ZAMBIA NATIONAL FARMERS’ UNION
PRESS STATEMENT ON THE CROP FORECAST SURVEY RESULTS AND
THE FRA FLOOR PRICE
The Zambia National Farmers’ Union would like to congratulate the Zambian farmers at large for there continued effort in ensuring that Zambia is food secure. Clearly this has been demonstrated by the recently announced Crop Forecast Survey results, which results have shown that the country has a surplus maize crop of over 200,000MT.
The surplus comes at a time when farmers are faced with numerous problems, such as poor road networks, communication and transport, high cost of inputs, increased farm insecurity etc, yet the farmers have managed to produce a surplus. There is no doubt therefore that our farmers have done our mother country Zambia proud. Congratulations fellow farmers well done. As your mother body we pledge total commitment to you to continuously support and serve you better in your farming business.
Therefore there is every reason to congratulate the farmers, as Union we call upon all Zambians and the stakeholders particularly Government to join the Union in congratulating the hard working farmers. While the farmers are being congratulated, the Union is very disappointed that year in, year out farmers are not being rewarded for their tireless efforts they put in to ensure that this country has food. This has been clearly demonstrated by this years’ FRA floor price.
It is inconceivable that FRA and Government would have elected to set the floor price as low as K65, 000/50 kg bag of maize. This price by far, falls short of meeting the very basic input costs. This price is demeaning to the farmers. It is well established that fertilizer prices last year were unprecedented very high such that it was only fair that FRA should have applied due consideration to this undisputed fact in coming up with this year’s floor price.
Farmers like any other business persons would like to recover their input costs in order to remain viable in their farming business. From the past experience in a year like this one where there is a surplus crop, the floor price tends to be the actual price. Therefore the processes that go into setting a floor price are very important and cannot be trivialized through a window-dressed consultation process.
The Union holds a strong view that setting of the floor price is such a serious national matter which demands that the consultations must be taken seriously and must be exhaustive before a floor price is announced. As far as the Union is concerned, the so called consultations between various interests groups were not exhaustive as there were still being done at technical level. Our technical team provided well researched and undisputable cost models which indicated that the bearest minimum price ranged between K75, 000 and 85,000/50kg bag.
The Union therefore rejects the calculated move by FRA and Government to use the Fertilizer Support Program as a benchmark in setting the floor price. As a mater of fact, less than 10% of the farmers benefit from the FSP subsidy program, implying that the majority of the farmers have to fetch the commodity on the commercial market. As it have been indicated already the price of fertilizers last year were too high, and therefore farmers were looking forward to recover their production costs. Further if one looks at the foreign exchange rate last year which averaged between K4,200 -4,800/1 US$ last year at time when the inputs were being sourced and now when the exchange rate is between K5,400-6, 000 to 1US$, it is clear that the so called the floor price in real terms has gone down as compared to last year.
In light of the foregoing, ZNFU would like disassociate itself from this consultative process which is being claimed by FRA. In future ZNFU will not even attempt to attend a single meeting with FRA on the floor discussions because we feel the Union has been used and the consultations were merely a waste of time because before a consensus position was reached, FRA had already made its mind to announce the price. Clearly this is not the kind of the reward and support the farmers can get from Government, given their demonstrated commitment and hard work to make Zambia food secure. As a serious reflection to this, ZNFU has therefore called for a Council meeting for the Thursday 28th May 2009 to discuss the matter further and map the way forward. Until then, the farmers all over the country hereby advised not sell their maize at the floor price announced by FRA as this price is not reflective of the real cost price to the farmers. The ZNFU Council is a supreme policy organ of the Union which brings together representatives from all the country which includes 68 District Farmers’ Association, Agribusinesses, Commodity associations and large scale corporations.
As a Union we have refused to continuously subsidize the consumers in the cities. The Union fails to understand while Government has continued implementing a four months- long subsidy program on mealie-meal for the consumers but fail to give a good price to the farmers who have earned a country a food surplus thereby guaranteed food security.
This Years’ Strategic Food Reserves
Additionally, the ZNFU describes the pronouncement by FRA to only purchase about 110,000MT of maize for strategic reserves as joke. Our food balance sheet indicates that the country requires about 70-80,000MT of maize per month, such that a 110,000 Mt of maize as strategic food reserves does not only show lack of serious by the FRA, but also shows how food security matters are not being taken serious by the Agency and Government. The FRA Act mandates FRA to buy up to 250,000MT as strategic reserves.
In fact given that the Food Balance Sheet has increased from 1,200,000MT to 1,700,000MT, logic demands that what should be held as strategic reserves should also be increased so that, should there be a shortfall, our national food reserves should be able to sustain stable maize supply up three months which is considered to be a sufficient lead time while food imports are being arranged. With this understanding, clearly what is being proposed as strategic food reserves fall short of qualifying for meaning itself. Therefore the Union is strongly recommending that FRA purchases between 300 – 400,000MT of maize as strategic food reserves for the very reason stated above.
Failure by FRA to mop out as much maize from the farmers, will lead to the proliferation of Brief case businessmen who will buy maize from farmers at ridiculous low prices, then even export the commodity to neighboring countries, a situation that may cause the country to import maize amidst a much celebrated surplus. Therefore FRA and Government must take this one as a timely warning.
16th May 2009