The deal is further going to hurt farmers who had expected to profit from a forecast rise in maize prices.
The multi-billion shilling deal that will see Kenya buy a 90kg bag of maize at Sh2,050 each was brokered by the Trade ministry to curb rising flour prices triggered by deficit of the commodity.
“The deal is between Grain Council of Uganda and the Cereal Millers Association and was brokered by the Ministry of Industrialisation, our role was to bring together the two bodies by acting as the intermediary party,” said NCPB managing director Newton Terer.
As per the deal, local millers will pay Grain Council of Uganda for delivery of cargo at the National Cereals and Produce Board (NCPB) depots.
They will also have access to 600,000 tonnes of maize at $225 per tonne in what the government say will address a deficit of more than five million bags following poor weather last year.
This is despite hundreds of maize farmers in the North Rift being turned away with their produce by the NCPB last week, with the agency saying its silos are full.
“The government has been encouraging farmers to produce more grains but we don’t know why they don’t want to buy our maize,” Christopher Kiptum, a farmer from Moiben told a local daily.
The same fate met farmers from Migori County who were reduced to watching their produce rot outside the NCPB depots in Ntimaru due to lack of storage facilities, despite the government recently saying that it was ready to buy maize to cover the shortage experienced last year.
Agriculture secretary Mwangi Kiunjuri last week admitted mistakes in the collection of maize from farmers and noted on Wednesday that the NCPB is facing a crisis as stores in the North Rift are full.
“We made a mistake ... when we realised we were getting more maize than ever before, we should have started moving it ... we should have started moving it early enough," he told a press briefing.
The deal comes a few days after Uganda announced it would ship its first batch of crude oil through Kenya and not Tanzania has it had indicated two years ago.
Coming on the backdrop of a tough year occasioned by prolonged electioneering period and severe drought, the deal is further going to hurt farmers who had expected to profit from a forecast rise in maize prices from the current Sh3,200 ($32) a bag to above Sh3,400 ($34).
Maize prices rose to above Sh3,000 ($30)a bag after the government started buying from farmers at Sh3,200 ($32) in a Sh6.7 billion ($670m) plan.
The state has since stopped buying the grains tilting the market in the favour of millers now buoyed by the Uganda deal.