The origin of National Cereals and Produce Board is traced back to the early 20th century when farmers, mainly European settlers, formed Committees which later developed into regional marketing Boards to assist them in the procurement of inputs, market information, marketing their produce and lobbying the Government for better prices. In 1939, the colonial Government formed the Maize and Produce Control Board to regulate the operations of the regional Marketing Boards.
In 1967, the new Kenyan Government consolidated the handling and marketing of maize and all produce, except wheat, by merging the Maize & Produce Marketing Board with all regional marketing Boards to form the Maize and Produce Board. Wheat, however, continued to be controlled by the Wheat Board of Kenya.
In 1979, the Government established the National Cereals and Produce Board (NCPB) by merging the Maize and Produce Board with the Wheat Board of Kenya in order to streamline the management, handling and marketing of all grains. The NCPB Act, Cap.338, that made NCPB a corporate body, was enacted in 1985. Under the Act, the Board was given monopoly powers to purchase, store, market and generally manage cereal grains and other produce in Kenya. As a legal monopoly, NCPB was empowered to regulate and control the collection, movement, storage, sale, purchase, transportation, marketing, processing, distribution, importation, exportation, and supply of maize, wheat and other scheduled agricultural produce under a controlled price system. During this period of monopoly the NCPB worked very closely with other established agricultural institutions to ensure that the needs of the farmers were met. These institutions included the Agricultural Finance Corporation (AFC), which was the main provider of credit and the Kenya Farmers Association (KFA) which was the main provider of farm inputs.
However, due to increased food production, the cost of managing such a subsidized cereal marketing system turned out to be a heavy burden on the Exchequer. This led to the need to undertake revolutionary reform processes aimed at restructuring the grains sub-sector through deliberate policy reforms on importation and domestic marketing of grains as well as improving the operational performance and efficiency at NCPB. Therefore, in 1988, the government commenced the Grains Sector reform program in which the monopoly powers of NCPB were reduced and the Grains sector was fully liberalized in 1993.
The last of these reform processes was undertaken during the implementation of Kenya Government/World Bank funded NCPB Commercialization Project that commenced in 1996 and ended in April 1998. The key objective of this program was to transform NCPB into a commercially viable entity, free to make independent commercial decisions.
This process involved the engagement of Consultants (Technical Service Contractor – TSC). Its recommendations included further financial restructuring, enhancement of the private sector participation in grain trade, while de-linking NCPB from dependence on the Exchequer as from 1st July 1997.
Grain marketing is currently fully liberalized in Kenya allowing producers to dispose their produce to willing buyers at market driven prices for different regions depending on supply and demand. Commercialization has given the NCPB a new charter and vision that focuses on a commercial business role. In addition, the NCPB is occasionally contracted by the Government to carry out certain social roles. However, there are clear demarcations between the commercial and social roles. With the latter being transacted at commercial rates.