Ruto Economics. Solution to our Economic Crisis or Not

 

Months after being sworn into office after a hotly contested presidential election, Ruto implemented his bottom-up economic agenda. He was brave enough to drop the ongoing maize floor subsidy that the Jubilee government had previously implemented as an intervention to lower its price. President Ruto explained that it was not sustainable for the country to continue subsidizing consumption and felt it was time to subsidize production. In economics, that was spot on.


President Ruto visits his maize firm on 28th June 2023

The government embarked on production subsidy, which saw the Ministry of Agriculture supply subsidized fertilizer to the people in an attempt to lower the production cost. Months later, President Ruto posted a photo in his large garden where he planted maize with subsidized fertilizer, just like any other farmer. The photo shows that the maize is about to mature, and it seems the dream of stabilizing the price of maize floor in the country is almost.

The big question is. Will the farmers agree to sell the maize at a throwaway price to bring down the aggregate price of the maize floor? Who will agree to sell maize cheaply with such a high cost of living in our country? I don’t think that is possible. However, the market forces might rescue Mr. Ruto and his government. Increased supply in the market will result in high competition by the supplies; hence the price must go down. We should also not forget what the external market can do to this plan because our farmers might consider the external market if the local market is unfavorable.

Yesterday, Gatundu South member of parliament Gabriel Kagombe hinted that farmers would not sell the maize at throwaway prices. Mr. Kagombe was replying to the opposition chief Raila Odinga who requested farmers to sell the maize at a throwaway price to save vulnerable Kenyans who have been hard hit by the current challenging economic time. 

Let me not conclude anything. I, David, just want to sit and watch what happens.

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