Cereal millers are yet to ink a deal with the Ministry of Agriculture for the Sifted Maize Flour Subsidy Programme, it has emerged. Details of the subsidy programme surfaced on Monday, July 18 revealing the plan for the government to subsidize the cost of maize flour for a four week-period.

The leaked documents seen by Business Today disclosed that the price of a 2Kg packet of unga (flour) would drop from Ksh230 to Ksh100. The Cereal Millers Association, which sits on the Oversight Committee intended to steer the program, has however since disclosed that they were yet to reach an agreement with the Ministry over the proposal. The talks are set to continue this week, meaning Kenyans will have to wait longer for the subsidized unga.

“The Cereal Millers Association (CMA) is consulting with the Ministry of Agriculture and other relevant stakeholders on how best to reduce maize flour prices. Negotiations are at an advanced stage, but no prices have been set,” Cereal Millers Association CEO Paloma Fernandes told Citizen.

At the heart of the wait is believed to be the issue of commitments and payments. The last time the government undertook a similar program, during the drought in 2017, millers faced damaging delays in having their bills settled.

At the time, the price of a 2Kg packet dropped to Ksh90. The eight millers who were contracted for the subsidy have spent years, including in court, chasing payments from the government.

Careful not to be burned twice, millers reportedly want funds for the new subsidy programme deposited in an escrow account. The leaked documents on the proposal notably include a provision for the Ministry of Agriculture to set up and operate an escrow account with the Central Bank of Kenya (CBK).

This comes even as the prices of fuel and food remain at historical highs, driving up the cost of living. The inflation rate in Kenya hit 7.9% in June 2022, crossing the upper limit of the Central Bank’s target range of 2.5%-7.5% for the first time since August 2017.