Simmering tension between small-scale
maize millers and their large counterparts came to the open Thursday as
the government was forced to raise their allocation of the subsidised
grain, which is intended to lower the cost of flour to a maximum of Sh90
per two-kilogramme packet.
The small millers have
complained of favouritism in the subsidy plan, which will see the
government pay them up to Sh1,700 per bag to keep the cost of the staple
at the controlled price.
A lack of supply to the small millers could defeat the government’s price control in the rural areas, where they dominate.
Maize dealers are set to reap big from the subsidy plan, which explains the tension between the millers.
The Treasury will spend an estimated Sh6 billion on the maize millers and traders in the next three months.
United
Grain Millers Association, which is an umbrella body of the small
millers, had complained that the government allocated them only 100,000
bags compared to their rivals’ allocation of 400,000, despite the fact
that they control a larger market share across the country.
The millers’ allocation was doubled on Thursday.
They are also to be given priority on allocation of imports expected from Ethiopia over the weekend.
Agriculture
principal secretary Richard Lesiyampe Thursday directed the National
Cereals and Produce Board (NCPB) to allocate 200,000 bags of maize to
the members starting Friday.
“We appreciate the
important role that you play in the country and we shall ensure that we
double your allocation to 200,000 bags of cheap maize from NCPB,” said
Dr Lesiyampe.
Peter Kuguru, the association’s chairman,
said the increased allocation would ease the tension that was building
between the two associations.
“The government has
always been giving priority to large-scale players at the expense of our
members, who supply flour to more than half of the country,” said Mr
Kuguru.
He
added that the increased allocation will ensure supply of flour to
consumers at the government recommended prices. Under the subsidy plan,
millers will process, package and distribute the maize flour from this
subsidy programme in packets clearly and boldly marked ‘‘GoK Food
Subsidy.’’
The government inked the deal with millers on Monday.
The maize processors will access maize at Sh2,300 per 90-kilogramme bag, down from the market rate of Sh4,500.
The shortage of maize had pushed the cost of the staple to a high of Sh144 per 2kg packet.
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.
An additional five million bags will be imported between now and the end of July to maintain the lower prices.
Last month the government removed VAT on maize flour and bread and waived duty on yellow maize for animal feeds.
The waiver of duty on Yellow maize was intended to eliminate competition with maize flour for human consumption.
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