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{
    "id": 36165,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/36165/?format=api",
    "text_counter": 288,
    "type": "speech",
    "speaker_name": "Mr. Onyonka",
    "speaker_title": "The Assistant Minister for Foreign Affairs",
    "speaker": {
        "id": 128,
        "legal_name": "Richard Momoima Onyonka",
        "slug": "richard-onyonka"
    },
    "content": " Madam Temporary Deputy Speaker, that is a contribution. Let me be very clear. When you take a bag of fertilizer and decide that you will subsidize the price of the fertilizer to Kshs1,200 instead of Kshs3,000, the argument is that you are helping the farmer produce maize at an acceptable price at the end of the consumption chain. That is the whole reason of creating a subsidy. However, let us make an assumption. We will, for example, give subsidy for maize which has already been produced. The argument is very simple. The farmer will increase his price so that you can keep on giving the subsidy so that the price of maize can come down. That is very simple economic logic. The subsidy which my colleagues are advocating for will only work if you make the National Oil Corporation of Kenya (NOCK) to be the sole purchaser of fuel. You can then subsidize them and supply the fuel from NOCK to the market. That makes sense as far as you are able to put up enough petrol stations so that you do not create an artificial shortage. So, what I am saying is very simple. Before my colleagues bring this Motion to be discussed here; before we can discuss it, let us have a Kamukunji to discuss the true scenario of the economics of it, so that we do not punish the economy and the general public. Number two, I would prefer if my colleagues could come up and say that, instead of us having a subsidy for fuel, we should create a social security network system where all the poor people of Kenya are given Kshs3,000 a month. The reason is that even if the fuel prices are high, which would be at Kshs20 more per liter of fuel, if you gave a poor person Kshs2,000 to buy the product, they would have a choice of using that money to fight the poverty we are talking about. For me, a social welfare system is a much better subsidy than saying that we should create subsidies for the oil companies. The reality is that oil companies will take this money from us because we would subsidize or make fuel cheaper, not from the fact that they will be cheaper when supplying fuel to the country, but we would be giving a “tax back” to the suppliers of fuel. This is, according to me, what Americans used to call Vodoo Economics. We must make sure that we do not adopt policies which have not been tried and tested anywhere in the world. A subsidy in production has never succeeded anywhere in the world. But a subsidy in consumption has"
}