Daily Nation columnist Jaindi Kisero’s November 14 article, “On maize, the biggest scandal was the role of major millers”, was unfair.
In December 2016, millers warned the government of an impending maize shortage. The delay to open a duty-free maize import window led to real and serious shortages in the country.
The severe drought in April to September last year left the region with no maize stocks. Millers had to source maize from Ethiopia at Sh4,200 per 90kg bag. Tanzania had banned exports and Uganda had no surplus. A 2kg packet of maize flour retailed at Sh150.
To lower flour prices, the government released 450,000 bags of maize at Sh3,000 each but prices still shot up to Sh4,500. The only source of imported non-GMO maize was Mexico and South Africa.
A maize flour subsidy programme on May 20 last year saw a 2kg packet of flour cost Sh90 as the government supplied maize to designated millers at Sh2,300. With the shortage, the government put out a tender for imports, to be bought at Sh3,600.
The government bought the maize brought in by the first vessel in June for the subsidy programme, gazetted to run from May 20 up to September 30. But millers faced challenges, including one entry and offloading port at the port, which created bottlenecks.
Millers and traders incurred demurrage charges of Sh1.3 billion on vessels carrying wheat grain. Logistical challenges included transferring maize from the port to depots, seeing millers operate below capacity and lose brand differentiation due to uniform pricing.
The government declared a Sh3,200 retail price for local maize in October but there was no significant flow as farmers expected Sh3,600. Millers did not have stocks by the end of the programme, whose extension to December 31 saw them bring in a million bags of costlier maize.
The anticipated harvest was affected by a fall army worm invasion and inadequate rainfall. The government required 1.5 million bags per month, or 4.5 million for this period, but local supply was inadequate, hence purchased a million bags at Sh3,200 from the importers.
Millers participated in the maize flour subsidy programme to ensure affordable food for consumers. However, despite these initiatives, they are crippled by serious cash flow constraints as they are yet to be paid for the million bags, worth Sh2.3 billion.
It would, therefore, be selective amnesia to sweep under the rug, the myriad complications that led to last year’s maize crisis by heaping blame on millers. The problems that the maize sector faces are multifaceted and can only be genuinely addressed through a sober inquiry and not finger pointing as Mr Kisero opted to do.
Mohamed Islam, Cereal Millers Association (CMA) chairman.