The maize subsidy is simply 'bread and circuses' policy

What you need to know:

  • Policy choices should at all times be alert to this constant suffering among Kenya’s children and a quarter of its population.
  • Even if government chose the noble idea of easing suffering for Kenyans, the subsidy of Sh6 billion could be spent more efficiently, through a simpler and more transparent mechanism.
  • The manifestly better plan would be to identify the most vulnerable households in Kenya and provide direct cash or vouchers to them

About three and half years ago, when I started writing this blog, I made a mental undertaking that I would not write about the same subject more than once.

My impression then was that an intelligent audience ought to be spared articles repeating the same point. I have to apologise for writing on a subject of food policy that I wrote recently about here. I am compelled to rehash some points.

The material conditions in which many Kenyans live are so dire that food policy ought to be designed and implemented with more seriousness and competence than has been demonstrated with the announcement of the subsidised maize flour policy.

Kenya’s Food and Nutrition Security Policy of 2011 acknowledged that up to 10 million Kenyans suffer chronic food insecurity and poor nutrition and 30 per cent of Kenya’s children are undernourished.

Policy choices should at all times be alert to this constant suffering among Kenya’s children and a quarter of its population. So this administration must not posture as if it has solved an emergency; food insecurity and insufficient nutrition is a permanent emergency in Kenya.

While the Food and Nutrition Security policy is soundly compiled, my concern is that it falls short in proposing market mechanisms to reach the objective of food security.

That weakness notwithstanding, the policy options that it identifies for dealing with the emergency are far removed from the plan that the government announced last week.

EXISTING LICENCES

To put it simply, we have a policy drafted in advance but when the emergency is most apparent, the Ministry of Agriculture, the Executive, Parliament and the National Treasury pull out a sophisticated but completely ineffective policy of throwing taxes at this problem by paying millers to package maize in the name of the government of Kenya, a feature most common in socialist states.

It is defensible for the government to design and provide support for vulnerable populations during famines or other emergencies. However, it is unacceptable for officials to sit with the millers, whisper an incoherent policy that supplants existing policy without any public participation and produce a corporate welfare programme in the guise of protecting the poor.

The result not only demonstrates very cynical politics at work but sadly entrenches in Kenyan minds the view that the private sector colludes with the government to extract rents, which may be used, in part, to bribe public officials.

An enduring problem here will be the conspiracy theory that the maize shortage that led to high prices was a joint plan to create a crisis and exploit existing licenses in order to enrich selected contractors at taxpayer cost.

I have dwelt on why Kenya having to cobble up an emergency food policy, mollycoddle millers and import maize from an unknown or unstated place demonstrates policy failure and professional incompetence.

Even if the government chose the noble idea of easing suffering for Kenyans, the subsidy of Sh6 billion could be spent more efficiently, through a simpler and more transparent mechanism.

DAY LABOURERS

The manifestly better plan would be to identify the most vulnerable households in Kenya and provide direct cash or vouchers to them, enabling the purchase of whatever food they prefer.

An afternoon spent with the Kenya National Bureau of Statistics viewing household budget data would generate very accurate samples of the households that most deserve this help.

These would mostly be rural-based, female-headed households with children who have small farms or are day labourers.

They could receive a voucher based on mobile money or other cheap transfer alternative. Nobody need go to Mexico, Ukraine or South Africa to buy maize.

The market would deal with the rest and the oligopoly of millers would not be receiving corporate welfare from poorer taxpayers.

What we have designed instead is the cruel equivalent of the “bread and circuses” of the Roman Empire.

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi. Twitter: @IEAKwame