Economics of open-air sun drying in the maize value chain of Kenya

In Africa maize is the main food staple and proper drying is crucial to contain storage losses. Open-air drying is the common practice, but new methods including solar and biomass-heated dryers are being proposed; therefore, their efficacy and profitability need to be compared to current practice. As traders can more easily estimate drying costs and maize prices than farmers, we estimated the efficacy, costs and benefits of open-air drying based on interviews with 122 traders in Kenya. Respondents reduced maize moisture content by 5.8% (from 17.8%), at a cost of KES 113/90 kg bag (US$ 1.13) or KES 22/90 kg bag/% moisture (US$ 2.46/tonne/% moisture or 0.7% of the grain value). The interviews also indicated that drying is an integral part of the larger maize trading and value chain. The rate of return (RoR) for transporting maize from purchase place to drying place, plus actual drying, was estimated at a modest 11%; The RoR of transporting maize from drying place to point of sale, on the other hand, was a strong 24%, while the overall RoR over the whole value chain was the highest, at 26%. We conclude that profits from maize drying itself are rather small, and that profits from trading in the maize value chain are largely derived from spatial arbitrage. Further, it needs to be ensured that alternative drying technologies are more economical than open-air drying, by comparing their performance to open-air drying using the parameters presented here.

Automated summary

The study found that profits from maize trading in Africa mainly come from spatial arbitrage rather than drying itself. The highest rate of return was for transporting maize from the drying place to the point of sale, at 24%, while the overall rate of return over the whole value chain was 26%. It is important to ensure that alternative drying technologies are more economical than open-air drying.