In the directive, the Ministry of Agriculture directed that all retailers should sell the two-kilogramme packet of flour at Ksh100, a drop from as high as Ksh230.
The statement also showed that the 1-Kilogramme packet should retail for not more than Ksh52 while the 500-gram packet should retail for a maximum of Ksh30.
The subsidies, however, will only be effective for a month after which the government hopes the prices will have fallen back to normal market rates.
“It is agreed between the parties that the ministry shall deploy market surveillance teams to ensure that sifted maize flour is sold at the maximum recommended retail price stated.
“The market price of maize (per 90kg bag) as at the date of this contract is in the range of Ksh 5,800 and Ksh 6,000. Based on this market price, MOALFC will compensate the miller for each unit sold,” the statement read in part.
The statement further noted that the state will subsidize the staple food’s production for a period of four weeks to cushion Kenyans from the high cost of living.
The subsidy programme will be overseen by the Ministry of Agriculture as well as the National Treasury, Cereal Millers Association and Grain Mill Owners Association.
“The Ministry of Agriculture shall subsidise the price of maize flour being produced/sold by the miller for a period of four (4) weeks from the date of this contract,” the statement added.
A packet of flour had reached high prices as a result of a severe shortage of local stocks caused by the ongoing drought in the horn of Africa among other areas.
“We are extremely running low on raw materials which is maize which is being caused by disruptions in the supply chain in that local supply has dried up as well as regional supply,” an official from one of the local millers stated in mid-June.
He further noted that importing the cereal was too expensive for local millers which may force some either to halt production or increase prices.
Towards the end of May, the Kenya Association of Manufacturers (KAM) and Cereal Millers Association (CMA) had cautioned Kenyans that the maize flour prices would still go up despite the National Assembly opposing the introduction of Value Added Tax (VAT) on the commodities as proposed by the Finance Bill 2022.