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Middlemen, Retailers Overcharging Food Consumers

David Kitanda, a Grain miller at Machitope Milling concern in Kisenyi, says there is a lot of speculation between the farm gate price and the mill gate, a factor that is pushing the price of maize flour skywards. According to Kitanda, one cannot be sure on the stability of the price of a kilo of maize, citing how the prices went up by a difference of 50 Shillings between Sunday and Monday.

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Although the country is experiencing food shortages in some area, the situation is not so bad to warrant the exorbitant food prices, a mini study by URN has revealed. On Monday, URN tracked the pricing of maize flour from the farmer to the consumer and found elements of overcharging in the value chain.

While middlemen buy a kilo of maize grain at between Shillings 500 and 800 in the countryside, they double the price when selling to millers at Kisenyi, a Kampala suburb renowned for grain milling. The millers impose between Shillings 500 and 700 on a kilo of maize flour depending on the quality, increasing the price to between Shillings 2,000 and 2,200. 

A 50-kilo bag of maize flour, depending on the quality, then sells between Shillings 110,000 to 130,000. Retailers then add between Shillings 1,000 and 1,500 shillings on a kilogram of maize flour pushing the price to between Shillings 3,000 and 3,500. From the farm gate to the consumer there is an addition of between Shillings 2,500 and 3,000 on each kilo of maize flour, depending on the quality, suggesting an element of overcharging.

David Kitanda, a Grain miller at Machitope Milling concern in Kisenyi, says there is a lot of speculation between the farm gate price and the mill gate, a factor that is pushing the price of maize flour skywards. According to Kitanda, one cannot be sure on the stability of the price of a kilo of maize, citing how the prices went up by a difference of 50 Shillings between Sunday and Monday.

//Cue in: Maize is going …

Cue out: … five hundred.//

According to Kitanda, it would be good if government intervened on the supply side, adding that a lower price at the mill gate would result in a lower price for the consumer. Asked if there are other extraordinary costs the millers incur that pushes their prices, Kitanda says the problem is with the middlemen who keep increasing the price of the maize grain.

He says the demand for maize flour and other foodstuffs for humanitarian interventions in hunger-stricken areas is also responsible for the increase in prices of grains. Kitanda says electricity is no longer a big challenge since its supply is stable and the price relatively low compared to previous years.

 

High transport costs could have been another factor, but fuel prices have been stable for close to two years now. Interestingly, in Nebbi Park and parts of Kikuubo Market, maize flour from northern Uganda, an average of five hours away, is being sold cheaply compared to that in Kisenyi.

A 50-kilo bag of maize flour is selling between Shillings 100,000 and 110,000 depending on the quality. There is a difference of almost 20,000 Shillings between maize flour from the North and that milled in Kisenyi. Harriet Asiimwe, a trader at People's Plaza in Nebbi Park, told URN that milled flour especially from Lango is comparatively cheaper.

The head of The Nature Conservancy in East Africa, Dr. Medard Modesta, recently told journalists that the food crisis has got to do more with the poor food distribution system than the adverse effects of drought. According to Dr. Modesta, while some parts of countries in the region have food, means of distributing it to starved areas tend to be a challenge, a situation exploited by middlemen.

The Minister of Finance, Matia Kasaija, persistently says government will not intervene in the market, preferring to leave it to the forces of demand and supply.

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