Kenya’s Cereal Millers Association Hopes for Stable Maize Prices as Government Subsidy Program Comes to an End

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Kenya’s Cereal Millers Association (CMA), a regulator for the country’s grain sector, is hoping that maize prices will stabilize following a government-backed program to subsidise the cost of the staple crop that ended on December 31st, 2017.

Kenya’s Cabinet Secretary for the Ministry of Agriculture, Livestock, and Fisheries announced that the subsidy program would end in 2017. The initiative was initially implemented to help replenish the country’s maize reserves after poor rains led to a delayed harvest.

Maize is a staple crop in Kenya and is used to make flour, a major food group for millions in the country. The East African nation requires an average 36 to 40 million bags of maize annually to satisfy demand, estimates by the Agriculture Ministry have revealed.

However, a prolonged drought forced the government to import emergency reserves as local farmers were unable to meet demand earlier in 2017. The government also cut the price of maize flour by nearly half at one point to cushion consumers from runaway prices.

The country’s Ministry of Agriculture then made provisions to transition into the end of the subsidy program.

“Millers’ allocated quotas were reduced in order to ensure that no subsidy maize was leftover at the end of the subsidy programme,” explained Nick Hutchinson CMA Chairperson.

“There was also an agreement that at the end of the subsidy programme, millers would return any leftover subsidy maize to the National Cereals and Produce Board (NCPB),” he added.

According to the CMA, members of the Association currently have no subsidized maize left in the stores.

“They are now buying maize from the open market at market determined prices. We hope that the prices will stabilize as soon as there are adequate supplies of maize in the market,” Hutchinson said in a statement issued this week.




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