Andrew Tuimur
Cereal Millers Association
Tegemeo Institute

Millers, transporters owed Sh7.6bn in food subsidy scheme

Agriculture chief administrative secretary Andrew Tuimur said the money has been factored in the supplementary budget and millers will be paid once it has been approved by Parliament.

Millers argue that their activities have been paralysed as they are not able to stock maize as should be the case and that they are buying small quantities for immediate use.

“The government owes millers about Sh4 billion and transporters Sh3.6 billion, we have included these funds in the supplementary budget and we are going to pay them once it has been approved by Parliament,” said Dr Tuimur.

The second Supplementary Budget is still with the Treasury and is expected in Parliament next month, according to the ministry.

The Sh6 billion subsidy programme started last year in May to tame the rising cost of flour that had hit a high of Sh153 per two-kilo packet.

Initially, the scheme was to end in September but the government extended it to December for fear that the prices would have gone up were it to be terminated then.

Millers say the government did not pay them after the programme was extended yet they used their money to import maize.

“The government was to refund us on the cost that we incurred in shipping in the grain but so far they have not and this is taking a serious toll on our business due to difficulties that we are facing in financial cash flow,” said a member of the Cereal Millers Association.

Under the programme, millers were buying a 90-kilogramme bag of maize at about Sh4,000 and selling it to the Government at Sh2,300, with the State paying for the difference.

The price of flour rose to an average of Sh110 from Sh90 after the subsidy programme ended on December 31.

But the country is not out of the woods as another round of subsidy programme could come this year as research finding by Tegemeo Institute revealed the country will have to import maize to bridge a four-month deficit between April and August.

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