Posted by Benson on August 14, 2017

The Zambia National Farmers Union(ZNFU) engaged the Food Reserve Agency (FRA) after the FRA announced the 2017 maize producer price. A meeting was held with the FRA on Friday 4th August 2017 as the Union was not consulted prior to announcing the price. During the meeting, the Union made it very clear that the K60 set by the FRA was below the cost of producing maize. The FRA calculations put the cost of growing maize under FISP along the line of rail and in rural areas at K60 per bag and K73 per bag as the cost for non-FISP farmers. Under the FRA model farmers are not expected to make any ends meet from growing maize as the FISP supported farmers will only break even with no profit while the non FISP supported farmers will make a loss. The Union made its case and management of FRA decided to commute the matter to the FRA Board.

In a new turn of events, the Union has received a letter from the FRA stating and we quote…” It is therefore the considered view of the board that the price of K60 per 50 Kg bag of white maize be maintained because it is a market price.” The Union is shocked by this development and we have escalated this matter to the Minister of Agriculture because of the inconsistencies at play. Last season, market conditions were interfered with because after the maize was bought from farmers exports were stopped through an export ban and introduction of a 10% export tax. Resulting from this, traders who would have exported the maize and would have been liquid to buy the maize this season are out of the equation as they have no money to participate. As we speak FRA is also selling to some traders ostensibly for exports.

What we can deduce is that farmers have been sacrificed after interfering with market prices last season. We must fore warn against such piece meal and short-sighted benefits that will arise because of paying farmers paltry prices. The mealie meal price may drop now but the clear signal to farmers is DON’T GROW MAIZE going forward. Being a staple food maize production cannot be left to the vagaries of unpredictable interventions. A case in point of our neighbours, Malawi and Zimbabwe shows that the farmers there have been offered prices that translate to US$240 per tonne and US$380 per tonne respectively which translates to US$12 (K120) and US$19 (K190) per 50Kg bag against the FRA price which amounts to US$120 per tonne or US$6 (K60) per 50Kg bag.  It is evident that our neighbours are incentivising maize production while our situation is to the contrary. Unless a careful review is done to improve the FRA producer price, the country will find itself having to import maize in the seasons ahead.

The reality on the ground is that the producers of the 2.2 million tonnes of the maize that is marketed was not largely FISP farmers because some of the FISP maize is retained for own consumption; FISP inputs were supplied late so most farmers had to buy inputs anyway and stored away the late inputs for next season and the FISP pack is too small for many households that interact with markets. In our view, the FRA price will increase poverty in farming areas because the perennial middlemen have already positioned themselves buying at very low prices for supplying to the real market players such as FRA, Millers, other Processors, exports etc.  The consequences of the announced FRA producer price are just too severe to even contemplate. As such, it should be revisited immediately without any hidden agendas. If nothing is done, monitor the disastrous ripple effects that will follow on all other businesses that deal with the farmers such as banks, agribusinesses and many more. To us, passing a verdict the FRA price is premised on market prices is literally spitting on the farmer for having grown the staple food leading to the huge supply is utterly short sighted. The Union has written to the Minister of Agriculture to sanitize this unfortunate state of affairs. At this juncture, my appeal to the farmers is that let us give Government a chance to hear our plea and review this matter failure to which the crusade to make Zambia the bread basket will remain the usual rhetoric and pipe dream.

 

 

Jervis Zimba

ZNFU PRESIDENT

 

 

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