Maravi

COMESA bemoans high Agro input prices

COMESA bemoans high Agro input prices
By Joan Chirwa
Thursday May 22, 2008 [04:00]

HIGH agricultural input prices will force farmers to cut back on production, COMESA Agricultural inputs trade specialist Julius Mathende has said. Mathende said high input costs, without increases in farm gate prices, were a disincentive to agricultural production. “A decline in production compromises food security, employment, export earnings, raw material supply to downstream industries and many more.

The sum effect of these factors is reduced growth in Gross Domestic Product (GDP) and overall economic development,” Mathende said. “The situation may be worse if Zambia is caught up in the current global recession where real incomes including for Zambians are going down but prices especially those of basic commodities are going up.”

Just before the beginning of the last farming season, Zambia’s agricultural sector witnessed a significant increase in prices of seed and fertiliser owing to a number of market factors such as high fuel costs.

Mathende said cutting down on production might lead to under-development since most low income countries largely depend on agriculture for food, incomes, export earnings and raw materials.

“From the farmers perspective, high produce prices are welcome and high input prices are bad news. However, the experience is that farmers, especially the smallholders, do not benefit much from high prices.

This stems from poor bargaining power, information asymmetry and seasonal price cycles,” Mathende said. “Generally, it is the middlemen and other parties downstream who benefit most. Faced with high input prices without corresponding high produce prices, farmers are discouraged from producing.”

Mathende noted that appropriate government policies were required to mitigate the likely effects of high agricultural input prices.

“Governments which also spent a lot of money to support production may find themselves in a dilemma as objectives may not be achieved,” Mathende said.

“The livestock sector is also affected by high input prices and this may have a serious impact on protein supply in terms of beef, pork, poultry and milk. High input prices do not only cutback production in these areas but also increase costs of these commodities leading to nutritional deficiencies.”

Labels: AGRICULTURE, COMESA, FERTILIZER

posted by MrK @ 3:47 AM