POLITICS OF MAIZE

Tue, 22 Aug 2017 11:02:56 +0000

Maize may intrude into the 2021 elections unless measures are taken now to pacify the situation. Farmers across the country are angry. Very angry.

The decision by the Food Reserve Agency (FRA) to peg the price of a 50kg bag at K60 was at best arbitrary but at worst unilateral and without the full support of the National Farmers Union (ZNFU) which estimated that it costs up to K81 to produce one 50 Kg bag of maize.

It is certainly not correct that FRA, a Government agency should arbitrary set a floor price that is below production cost, on the premise that Government must balance its budget or indeed meet financial benchmarks.

In a liberalized economy the market should have been allowed to find a price. Setting a low price sets the trend and disadvantages any attempt at equitable negotiations, especially for the small farmer.

This conduct raises two fundamental issues.

The first being the manner in which agriculture is managed, particularly as it relates to food produce pricing.  Europe and most developed countries produce Food Mountains because price incentives are provided for the farmers. Farmers are not left to face the full force of market vagaries. Of course the market plays a role, so does the Government.

A breakdown in the balance has often seen farmers picket Government institutions and in some cases massive displays by farmers, as was the case in France recently when milk was poured in the streets.

 Secondly the place of agriculture in the 7th National Development plan as it relates to the promotion of the industry as a poverty reduction exercise considering that well over 60 percent of the Zambian population depends on it in one way or another is placed in jeopardy.

In our view Government must work in close synchronization with the farming community if agriculture will take the place it deserves.

The arbitrary maize pricing and the general vagaries agriculture produce suffers is a concern that has bedeviled the industry. The wild fluctuations that have left producers bankrupt because commodity prices have slumped beyond production costs has left many farmers bankrupt, dispirited and definitely without the morale to soldier on..

This was the case with cotton and on many occasions tobacco and now maize.

The absence of a price stabilization mechanism means that producers are on their own left to the vagaries of the market which market often favours the consumer, who also wields political power and influence.

In the absence of a grain marketing board or indeed generally an agriculture marketing board as was the case with NAMBOARD, the plight of farmers and producers will continue to be indeterminate making farming a high risk activity on which investors especially small scale ones cannot rely for a livelihood.

A good example is the fluctuation in the price of tomatoes, which range from K10 per box to K160 depending on the season and the demand.

The ultimate beneficiary is the consumer, while the producer must meet all the costs.

This is the case with maize, which admittedly is apolitical crop mainly because of its status as a staple.  That is why the establishment of a floor price at K60.00 has proved untenable in view of the high production costs.

A floor price should be a price mechanism used by government to cap the lower limits in order to avoid exploitation of the producers.  At K85.00 last year, buyers purchased around this amount with briefcase buyers buying at K70 on the extreme end.

But that benchmark has been breached this year and FRA has failed to explain why a bag which cost K85 last year should this year cost K60 and why indeed it should be FRA, an interested party to settle the price instead of the ministry of agriculture that has a more holistic view of the production and marketing dynamics in the country.

Our concern and that of many other genuine actors is that while we have a bumper harvest this year, production will continue to dwindle and given the three year or so lag, the negative momentum generated this year will have its full fruition closer to the elections of 2021 and hence this will become another political issue.

It is advisable that farmers are given a hearing to allow for a more amicable settlement that will ensure a productive incentive to keep farmers on the plough.

It is understandable that Zambia is now subject to IMF conditionalities but undoubtedly the programmes of poverty alleviation which the Bretton Woods organization supports has a component that caters for such exigencies.

Therefore a policy with a human face must be manifested otherwise human frustration particularly peasants and small scale farmers scattered throughout the country will in due course vote with resentment and anger.

We expect that a listening government will consider the plight of far flung rural peasants who produced in the hope of creating a surplus for their maize but must now face the possibility of losing their crop to lack of market or indeed poor pricing.

These are looking up to the government.