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FRA defends K110 maize priceBy Natasha Sakala on 12 Jul 2019
The Food Reserve Agency (FRA) has defended the K110 maize price, saying an increase might lead to a hike in the price of mealie-meal.
Since the announcement of the FRA’s K110 maize price per 50Kg, the Zambia National Farmers’ Union (ZNFU), among others, rejected the price opting to sell their produce to briefcase buyers who offered a better price.
But FRA executive director Chola Kafwabulula argued that the K110 was a fair price as it was an increase from K70 per 50Kg offered last year.
He equally observed that the Agency could not peg its maize buying price any higher because that could trigger higher mealie meal prices.
“Are you also asking that if the price of maize goes up how do you compromise the price of mealie meal? Are you asking these people that question? So, it’s a must, once we increase the price of maize, the price of mealie-meal will definitely go up! You see, maize is a raw material that goes into the production of mealie-meal. You and I are aware that just a few months ago on the Copperbelt, people were complaining about the high prices of mealie-meal. It went to K120, K125 and even K115 and people were complaining because it was unaffordable. So, what we need to understand is if you take the price of the raw material too high, you now risk having very expensive mealie-meal,” Kafwabulula said in an interview in Lusaka.
“Also, there is a way in which this can be done although on one side, you have to satisfy the hardworking farmers by giving them a price that is good from a business point of view; you should also look at the public good which is the staple food (mealie-meal). So, you need to strike a balance in the sense that on one side don’t punish the farmer, on the other side again don’t punish the consumer. So, you try to glide it and find a good compromise. But that price of K110, again, it’s not a low price because if you look at the price at which we were buying last year, it was K70. This year, we have increased by K40 to K110 so that is not a very bad price.”
Kafwabulula also cited the Agency’s limited resource envelope as another factor preventing it from hiking its maize price.
“The second point, we also have to look at the resource envelope, the budget that we have. You know resources are limited so we have to operate within the budget that we have. Further to that, the people who buy at whatever price you are mentioning, whether it’s K130 or K140, the other players or traders, they are not buying as much maize as we are buying. Some of them are just buying maybe 50 or 100 metric tonnes. FRA is buying 300,000 metric tonnes plus so that’s a lot of maize! So, you have to look at the resource envelope and you are aware that as a government programme, we get money from the Ministry of Finance, which also has to look at other equally important government programmes, such as roads, education, and health and so on. So, the price of K110 is not a bad price,” he explained.
“In fact, I have been reading in the press, there are a number of stakeholders who are happy with that price. But please take note that the people who are claiming to be buying at K130 or whatever price, they are buying very few quantities so they can afford it. Now look at the quantities that the FRA has to buy, mind you, we are buying for the whole nation, to feed all of us so if you are going to buy at K130, then how much money will you spend? But, ultimately, we need to do a balancing up to make sure that the price of mealie-meal is affordable. This is a staple food.”
Asked whether Zambia had enough maize stocks to cover consumers in the event of another drought, Kafwabulula responded in the affirmative.
“At the moment, yes, we do have sufficient quantities, this is why from where we are seated ourselves as a food reserve, we are ensuring that none of this maize that we are having goes to waste due to compromise of quality like getting soaked, getting rotten, we cannot afford. So, we are making sure that the little that we have got is in good quality because if the few stocks that we have then on top of that we also lose some to wastage that will be a very big problem. So, we have sufficient maize and I guess that is why you have noticed that even though we have had this drought, you have not heard of anyone dying of hunger because we are supplying to the DMMU (Disaster Management and Mitigation Unit); we are supplying to various boarding schools and we are also selling to communities and then we are also supplying to the Ministry of Education under the school feeding programme. So, the very fact that no one has died of hunger is because FRA has got sufficient stocks, which we are releasing on a daily basis. In fact, we have prepositioned a lot of stocks in Southern Province so that we reduce the distance that we are going to cover to reach various communities. So, deliberately, we have put a lot of maize in Southern Province,” said Kafwabulula.Related Items
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