The Ministry of Agriculture will now limit the amount of maize sold to millers under the subsidy programme to a two-day stock equivalent as the government starts to withdraw the Sh90 flour ahead of the September 30 deadline.
Agriculture Cabinet Secretary Willy Bett said the government had been giving millers huge stocks that could last for weeks, but as the programme nears its end, the quantities will be reduced to ensure processors are not in possession of cheap maize.
Mr Bett said the move is to ensure millers do not take advantage of cheap government maize to sell to consumers at high prices once the subsidy programme closes.
“Starting next week, we shall limit quantities of maize sold to millers to stocks that can only be milled in two days, we don’t want a scenario where they will be in possession of cheap produce when the programme has ended,” he said.
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The CS said they are in talks with Kenya Revenue Authority to audit all millers at the end of the programme to ascertain the amount of maize that they would be having in their stores once the scheme ends.
He said millers who would be found to have stocks of cheap maize will have to reimburse the government the cost incurred on subsidy to make it at par with the prevailing market price.
Under the subsidy programme, the State buys imported maize at Sh3,600 (90kg bag) and sells it to millers at Sh2,300.
Millers who benefit from the scheme are then required to sell the flour at Sh90 for a 2kg packet.
Mr Bett will be meeting with millers and farmers’ representatives Thursday to discuss the planned exit from the programme that has been running since May.
The ministry says the onset of short-rains crop harvest from the South Rift will stabilise the market.
However, the country will not be out of the woods yet as production is projected to drop to an eight-year low this year as erratic weather and pest invasions are expected to affect the yields, setting the stage for a shortage in 2018.
Production is forecast to drop from 37 million bags in 2016 to 28 million bags this year according to the government projection of a 25 per cent loss in the current crop.