Maize flour shortage looms, Cereal Millers Association warn
Customers countercheck the prices of maize flour at a supermarket in Nakuru City on April 19, 2023.
The Cereal Millers Association (CMA) has warned of an impending shortage of maize flour in retail stores due to the failure by the government to settle an outstanding Sh2.5 billion from the maize subsidy programme.
The association says consumers should brace themselves for a rise in the cost of maize flour and a shortage of the product since they would soon be unable to purchase maize from farmers for milling.
Appearing before the National Assembly Committee on Agriculture and Livestock, the association said failure by the government to settle the outstanding balance means that they cannot continue to produce optimally.
The association, through their representative Caxstone Kigata, told MPs that being unable to buy maize from local producers means they will not be able to mill, hence will have no flour to supply to local stores.
“Millers have been unable to purchase sufficient maize from the local market due to cash flow constraints. This has resulted in an imbalance in the stocks held by millers, which will in the long run drive up the prices of maize meals,” Mr Kigata said.
Nyando MP Jared Okelo observed that the impending rise in the cost of maize flour is likely to affect Kenyans who are already struggling with the high cost of living.
“Are you, therefore, telling this committee that prices of maize flour will go high and that Kenyans should tighten their belts for tough times ahead?” asked Mr Okello
Sh2.5bn balance
Mr Kigata said 29 millers supplied subsidised maize flour worth Sh4.4 billion during the tenure of President Uhuru Kenyatta but to date, the government has only settled Sh1.9 billion, leaving a balance of Sh2.5 billion.
He said only three millers, namely Goldleaf Kenya Limited, Kabansora Millers Limited and Osho Grain Millers Limited have been fully paid by the government.
Goldleaf was paid Sh48, 074,666.87, Kabansora received Sh171, 355,975.64 while Osho Grain Millers got Sh34, 931,180.73
Documents presented before the committee show that so far the balance has attracted an interest of Sh269 million as at March 10, 2023.
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The committee however questioned the outstanding balance amount saying the figures do not add up and that the association needs to reconcile its books. The committee cited Grain Industries Limited, which is owed Sh6.9 million, but has since written off the debt and is no longer among the millers that are waiting for payment from the government.
Gatundu South MP Gabriel Kagombe told the association to provide details of the invoices it gave to the Ministry of Agriculture for the process of payment for the committee to ascertain their authenticity.
“Your figures don’t add up, there is a variance of up to Sh5 million. These figures look ‘cooked up’. What then are you expecting the government to pay if your own figures don’t add up? posed Mr Kagombe.
“How can the amount be the same yet you have told us that some millers have already written off the debt?” he added.
The committee chairman John Mutunga said the money to the millers cannot be released due to the variance in the figures provided.
“The subsidy programme was started by former President Uhuru Kenyatta in July last year as the government moved to stem the rising cost of maize flour, which had hit Sh230 for a 2-kilogramme packet.
Early this month, the agriculture committee in a report put on hold the release of the billions owed to the millers saying there is a need for more investigations into the subsidy program
“There are a number of issues that need to be interrogated. The committee will conduct further investigations and table a report with recommendations on the way forward.” Reads the committee report
The committee raised concern that despite the millers under the Cereal Millers Association (CMA) supplying the sifted maize flour at Sh100, the programme did not achieve its intended objective.
The millers yesterday pleaded with MPs to relook their report so that they can be paid by the government.
