Cereal Millers Statement On Subsidy Cash

The Cereal Millers Association (CMA), has released an update on the payment status of the maize flour subsidy that was put in place by the government to cushion Kenyans against the spiking prices of Unga.

CMA members participated in the Maize Subsidy Program that was introduced by the Government in mid-2022 that ran between 21st July to 17th August 2022 and aimed at cushioning consumers from the high price of maize flour that by June 2022 touched a historic high of Ksh230 for a 2kg packet.

Under the program, consumers were to purchase a 2kg packet of maize meal at Kshs100 instead of the prevailing price of Kshs210.

The significant increase in the cost of maize flour was primarily due to the severe drought that impacted the East Africa region. The adverse weather coupled with other factors including a global shortage of non-GMO maize resulted in a sharp rise in the price of a 90kg bag of maize grain from Ksh3,000 to as much as Ksh 6,800, which ultimately caused the high price of maize flour.

The Government signed contracts with a total of 129 Kenyan millers, including 27 members of the CMA, as part of its efforts to cushion consumers against the high price of maize flour. The Treasury opened a special account and credited it with Kshs4 Billion, which was part of the estimated Kshs 8 billion required for the program.

The implementation of this initiative was undertaken through a transparent process that involved the Ministry of Agriculture and Treasury, and all beneficiary CMA member millers and other millers were selected based on strict criteria, including adherence to government regulations and proof of their capacity to process maize.

A multi-agency team dubbed the Command Centre comprising of Ministry of Agriculture (MOA), Treasury, KRA, NCPB, AFA, and the Ministry of Interior ran the operations during the entire Program from 25th July 2022 to 4th October 2022.

A Government representative was stationed at every mill that participated in the subsidy program.  The Command Centre received, audited, and processed 1,027 invoices from the CMA millers, validating their accuracy and completeness. Errors were communicated to the millers and collaborated with them for correction.

Consequently, CMA millers sold flour worth Kshs4,340,064,312. Only Kshs1,769,822,739 was paid leaving an outstanding balance of Kshs2,570,241,572.

The CMA has been in communication and is still consulting with the Treasury and other relevant government ministries to address all matters related to the Maize Subsidy Program and is urging the Government to pay millers their outstanding amounts, to enable them to buy adequate quantities of raw material to ensure food security during these difficult climatic and economic times.

The CMA has endeavored to provide safe, affordable, and nutritious food in sufficient quantity to our consumers and has participated in numerous discussions with farmers, traders, exporters, importers, marketers, purveyors of finished goods, Governments, and other agencies in a bit to make Kenya food secure.

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