Columnists Features

Small-holder maize pricing nightmare


FIRSTLY, may I take this opportunity to earnestly thank the hardworking farmers of Zambia for a relatively good crop that we have produced against all odds? Crop production last season was against the farmer because of various negative factors that were at the farmer’s exposure. We had the Kwacha weakening against the major currencies such as the dollar which make the cost of inputs become dear. It is not a secret that we import almost all inputs for production except for seed and labour. I was almost shedding tears when I was buying fertiliser for my small ‘shamba’ at K380 per 50kg bag.
The cost of herbicides for weed control; fungicides to protect my crop against diseases and insecticides almost shot to double the price as compared to the previous season. My cost of production was around K5,200 per hectare for maize. Knowing that the season may have challenges with rains, I doubled my fungicide application just to give my crop that added protection in case of eventualities. This worked to my advantage as I am expecting at least 7mt per hectare.
I know that for most average farmers, especially those that apply fertiliser as though they are putting salt in Kapenta; they may average 2mt/ha. We farmers are in the business of making people develop pot bellies and if we don’t operate as a going concern, people might start looking as though they live in a war torn country. Regardless of the production environment, we have to recoup the costs and make at least some profit so that we don’t fail to buy inputs for the coming season. This is the period when I get surprised because farmers start to ask for the price they need to sell their crop at! We are the people that produced and we expect to know what price we need to sell our products at. The government has announced that they will be buying the maize for strategic reserves at K75 per bag. For a person like me who may get over 7mt, that is not a bad price because I might make a gross profit of K5,270. However, a less efficient farmer like my cousin will make a loss of about K1,500 at that price. This will mean he might not be able to participate in the coming season because he may fail to buy all the inputs. This does not mean he should sit back and cry that Boma iyanganepo, (let the government intervene) no! Governments normally don’t do business; let him search around for the private sector that I am very confident that they will be offering better prices than this. I expect them to be buying maize at between K80 to K110 per bag. This is not a political secret because we are the only country in the region with surplus corn and all countries have their eyes almost popping out of the sockets; they are focused on Zambia to be a saviour. We will never be any luckier than we are this season because the warehouse receipt system (WRS) is now in effect; if you don’t agree on the price offered by a particular buyer just deposit your grain with any certified warehouse and wait for the price which might satisfy your level of productivity – that is business.
As for the government, I do not blame them on the price set for their purchases because if they upped the purchase price, this will also have a ripple effect on the price of mealie meal. They are acting like a social corporate responsibility for most of the poor that might not afford the price of food. Therefore, commodity pricing this year has been made very simple because of the demand for the commodity.
Lastly, let me end by disagreeing with a Dr Kayula in one of the daily tabloids who suggested that the government should have maintained the normal 500’000mt strategic reserve as opposed to the 1’000’000mt which they have indicated to buy. This one million is enough for two years with the current consumption levels. I was of the view that they could have even bought for three seasons (1.5million mt). I guess that is what we were all talking about in January when we had that shortage of food. Suppose we did not receive good rains last season, where were we going to get our food? The justification that it might be subjected to misuse by the people tasked to look after the reserves does not hold water for me. I think Dr Kayula and I need to sit down so that we come up with strategies that will ensure that our reserves are not subjected to misuse by people we have employed. Mind you, agriculture in Zambia is dependent on rainfall, which we have no control over. Let’s remain peaceful as we make money through feeding people; it’s a noble career we have.
This author is an Agribusiness Practitioner.

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