State told to clear NCPB debt to spur reforms

An ambitious process to turn around the fortunes of the loss-making National Cereals and Produce Board will only be successful if the government commits to pay the Sh5.6 billion it owes the board.

This is one of the recommendations offered by Ernst & Young consultants, who have completed a one-year study of n the process of restructuring the State corporation.

Established in 1985, the NCPB will be renamed the Grain Corporation of Kenya if the recommendations by EY are approved by the government.

The consultants have recommended the establishment and development of a market regulator to undertake market stabilisation measures, intervention in grain prices and policy enforcement.

The consultants have also recommended a National Food Security Agency should be established to handle the strategic grain reserve as well as the strategic food reserve.

RECOMMENDATIONS

“We recommend that government moves from price intervention-led commodity markets to economic-based ones through establishment of a Commodity Exchange market for grain,” said Daniel Kamande, the project manager.

Other recommendations include the launch of a grain institute in partnership with local universities to offer technical training in post-harvest grain management, marketing and storage.

Other recommendations include the downsizing of staff and a proposal that NCPB managers be given authority to engage county governments to help the farmers access inputs and fertilisers easily.

The consultants have held several meetings across the country and will receive concluding views from various stake holders in Nairobi tomorrow before compiling their final report to be submitted later to the Cabinet secretary for Agriculture, Felix Koskei.

Minister of Agriculture, Livestock and Fisheries, Mr Felix Koskey.

RESTRUCTURING PROCESS

Addressing stakeholders at Milele Resort in Nakuru last week, Mr Kamande, accompanied by the NCPB Chairman Colonel (Rtd) Geoffrey Kingangi and Managing Director Newton Terer said the restructuring process will come to an end on Monday.

The lead partner of EY, who is based in South Africa, Mr Joe Cosma, arrives in the country Monday to help in compiling the final report and incorporate the recommendations of stakeholders.

Mr Kamande said in order for the NCPB to move to the anticipated commercial level alternative funds would be required to address the board working capital.

“To move to the next level of profitability, the new board will require a massive credit facility that is fully government funded and a strategic investor who would take over the ware house receipting infrastructure,” said Mr Kamande.