Nairobi — Kenya's government has moved to avert a looming famine by introducing price controls on the cost of maize flour in efforts to bring it into reach of most middle class and low income households.

A lengthy meeting between the government and millers lasting one week reached a reluctant middle ground that will see government-branded flour sold at subsidised prices in low income settlements of major towns in the country.

The action is a culmination of fears that the East African country long considered as the region's economic powerhouse could slip into starvation as the price of the precious staple used in preparation of ugali was retailing at KShs120 (US$2) per 2-kilogramme packet, well out of reach for the common masses.

The new arrangement will see the subsidized government flour retailing at KShs52 per 2kg packet which will be specially branded with the government label. Supermarkets stocking the usual brands will retail the commodity at KShs72, prompting concerns on how the government will ensure adequate supply of the subsidized brands while at the same time ensuring no artificial shortages of the cheap maize flour.

The new arrangement will see the government release 1.2 million bags of maize for both the private sector branded and the government branded maize products. Another 5 million 90kg bags of maize will be imported to cushion the country's reserves in a situation that appears to have caught the coalition government flat footed. The measures have however attracted the wrath of a section of the civil society which feels that the government is slowly turning the country into a caste society where the rich and the poor have distinct market outlets further widening the poverty gap.

Professionals in the agriculture sector have criticized the government's move terming it restrictive for free business and asked the government to divest from the business of cereal importation and allow the forces of demand and supply to dictate prices. Prime Minister Raila Odinga at his office announced the long awaited measures to the press.

The arrangement will only target genuine millers vetted by the Ministry of Agriculture in consultation with the Cereals Millers Association registered by the National Cereals and Produce Board (NCPB).

NCPB will purchase maize from farmers at KShs1, 950 per 90kg bag with immediate effect. No other individual or company will be allowed to purchase more than 10 bags from farmers as police have been instructed to be on the lookout for brokers and middlemen.

To ensure adequate supply of the low priced flour, millers agreed to offer 30-40 per cent of their milling capacity to the NCPB at a cost of KShs200 per 90kg bag per day. This will be ensured through a distribution mechanism, involving stockists monitored by the government to ensure that targeted consumers are reached. The normal flour brands will retail at KShs72 after the government agreed to supply the millers with maize at KShs1, 750 with an ex-factory price of KShs65 per 2kg of maize meal.

There will be set up an allocation committee comprising of Strategic Grain Reserve (SGR) trustees, millers and the NCPB. This committee will give preference only to millers willing to give the government 30-40 per cent of their milling capacity.

The prime minister has been quoted as describing the current high food prices as having "all the makings of a catastrophe."

Various civil society groups had asked the government to move with speed in taming the crisis. NGOs had also threatened to hold demonstrations on Jamhuri Day to demand a reduction of prices on the commodity.

It was also a week that saw the Central Organization of Trade Unions (COTU) give the government a one-month notice to address the high cost of food in the country or prepare for a seven-day protest holiday. Last Thursday a cabinet meeting chaired by President Mwai Kibaki, mandated NCPB to immediately import 5 million bags of the maize and sell it directly to millers, eliminating middlemen who have been blamed for the current crisis.

Cabinet approved the release of 700,000 bags of maize from the strategic reserves to the millers in the next three weeks.

Last Wednesday, the country witnessed the first ever demonstration over the crisis after residents of Soweto Village in Kibera slums demanded action from the government.

Parliament interrupted normal business last Wednesday to discuss the crisis and lawmakers tasked the government to consider other alternative crops instead of the high reliance on maize.