The government has announced a Sh6 billion maize subsidy to lower the cost of flour to Sh90 for a two-kilogramme packet and easy inflationary pressure.
Agriculture Cabinet Secretary Willy Bett Tuesday said the government will offer millers cash to allow them mill flour at Sh2,300 for a 90-kilogramme bag, from the current Sh4,000 to tame the rising cost of the staple.
This means the taxpayers will reimburse the millers about Sh1,700 for every imported bag of maize.
The move, which will see millers process and brand the flour bearing the government of Kenya label, was reached on Tuesday after negotiations between the State and the processors.
“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,” states one of the resolutions passed after the meeting.
Pass on benefit
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 its distributors and retailers across the country have adequate stocks and that they do not sell the flour exceeding the marked prices.
Under this subsidy scheme, the Ministry of Agriculture shall undertake a promotion campaign of the programme to create public awareness of the subsidy programme.
The millers have authorised the ministry to use its sifted maize brand name in the subsidy programme together with other brands for Cereal Millers Association participating members in the promotion campaign.
The shortage of maize has raised the cost of staple to a high of Sh144 currently per 2kg packet as limited stocks have pushed the cost of a 90kg bag to Sh4,500.
About 30,000 tonnes of maize have so far been imported from Mexico to address the shortage, with an additional consignment expected in a fortnight.