Export maize reserves, ZNFU advises FRA

COMMENT - So maize will be cheaper. It is better to have maize in reserve than to have to buy it in case of an emergency. Does anyone remember Malawi being told to sell it's maize reserves, and losing 1,500 people from famine? Farmers should use other means to stabilize their prices. Zambia really needs to expand ZAMACE, so farmers (collectively) can use commodities to lock in the prices they can get or their maize.

Export maize reserves, ZNFU advises FRA
By Fridah Zinyama
Tue 06 Apr. 2010, 04:00 CAT

THE Food Reserve Agency (FRA) should immediately export the 180,000 metric tonnes of maize in its custody as the stocks will distort the next marketing season, Zambia National Farmers Union (ZNFU) president Jervis Zimba has advised. And Zimba has urged the government to quickly institute a new board at FRA as the lack of one was affecting its operations.

Zimba said FRA needs to quickly sell off the 180,000 metric tonnes of maize it has in its reserves so as to prepare for the new marketing season, which is supposed to start in July.

Zimba said FRA also has about 180,000 metric tonnes of maize in its reserves, a situation which could affect its role on the market, unless it was allowed to export its current stock of maize.

“FRA has to export this maize as quickly as possible,” he said. “If they do not, it will affect their participation in this year’s crop marketing season, as they might come onto the market late and go against regulations which require them to enter the market in July every year.”

He said the forthcoming crop marketing season was worrisome as the country was likely to produce a huge harvest this year.

“We say that the issue of marketing is worrisome this year because of the huge crop that farmers are likely to produce,” he said. “All the players in the maize sector seem to be holding enough maize stocks at the moment. Millers have excess crop which is likely to last them until June–July.”

Zimba said FRA normally offered better prices for farmers and if they did not quickly come onto the market once marketing starts, unscrupulous traders would take advantage of desperate farmers wishing to sell their crop.

“The current situation in the maize industry is affecting the price of the commodity,” he said. “…As it is, the early maize is already on the market and millers are buying it, meaning that once the crop marketing season properly starts, farmers will not have a ready market for their crop... leaving them vulnerable to ‘briefcase buyers’.”

Zimba said briefcase buyers had already started buying maize from desperate farmers in Southern Province for prices as low as K40,000.

“Some buyers are already buying maize from farmers at K25,000 before it is even harvested,” he charged. “This is unacceptable and government, through FRA, should not allow such a thing to continue, as it might demoralise farmers from growing maize.”

Zimba said unscrupulous buyers purchasing maize at low prices were pushing farmers into poverty.

“Zambia can reach self efficiency in all the crops that it grows, if marketing issues that the agriculture faces are well addressed,” the ZNFU president said. “For instance, for the past two years, farmers have ensured the food security of the country by producing more than enough than the country needs.”

Zimba said while it was important for farmers to produce enough food for the country, certain challenges which the sector was experiencing needed to be addressed if the country was to become a bread basket of the region.

“We have enormous potential as farmers to produce more but the high cost of production was killing the industry,” he said. “We have such a high production cost and this is making us uncompetitive in the region... when we have maize to export, we are losing out because South Africa is beating us where prices are concerned.”

Zimba said fuel, electricity and fertiliser were major contributors to high production costs in the country and the government needed to quickly address their concerns if the local agriculture sector was to realise its potential.

“As a country, we even fail to export maize to the Democratic Republic of Congo because our prices are so high,” he said. “South Africa, which has to transport its maize through Zimbabwe and Zambia, lands its maize in DRC at a much cheaper price than Zambia.”

Zimba said the government needed to seriously address the agriculture sector’s concerns because of the crucial role that the industry played in the economy.

“Agriculture is a major source of employment and inflation goes down if the country has enough food,” he said.

Zimba added that the government’s setting of the floor price did not benefit farmers in any way.

“The setting of floor prices is disadvantaging farmers as it does not consider the production costs,” Zimba said. “This is one issue which we have raised time and again but which government has failed to adequately handle.”

Zimba said the setting of floor prices was to some extent affecting production in the agriculture sector, as the cost of production was not considered.

“This might be because government has been subsidising the crop that small scale farmers produce, but what happens to farmers who do not have access to such facilities,” he wondered. “The crop marketing should therefore be liberalised so that farmers can sell their crop at profitable prices which in turn will further improve on production.”

Zimba said there was need for the country to show interest in the crop marketing season, as it played a critical role of determining whether the country would produce enough food to meets its consumption requirements.

“We want to hear more from all stakeholders,” he said. “Let them comment on the market floor price and how it affects farmers.”

Zimba said unless problems in the crop marketing process were addressed, farmers might be discouraged from producing maize next year, as they might be worried of making losses.

“This has happened in previous years… when prices were bad, farmers abandoned the production of maize to grow other crops which offered better prices,” he said.

Zimba said a precedent had been set in Zambia in that whenever the country went high in production and the marketing was not done properly, the following year always recorded a reduction in production.

“This happened for maize, cotton, sunflower, soya beans and wheat,” he said. “Farmers would like to realise a profit whenever they work hard to produce any commodity.”

And Zimba said there was urgent need for agriculture minister Peter Daka to quickly institute a new board at FRA.

The Costain Chilala-led board was dissolved last September after then agriculture minister Dr Brian Chituwo refused to renew its mandate, which had expired.

The board was dissolved at the height of the acquisition of the K270 billion loan from an undisclosed bank for that year’s maize purchasing exercise.

Zimba said the government through the Ministry of Agriculture should put a new board in place at FRA, as it was currently operating without one.

“For example, it takes a lot of thinking and strategising to ensure that the maize which farmers have produced is mopped up in four months,” he said. “FRA cannot do this if they do not have a board in place to address such pertinent issues.”

Zimba said putting a new board in place should be a priority for the government as the country entered the critical period in which it purchases its staple food.