital to refurbish some of our facilities.”
Facing the challenge
Joining forces will be important to deal with the consequences of today’s unprecedented market developments. Mr Kimote explains that in response to the global pandemic, the government has formulated a post-Covid recovery strategy, whereby all sectors will get some level of support to bounce back.
That support will be needed, as the agricultural sector faces empty warehouses and silos, previously leased to entities that have gone out of business or lost cash flow, and reduced post-harvest activities as people turned to traditional (and cheaper) methods. The fertilisers uptake was also less aggressive as a result of farmers’ reduced resources, says Mr Kimote.
“On an internal level, we have made sure that our people stay safe – social distancing, minimised human interactions and periodic communications to keep everyone informed are now the new normal. We have also put together a Covid-19 response committee to make sure we are compliant with governmental Covid protocols throughout our network of 110 sites across the country, and making sure that our customers also comply with those protocols. As a result, our infection rate has remained low.”
Still, the pandemic has not eliminated the everyday requirements and the need to continue to operate to the country’s benefit. Important topics such as CSR and sustainability remain high on the NCPB’s agenda, and the Board continues to actively promote financial and environmental sustainability including green energy and re-cultivation. A number of risk management programmes have been introduced to
cover areas where the Board feels exposed, to secure continued operation and staff safety and wellbeing.
Speaking about the future, Mr Kimote affirms that the investment plans remain unaffected. The NCPB plans to invest Kshs.1.9 billion (approx. US$ 1.9M) over the next three years in modernising its installations across the country and is currently in the process of mobilising the funding.
“We will be playing a wider national role in managing the national food reserves and the entire food basket. Innovations will be required in this respect, with a focus on the national food balance sheet and Warehouse Receipt System. This means that as opposed to outright buying from farmers the produce will be stored, with farmers getting receipts that can be traded through the commodity exchange programme (COMEX) which is at an advanced stage of formalization. NCPB also plans to intensify its post-harvesting activities, aiming to bring down post-harvest losses by 10% by improving storage facilities,” he says, summarising the tasks ahead.
“With the new reforms, we are changing for the better. We want to add value to the customers. As key participants in the food management and food security value chain of this country, we want to be part of the solution. In a nutshell, we want to ensure that we can sustainably manage the partnerships within the food security value chain to the common good of everyone in this country in line with the ‘Big 4’ commitments and the Vision 2030 aspirations.”