17 May 2017

Kenya: Relief As State Brings Down Price of 2kg Maize Flour to Sh90

Photo: Courtesy
A sample of a two-kilo packet of Pembe maize meal that will retail at Sh90 starting on May 17, 2017, according to Agriculture Cabinet Secretary Willy Bett.

Kenyans will now have relief on the cost of flour, following the government's move to subsidise the price of the staple to Sh90 for a two-kilogramme packet.

Agriculture Cabinet Secretary Willy Bett made the announcement on Tuesday at a news conference, stating that the new prices will be effective on Wednesday.

"To cushion the consumers, the government has now entered into a subsidy programme in partnership with importers and millers who will now access maize at Sh2,300 per 90kg bag," said Mr Bett.

"This will enable millers to sell the two-kilo packet at Sh90 and Sh47 for the 1kg packet," he added.

The last time the 2kg packet sold at close to Sh90 was seven years ago, when it retailed at Sh70 in December 2010 and in 2011 when it sold for between Sh86 and Sh89.

UPWARD SPIRAL

Since then, it has been on an upward spiral until Tuesday's intervention.

Mr Bett said this temporary intervention would continue until local production stabilises and stocks normalise around the country.

To address the acute shortage and high prices of other essential food items, the government has also waived duty on imported sugar and milk powder.

"These interventions will cumulatively reduce the prices of these basic food commodities and make them affordable," said the CS.

Under the subsidy programme, the State will buy imported maize and sell it to millers at Sh2,300 for a 90-kilogramme bag.

INDICATING PRICE

For their part, the millers will process and brand the flour with the government of Kenya label, clearly indicating the price.

"Millers will process, package and distribute the maize flour from this subsidy programme in packets clearly and boldly marked 'GoK Food Subsidy' in line with the approved subsidy mark," said Mr Bett.

He said the government had engaged all stakeholders, including importers, millers and other private sector players, to manage the current situation that has seen inflation jump to a 57-month high, having recorded 11.48 per cent in April.

Last month the government zero-rated duty on maize flour and bread and waived duty on yellow maize for animal feed.

DUTY WAIVER

The waiver of duty on yellow maize was to eliminate competition for white maize for human consumption.

The government says millers have committed to pass on the benefit of the subsidy to consumers by ensuring that the processed and packaged maize flour is sold at a marked shelf price not exceeding Sh47 per kilo and Sh90 for a 2kg packet.

Millers have also undertaken to ensure that all their distributors and retailers across the country have adequate stocks and that they do not sell the flour above the marked prices.

Under this subsidy scheme, the ministry of Agriculture shall undertake a promotion campaign of the programme to create public awareness.

The millers have authorised the ministry to use their brand names in the subsidy programme.

SHORTAGE

Shortage of maize has raised the cost of the staple to a high of Sh144 for a 2kg packet as limited stocks of maize have pushed the cost of a 90kg bag to Sh4,500.

About 30,000 tonnes of maize have so far been imported to address the shortage, with an additional consignment expected in a fortnight.

Even as the government made the intervention, Nasa presidential nominee Raila Odinga said there was little to show for the billions of shillings spent on food security since Jubilee came to power in 2013.

He singled out the Galana-Kulalu irrigation project, which he said had consumed billions for so little.

"After spending all these billions, how did we end up without food? Where did the money go? Mr Odinga asked in a statement to the newsrooms.

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