Kibos rice milling plant is set for a major expansion at a cost of Sh200 million.
Lake Basin Development Authority (LBDA), which manages the mill, has received Sh200 million from Treasury to revitalise its operations.
LBDA Managing Director Evans Atera said the funds would be used to address the challenges that have dogged the rice milling plant for years.
"We have never had sufficient raw material in the past two decades, so to speak, and the mill has been operating below its optimal capacity," said Dr Atera.
The expansion plan is good news to thousands of rice farmers in Nyando rice belt, who have been reluctant to intensify rice farming, fearing their produce would go to waste.
Atera said the plant had huge potential and was capable of enhancing food security even as millions of growers who depend on the crop benefit.
"Kibos Rice Mill Complex is part of the appropriate initiative by LBDA to develop the sub-sector to make it more competitive to achieve and boost food security," said Atera.
The complex has modern milling machines with a throughput capacity of 25 tonnes per hour (cleaning and drying), and 3.5 tonnes per hour milling.
Part of the Sh200 million will also be used to buy raw materials from rice farmers each harvesting season.
Production of rice in Nyanza has drastically reduced over the years yet its demand has increased.
In Kenya, rice is mainly produced in Central (Mwea), Western (Bunyala), Coast (Tana Delta, Msambweni) and Nyanza (Ahero, West Kano, Migori and Kuria).
The country is only able to produce 650,000 metric tonnes of rice a year, against consumption demand of 400,000 metric tonnes.
Atera disclosed that rice farmers in Nyanza were only able to grow and produce the cash crop once each season.
"If we can mobilise our farmers to grow more rice and harvest three times a year, then rice production in this area will increase and boost food security," he said.
The mill, Atera disclosed, requires expansion to thresh an additional 7,500 metric tonnes a day if its operation is to be optimised.