Maravi

Agriculture and the PF government

Agriculture and the PF government
By The Post
Wed 01 Feb. 2012, 13:00 CAT

TWO technocrats from the Ministry of Agriculture and Co-operatives early last week appeared before the parliamentary committee on agriculture and revealed that there was too much political interference from top MMD officials in the determination of maize floor prices.

Ministry of Agriculture acting permanent secretary Edwin Sakala and director of agri-business Green Mbozi told the parliamentary committee that it was possible to address the chaotic crop marketing and even allow private sector participation provided there was no government interference.

The duo revealed that there was too much political interference when determining maize prices during the MMD's regime and that top government officials overlooked advice from technocrats in the Ministry of Agriculture. As we have stated before, agriculture is a very vital sector for the wellbeing of the majority poor of our country.

Over half of our population heavily depends on agriculture for survival. The majority of our people in rural areas have their livelihoods centred on agriculture. It is therefore sad to hear about the heavy political interference that characterised pricing of maize during the previous government. We know that agriculture has many components which require government's intervention at every level.

It will not be wrong to say that right from the procurement of inputs under the Farmer Input Support Programme to the marketing of the crops, politicians in the previous government of the MMD influenced the processes for their personal gain. This is definitely a dangerous way of running a key sector that has potential to heavily contribute to the reduction of poverty in our country. We say so because pricing of commodities should not be the preserve of the politicians; market forces should determine the prices of the commodities being sold.

Those in government may only intervene where necessary to ensure that our poor farmers are justifiably rewarded for their effort. Every aspect of the agriculture sector needs to be taken seriously and the government should ensure that appropriate measures are employed to revamp this very important industry of our country this year.

The awarding of contracts for the supply of inputs - fertiliser and seed - needs urgent attention; the pricing and marketing of crops equally need attention of our new government. Time and again, our farmers have complained of delays by the Food Reserve Agency to purchase their produce. We hope this will be addressed by the PF government in the coming marketing season.

When - as is often the case in Zambia - a multitude of small farmers are faced with a limited number of buyers for their crops, it is hard for them to influence prices and they often just accept the price that is offered to them. Nevertheless, the situation has greatly evolved in our country today.

For several decades, many African countries have left their states to set the price of agricultural products, especially cereal and export products. But agricultural prices rely on various factors which depend upon the conditions of demand and supply. Supply depends upon the total available amounts of a given product and can include - depending on the product - local production, the production of neighbouring countries as well as world production in the case of export products.

It also depends upon the needs of producers for ready cash: the more they need cash at harvest-time, the more they will be inclined to accept low prices. And if infrastructure is bad, part of the money that the dealer could pay to the producer will be used to pay for transport; therefore, the dealer will tend to bring down the price offered to the producer in order to make up for the high costs of transport.

Another factor that influences prices is competition among dealers. If there are many dealers who want to buy the available products, producer prices will tend to rise. On the contrary, if there is only one dealer and many producers or abundant production, a modest price will be offered. Lastly, prices vary depending on the seasons. During harvest time, prices are low, while they rise as sowing time draws near.

The ability of producers to stockpile their produce can help to minimise these seasonal fluctuations by placing on the market only amounts of produce sufficient to maintain a given price. That is why market information services are useful. Their role is to provide producers, as well as dealers and especially consumers, with information on the availability of products and on the prices charged in production as well as in consumption areas.

They can also tell producers where the potential buyers are, what their preferences are in terms of processing, delivery, packing and so on and so forth. They can help producers to plan their production, to seek out the best markets and the best prices for their crops. It is therefore important for producers to know when, where and what amount of produce to sell, bearing in mind the market price.

Ideally, they should be able to get the most out of the existing prices. And as Food Reserve Agency executive director David Matongo observed during the same parliamentary committee on agriculture, the Agency should revert to its role of being the buyer of the last resort. We agree with Matongo on this score. As long as the Food Reserve Agency is left to be the largest player in the crop market, private sector participation in the whole exercise will be very limited.

This will also mean the pegging of prices will continue to be done by the government. Allowing the private sector to play a key role in crop marketing will have a far-reaching effect on agriculture in terms of pricing of the crop. This will bring about competition as buyers will work towards outdoing each other, thereby providing the best prices to farmers for their produce. This, we believe, is how the agriculture market should be run.

We hope the Patriotic Front government will lead the way and correct the wrongs of the previous regimes in the marketing of crops for the growth of the agriculture sector.

Labels: AGRICULTURE, FISP, PF

posted by MrK @ 5:47 PM