from the market due to unpredictable government interference<sup>84</sup> . This means that consumers continue to pay higher prices for longer, before the imports bring prices back down.

**The ban on GMO imports of maize, and the way in which it has been varied over time, is another source of uncertainty in maize prices.** The Biosafety Act of 2009 created the National Biosafety Authority and granted it broad powers for the control of Genetically Modified Organisms (GMOs).  This includes the control of imported GMOs such as GMO maize.  Since this time, the control of imported GMO maize has been erratic, with periods during which a complete ban has been in place, while in others imports by millers (for the production of flour only) have been allowed.  In addition, the National Biosafety Authority has not been the sole regulator, with direct intervention by the Ministry of Health, following a decree from the cabinet in 2012<sup>85</sup> .  This ban has an important effect on imports, since there are only a very limited number of countries from which Kenya can source non-GMO maize. During 2009, and even through in 2010, Kenya imported significant volumes of GMO maize, mostly from South Africa<sup>86</sup> .  After South African (GMO) maize was blocked, imports dropped off substantially.  The GMO ban may in essence separate Kenya from other sources of maize outside the region, even if the tariff is reduced.

**Further down the value chain, the Competition Authority of Kenya (CAK) has taken action against potential anticompetitive pricing practices in sifted flour.** The Competition Authority of Kenya (CAK) (formerly the Monopolies and Price Commission) assessed the sector and provided pertinent recommendations based on their antitrust enforcement and advocacy powers. The removal of the clauses of the Cereal Millers Association (CMA) that allowed for price coordination was a good move, and the investigation itself may have triggered a response lowering prices of sifted maize flour. In addition, the recommendations on the actions of the National Cereals and Produce Board (NCPB) aimed at reducing the heavy burden on consumers of maize grain prices were timely. We will return to this in more detail in section 3.4.

# **We can summarize briefly what we know about the maize market in Kenya as follows:**

- NCPB actions have increased the price of maize by 20 percent on average between 1995 and 2004, and given the continued high levels of purchasing, it is likely that they continue to inflate prices substantially.

- Inconsistent application of trade policy and bans on GMO maize imports has played a complementary role in inflating maize prices in Kenya.  During times of plentiful regional supply of maize, these are less important as other producers in the region are able to produce at competitive prices (although trade costs do erode the competitiveness of the prices).  During times of tight regional supply these factors have caused prices in Kenya to rise significantly above world prices, with the short term management efforts of government creating additional complications.

- CAK has played a positive role in improving the competitive environment in the sifted flour sector, with additional pertinent recommendations relating to the activities of the NCPB in the grain sector.

> 84 Jayne and Tschirley (2009), Kirimi et al (2011)

> 85 See FAS (2012a).

> 86 Trademap mirror data.  Another substantial source of GMO maize was the United States.

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