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Kenya sets subsidies as food prices become election issue

May 17 2017 20:01
Felix Njini and Samuel Gebre

Nairobi - Kenya on Wednesday announced steps to rein in food prices that are rising at the fastest pace in five years and providing campaign fodder for the opposition ahead of elections in August.

The government will spend as much as $58m subsidising maize prices and waiving duties on milk and sugar, Agriculture Secretary Willy Bett told reporters in the capital. The measures come as the Treasury prepares a supplementary budget to deal with the surging cost of living.

The price of milled maize, a staple food known as unga in Kenya, has risen to as high as $1.50 for a 2kg from 99 American cents a year ago, after a drought in crop-growing regions cut production. That helped fuel annual food inflation of 21% in April, the fastest pace since February 2012, squeezing families in a country where almost half of the population lives on less than $2 a day.

High food prices

The nation’s strategic reserves of maize have dropped to less than a day’s worth of consumption, with only 4 500 tons left, the National Cereals & Produce Board said earlier.

Public discontent over the rise in prices of basic commodities is providing ammunition for the opposition National Super Alliance, led by former Prime Minister Raila Odinga, who will take on incumbent President Uhuru Kenyatta in the August 8 vote. The opposition’s narrative has shifted its campaign away from corruption and onto high food prices and shortages of maize, said Anzetse Were, a Nairobi-based independent economist.

Last weekend, Odinga’s running mate Kalonzo Musyoka warned opposition supporters would carry out an “unga revolution” unless food prices are reduced.

“The government is going to take a lot of flak on this,” Were said. “The drought could have been mitigated, but nothing was done”.

Insufficient rain

Kenya consumes about 288 000 tons of maize per month, according to the Cereal Millers Association, an industry body. 135 000 tons of that is packaged and sold by millers, said CMA chair Nick Hutchinson in an interview.

The measures announced by the Agriculture Ministry include importing 450 000 metric tons of maize by the end of July and providing the grain to millers at more than half the price it’s currently available in the market, Bett said.

“The government did the responsible thing to do...it’s not a political move,” Bett said.

Kenya had insufficient rain in crop-growing areas in March and April, the Kenya Meteorological Department said in a preliminary assessment of the March-May so-called long rains. Most weather stations reported receiving less than 75% of their seasonal long-term average, it said.

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kenya  |  food production  |  rains

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