5 March 2018

Kenya: State Yet to Pay Millers Billions for Subsidised Flour

Maize millers are struggling to stay in business following delays by government to pay them billions of shillings accrued during the maize subsidy programme that ended last December.

The debts result from transport rebate that the government was supposed to refund the processors for ferrying maize from the Port of Mombasa to their milling plants and the cost difference incurred in purchasing the grain.

Under the subsidy programme, millers sold maize at Sh2,300 for a 90kg bag despite buying the produce at above Sh4,000, with the State settling the difference, a move that lowered the price of a two-kilogramme packet of flour to Sh90.

Millers who spoke to the Business Daily said they are struggling to procure raw material as they are facing cash constraints.

"Government owes us billions of shillings under the concluded subsidy programme and this has almost paralysed our activities," said a member of the Cereal Millers Association.

The subsidy programme was introduced last year in May as a government intervention on the rising cost of flour that had hit a high of Sh153 per two-kilo packet. The state spent over Sh6 billion under the programme last year, which saw over five million bags of maize imported to bridge the deficit.

The Ministry of Agriculture admitted that they owe millers billions but could not disclose the exact figure saying it is confidential.

The millers too were reluctant to give the figure for fear of reprisal from the government as they are keen to establish a good relationship with Kilimo House following the change of management.


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