Add Sh500m to Ruto's budget to pay small-scale millers, say MPs

Shoppers queue to purchase packets of subsidized maize flour at a Nakuru supermarket in 2022. [Harun Wathari Standard]

The National Assembly Agriculture and Livestock Committee now wants Sh500 million added to President William Ruto's first budget to pay debts owed to millers.

The House team, which has been probing the maize flour subsidy program introduced by former President Uhuru Kenyatta in 2022, explained that the funds would go towards offsetting an accrued debt to the small-scale millers following suspension of the programme.

The Committee led by Tigania West MP, John Mutunga, noted that the Grain Mill Owners' Association (GMOA) had not been fully paid by the time the programme was suspended by Ruto.

"The Sh500 million owed to members of the Grain Mill Owners' Association should be factored in the budget estimates for the financial year 2023/24 and paid because their computations were clear..." read the report.

If implemented, the move will see Ruto's budget increase from the current Sh3.6 trillion, which is already an increase from last year's Sh3.39 trillion. The budget is expected to be read before Parliament by Treasury CS Njuguna Ndungu next week.

The Committee also called for the regularisation of Sh841.8 million that GMOA was paid, noting that it had established there was value for money.

The Committee, during its investigation process, had heard that most of the GMOA members operated in estates and their flour was bought by people in residential areas, thus it did not go through the value chain.

At the same time, large-scale millers under the Cereal Millers Association (CMA) will have to wait longer to be paid Sh2.5 billion owed to them by the government for the supply of subsidised maize flour under the subsidy programme.

This is after the Agriculture Committee called for further probe into how the programme was administered, and questioned some of the payments.

The Committee observed that whereas the millers under the CMA supplied the sifted maize flour at Sh100, the programme was not a success. It went on to reveal that flour under the programme was not stamped as subsidised, which could have encouraged hoarding of the same by unscrupulous dealers.

According to the report, the 119 millers who were tapped for the subsidy programme were paid a total of Sh3.4 billion out of a total Sh6.4 billion that they are claiming for the supply of 121,714,844 kilogrammes of flour.

The large-scale suppliers under CMA and the small-scale millers under GMOA are part and parcel of the group paid. CMA has, however, insisted that it supplied flour worth Sh4.49 billion but was paid only Sh1.95 billion and is now claiming a balance of Sh2.58 billion.

The house however noted that before any further payments are done, there is need to ascertain the amounts paid and those due to the millers. It also called on the ministry of Agriculture to craft a policy to guide the administration of future subsidy programs.

"There are a number of issues that need to be interrogated...the Committee will conduct further investigations and table a report with recommendations on the way forward," read the report in part.

Moreover, the Committee substantiated its recommendation for a further probe into the programme by highlighting the disparity between the monies owed to CMA and what they were demanding from the ministry of Agriculture.

"The amount of money owed to CMA submitted to the Committee was different from the amount of money they were demanding the ministry to pay as seen from the letter that was attached to their presentation," the report read.

"The committee established that the presentation by the GMOA was genuine and had no underlying issues hence value for money. The presentation by CMA had a number of underlying issues and therefore no value for money on their part."

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