Columnists Features

Of market fundamentals, maize price debate

FLEXISON Mweemba, a small-scale farmer in Kalomo’s Dundumwezi area in Southern Province, has a heap of about 4, 000 bags of maize stacked in his backyard.

Mr Mweemba is not the only smallholder farmer in the rural parts of the province with a good harvest from the 2016/2017 farming season.

There are many others who are waiting to sell while some are already selling their commodities to the Food Reserve Agency (FRA) or private buyers.
This marketing season, the FRA is buying a 50kg bag of maize for K60, which is K25 less than what they were offering in the previous season.
The price reduction of maize has not been received well by the Zambia National Farmers Union (ZNFU) and other stakeholders.
This has resulted in ZNFU urging farmers to keep their commodity until the FRA adjusts the price upwards.
As the ZNFU is taking on the FRA over the price of maize, private buyers, otherwise known as “briefcase buyers” have taken advantage of the situation by offering farmers as little as K30 for a 50kg bag of maize.
But Mr Mweemba and other farmers in Southern Province have refused to sell their maize at a lower price than what the FRA is offering.
“I would rather sell my maize to the FRA because it is more profitable than what the private buyers are giving us. It is also more secure to trade with FRA because private buyers sometimes run away with our money,” he says.
Driven by the desperation to survive, some farmers are selling their maize to the private sector at K30 per 50kg.
Mr Mweemba and others in Southern Province prefer to deal with FRA, saying the Agency is trustworthy and its price is the best so far.
The FRA has been paying the farmers every two weeks for the maize supplied to it.
The ZNFU has condemned the K60 price, contending that it is exploitative, therefore urging farmers to hoard their maize until the FRA raises the price.
Evans Matongo, another maize farmer based in Kalomo, laments that farmers are getting a raw deal from private buyers who have taken advantage of the impasse between FRA and ZNFU.
“I want profit for my maize because it is from this business that I am able to feed my family and send my children to school. I would therefore not risk selling my maize to the private buyers,” Mr Matongo says.
Other farmers interviewed in the area echoed ZNFU sentiments that FRA should offer a better price for the commodity to protect farmers from slipping into vulnerability.
They argued that maize farming is the only source of income for some farmers and therefore a good price will make their businesses sustainable.
“We want to find out if FRA will increase the price of maize and if so, when will this would be done? Our plea to the FRA is that, please consider adjusting upwards the price of maize,’’ one farmer said.
Following the numerous pleas and complaints from ZNFU and farmers, FRA executive director Chola Kafwabulula embarked on a countrywide tour of maize depots to check how the maize marketing process is proceeding.
Mr Kafwabulula undertook a five-day tour of depots in Southern
Province, where he said he was impressed with the overwhelming turnout of farmers who are selling their maize to the agency.
It is said that when you want things to be done the right way, then better do it yourself.
True to this saying, Mr Kafwabulula left his office in Lusaka to get first-hand information of what was happening at grass-root level.
Flanked by provincial marketing coordinator Lundu Sichala and other field officers, Mr Kafwabulula toured depots in Monze, Choma, Kalomo, Zimba, Livingstone and Kazungula districts.
“There has been too much talk surrounding the price of maize for this year, so I decided to come and see for myself what is happening on the ground and I am happy to report that the response from the farmers in Southern Province is overwhelming and good,” he says.
“I don’t just drink coffee in my office. From time to time, I put on my fieldwork attire and visit our offices across the country.”
He said the FRA price for a 50 kg of maize is the best on the market because private buyers were offering about half of this price.
Mr Kafwabulula encouraged farmers to supply their maize to the FRA because they stood to benefit more than if they sold to other buyers.
Considering the market fundamentals, he said K60 was a good price the farmers could get, although it was K25 lower than what FRA was offering in the previous marketing season.
He said the price was not fixed to exploit the farmers but was prompted by the market forces in the region where Zambia was exporting its maize.
Mr Kafwabulula, however, said arguments for maize price adjustment were valid and therefore the FRA would present the proposals to the relevant ministries for consideration.
During field tours, the FRA chief urged depot clerks to ensure that the maize they were receiving meets the required standards.
He said the maize should be of high quality to satisfy the needs of millers and importers in other countries in Africa.
The FRA says it will not accept dirty and insect-ravaged maize. In this vein, Mr Kafwabulula ordered that 690 bags of maize found at Chipembele, Ngwezi and Dimbwe depots be properly sorted out to remove dirt and damaged grain.
Some of the depots that he visited included Siachitema, where he found 8,745 bags of maize in stock and Bulyambeba and Kasuswe depots, where 11, 485 and 3, 900 bags, respectively, had been bought.
Cosmas Chileshe, a clerk at Kanchele depot, said the purchasing process was going on well and farmers were turning out in large numbers to sell their maize.
Officers at almost all the depots that were visited said the response from farmers was overwhelming. Some of the depots toured were Dimbwe (Kalomo), Luyaba, Chinkoyo and Misika in Zimba. Others are Lunungu, Ngwezi and Makunka in Kazungula and Livingstone depot in Livingstone.
Mr Sichala, the provincial marketing coordinator, said at provincial level, the FRA is well equipped and prepared to buy all the maize and other commodities that will be taken to satellite depots during this marketing season.
According to the 2016/2017 crop forecast survey released in May this year, Zambia’s maize production increased to 3,606,549 metric tonnes (mt), compared to 2,873,052mt in the 2015/2016 season, representing a 25.53 percent increase.
The survey further indicated that the national average yield rate for maize has increased slightly to 2.19mt per hectare, from 2.1mt per hectare last season, representing an increase of 4.18 percent.
Small and medium-scale farmers recorded an average maize yield rate of 2.12 mt per hectare, while large-scale farmers recorded an average maize yield rate of 5.24mt per hectare.
Of the produced maize in the 2016/2017 farming season, the FRA will buy only 500, 000 metric tonnes from small scale farmers at K60 per 50 kg bag.
Zambia is not the only country in the Southern African region to record a good maize harvest in the 2016/2017 farming season, hence the FRA price coming down to K60 per 50kg.


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