Why Busia cereal market lost glory

Busia market is grappling with its worst business performance in years. The significant drop in cereal deliveries and buyer turnout has left traders facing heavy losses, forcing some out of business.

According to Mr Henry Bwire, a trader and data collector for organisations such as the East African Grain Council, Kenya has traditionally been the primary destination for cereals exported from Busia. Other destinations include Tanzania, South Sudan, Somalia, and overseas markets.

During peak seasons, formal trade would see at least 20 trailers, each with a capacity of 40 tonnes, and 100 trucks, each carrying 12 tonnes, transporting approximately 2,500 tonnes of maize and 2,000 tonnes of beans daily. Informal trade via bicycles and motorcycles along porous routes accounted for an additional 1,500 tonnes.

“The main destination has been Kenya and neighbouring countries, generating an estimated cash flow of nearly Shs5 billion,” Mr Bwire noted.

Other cereals, including simsim, soya beans, green gram, sorghum, and groundnuts, were also exported from the market.

However, during off-peak seasons, maize exports averaged between 1,200 and 1,800 tonnes daily, while beans slightly exceeded 1,000 tonnes.
Currently, the market exports less than 20 tonnes of maize and around 800 tonnes of beans daily, which Mr Bwire described as alarmingly low.

Mr Bwire attributed the decline to Kenya’s bumper harvest of more than four million tonnes of maize, supported by the reopening of the Namanga border for trade with Tanzania. This shift has reduced Kenya’s dependence on Busia for grain supplies.

“For the first time, Kenya is exporting beans and maize at lower prices compared to Uganda’s produce,” he said, adding that Kenya’s robust irrigation system now allows two harvest seasons annually, thereby increasing production.

“So once Kenya started producing maize and beans in huge quantities their external demand and import of the above grains declined,’’ Mr Bwire noted.

“Since the drought of 2017, Kenya been importing close to 2.6 million tonnes of maize from neighbouring countries mainly Uganda and Tanzania,’’ Mr David Erulu , the Busia Kenya cross border chairman, said.

Mr Samuel Wamakuyu, the secretary of the Busia Market Produce Dealers Association, suggested that Kenya’s economic policies under President William Ruto have boosted local farming, reducing the need for imports.

“Currently, Kenyan maize sells at Shs1,100 per kilogramme compared to Uganda’s Shs1,200,” he noted.

Mr Frank Kasumba , who manages Busia Municipal markets, said this market was the main supplier of cereals but during the 2022 Kenya elections the issue of maize in Kenya and unga (maize flour) prices had been a touchy issue.

“One time the government of Kenya had to resort to subsidies on prices of maize flour and once Dr Ruto won elections, he laid a strategy to ensure there was increased maize and beans production,’’ Mr Kasumba said.

He said whereas they were supposed to remit Shs21m revenue to Busia Municipality from market dues, they were only able to raise Shs7m.
Reduced demand has discouraged farmers and traders from regions such as Mubende, Hoima, Kayunga, Luweero, Masaka, Bugerere, Lira, Soroti, Sebei, and Busoga from delivering grain to Busia market.

Ms Milly Katamba, a trader in the market, said she has been stuck with 12 tonnes of beans for three days now due to low turnout of buyers.

“Middle men in the market are behind its collapse in business," Ms Teopister Nakirinda Baseke,a cereal trader at the market, said.

Ms Baseke said she sold at least two trucks of grain each day but that has drastically changed because it tasks a week to have 12 tonnes of maize sold because of middlemen. She said Kenyan traders have started buying directly from Ugandan farmers in rural areas of Kayunga,
Mubende , Lira , Masaka Hoima and Sebei to avoid middle men.

“So we are having a situation where Kenyan traders drive to the villages and buy directly from farmers and after loading the trucks drive across the border without goods having to come to this market," Ms Baseke said.

Mr Hassan Bwire Opio, the former mayor of Busia Municipal Council and now a trader, revealed that Kenyan traders have gone as far as purchasing immature crops directly from Ugandan farmers, which they harvest when mature.

To revive the struggling border markets, Mr Opio suggested that Uganda should implement measures to prevent foreign traders from buying directly from farmers, which he believes undermines local market dynamics.

However, Mr Henry Bwire disagreed, citing the East African Community (EAC) protocol that promotes the free movement of goods and services among member states. He emphasised that the protocol grants traders unrestricted access to goods, wherever they are located.