Editor's Comment

Maize price a boost


THE gigantic rise in the price of maize by the Food Reserve Agency (FRA) is the kind of welcome news that should spur production at all levels of farming.
This is the first time in a long time that the price of maize has been increased by such a margin – from K70 to K110.
Prices of maize for a 50 kilogramme of maize had shuttled between K60 and K75 in the last four years. Last year, the Food Reserve Agency offered K65 but after President Edgar Lungu’s intervention, the price was adjusted upwards to K70.
Earlier this week, President Lungu noted the need for farmers to be encouraged by offering them prices that will sustain their operations and for them to run their activities as a business.
Considering the farmers’ justifiable cry that K70 was too low, this increase should give them that encouragement to continue farming. For peasant farmers, this should be the push they needed to not only grow for themselves, but also for sale in substantial quantities.
The monumental increase to K110 means some farmers who sell their produce to private buyers will be encouraged to consider FRA as a good buyer, too.
Hopefully the FRA will be sufficiently and timeously funded to ensure that the farmers are paid in good time, if not immediately they deliver the grain to the designated depots.
Some buyers are said to already be offering “good” prices. This is all good for the farmer.
The new price also means that farmers will create cash reserves to re-invest not only in maize but other crops and areas.
Farmers will have more disposable income to spend and boost other economic sectors, including obligations such as school fees, shelter, offering at church, medicals and clothing, including paying farm workers.
Investing in other crops and livestock is critical for farmers to diversify their agriculture business and reduce dependence on maize, which is prone to changes in weather patterns like was the case in the 2018-2019 season when almost half of the country experienced prolonged dry spells.
Alternative crops, especially early-maturing varieties and cash crops, as well as livestock such as goats and chickens will come in handy in the event of poor rainfall.
Farmers should become wiser by embracing drought-resistant crops.
The K110 maize price announced by FRA yesterday will also attract additional and more meaningful investments by farmers, seed researchers and suppliers and other maize-related agro-merchants.
The new price has sent signals to the financial sector. It will attract the financial sector such as banks and micro-financial institutions to consider the farmers as worthwhile borrowers.
It also drops the risk factor of the farmers’ credit rating and even the ratio of non-performing loans thereby reducing overall cost of money from banks.
It will also enhance national food security and opportunities to seek export markets and will increase farmers’ appetite of seeking more efficient and effective methods of production, which can lead economies of scale therefore attracting bigger markets for their produce.
There is the additional downstream benefit of creation of job opportunities on farms because of the enhanced income as farmers will be looking forward to increasing the hectarage under production.
The treasury should on its part support FRA by ensuring that farmers are paid timely.
It is one thing to announce the new price but another to fail to pay on time and this has tended to compel some farmers to sell their produce to private buyers.
This is despite private buyers offering a low price but paying on the spot to ensure farmers carry on with their daily chores.
Therefore, the Ministry of Finance should release enough money to FRA so that it can pay farmers promptly.
After all, the maize FRA buys is for the country’s food security, so the earlier it is secured, the better for the nation.
Failure to guarantee timely payments to farmers may see FRA failing to get adequate maize stocks to build food security.
Sadly, though, there are some players in the sector who still contend that the K110 offer is insufficient. The Zambia National Farmers Union (ZNFU) stated yesterday that they expected a price ranging between K130 and K140.
The ZNFU states that in some regions of the country private buyers are offering higher prices. This is well and good, but it ought to be remembered too that FRA price is NOT a floor price as was the case in years gone.
Any player in the market can sell or indeed buy the maize at other agreed prices, so ZNFU should be encouraging other buyers to keep the prices high for the good of the farmers.
In any case, FRA will be buying only 300,000 tonnes of the grain, so there will be plenty more on the market for other buyers.
Of course it would have been much better and more encouraging for the farmers if the FRA price was even higher, but the reality is what it is.
It is important, too, that FRA be selective in who it buys its maize grain from. It should target the peasant farmers first, especially those in the hinterland.
While it is true that some buyers are offering higher prices than that which FRA has set, it is also true that there are many other buyers that are offering ridiculously low prices. Such low offers are often in the remotest parts of the country to which transportation costs inhibit attractive prices.
It is to such places that FRA should move so that the remotest farmers get the due rewards of their hard work and be encouraged to do even better in the next farming season.

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