Maravi

Tembo advises government on commodities exchange

Tembo advises government on commodities exchange
By Joan Chirwa-Ngoma
Wed 01 Feb. 2012, 13:59 CAT

THE government must put in place a legal framework for the commodities exchange, advises Zambia Agricultural Commodities Exchange executive director Brian Tembo. In an interview, Tembo also advised the government to exit from the main crop market and offer policy direction in the agriculture sector.

He said the government should support the commodities exchange so that private sector players can freely trade in a regulated environment.

"It was important to look at agriculture as a business. When there is over production of tomatoes, no one cries foul. The market corrects itself. What most stakeholders have been saying is that the government should put in place a legal framework for the commodities exchange," Tembo said.

"In so doing, let government exit and focus on other things like infrastructure development, regulation…and tone down and revert FRA's role to that of strategic reserve."

Last week, Ministry of Agriculture acting permanent secretary Edwin Sakala and director of agri-business Green Mbozi said there was too much political interference from top MMD officials when determining maize floor prices.

Appearing before the parliamentary committee on agriculture on Monday, the duo admitted that it was possible to address the chaotic crop marketing and even allow private sector participation provided there is no government interference.

The duo revealed that there was too much political interference when determining maize prices during the MMD's regime, with top government officials overlooking advice from technocrats in the Ministry of Agriculture.

They said top government officials at times opted to peg maize prices at levels that were not cost-reflective in a bid to please those that strongly lobbied the government.

And Food Reserve Agency executive director David Matongo, during the same committee sitting, said there is need to quickly put an end to the "blame game" on the chaotic maize marketing in the country by addressing the root causes of the problem.

And Tembo said the majority of small-scale farmers were not benefitting from the subsidy programme despite a lot of money being spent on the initiative.

"According to research, there is also no impact on poverty reduction. This should tell the government that if you are not getting anything, then there is something wrong. What us Zambians and the new government need to understand is that for a lot of money being spent on maize, there is a school that hasn't been built; drugs that haven't been built and many more," said Tembo.

"The government spends about US $500 million to purchase maize from the farmers which they do not even have capacity to store. There is no return on the investments made in the manner that the government has made on maize. About 40 per cent of budget on agriculture spent on input support."

Labels: BRIAN TEMBO, COMMODITIES

posted by MrK @ 5:25 PM