MPs dash millers hopes for Sh2.5b unga subsidy pay

Large-scale millers will have to wait  longer to be paid Sh2.5 billion owed to them for the supply of subsidised maize flour during President Uhuru Kenyatta’s tenure.

The move comes after a House committee ordered further investigations into how the programme was handled.

In a report tabled in the National Assembly, the Committee on Agriculture and Livestock chaired by Tigania West MP John Mutunga, raised concern that despite the millers under the Cereal Millers Association (CMA) supplying the sifted maize flour at Sh100, the programme did not achieve its intended objective.

The committee said the flour under the programme was not stamped as subsidy, which could have resulted in hoarding and other unscrupulous practices by value chain players.

In the report, the committee noted that before any money is paid to the millers, they need to find out how much they are owed and how much has been paid.

Pending issues

The committee also wants to establish how the millers were paid Sh500 million as interest for the money they are owed as no proper explanation was not provided on how it was distributed.

The committee also raised concern that the multi-agency team put in place to oversee the programme at all stages did not provide a report on the areas of coverage of the subsidised flour.

All the 119 millers who participated in the subsidy programme including the CMA (large scale) and Grain Mill Owners Association (GMOA), who are small-scale millers, were paid a total of Sh3.4 billion out of the Sh6.4 billion they are owed for distributing 121,714,844kg of flour.

The CMA in particular claimed they supplied flour worth Sh4.49 billion, but have been paid only Sh1.95 billion leaving a balance of Sh2.58 billion.

Reads the report: “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.”

It says the Ministry of Agriculture should come up with a policy on how future subsidy programmes should be run.

The committee, however, told the government to pay Sh500 million it owes GMOA because their computation was clear, the membership of the association that participated in the programme was static and they did not participate in the maize subsidy programme for the 2017/18 financial year.

Closure threat

Further, the committee called for the regularisation of Sh841.8 million that they have so far been paid because the committee had established that there was value for money on the associations’ part.

In their presentation before the committee, the GMOA stated that most of their members were small scale and operate in estates and areas close to residential areas. Because of this, they explained, the flour was bought by people living in the locality, thus most of it was not distributed through the value chain.

While demanding their money on grounds that most of the members were facing closure, the GMOA raised concern that their members signed contracts for the maize flour distribution a day after their CMA counterparts signed their contract.

“The contract submitted by the ministry in their presentation was different from the contract signed by millers. The contract submitted by the ministry was similar to that presented to the committee by the Grain Mill Owners Association,” reads the report.

The committee noted that they had established that the total amount of money spent under the subsidy programme was Sh7.3 billion as contained in the supplementary estimates for financial year 2022/2023 yet CMA had explained that the total amount of money spent was Sh6.4 billion.”

Genuine

In addition, the committee raised concern that the amount of money owed to CMA was different from the amount 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. CMA explained that the figure submitted to the committee had gone up because two other millers joined the programmee later. They, however, did not submit details of the two millers,” reads the report.

It adds: “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.”