Agri-business Business Editor's Choice

‘Buy less of maize’

TRYNESS MBALE, Lusaka
GOVERNMENT’S involvement in strategic maize reserves need to be reduced by 200,000 metric tonnes to 300,000 tonnes to avoid crowding out the private sector, the Indaba Agricultural Policy Research Institute (IAPRI) has observed.
The IAPRI has urged Government to lessen strategic reserves in the 2014/15 marketing season unlike the 500,000 tonnes to increase private sector participation in the buying of maize.
IAPRI chief executive officer Chance Kabaghe said Government should consider buying 300,000 tonnes of strategic maize reserves as food security because the country consumes 100,000 tonnes per month.
Mr Kabaghe made the submission before the Expanded Committee on Estimates to Parliament on the 2015 national budget last week.
He said the country  only requires at least  three months reserves to give Government time to put place some funds to import maize in case of a calamity.
“We came to you [a parliamentary committee] last year indicating that Government should this year consider buying only 300,000 tonnes of maize as strategic reserves for security reasons…We use 100,000 tonnes per month.
“But, if you are going beyond the target, then the Food Reserve Agency (FRA) should stop being a strategic reserve agency but a crop marketing institution. This behaviour to buy maize beyond its targets discouraged many private traders to participate in the maize market,” he said.
He said the strategy by FRA to buy maize at a high price and reselling it at a lower charge, is crowding out the private sector.
He said there is no reason why a grain trader should buy maize when FRA is holding stock worth over one million tonnes.
Mr Kabaghe said the exit of formal and informal players in the maize market has reduced competition because millers have started depending on maize held by FRA.



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