MAIZE PRICE SAGA

Sat, 26 Aug 2017 10:24:57 +0000

IT is highly myopic and short term thinking for FRA Executive Director, Chola Kafwabulua, to suggest that farmers who are unhappy with the maize price should move out of the crop because this is a recipe for political instability three to four years down the line. Should this come to pass, this country will face a maize crisis within three years which will result in high mealie meal prices, which in turn will impact the political character of our country.

The unseemly confrontation between the Food Reserve Agency (FRA), and the Zambia National Farmers Union ( ZNFU), over the K60 per 50kg bag maize price is symptomatic of the malaise afflicting most public institutions which fail to consult and instead announce far reaching measures which produce dire consequences.

And we have said before and we wish to repeat that the K60 should have been the result of consultation between the various stakeholders to reach a consensus over the marketing of this year’s crop – which is excess of demand.

It is not so much the price but rather the manner this was reached and then announced which has caused consternation because FRA is a major buyer, wielding tremendous influence over the market, meaning that whatever price it sets acts as the floor price and herein lies the problem.

The government has not announced a floor price to allow market forces to operate and indeed the prevailing market price hovered around the K85 from last year.  But this changed drastically when FRA announced its price.

This became the floor price and according to ZNFU, the market adopted this as a floor price meaning that any form of bargaining was centred around it.

The argument is not against a liberalised maize market especially considering that maize is a very political crop.  On the contrary the argument is that if the price was to be announced it should have served as a floor price which should have taken into account the concerns, costs and logistics that farmers encounter.

On average a 50kg bag now costs almost K80 given the cost of fertiliser and inputs last year.  In this respect only 1.4 million metric tonnes of maize has come from farmers who obtained support from the government.  The rest had to buy fertiliser and chemicals at full value.

That is why the K60 has angered most producers more so that FRA is only buying 500,000 tonnes of maize leaving the bulk, 3.1 million tonnes to the market which is being influenced by the K60 tag.

Understandably, FRA is using public funds to purchase the maize but this in itself should not be the reason to undercut and undermine the ordinary small-scale or commercial producers.

There was need for both parties, FRA and ZNFU, to have consulted over the price and the modality in which it was going to be announced to ensure that there was a meeting of minds between the producer and the purchaser.

There is no doubt that mealie meal consumers are happy in maize meal reduction but this cannot be said of the producer and it is very unfortunate that FRA suggested that instead of mourning, the ZNFU should encourage its members to diversify to other crops.

There is still time for Government to bring together FRA and ZNFU to hammer out a compromise that will ensure the purchase of grain throughout the country, and subsequent disposal of the same at a reasonable price.

The export potential must be exploited to the full to dispose of our excess maize as well as secure markets that provide a much more reasonable return for the labours and rigours that farmers have to undergo.