Maize millers will have to wait longer for payment after the government stopped the release of 1.7 million bags meant to offset their Sh2.3 million debt.
Agriculture Cabinet Secretary Mwangi Kiunjuri said the decision was meant to enable the National Cereals and Produce Board (NCPB) to buy two million bags of maize from farmers.
The government has also downgraded the maize that was to be given to millers to a lower grade, which cannot be used for milling.
“We are not going to release the 1.7 million bags of maize to millers until we finish the purchasing exercise,” said Mr Kiunjuri last week.
This is bad news for millers who are grappling with cash flow problems as the delayed payments run into the second year.
“It is going to be a big challenge for us but we have no alternative other than to wait,” said an official of the Cereal Millers Association. The government owes nine processors Sh2.3 million for maize imported in 2017 under the subsidy programme.
The amount has increased to Sh2.7 billion as interest keeps accruing. “This step by the government is meant to depress the market and drive small scale players out of business,” said United Grain Millers Association, an umbrella body for small millers.
NCPB started buying maize last week and has capped the total at 400 bags per farmer, worth Sh1 million, as the government moves to tame middlemen accused of abusing the window at the expense of small scale farmers.
Any farmer offering more than 400 bags must be cleared by the Strategic Food Reserve.