Maize export ban cost Zambia revenue – CTPD

Centre for Trade Policy and Development acting executive director Isaac Mwaipopo says the 2016/2017 marketing season is a lost opportunity for small-scale farmers and grain traders to cash in because of the maize exportation ban.

In a statement, Mwaipopo feared that the 2017/2018 agriculture-marketing season would be tougher for small-scale farmers and maize traders in Zambia.

“CTPD considers the 2016/2017 marketing year as a lost opportunity for small scale farmers and export grain traders to cash-in, because Zambia had closed its borders on the exportation of maize. The 2017/2018 agriculture-marketing season is likely to be tough for small-scale farmers and maize grain traders in Zambia. This follows the shrinking regional market which is likely to impact negatively on the price for commodities like maize and Soya beans,” Mwaipopo said.

Mwaipopo said Zambia’s failure to take advantage of the regional demand for maize made the country lose out on potential revenue that would have propelled the domestic revenue mobilization agenda forward.

“The failure by Zambia to take advantage of the demand that existed for maize has made Zambia lose out on potential revenue that would have otherwise propelled the countries domestic revenue mobilization agenda forward. As we prepare for the 2017/2018 marketing year, it will be critical that effective measures are put in place to help reduce post-harvest losses, more especially that the nation has limited storage facilities. There would be need to consider creating incentives that would help attract investments in the construction of modern storage facilities,” he said.

“According to the recently published SADC quarterly food security update, the crop output and regional food security situation during the 2017/18 marketing year is expected to improve compared to the previous season. This is being attributed to the significant increases in agricultural production expected in some member states within the region. South Africa, which normally averages slightly more than 40 per cent of maize produced in the region, has already released their first round crop estimates figures which show an increase in production of most of the crops.”

Mwaipopo said that the published SADC quarterly food security update further revealed that the production of maize in South Africa was expected to increase by 79 per cent from 7.8 million tonnes produced in the 2015/2016 season to 13.9 million tonnes in the 2016/2017 season.

“Malawi, one of the countries that was hit hard by the drought last season, has released the first round agricultural production figures which are also indicating an increase in the production of most crops including the staple food, maize. Maize production is estimated to stand at 3.2 million tonnes, up by 36 per cent from 2.4 million tonnes last season,” Mwaipopo added.

He expressed fear that the recent ban on the exportation of grain products would lead to a drop in demand for Zambia’s maize.

“CTPD notes that this may lead to a drop in demand for Zambia’s maize as the countries which we have been supplying our surplus maize might not look up to Zambia. This is also likely to weaken the participation of private sector players who mostly buy for the export market, now the export market seems depressing,” Mwaipopo observed.

“We are aware that the country is still seating on close to 600,000 Mt carry over stock of maize, from the 2016 season. This maize is in the hands of the Food Reserve Agency (FRA), the informal and formal grain traders as well as the National Farmers Union. With preliminary harvest projections suggesting a bumper harvest for 2017, Zambia is likely to emerge as one of the countries within SADC with huge stocks of maize like South Africa and Malawi.”

He warned that if Zambia’s maize output exceeded 2,873,052 Metric tonnes in the 2017 marketing season, it would lead to a shortage of storage facilities.

“In terms of domestic consumption and crop output, we note that on average, Zambia consumes close to 2 million metric tonnes of maize per year that is both human and industrial consumption. For the 2016 marketing season, Zambia’s maize output stood at 2,873,052 metric tons, which was an increase of 9.73 per cent from the 2015 output that stood at 2,618,221 metric tons. If this figure is exceeded in the 2017 marketing season, it might lead to Zambia having stocks of maize above 3.5 million once carryover stocks are added. This will create serious problems, as the country will have a challenge to store this amount of grain,” said Mwaipopo.

“There is also need to begin exposing the Zambia agro producers and traders to innovative trading platforms like the Zambia Commodity Exchange, this will help the farmers to discover alternative markets where they could profitably sale their produce as well as have information that would help them know alternative crops that can fetch them more money.”

         

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